VPH Annual Report 2010.pdf - Saigon Asset Management

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VPH Annual Report 2010.pdf - Saigon Asset Management

Vietnam Property Holding

VPH

Annual Report 2010


Tables of Contents

Company Overview

Chairman’s Statement

Real Estate Market Overview

Financial Highlights

Top Portfolio Holdings

Board of Directors

Report of the Board of Directors

Independent Auditors’ Report

Consolidated Statement of Financial Position

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

1

2

4

5

9

17

19

21

22

23

24

25

26

Saigon Asset Management

TMS Building, 12th Floor

172 Hai Ba Trung, District 1

Ho Chi Minh City, Vietnam

Tel: +84-8-5404 3488

Fax: +84-8-5404 3487

IR@saigonam.com

www.saigonam.com

Annual report

2010


Company Overview

ABOUT THE COMPANY

Vietnam Property Holding (“VPH or the

“Company”) is an exempted company

incorporated in the Cayman Islands on

CORPORATE INFORMATION

Structure Cayman Islands registered closed­end

investment company

Incorporation Date August 9, 2007

Total Net Asset Value 32mn ﴾as of December 31, 2010﴿

August 9, 2007. Its shares are listed on the

Frankfurt Stock Exchange.

Duration

Listed

5 years subject to shareholder vote for extension

Frankfurt Stock Exchange ﴾FSE﴿

The Company is managed by Saigon Asset

Management Corporation (“SAM” or the

“Investment Manager”), an exempted

company incorporated under the laws of

the Cayman Islands. For more information,

please visit www.saigonam.com.

INVESTMENT OBJECTIVES

The principal investment objective of the

Company is to maximize capital gains from

investing in a diversified portfolio of

Vietnamese properties through corporate

vehicles or a Vietnamese investment fund

that is expected to receive local land use

rights, thereby allowing the Company to

indirectly participate in attractive projects

at early stages. The Vietnamese investment

fund will exit its investments by disposing

NAV Frequency

Annual Management Fee

Performance Fee

Investment Manager

Auditor

Legal Counsel

Administrator

Custodian

TRADING

Market

Clearing/Settlement

ISIN

Bloomberg Symbol

Monthly

2% of NAV

20% of gains over 8% hurdle rate with a high

water mark

Saigon Asset Management

Grant Thornton ﴾Vietnam﴿ Company Ltd.

Reed Smith LLP

Appleby

Deutsche Bank ﴾Cayman﴿ Ltd.

Deutsche Bank AG ﴾Ho Chi Minh City Branch,

Vietnam﴿

FSE and Xetra

Euroclear or Clearstream

KYG9361R1074

3MT:GR

them to institutional and private investors,

including real estate investment trusts.

Reuters Symbol

3MT.DE

Designated Sponsor/Market Maker 886 AG ﴾www.886ag.de﴿

Enquiries

IR@saigonam.com

01


Chairman’s Statement

Dear Shareholders,

We are pleased to present the 2010 annual report of Vietnam

Property Holding (the "Company").

Over the year, the Company's Net Assets Value (NAV) per share

decreased 1.34% to EUR2.54 at the end of 2010 from EUR2.57 at the

end of 2009. The decline in the NAV was attributable to weakness

in the real estate market and a partial allocation in the portfolio to

individual segments of the real estate sector that were particularly

out of favor, including industrial parks and infrastructure.

There were several factors behind the weakness in Vietnam’s real

estate sector in 2010, including high interest rates due to high

inflation, new regulations by the government designed to clamp

down on speculation in the market, and a heavy supply of new

offerings in the primary market.

The new regulations restrict developers’ ability to finance projects

out of customer’s advanced deposits and encourage banks to

reduce their lending to the sector. While these regulations will

undoubtedly add to the long term health of the real estate market,

the short term effect on developers is the necessity to find new

sources of financing such as convertible bonds.

In terms of supply, the real estate boom during 2007 – 2008

witnessed the initiation of numerous projects. Some of these

projects came to completion in 2010 whilst many others are

expected to complete in 2011. Specifically, the supply of

condominiums in Hanoi and Ho Chi Minh City (HCMC) will more

than double from 2008 to 2011. High-end real estate prices in

Vietnam further complicate the picture. In Hanoi and HCMC,

grade-A office rents are comparable to any of the other major Asian

cities excluding Singapore, Hong Kong and Tokyo.

Association of Foreign Investors in Real Estate (AFIRE), based on the strong

growth prospects of Vietnam’s economy, favorable demographics, and

cultural factors such as work ethic and emphasis on education.

Given the excellent long term and the mixed short term prospects for

individual segments within the market, successful real estate investing in

Vietnam requires a savvy and locally embedded team. For instance, the

Investment Manager has identified two categories of investment with

promising returns in the current market environment: real-estate products

which cater for the needs of middle-class consumers, and residential land

plots, which are likely to benefit from new infrastructure developments.

The importance of new infrastructure development is evidenced by a boom

in land prices that occurred in the western area of Hanoi during the first half

of 2010 as a result of a newly-built Thang Long highway connecting that area

with the center of the city. In HCMC, the development of the east-west

highway has also opened up new pockets of development in which the

Company has actively invested via listed developers such as NBB, CNT and

C21 with significant exposure to this geography.

In addition, the emerging middle class is driving a major shift of many

developers from the high-end segment of the residential market, which

underperformed in 2010, to the mid-end and affordable housing ones. This is

supported by Vietnam’s favorable demographics which translate into an

annual demand of about 10 million square meters of new housing as

estimated by Ministry of Construction. It’s not comparative because it is quite

a different segment (ie. affordable housing).

The existence of pockets of opportunity in the current market combined with

Vietnam’s excellent long term growth prospects and the traditional role of

real estate, as a store of value in inflationary times, are key drivers to generate

attractive returns for investors in this asset class over the next few years.

Luxury apartment rental rates and prices are roughly the same as

those in Bangkok, despite GDP per capita in Vietnam that is about

one fourth of Thailand’s. The situation is similar for the rental of

high-end shopping mall spaces.

Regardless of these challenges for Vietnam’s real estate market, the

long term prospects remain favorable with a very promising

outlook for certain segments such as affordable housing and retail.

Dr. Lee G. Lam,

Chairman & Independent Director

Vietnam Property Holding

Vietnam is rated the fourth most attractive emerging market by the

02


Annual report

2010 03


Real Estate Market Overview

In 2010, a number of factors brought uncertainty to the real estate market.

New regulations (Decree 71, Circular 16) were issued on the one hand,

intended to discourage speculative investments, but on the other hand,

overseas Vietnamese (about 4 millions worldwide) were permitted to own

property in the same manner as local Vietnamese citizens. Simultaneously,

Decree 71 mandates that property projects with a total of 2,500 housing

units or higher require approval of the Prime Minister, which is likely to

cause delays in project development.

An economic downturn also contributed to the uncertainty in the market.

This downturn was attributable to high interest rates aimed at curbing

double digit inflation and slowing down the depreciation of the VND.

High interest rates and restricted lending from the banks also hinderred

the local mortgage market from flourishing and prevented access to

project financing for developers. As a result, the real estate market is

expected to move sideways short term. One potentially mitigating factor

is the tendency of local savers to shift their money out of VND and into

USD, gold and landed properties in the face of high inflation.

Despite slow market conditions, the property sector saw many successful

M&A deals in 2010. The typical transactions were between local

developers such as Dat Xanh Group & Bitexco Nam Long and foreign

investors such as JSM Indochina, Indochina Capital & Prudential Vietnam

Investment Fund. The M&A trend in the property sector is expected to

continue throughout 2011.

The office vacancy rate increased in both Hanoi (+7% y-o-y) and HCMC

(+3.3% y-o-y) due to the large supply of newly completed office stocks,

thus depressing office rents in both cities. Despite this vacancy growth,

average rents across all grades of the serviced apartment achieved a

positive y-o-y growth rate of 3.9% for HCMC market and 4.9% for Hanoi

market due to the fact that rental rates recovered from lowest levels in

mid-2009, mostly driven by Asian expats. Going forward, both serviced

apartment rates and office rents are expected to decrease further due to

the increasing new supply and substitute market of buy-to-let apartments.

In the retail segment, Vietnam’s retail sales in 2010 continued to be

buoyant with a 30% y-o-y increase. Department stores in CBD area of

HCMC and Hanoi remained at full occupancy. There has been a fierce

competition between local and foreign retail operators. Foreign retailers

like Big C, Lotte Mart, Metro Cash & Carry, who have already gained a

foothold in the Vietnamese market, are rushing to strengthen their

presence as forecasts indicate fast-paced growth for the sector through

2014. Local retailer Saigon Co-op has just partnered with the Singaporean

supermarket chain NTUC FairPrice to set up a hypermarket chain in

Vietnam.

In the residential segment, property developers have been using promotions,

extending payment deadlines and quoting prices in VND instead of USD in an

effort to stir up interest. This segment’s demand is strongest in the mid-range

segment which caters to Vietnam’s emerging middle class.

In the hospitality segment, occupancy rates increased from last year whilst

room rates fell. In HCMC, the average occupancy rates was about 67% (+18%

y-o-y) and the average room rate was US$82 (- 8% y-o-y) while Hanoi’s

respective rates were 65% (+6% y-o-y) and US$77 (- 3% y-o-y). There was

increasing competition from three-star hotels and from international operators

like Centara and Hilton that expanded their operations. Many two and

three-star hotels upgraded their facilities in 2010. In the upper segment,

additional supply of new four or five-star hotels remains limited until 2012.

In conclusion, despite the uncertainty of the real estate market of Vietnam in

2010, we still expect a long-term growth on the market for the following

reasons:

Demand for affordable housing has increased in recent years, given the rise of

the emerging middle class and rapid urbanization. Demand now outstrips

supply because residential development to date has largely focused on

high-end customers. RNCOS, a leading market research and information

analysis company with a global presence based in U.S., estimates that Vietnam

currently needs another 20 million permanent housing units, but according to

Savills Vietnam, only 28,500 apartments are currently under construction and

expected to be completed in the next two years. Rental yield in HCMC and

Hanoi is relatively attractive compared to other metropolitan cities across Asia.

According to CBRE Vietnam, the average rent for high to mid-end

condominium units in Vietnam was US$10 per sq.m in 2010 for a rental yield of

9% while the rental yield in Hanoi is slightly lower at around 7%.

Foreign investors continue to view the market favorably. The Association for

Foreign Investors in Real Estate (AFIRE) ranked Vietnam the fourth most

promising emerging market for 2011 after Brazil, China, and India. Vietnam was

also ranked among the 10 most optimistic nations in the world, according to a

survey conducted in late 2010 by the France-based BVA Institute. As a result,

international real estate developers continue to pour capital into the country

causing both local and foreign investors to anticipate a recovery in the market in

the second half of 2011.

Source: 2011 AFIRE Annual Survey

04


Financial Highlights

NAV per share declined 1.3% to €2.54 at the end of 2010 from €2.57 at the end of 2009

Listed investment valued at €22,129,825 (69%)

Unlisted investment valued at €9,370,146 (29%)

Cash and other assets valued at €588,430 (2%)

FINANCIAL DATA

As of

Dec 31, 2010

As of

Dec 31, 2009

% of Change

Net Asset Value

32,088,401

32,904,449

﴾2.5%﴿

Outstanding Shares

12,647,051

12,794,267

﴾1.2%﴿

Net Asset Value per Share

2.54

2.57

﴾1.3%﴿

Share Price

1.69

1.18

43%

Share Price Premium/Discount to

NAV

﴾33.4%﴿

﴾54.1%﴿

CAPITAL STRUCTURE

Ordinary Shares Share Capital

Outstanding shares number as of November 30, 2007

﴾Inception﴿

12,893,972 25,787,944

Outstanding shares number as of December 31, 2009 12,794,267 25,588,534

Movement during the year 2010 ﴾147,216﴿ ﴾ 294,432﴿

Outstanding shares number as of December 31, 2010 12,647,051 25,294,102

Annual report

2010

05


Financial Highlights

NAV performance vs. VN Index in EUR

Net Asset Value vs. Share Price since Inception

Share Price Premium/Discount to NAV since Inception

06


Financial Highlights

PORTFOLIO BY SECTOR

PORTFOLIO BY ASSET TYPE

€32mn

€33mn €32mn €33mn

Cash & Other

Assets

Commercial

Infrastructure

Cash & Other

Assets

Cash & Other

Assets

Cash & Other

Assets

Commercial

Listed

Mixed Use

Infrastructure

Listed

Mixed Use

Property

OTC

PE

Property

OTC

PE

2010 2009 2010 2009

TOP PORTFOLIO HOLDING 2010

Annual report

2010

07


Top Portfolio Holdings


Top Portfolio Holdings

NBB Investment Corporation (NBB)

NBB is one of the leading publicly traded developers of the mid-end residential sector and is the infrastructure contractor under CIENCO

5, one of the largest state-owned infrastructure companies managed by the Ministry of Construction. NBB owns 100ha clear residential

land acquired at low cost and another 506ha of property projects’ land under compensation across the country. NBB also owns 1,000ha

of large-scale projects in construction stones, titanium mining, and mineral water. Its business includes real estate, construction,

mining and industrial production. 2010 PAT (un-audited) was VND122bn ($6.1mn), (34% y-o-y), equal to EPS of VND8,000 driven by the

gain realized from the sale of its 40% stake in 4.1ha “Diamond Riverside” project and substantial revenue attributable to sales

collections from Carina Plaza and City Gate condos in HCMC and Bac Lieu sub-divided land plots in Mekong Delta. In Jan 2011, DWS

Vietnam Fund purchased 2.6mn NBB preferred shares at VND80,000/share. During 2010, NBB also received approval of Binh Thuan

province’s People Committee on the detailed plan for a 216ha beach-front residential and a resort project called “De Lagi”. In Mar 2011,

the Board of Directors approved a 2011 dividend of VND1,600 per share (1.8% dividend yield). The Investment Manager continues to

believe in promising growth of the Company.

VN Index

NBB VN Equity

Sector/Asset Type

Mixed­Use/Listed

Year Acquired 2009

Size/Area 51.9mn ﴾Market cap as of end 2010﴿

VPH Ownership 15.6%

Book Value 8.1mn ﴾as of December 31, 2010﴿

Financial highlight 2010 2009

NBB’s City Gate Towers project, HCMC

Revenue 18.6mn 13.1mn

Net Income 4.7mn 3.5mn

Earnings per Share VND8,042 VND6,141

Earnings per

Growth

Share

31% 71%

Source: NBB’s Financial Statements

Annual report

2010

09


Top Portfolio Holdings

Century 21

C21 is a leading local property developer that has its historical roots in the popular “Tuoi Tre” newspaper. The Company owns over 217ha

of cleared residential land acquired at low cost in prime locations in HCMC. This includes one fully-occupied grade C office building in

District 1. The Company also owns 166ha of clear resort land near Nha Trang that includes the Thap Ba resort, a well-known mineral bath

resort. The project has a 24% CAGR and attracts more than 40% of all the tourists visiting Nha Trang. C21 maintains a consistent

revenue growth and high gross margins from commercial and hospitality properties. The company plans to list on the Ho Chi Minh City

stock exchange by Q2 2011. 2010 PAT (un-audited) was VND65bn ($3.3mn) (+41% y-o-y) due to better sales collections from the Song

Giong sub-divided land plots, & higher occupancy in YOCO office building & Thap Ba resort. C21’s emphasis on the development of

affordable housing and high-end commercial properties should continue giving its competitive edge in the local real estate market.

Sector/Asset Type

Mixed­Use/OTC

Year Acquired 2010

Size/Area 20.0mn ﴾Market cap as of end 2010﴿

VPH Ownership 19.1%

Book Value 3.8mn ﴾as of December 31, 2010﴿

Financial Highlight 2010 2009

Revenue 4.6mn 3.1mn

Net Income 2.3mn 1.8mn

Earnings per Share VND4,200 VND4,211

Earnings per Share

Growth

0% ﴾30%﴿

Source: C21’s Financial Statements

Source: C21’s Projects

10


Top Portfolio Holdings

Mo Plaza (”MP”)

Mo Plaza is a mixed-use retail, serviced apartment and office development located on 14,700 square meter land area in Hai Ba Trung

District, towards the South of Hanoi. The site was originally a well-established local market with over 700 local tenants in Hanoi. This

86,290 square meter commercial project include two 25-storey office and serviced apartment towers above a 5-storey retail

podium. In 2010, the project completed the second basement and is expected to complete the retail podium by Sep 2011 and the

whole project by Q3 2012. The construction will produce 86,000 square

meters total gross floor area (GFA), consisting of 24,000 square meters of

premium retail space, 47,000 square meters of office space and 90 condo

units to be sold on a 50-year leasehold basis. The Company signed a 50

year lease for the entire 21,122 sqm retail space with VP Capital, one of

the largest shareholders in the project and received advance payment of

VND210bn ($10.5mn) from this agreement. This advance payment

helped to finance the construction without the need for bank loans at

this stage. The company plans to seek tenants for the office block with

rents based on a market evaluation completed by CBRE in Feb 2011.

Given the favorable development of Hanoi commercial property market,

the Investment Manager believes that the prospects of Mo Plaza

continue attractive. The expected rental yield will make it an attractive

property for institutional investors.

S ector/As s et Type

Office & Commercial/Property

Y ear Acquired 2008

T ype

Mixed-use retail, serviced apartment, office

development

Location Hai Ba Trung District, Hanoi

Size/Area

Total GFA

Status

Land area: 14,700sqm

Market c ap: €42.3 mn (as of end 2010)

86,290 sqm

It is scheduled to be completed by the end

2012

The Military Bank approved the

construction loan

Mo Plaza

V P H Owners hip 8%

Book Value €3.4 mn (as of 31 December 2010 )

Highlights

Entire retail podium was approved to lease

in early 2010 and 90 condo units were

approved to sell on 50 year terms

Annual report

2010

11


Top Portfolio Holdings

Savimex (“SAV”)

SAV is a real estate developer and one of the leading wooden furniture manufacturers affiliated with SATRA, one of the largest

state-owned trading groups in Vietnam. The company also has a 34ha clear residential land bank, acquired at low cost. In 2010, the

company received approval to develop 5.2ha Phu My project in District 7, HCMC into a retail and condo development. We believe the

market value of this one single project is worth double SAV’s current market capitalization. Recently, SAV has worked with CapitaLand

and REE Land to co-develop Phu My residential project, Dao Tri residential project and Tuyen Lam villa projects. In addition, VPH’s

Investment Manager is assisting SAV with the sales and marketing of its projects such as the Ngoc Lan project in District 7 HCMC. These

efforts are aimed at helping the company achieve its revenue and profit targets. CapitaLand, a leading Singaporean property developer,

has shown solid interest and signed a MOU to acquire 95% stake in SAV’s 5.2ha residential Phu My condo project. Approval of key

commercial terms is expected to be approved during the extraordinary general meeting. We expect substantial earnings in 2011 due

to a favorable revaluation of this project. During the year, VPH acquired an additional 407,030 SAV shares, increasing the fund’s stake

from 19.3% to 23.4%.

VN Index

SAV VN Equity

Sector/Asset Type

Mixed­Use/Listed Equity

Year Acquired 2008 and 2009

Size/Area 13.6mn ﴾Market cap as of end 2010﴿

VPH Ownership 23.4%

Book Value 3.2mn ﴾as of December 31, 2010﴿

SAV’s Ngoc Lan apartment project

Financial Highlight 2010 2009

Revenue 15.0mn 15.4mn

Net Income 0.4mn 0.5mn

Earnings per Share VND1,018 VND1,475

Earnings per Share

Growth

﴾31%﴿ 7%

Source: Savimex’s Financial Statements

12


Top Portfolio Holdings

Construction and Materials Trading Company (CNT)

CNT is the fifth largest supplier of building materials in Vietnam, a mid-size contractor and a real estate developer with a 99ha clear

residential land bank. The company’s 1.4ha “Green Pearl” project with 100,000 sqm GFA of retail, office and condo space is located along

the East-West Highway in An Phu, District 2. Another project, the 96ha Ha Tien Township development fronts the Thailand Bay near the

border with Cambodia. VPH’s Investment Manager is assisting CNT to expedite its real estate projects by working with both local banks

and securities firms to issue corporate bonds/new shares to finance the construction of its projects. 2010 PAT (un-audited) was

VND29bn ($1.45mn) (-33% y-o-y) because of lower contribution by its real estate business compared to that of previous year. In Q4

2010, VPH accumulated a total of additional 520,000 shares to increase equity holding to 24.9%. In Jan 2011, its BOD approved payment

of a cash dividend of VND1,000 per share (5% dividend yield).

CNT VN Equity

VN Index

Sector/Asset Type

Mixed­Use/Listed Equity

Year Acquired 2009

Size/Area 7.3mn ﴾Market cap as of end 2010﴿

VPH Ownership 24.9%

Book Value 1.8mn ﴾as of December 31, 2010﴿

Financial Highlight 2010 2009

Revenue 121.0mn 100.1mn

CNT’s My Phuc apartment Project

Net Income 0.9mn 1.6mn

Earnings per Share VND2,107 VND5,386

Earnings per Share

Growth

﴾61%﴿ 111%

Source: CNT’s Financial Statements

Annual report

2010

13


Top Portfolio Holdings

Phu My Bridge Corporation (PMC)

PMC is the project owner and operator of the Phu My Bridge, a new suspension bridge linking District 2 and District 7 in Ho Chi Minh

City. The bridge opened in September 2009 under a 26 year Build Operate Transfer contract and officially started to collect toll fees from

April 2010. The bridge cuts an hour off the drive from the port area to downtown Ho Chi Minh City and connects the East and West of

Southern Vietnam. PMC completed constructing the bridge ahead of schedule, which is unusual for an infrastructure project in

Vietnam. This accomplishment has gained the confidence of the Vietnamese Government and given PMC a leading position in the

infrastructure industry. Toll collection commenced in April 2010 and while traffic has shown a 3% monthly growth, toll collections have

significantly underperformed expectations. PMC expects traffic over the bridge to increase when the road connecting Phu My Bridge

and the Hanoi national highway is completed in 2012. PMC has also proposed higher tolls to ensure the repayment of the VND3,030bn

investment cost. Toll revenue improved in Dec 2010 with a 10% increase compared to Nov 2010 due to the government ban on heavy

trucks in downtown HCMC.

However, the Investment Manager, based on the independent valuation, has written down the value of this holding to reflect the

uncertainty of PMC’s prospects.

Sector/Asset Type

Infrastructure /OTC

Year Acquired 2008

Type

Infrastructure Company

Location

District 7, Ho Chi Minh City

Size/Area

US$180mn Phu My Bridge BOT project & US$90mn Phu My Bridge Approach

Roads project

Status

The deck closure ceremony was held in May 2009

Toll fee collection started from April 1, 2010

VPH Ownership 3.5%

Book Value 1.6mn ﴾as of December 31, 2010﴿

Phu My Bridge

14


Top Portfolio Holdings

Industrial Urban Development Joint Stock Company No 2

D2D is a real estate developer who focuses on the development of affordable housing. The company owns 331ha fully-leased Nhon

Trach II industrial park in Dong Nai province with 95% occupancy rate, 90ha clear residential land bank and 668ha under compensation,

located 17km from HCMC. D2D plans to launch 14.7ha Quan Thu residential project in Dong Nai province in early 2011. The 90ha land

bank is the company’s immediate focus, whereas the 668ha land bank presents the company with a pipeline of longer term

opportunities. This 668ha land bank is adjacent to the new Long Thanh Highway which is scheduled to be completed by 2013. The

highway will connect downtown HCMC to the new Long Thanh International Airport so we anticipate the company’s projects will

realize considerable capital appreciation and generate significant cash flows over the next coming years.

VN Index

D2D VN Equity

Sector/Asset Type

Mixed­Use/Listed Equity

Year Acquired 2010

Size/Area 16.2mn ﴾Market cap as of end 2010﴿

VPH Ownership 10%

Book Value 1.6mn ﴾as of December 31, 2010﴿

Financial Highlight 2010 2009

D2D’s Thong Nhat project

Revenue 8.5mn 8.1mn

Net Income 3.8mn 2.0mn

Earnings per Share VND9,234 VND4,826

Earnings per Share Growth

91% ﴾25%﴿

Source: D2D’s Financial Statements

Annual report

2010

15


Board of Directors


Board of Directors

Dr. Lee G. Lam

Chairman

Independent Director

Dr. Kathryn Vagneur

Independent Director

Chairman - Hong Kong, Chairman – Vietnam and Senior

Adviser - Asia, of Macquarie Capital Advisers (the investment

banking business of Macquarie Capital).

Chairman – VinaSecurities (Ho Chi Minh City), Vietnam.

Former Managing Director, COO and Vice Chairman,

Investment Banking Division - Bank of China International

Holdings.

Former President and CEO, Vice Chairman of the Board - Chia

Tai Enterprises International Ltd. (CP Group).

Former Executive Director - Singapore Technologies

Telemedia.

Former President and CEO - Millicom International Cellular

Asia Pacific.

Former Managing Partner - Greater China, A.T. Kearney.

Former General Manager - Cable & Wireless/Hong Kong

Telecom.

BSc in sciences and mathematics, MSc in systems science,

MBA from the University of Ottawa in Canada, post-graduate

diploma in public administration from Carleton University in

Canada, post-graduate diploma in English and Hong Kong

Law and LLB (Hons) in law from Manchester Metropolitan

University in the UK, LLM in law from the University of

Wolverhampton in the UK, PCLL in law from the City

University of Hong Kong, Certificate in Professional

Accountancy from the Chinese University of Hong Kong SCS

and PhD from the University of Hong Kong.

Director - Durant, a private investment fund.

Director & Chairman, Audit & Risk Committee - The Foresters

Friendly Society, a British mutual insurance company.

Finance & Performance Committee - The Royal United

Services Institute, the defense and security think-tank.

Formerly:

Chief Operating Officer – Tribune Capital Partners, investment

management of a media sector focused venture fund.

Director – PricewaterhouseCoopers in London, consulting to

the financial services sector, developed investment banking

strategies, evaluated acquisitions including deal structure,

forensic due diligence and restructuring strategies.

Contributor to the redesign of PwC’s audit methodology used

globally.

Founder of Vagneur & Firth, Certified Public Accountants,

Colorado.

Developed courses in strategy implementation and

management control, corporate governance and internal

governance at London Business School and Edinburgh

Business School.

Built a financial decision model for US Department of Justice

while at Carnegie-Mellon University.

PhD in Management, London Business School.

Board Member of the East-West Center Foundation.

Fellow of the Hong Kong Institute of Directors.

Member of the General Council and the Corporate

Governance Committee of the Chamber of Hong Kong Listed

Companies.

Vice President of the Hong Kong Association for the

Advancement of Real Estate and Construction Technology.

Founding Board Member and the Honorary Treasurer of the

Hong Kong-Vietnam Chamber of Commerce.

Fluent in English, Mandarin, Cantonese, and Vietnamese

Annual report

2010

17


Board of Directors

Mr. Howard Golden

Independent Director

Mr. Louis Nguyen

Executive Director

Chairman - The Worldwide Opportunity Fund (WWOF).

Partner of Terra Partners Group, an investment management

company with $135 million AUM.

Chairman - Romanian Investment Fund and Reconstruction

Capital II.

Former Chairman - Kazakhstan Investment Fund.

Former Chairman of the Supervisory Board of Slovak RIF, the

largest Slovak closed-end fund, the Slovak Restitution

Investment Fund.

Former Board Member of Beta Vietnam Fund and

Framlington Bulgaria Fund.

Lectured on closed-end funds in London and Prague and at

various business schools (Harvard University, University of

Chicago).

Quoted as an expert in capital markets and corporate

governance in The Economist, The Financial Times, The New

York Times, The International Herald Tribune, Newsweek,

Prague Business Journal, and Business Central Europe.

Practiced law in Chicago, New York and Israel.

BA, JD, and MBA from University of Wisconsin.

Current Chairman and CEO of Saigon Asset Management.

Managing Director - VinaCapital, a fund management

company based in Ho Chi Minh City, Vietnam.

Founding General Partner - IDG Ventures Vietnam, a fund

management company based Ho Chi Minh City, Vietnam.

Vice President - Intelligent Capital, a mergers and acquisitions

firm based in San Francisco, California.

Partner - Osprey Ventures, a venture capital fi rm based in

Menlo Park, California.

Held management positions in fi nance and manufacturing

operations at NEC and Apple Computers in California.

Audit and management consulting experience at KPMG in

San Jose, California.

Member of the board of directors of various listed and private

companies based in Vietnam.

Chairman, WTO Committee, American Chamber of

Commerce, Vietnam.

BS in Accounting, San Jose State University, California.

Fluent in English and Vietnamese.

Fluent in English and Hebrew, knowledgeable in Czech.

18


Report of the Board of Directors

The Board of Directors submits its report together with the audited consolidated nancial statements of Vietnam Property Holding (“the

Company”) and its subsidiaries (together “the Group”) for the year ended 31 December 2010

The Company

Vietnam Property Holding was incorporated in the Cayman Islands as a company with limited liability. The registered o ce of the Company

is at Deutsche Bank (Cayman) Limited at Boundary Hall, Cricket Square, PO Box 1984, Grand Cayman KY1-1104, Cayman Islands.

Particulars of the Company’s principal subsidiaries are set out in Note 7 to the consolidated nancial statements. The Company has no

associates.

Principal activities

The principal activity of the Group is to invest in a diversi ed portfolio of Vietnamese properties through corporate vehicles or a Vietnamese

investment fund that is expected to receive local land use rights, thereby allowing the Group to indirectly participate in attractive projects

at early stages aiming at maximising capital gains and dividend or interest income.

Results and dividend

The results of the Group for the year ended 31 December 2010 and the state of its a airs as at that date are set out in the consolidated

nancial statements on pages 22 to 47.

The Board of Directors does not recommend the payment of dividends for the year.

Board of Directors

The members of the Board of Directors during the year and up to the date of this report were:

Board of Directors:

Appointed on

Lee G Lam Chairman and Independent 9 November 2007

Non-executive Director

Howard Golden Director 9 November 2007

Louis T Nguyen Executive Director 9 August 2007

Kathryn Vagneur Director 8 February 2010

There being no provision in the Company's articles of association to the contrary, all Directors shall remain in o

ce for the ensuing year.

Auditors

The nancial statements have been audited by Grant Thornton (Vietnam) Ltd and they have expressed their willingness to accept their

re-appointment subject to their reacceptance policies and procedures.

Directors’ interest in the Company

No contract of signi cance to which the Company was a party and in which a Director of the Company had a material interest, whether

directly or indirectly, subsisted at the end of the year or at any time during the year.

At no time during the year was the Company a party to any arrangement to enable the Directors of the Company to acquire bene ts by

means of acquisition of shares in or debentures of the Company or any other body corporate.

Annual report

2010

19


Report of the Board of Directors

Board of Directors responsibility in respect of the consolidated nancial statements

The Board of Directors is responsible for ensuring that the consolidated nancial statements are properly drawn up so as to give a true

and fair view of the nancial position of the Company as at 31 December 2010 and of the results of its operations and its cash ows for

the year ended on that date. When preparing the consolidated nancial statements, the Board of Directors is required to:

(i)

(ii)

(iii)

(iv)

(v)

adopt appropriate accounting policies which are supported by reasonable and prudent judgements and estimates and then

apply them consistently;

comply with the disclosure requirements of International Financial Reporting Standards or, if there have been any departures in

the interest of true and fair presentation, ensure that these have been appropriately disclosed, explained and quanti ed in the

consolidated nancial statements;

maintain adequate accounting records and an e ective system of internal control;

prepare the consolidated nancial statements on a going concern basis unless it is inappropriate to assume that the Group will

continue its operations in the foreseeable future; and

control and direct e ectively the Group in all material decisions a ecting its operations and performance and ascertain that

such decisions and/or instructions have been properly re ected in the nancial statements.

The Board of Directors is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

The Board of Directors con rms that the Group has complied with the above requirements in preparing the consolidated nancial

statements.

Statement by the Board of Directors

In the opinion of the Board of Directors, the accompanying consolidated statement of nancial position, consolidated statement of

comprehensive income, consolidated statement of changes in equity and consolidated statement of cash ows, together with the notes

thereto, have been properly drawn up and give a true and fair view of the nancial position of the Company as at 31 December 2010 and

of the results of its operations and cash ows for the year then ended in accordance with International Financial Reporting Standards.

On behalf of the Board of Directors

Lee G Lam

Chairman and Independent Non-executive Director

Ho Chi Minh City, Vietnam

Date: 09 May 2011

20


Independent Auditors’ Report

On the consolidated financial statement of

Vietnam Property Holding

for the year ended 31 December 2010

No: HCM/11/009

To the Shareholders of Vietnam Property Holding

We have audited the accompanying consolidated nancial statements of Vietnam Property Holding and its subsidiaries (“the Group”) which

comprise the consolidated statement of nancial position as at 31 December 2010, and the related consolidated statements of

comprehensive income, changes in shareholders’ equity and cash ows for the year then ended and a summary of signi cant accounting

policies and other explanatory notes.

Management’s responsibility for the consolidated nancial statements

Management is responsible for the preparation and fair presentation of these consolidated nancial statements in accordance with

International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant

to the preparation and fair presentation of consolidated nancial statements that are free from material misstatement, whether due to fraud

or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated nancial statements based on our audit. We conducted our audit in

accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance whether the consolidated nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated nancial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of

the consolidated nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the consolidated nancial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the e ectiveness of the entity’s internal control. An

audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by

Management, as well as evaluating the overall presentation of the consolidated nancial statements.

We believe that the audit evidence we have obtained is su

cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the accompanying nancial statements give a true and fair view of the nancial position of Vietnam Property Holding and its

subsidiaries as at 31 December 2010, and of its nancial performance and its cash ows for the year then ended in accordance with

International Financial Reporting Standards.

GRANT THORNTON (VIETNAM) LTD

Certified Chartered Accountants and Management Consultants

Member within Grant Thornton International Ltd

21


Consolidated Statement of Financial Position

Notes

31 December 2010

EUR

31 December 2009

EUR

ASSETS

Non-current

Investment property 8 - 2,070,765

Non-current assets - 2,070,765

Current

Financial assets at fair value through profit or loss 9 31,499,971 21,242,509

Other receivables 10 169,945 261,520

Other current assets 11 11,475 8,975,823

Cash and cash equivalents 12 546,680 834,596

Current assets 32,228,071 31,314,448

Total assets 32,228,071 33,385,213

EQUITY AND LIABILITIES

EQUITY

Share capital 13 25,294,102 25,588,534

Share premium 14 5,067,271 4,961,201

Translation reserve 2,041 -

Retained earnings 1,724,987 2,354,714

Total equity 32,088,401 32,904,449

LIABILITIES

Current

Other liabilities 15 139,670 480,764

Total liabilities 139,670 480,764

Total equity and liabilities 32,228,071 33,385,213

Net asset value per share (EUR per share) 2.54 2.57

Annual report

2010

22


Consolidated Statement of Comprehensive Income

Notes

For the year ended

31 December 2010

EUR

For the year ended

31 December 2009

EUR

Net changes in fair value of financial assets at fair value

through profit or loss

(1,035,996) 3,395,881

General and administration expenses 16 (1,145,211) (846,852)

Other income 118,077 -

Other expense - (517,949)

Profit/(Loss) from operations (2,063,130) 2,031,080

Finance income 17 2,022,244 1,709,472

Finance expenses 18 (588,841) (680,578)

Profit/(Loss) before tax (629,727) 3,059,974

Corporate income tax 19 - -

Profit/(Loss) for the year (629,727) 3,059,974

Other comprehensive income 2,041 -

Total comprehensive income/(loss) for the year (627,686) 3,059,974

Attributable to shareholders (629,727) 3,059,974

Earnings per share – basic and diluted (EUR per share) 20 (0.05) 0.24

The accompanying notes are an integral part of these consolidated nancial statements

Annual report

2010 23


Consolidated Statement of Changes in Equity

Share

Translation

Retained

Total

Share capital

premium

reserve

earnings

Equity

EUR EUR EUR EUR EUR

Balance at 1 January 2009 25,787,944 4,881,682 - (705,260) 29,964,366

Repurchase and cancellation of share

(199,410) 79,519 - - (119,891)

capital

Profit for the year - - - 3,059,974 3,059,974

Balance at 31 December 2009 25,588,534 4,961,201 - 2,354,714 32,904,449

Balance at 1 January 2010 25,588,534 4,961,201 - 2,354,714 32,904,449

Repurchase and cancellation of share

capital

(294,432) 106,070 - - (188,362)

Loss for the year - - - (629,727) (629,727)

Other comprehensive income - - 2,041 - 2,041

Balance at 31 December 2010 25,294,102 5,067,271 2,041 1,724,987 32,088,401

The accompanying notes are an integral part of these consolidated nancial statements

24


Consolidated Statement of Cash Flows

Notes

Year ended

31 December 2010

EUR

Year ended

31 December 2009

EUR

Cash flows from operating activities

Profit/(Loss) before tax (629,727) 3,059,974

Adjustment for:

Net changes in fair value of financial assets through profit or loss 1,035,996 (3,395,881)

Unrealised (gain)/loss from foreign currency translation (455,223) 585,983

Interest and dividend income (729,486) (1,645,147)

Impairment of goodwill - 517,949

Change in other receivables 1,236,580 1,805,348

Change in other liabilities (79,625) 20,870

Net cash flow generated from operating activities 378,515 949,096

Cash flows from investing activities

Proceeds from disposal of investment property 2,070,765

-

Proceeds from withdrawal of cash held in escrow 7,827,075 (4,531,525)

Acquisition of investment property - (2,300,000)

Acquisitions of financial instruments (10,941,165)

(7,163,755)

Net cash inflow (outflow) from acquisition of subsidiary

7

(261,469)

46,423

Interest received 623,530

120,917

Dividend received 105,956

-

Loans provided -

197,400

Net cash used in investing activities (575,308) (13,630,540)

Cash flows from financing activities

Cost of repurchase of ordinary shares (188,362) -

Net cash flow from financing activities (188,362) -

Net change in cash and cash equivalents for the year (385,155) (12,681,444)

Cash and cash equivalents at the beginning of the year 834,596 13,524,457

Effects of fluctuations in foreign exchange rates 97,239 (8,417)

Cash and cash equivalents at the end of the year 546,680 834,596

The accompanying notes are an integral part of these consolidated nancial statements

Annual report

2010 25


Notes to the Consolidated Financial Statements

1. General information

Vietnam Property Holding was incorporated in the Cayman Islands as a limited liability company. The registered office of the

Company is at Deutsche Bank (Cayman) Limited at Boundary Hall, Cricket Square, PO Box 1984, Grand Cayman KY1-1104,

Cayman Islands.

The principal activity of the Group is investing in a diversified portfolio of Vietnamese properties through corporate vehicles

or Vietnamese investment funds. Its shares are listed on German stock exchanges (Frankfurt and XETRA).

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 (the “financial statements”) 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 revisions and amendments to IFRS issued by the International Accounting Standards

Board, which are relevant to and effective for the Group’s consolidated financial statements for the annual period beginning

1 January 2010:






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


2.2.2. Adoption of revised and amended standards

IFRS 3 Business Combinations (Revised 2008)




follows:


these costs would have been accounted for as part of the cost of the acquisition


arrangement gives rise to a financial liability, any subsequent changes are generally recognised in profit or loss.

Previously, contingent consideration was recognised only once its payment was probable and changes were



26


Notes to the Consolidated Financial Statements

2010.

Business combinations for which the acquisition date is before 1 January 2010 have not been restated.

IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

The Improvements to IFRSs 2009 made several minor amendments to IFRSs. The only amendment relevant to the Group relates to IAS 17

Leases. 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 did not hold any

leases of land during the year.

Improvements to IFRSs 2009 (Issued in April 2009)

IFRS 7 Financial Instruments: Disclosures – improving disclosures about

nancial instruments

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (e ective from 1 July 2010)

2.2.3. Standards, amendments and interpretations to existing standards that are not yet e ective and have not been

adopted early by the Group

Annual report

2010 27


Notes to the Consolidated Financial Statements

Management anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the

rst

period beginning after the e

ective date of the pronouncement. Information on new standards, amendments and

interpretations that are expected to be relevant to the Group’s

nancial statements is provided below. Certain other new

standards and interpretations have been issued but are not expected to have a material impact on the Group's consolidated

nancial statements.

Annual Improvements 2010 (e

ective from 1 July 2010 and later)

The IASB has issued Improvements to IFRS 2010 (2010 Improvements). Most of these amendments become e

ective in

annual periods beginning on or after 1 July 2010 or 1 January 2011. The 2010 Improvements amend certain provisions of

IFRS 3R, clarify presentation of the reconciliation of each of the components of other comprehensive income and clarify

certain disclosure requirements for nancial instruments. The Group's preliminary assessments indicate that the 2010

Improvements will not have a material impact on the Group's nancial statements.

IFRS 9 Financial Instruments (e ective from 1 January 2013)

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. To date, the chapters dealing with recognition, classi cation, measurement and

de-recognition of nancial assets and liabilities have been issued. These chapters are e ective for annual periods beginning

1 January 2013. 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 nancial 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.

IAS 24 Related Party Disclosures (e ective from 1 January 2011)

The IASB issued a revised version of IAS 4 Related Party Disclosures (IAS 24 (2009)) on 4 November 2009 which supersedes

IAS 24 (2003).

The changes introduced by IAS 4 (2009) relate mainly to the related party disclosure requirements for government-related

entities and the de nition of a related party.

In respect of de nition of a related party, the amendments have been made in order to clarify its meaning and to eliminate

previous inconsistencies. The changes include:

separate or individual nancial statements, the subsidiary is regarded as a related party of the associate as well as

the company itself;

the purposes of the subsidiary’s separate or individual

nancial statements, the associate is a related party;

entities, two associates are not regarded as being related parties simply because one person has signi cant

in uence over one entity, and a close family member of that person has signi cant in uence over another entity;

management personnel of a company have control or joint control over other entities, disclosures are required in

both the nancial statements of the Company and the nancial statements of the other entities;

in uence over a third entity, then the second and third entities are regarded as being related to each other.

In addition, other amendments have been made to the de nition of a related party which clarify that:

28


Notes to the Consolidated Financial Statements

3. Summary of signi cant accounting policies

3.1. Overall considerations

3.2. Presentation of consolidated nancial statements

The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements (Revised 2007). The

Group has elected to present the 'Statement of comprehensive income' in one statement: the 'Statement of comprehensive income'.

3.3. Basis of consolidation

3.4. Subsidiaries

Annual report

2010

29


Notes to the Consolidated Financial Statements

subsidiary exceed the non-controlling interest in the equity of that subsidiary. In such cases, the excess and further losses

applicable to the non-controlling interest are taken to the consolidated statement of comprehensive income, unless the

non-controlling interest has a binding obligation to, and is able to, make good the losses. When the subsidiary subsequently

reports profits, the profits applicable to the non-controlling interest are taken to the consolidated statement of

comprehensive income until the non-controlling interest’s share of losses previously taken to the consolidated statement of

comprehensive income is fully recovered.

Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are accounted

for using the parent entity method of accounting 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 as

additional goodwill. No adjustment is made to the carrying value of the subsidiary’s net assets as reported in the

consolidated financial statements.

3.5. Functional and presentation currency

The consolidated financial statements are presented in Euro (EUR) (“the presentation currency”). The financial statements of

each consolidated entity are prepared in either EUR, (“the functional currency”) of Vietnam Property Holding Limited, or the

currency of the primary economic environment in which the entity operates, which for Viet Phat Hung is Vietnamese Dong

(VND). EUR 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).

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 entity are translated at

the exchange rates in effect at the balance sheet date. Translation gains and losses and expenses relating to foreign

exchange transactions are recorded in the statement of comprehensive income.

In the consolidated financial statements, all individual financial statements of subsidiaries, if originally presented in a

currency different from the Group’s presentation currency, are converted into EUR. Assets and liabilities are translated into

EUR at the closing rate of the end of the reporting period. Income and expenses are converted into the Group’s presentation

currency at the average rates over the reporting period. Any differences arising from this translation are charged to the

foreign currency translation reserve in equity.

3.7. Financial assets

Financial assets, other than hedging instruments, are divided into the following categories: loans and receivables; financial

assets at fair value through profit or loss; available-for-sale financial assets; and held-to-maturity investments.

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 the Management re-evaluates this designation at each

reporting date.

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.

De-recognition of financial assets occurs when the right to receive cash flows from the investments expires or are

30


Notes to the Consolidated Financial Statements

transferred and substantially all of the risks and rewards of ownership have been transferred. At each balance sheet date,

financial assets are reviewed to assess whether there is objective evidence of impairment. If any such evidence exits, any

impairment loss is determined and recognised based on the classification of the financial assets.

The Group's financial assets consist of the following categories:

Receivables

All receivables are non-derivative financial assets with fixed or determinable payments 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 statement of income. All of the Group's receivables fall into this

category of consolidated financial instruments. Discounting, however, is omitted where the effect of discounting is

immaterial.

Significant receivables are considered for impairment on a case-by-case basis when they are overdue at the reporting date

or when objective evidence is received that a specific counterparty will default.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or are

designated by the entity to be carried at fair value through profit or loss upon initial recognition. By definition, all derivative

financial instruments that do not qualify for hedge accounting fall into this category. Other financial assets at fair value

through profit or loss held by the Group include listed and unlisted securities.

Any gain or loss arising from derivative financial instruments is based on changes in fair value, which is determined by direct

reference to active market transactions or using industry standard valuation techniques where no active market exits.

3.8. Income taxes

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 balance sheet date. They are calculated according to the tax rates

and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year. All changes to

current tax assets or liabilities are recognised as a component of tax expense in the statement of 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 nor loss.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their

Annual report

2010 31


Notes to the Consolidated Financial Statements

respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date. Most

changes in deferred tax assets or liabilities are recognised as a component of tax expense in the 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

other comprehensive income are charged or credited directly to other comprehensive income.

3.9. Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand as well as short term highly liquid investments such as money

market instruments and bank deposits with an original maturity term of not more than three months.

3.10. Equity

Share capital represents the nominal value of shares that have been issued. Share premium includes any premiums received

on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net

of any related income tax benefits.

No gain or loss shall be recognised in profit or loss on the repurchase of the Group’s shares for cancellation. Consideration

paid or received shall be recognised directly in equity. The difference between the consideration paid on repurchase and

original share issues prices will be recognised in share premium account.

Foreign currency translation differences arising on the translation of the Group’s foreign entities are included in the

translation reserve.

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

equity.

3.11. Financial liabilities

The Group's financial liabilities include trade and other payables 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 statement of comprehensive income.

Payables are recognised initially at their fair value and subsequently measured at amortised cost, using the effective interest

rate method.

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired.

3.12. Provisions

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 recognised for future operating losses.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable

evidence available at the balance sheet date, including the risks and uncertainties associated with the present obligation.

Where there are a number 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 provisions 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 management.

32


Notes to the Consolidated Financial Statements

3.13. 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:

1. 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;

2. a party is a jointly-controlled entity;

3. a party is an associate;

4. a party is a member of the key management personnel of the Company; or

5. a party is a close family member of the above categories.

3.14. Segment reporting

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.

3.15. 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 profit or

loss attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the

year.

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 interests.

4. Critical accounting estimates and judgements

When preparing the consolidated financial statements Management undertakes a number of judgments, estimates and

assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ

from the judgments, estimates and assumptions made by Management, and will seldom equal the estimated results.

Information about significant judgments, estimates and assumptions that have the most significant effect on recognition

and measurement of assets, liabilities, income and expenses are discussed below.

Annual report

2010 33


Notes to the Consolidated Financial Statements

Impairment of 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 credit history of its customers and prevailing market conditions.

In the process of impairment review, the Group’s Management makes assumptions about future cash flow and discount rates

associated with market risk and asset specific risk factors. The actual results of the impairment assessment to the Group’s

assets may vary and may cause significant adjustments to the Group’s assets within the next financial year.

Fair value of financial instruments

Listed securities are valued at their closing bid prices as of the last official close of the applicable exchange on the relevant

valuation day. Securities traded on a securities exchange for which there has been no sale that day are valued at the closing

bid price on the relevant valuation day.

Investments in unlisted securities for which an active OTC market exists are stated at fair value based upon price quotations

received from at least three independent brokers.

Other unlisted securities, for which no active OTC market exists, are valued at fair value using a valuation technique

determined by the Group and in accordance with International Accounting Standards and International Financial Reporting

Standards.

5. Segment reporting

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 segment by investment portfolio include commercial, mixed-use, infrastructure and

residential.

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.

34


Notes to the Consolidated Financial Statements

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

5. Segment reporting (continued)

Consolidated Statement of Financial Position

31 December 2010

Total assets

Vietnam

Financial assets at fair value

through profit or loss

Commercial Mixed-use Infrastructure

Cash and

Total

others

EUR EUR EUR EUR EUR

3,387,126 22,670,597 5,442,248 - 31,499,971

Other receivables - - - 169,945 169,945

Other current assets - - - 11,475 11,475

Cash and cash equivalents - - - 191,693 191,693

Outside Vietnam

Cash and cash equivalents - - - 354,987 354,987

Total assets 3,387,126 22,670,597 5,442,248 728,100 32,228,071

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2010

Commercial Mixed-use Infrastructure

Cash and

others

Total

Vietnam EUR EUR EUR EUR EUR

Net changes in fair value of

financial assets at fair value

through profit or loss

321,521 1,247,577 (2,605,094) - (1,035,996)

Foreign exchange gain 42,401 289,735 20,157 - 352,293

Financial income - Dividend

- 105,956 - - 105,956

income

Other income - - - 118,077 118,077

Total 363,922 1,643,268 (2,584,937) 118,077 (459,670)

Administration expenses - - - - (1,145,211)

Financial income-Interest income - - - - 623,530

Foreign exchange gain - - - - 351,624

Net loss for the year - - - - (629,727)

Annual report

2010 35


Notes to the Consolidated Financial Statements

5. Segment reporting (continued)

In comparison with the last year end

Consolidated Statement of Financial Position

31 December 2009

Commercial Mixed-use Infrastructure

Cash and

others

Total

EUR EUR EUR EUR EUR

Total assets

Vietnam

Financial assets at fair value

through profit or loss

3,023,203 14,051,095 4,168,211 - 21,242,509

Investment property - 2,070,765 - - 2,070,765

Trade and other receivables - - - 261,520 261,520

Other current assets - - - 8,975,823 8,975,823

Cash and cash equivalents - - - 169,960 169,960

Outside Vietnam

Cash and cash equivalents - - - 664,636 664,636

Total assets 3,023,203 16,121,860 4,168,211 10,071,939 33,385,213

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2009

Vietnam

Net changes in fair value of

financial assets at fair value

through profit or loss

Commercial Mixed-use Infrastructure Cash and

others

Total

EUR EUR EUR EUR EUR

(176,744) 3,501,541 71,084 - 3,395,881

Foreign exchange gain/(losses) (287,193) 122,516 (412,887) - (577,564)

Financial income - Dividend

income

- 294,433 - - 294,433

Total (463,937) 3,918,490 (341,803) - 3,112,750

Administration expenses - - - - (846,852)

Financial income-Interest income - - - - 1,415,039

Foreign exchange losses - - - - (103,014)

Other expenses - - - - (517,949)

Net profit for the year - - - - 3,059,974

36


Notes to the Consolidated Financial Statements

6. Comparative gures

Certain gures in the 2009 comparative consolidated nancial statements have been reclassi ed to conform with the

current year’s presentation.

7.Investment in Subsidiaries

Name

Place of

Nominal value of

Percentage

Acquisition cost

Principal

incorporation/

registered capital

interest held by

activities

operations

the Group as of

31 Dec 10

AC Housing

Development (*)

Cayman Islands USD6,500,500 100 USD6,500,500 Property

investment

Viet Phat Hung (**) Vietnam VND 6,300,000,000 100 VND 6,919,000,000 Property

investment

(*) On 9 February 2010, the Group decided to sell 4,693,000 shares of AC Housing Development (according to the share

repurchase programme of AC Housing Development) with price of USD1.22 per share and have already received all the

money from this sale during the year.

(**) The Group acquired 100% of the equity instrument of Viet Phat Hung on 4 December 2009 for EUR 261,469. This amount

was fully settled in 2010.

8. Investment property

31 December 2010 31 December 2009

EUR

EUR

At 1 January 2,070,765 -

Investment property acquired through acquisition of Viet Phat Hung - 2,070,765

Investment property transferred to My Khe (2,070,765) -

At 31 December - 2,070,765

Investment property pertains to investment rights held by Viet Phat Hung over land lots located at Tho Quang Ward, Son Tra

District, Da Nang City. The Group sold such investment rights on 20 July 2010 for VND 57,786 million. The gain amounting

to VND 2,989 million (equivalent to EUR118,077) is presented as other income in the consolidated statement of

comprehensive income.

Annual report

2010

37


Notes to the Consolidated Financial Statements

9. Financial assets held at fair value through pro t or loss

Financial assets at fair value through profit or loss

31 December 2010

EUR

31 December 2009

EUR

Ordinary shares – listed 22,129,825 13,597,614

Ordinary shares – unlisted 9,370,146 7,644,895

Total financial assets at fair value through profit or loss 31,499,971 21,242,509

10. Other receivables

Related parties 31 December 2010

EUR

31 December 2009

EUR

Saigon Asset Management - 261,520

Receivables from Phu My Corporation (*) 108,655 -

Other receivables 61,290 -

169,945 261,520

(*) This represents the amount paid for the subscription of additional shares in Phu My Corporation. Due to unfavourable

response from other investors, the capital raising was discontinued. Phu My Corporation has committed in writing that it

will repay that money before 20 May 2011. Because of the short term nature of the receivable, its carrying value approximates

its fair value.

11. Other current assets

31 December 2010

EUR

31 December 2009

EUR

Cash in escrow - 7,827,075

Interest receivable - 1,045,129

Dividend receivable - 97,033

Others 11,475 6,586

11,475 8,975,823

The amount previously held in escrow pertaining to AC Housing’s participation in a co-operation contract was withdrawn

along with the related interest thereon because the Group decided to discontinue its participation during the year.

38


Notes to the Consolidated Financial Statements

12. Cash and cash equivalents

31 December 2010

EUR

31 December 2009

EUR

Cash in banks 546,680 284,596

Cash equivalents - 550,000

546,680 834,596

13. Share capital

31 December 2010 31 December 2009

Number of

shares

EUR

Number of

shares

EUR

Authorised:

Ordinary shares of EUR2.00 each 50,000,000 100,000,000 50,000,000 100,000,000

Issued and fully paid:

Opening balance 12,794,267 25,588,534 12,893,972 25,787,944

Shares repurchased during the year (147,216) (294,432) (99,705) (199,410)

Closing balance 12,647,051 25,294,102 12,794,267 25,588,534

In 2010, the Group repurchased 147,216 of its own shares (2009: 99,705shares), at an average price of EUR 1.3866 per share

(2009: EUR 1.2025 per share). These shares were subsequently cancelled.

14. Share premium

The details of this account are as shown below:

31 December 2010

EUR

31 December 2009

EUR

(Reclassified)

At 1 January 4,961,201 4,881,682

Share premium during the year 106,070 79,519

31 December 5,067,271 4,961,201

Annual report

2010 39


Notes to the Consolidated Financial Statements

The movements in this account pertain to the di

erence between the costs of repurchase of the Company’s shares

compared with its original proceeds upon issuance.

15. Other liabilities

31 December 2010

31 December 2009

EUR

EUR

Trade payables - 99,398

Management fees (see Note 21) 55,136 -

Accrued expenses 84,534 381,366

139,670 480,764

16. General and administration expenses

Year ended

Year ended

31 December 2010

31 December 2009

EUR

EUR

Administrator fees 61,811 58,590

Management fees (Note 21) 704,804 632,759

Director fees (Note 21) 45,689 23,391

General administration expenses 130,938 116,738

Other expenses 201,969 15,374

1,145,211 846,852

Administrator fees represent fees to Deutsche Bank Cayman, the Administrator of the Group, for administration services.

17. Finance income

Year ended

Year ended

31 December 2010

31 December 2009

EUR

EUR

Interest income from bank deposits 57,045 117,750

Dividend income 105,956 294,433

Interest income from cash held in escrow (see Note 11) 566,485 1,045,129

Financial income - 64,327

Interest income from loan - 187,833

Realised gain from foreign exchange 837,535 -

Unrealised gain from foreign exchange 455,223 -

2,022,244 1,709,472

40


Notes to the Consolidated Financial Statements

18. Finance expenses

Year ended

31 December 2010

EUR

Year ended

31 December 2009

EUR

Realised loss from foreign exchange difference 588,841 94,595

Unrealised loss from foreign exchange difference - 585,983

588,841 680,578

19. Corporate income tax

The Company is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there are no income, state,

corporation, capital gains or other taxes payable by the Company.

Although the Company is incorporated in the Cayman Islands where it is exempted from tax, the Company’s activities are

primarily focused on Vietnam. In accordance with the prevailing tax regulations in Vietnam, if an entity was treated as

having a permanent establishment, or as otherwise being engaged in a trade or business in Vietnam, the income

attributable to or e

ectively connected with such permanent establishment or trade or business may be subject to tax in

Vietnam. As at the date of this report the following information is uncertain:

The implementation and enforcement of tax regulations in Vietnam can vary depending on numerous factors, such as the

interpretation of the tax rules by the speci c tax authority involved. The administration of laws and regulations by the local

or provincial tax departments may be subject to considerable discretion, and in many areas, the legal framework is vague,

contradictory and subject to con icting interpretation. The Directors believe that it is unlikely that the Company

incorporated in the Cayman Islands will be exposed to tax liabilities in Vietnam, and in the worst case, if tax is imposed on

income arising in Vietnam it will not be applied retrospectively.

The acquired subsidiary, Viet Phat Hung, is incorporated in Vietnam and is therefore subject to taxation in Vietnam.

However, during the year ended 31 December 2010 this entity was loss making. Therefore, no income tax was incurred in

2010.

20. Earnings per share

(a)

Basic

Basic earnings per share is calculated by dividing the pro

t (loss) attributable to shareholders of the Group by the weighted

average number of ordinary shares outstanding during the year.

Annual report

2010 41


Notes to the Consolidated Financial Statements

31 December 2010

EUR

31 December 2009

EUR

Earnings attributable to equity holders of the Company (629,727) 3,059,974

Weighted average number of ordinary shares issued 12,652,786 12,893,972

Basic earnings per share (EUR per share) (0.05) 0.24

(b) Diluted

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. The Group has no category of potentially dilutive ordinary

shares. Therefore, diluted earnings per share is equal to basic earnings per share.

(c) Net asset value per share

Net asset value (NAV) per share is calculated by the dividing the net asset value attributable to ordinary shareholders of the

Company by the number of outstanding ordinary shares as at the end of the reporting period. Net asset value is determined

as total assets less total liabilities and non-controlling interest.

21. Related party transactions

Management fees

The Group is managed by Saigon Asset Management (the “Investment Manager”), a company which was formed under the

Law of the Cayman Islands. Under the Investment Management Agreement dated 1 October 2007 between the Group and

Investment Manager (the “Management Agreement”), the Investment Manager is entitled to receive a management fee

based on the Net Asset Value of the Group, payable monthly in arrears, at an annual rate of 2%.

Total management fees for the year amounted to EUR704,804 (2009: EUR632,759). As at the reporting date, the unpaid

management fees amounts to EUR55,136.

Performance fees

In accordance with the Management Agreement, the Investment Manager is also entitled to a performance fee equivalent

to 20% of the realised returns over an annualised compounding hurdle rate of 8%.

Total performance fee is nil for the year because the Group’s performance did not meet the above requirement.

Directors’ fees

The aggregate directors’ fees payable to the Directors of the Group for the current year amounts to EUR45,689

(2009:EUR23,391).

42


Notes to the Consolidated Financial Statements

22. Risk management objectives and policies

The Group invests in equity instruments and property projects with the objective of achieving medium to long-term capital

appreciation and providing investors with an attractive level of investment income from dividends.

The Group is exposed to a variety of

nancial risks: market risk (including currency risk, interest rate risk, and price risk);

credit risk; and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of

nancial

markets and seeks to minimise potential adverse e

ects on the Group’s nancial performance. The Group’s risk management

is coordinated by its Investment Manager who manages the distribution of the assets to achieve the investment objectives.

The most signi cant nancial risks the Group is exposed to are described below:

Foreign currency risk

The Group invests in

nancial instruments and enters into transactions denominated in currencies other than its its

functional currencies. Consequently, the Group is exposed to risks that the exchange rate of its currency relative to other

currencies may change and have an adverse e

ect on the value of the Group’s assets or liabilities denominated in currencies

other than Euro.

The Group may enter into arrangements to hedge currency risks if such arrangements become desirable and practicable in

the future in the interest of e

cient portfolio management.

The Group’s exposure to uctuations in foreign currency exchange rates at the reporting date were as follows:

Short-term exposure

Long-term exposure

VND USD USD EUR

EUR EUR EUR EUR

31 December 2010

Financial assets 24,252,128 7,417,788 - -

Net exposure 24,252,128 7,417,788 - -

31 December 2009

Financial assets 19,959,178 12,753,095 - -

Net exposure 19,959,178 12,753,095 - -

Sensitivity analysis to a reasonably possible change in exchange rates

A 5% weakening of the VND against EUR at the end of the year ended 31 December 2010 and 31 December 2009 would have

impacted net loss of the Group’s equity by the amounts shown below. This percentage has been determined based on the

average market volatility in exchange rates in the previous twelve months. This analysis assumes that all other variables

remain constant.

Annual report

2010 43


Notes to the Consolidated Financial Statements

31 December 2010

Loss (net of taxation)

EUR

31 December 2009

Loss (net of taxation)

EUR

Devaluation of the Vietnamese Dong (1,212,606) (997,959)

A 5% strengthening of the VND against EUR would have had the equal but opposite e

ect to the amount shown above, on

the basis that all other variables remain constant.

Price risk sensitivity

Price risk is the risk that the value of the instrument will uctuate as a result of changes in market prices, whether caused by

factors speci c to an individual investment, its issuer or all factors a

ecting all instruments traded in the market. As the

majority of the Group's nancial instruments are carried at fair value with fair value changes recognised in the consolidated

statement of comprehensive income, all changes in market conditions will directly a

ect net investment income.

The Group’s unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of

the investment securities. The Investment Manager provides the Group with investment recommendations that are consistent

with the Group’s objectives. The Investment Manager’s recommendations are approved by the Investment Committee of

the Investment Manager before investment decisions are implemented.

All securities investments present a risk of loss of capital. The Investment Manager manages this risk through the careful

selection of securities and other nancial instruments within speci ed limits and by holding a diversi ed portfolio of listed

and unlisted instruments. In addition, the performance of investments held by the Group is monitored by the Investment

Manager and reviewed by the Board of Directors on a weekly basis.

The Group invests in listed and unlisted equity securities and is exposed to market price risk of these securities. If the prices

of the securities would have increased or decreased by 15%, the impact on Statement of Comprehensive Income would have

increased or decreased by EUR4.7 million (2009: EUR 3.2 million).

Cash

ow and fair value interest rate risk sensitivity

The Group’s exposure to interest rate risk is related to interest bearing nancial assets and nancial liabilities. Cash and cash

equivalents and bank deposits are subject to interest at

xed rates. They are exposed to fair value changes due to interest

rate changes. The Group currently has no nancial liabilities with oating interest rates. As a result, the Group has limited

exposure to cash ow and interest rate risk.

Credit risk analysis

Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Impairment provisions are provided

for losses that have been incurred by the Group at the reporting date.

31 December 2010

EUR

31 December 2009

EUR

Classes of financial assets – carrying amounts:

Ordinary shares – listed and unlisted 31,499,971 21,242,509

Other receivables 169,945 261,520

Other current assets 11,475 8,975,823

Cash and cash equivalents 546,680 834,596

44


Notes to the Consolidated Financial Statements

All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is

considered low, since any buy order cannot be accepted unless and until the buyer’s broker has veri

ed the payment ability

and the cash for the settlement will be blocked by the custodian as soon as the transaction is matched and concluded.

The carrying amount of other receivables, other current assets and cash and cash equivalents represent the Group's

maximum exposure to credit risk in relation to its

nancial assets.

The Group's Management considers that all the above

nancial assets that are not impaired or past due for each of the

reporting dates under review are of good credit quality.

The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high

quality external credit ratings.

The Group has no other significant concentrations of credit risk.

In accordance with the Group’s policy, the Investment Manager continuously monitors the Group’s credit position on a daily

and monthly basis.

Liquidity risk analysis

The Group invests in both listed securities that are traded in active markets and unlisted securities that are not actively

traded.

The Group’s listed securities are considered to be readily realisable, as they are mainly listed on the Vietnam Stock Exchange.

Unlisted securities, which are not traded in an organised public market, may be illiquid. As a result, the Group may not be

able to quickly liquidate its investments in these instruments at an amount close to fair value in order to respond to its

liquidity requirements or to other speci c events such as deterioration in the creditworthiness of a particular issuer.

However, the Group has the ability to borrow in the short-term to ensure su

cient cash is available for any settlements due.

Capital management

The Group’s capital management objectives are:

The Group considers the capital to be managed as equal to the net assets attributable to the holders of ordinary shares. The

Group has engaged the Investment Manager to allocate the net assets in such a way so as to generate investment returns

that are commensurate with the investment objectives outlined in the Company’s Placing Memorandum.

23. Fair value hierarchy

The Group adopted the amendments to IFRS 7 Improving Disclosures about Financial Instruments e

ective from 1 January

2009. These amendments require the Group to present certain information about nancial instruments measured at fair

value in the Consolidated Statement of Financial Position.

Annual report

2010 45


Notes to the Consolidated Financial Statements

The following table presents nancial assets and liabilities measured at fair value in the Consolidated Statement of Financial

Position in accordance with the fair value hierarchy: This hierarchy groups

based on the signi cance of inputs used in measuring the fair value of the

nancial assets and liabilities into three levels

nancial assets and liabilities. The fair value

hierarchy has the following levels:

Level 1: quoted prices in active markets for identical assets or liabilities;

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 asset or liability that are not based on observable market data (unobservable inputs).

The level within which the nancial asset or liability is classi ed is determined based on the lowest level of signi cant input

to the fair value measurement.

The nancial assets and liabilities measured at fair value in the statement of nancial position are grouped into the fair value

hierarchy as follows:

Level 1 Level 2 Level 3 Total

EUR EUR EUR EUR

Assets

Financial assets at fair value through profit or loss 22,129,825 1,614,086 7,756,060 31,499,971

Financial assets in Vietnam

Ordinary share – listed 22,129,825 - - 22,129,825

Ordinary share – unlisted - 1,614,086 7,756,060 9,370,146

Liabilities - - -

As at 31 December 2010 22,129,825 1,614,086 7,756,060 31,499,971

-

Level 1 Level 2 Level 3 Total

EUR EUR EUR EUR

Assets

Financial assets at fair value through profit or loss 13,597,615 4,168,210 3,476,684 21,242,509

Financial assets in Vietnam

Ordinary shares – listed 13,597,615 - - 13,597,615

Ordinary shares – unlisted - 4,168,210 3,476,684 7,644,894

Liabilities - - -

As at 31 December 2009 13,597,615 4,168,210 3,476,684 21,242,509

-

46


Notes to the Consolidated Financial Statements

24. Subsequent events

As of 31 March 2011, the aggregate fair value of the Group’s investments in securities has decreased to EUR25,660,010 from

the aggregate fair value of EUR31,499,971 as of 31 December 2010. The decrease was mainly due to the decline of share

price of listed shares in Vietnam stock markets at 31 March 2011 compared with the share price as of 31 December 2010 and

the weakening of the USD and the VND against the EUR as of 31 March 2011. The details are as follows:

31 December

2010

31 March 2011 Movement Total

Foreign

Price exchange loss

EUR EUR EUR EUR EUR

Financial assets at fair value

through profit or loss:

Ordinary shares – listed 22,129,825 17,401,069 (2,588,378) (2,140,378) (4,728,756)

Ordinary shares – unlisted 9,370,146 8,258,941 (7,289) (1,103,916) (1,111,205)

31,499,971 25,660,010 (2,595,667) (3,244,294) (5,839,961)

25. Authorisation of consolidated nancial statements

The consolidated nancial statements were authorised for issue by the Directors on 09 May 2011

Annual report

2010 47


Directors

Lee G. Lam

Kathryn Vagneur

Howard Golden

Louis Nguyen

Investment Manager

Saigon Asset Management Corporation

TMS Building 12th Floor

172 Hai Ba Trung Street

District 1, HCMC, Vietnam

Registered Office

C/o Deutsche Bank (Cayman) Limited

Boundary Hall,

Cricket Square,

P.O. Box 1984,

Grand Cayman KY1-1104

Cayman Islands

Legal Adviser to the Company

as to Cayman Law

Appleby

Clifton house, Fort Street

PO Box 190 George Town

Grand Cayman KY1-1104, Cayman Islands

Legal Adviser to the Company as to

US and German Law

Reed Smith LLP

599 Lexington Revenue, 29th Floor

New York, New York 10022

USA

Auditors

Grant Thornton (Vietnam) Company Ltd.

28th Floor Saigon Trade Center

37 Ton Duc Thang Street, District 1

Ho Chi Minh City

Vietnam

Administrator

Deutsche Bank (Cayman) Limited

Boundary Hall,

Cricket Square,

P.O. Box 1984,

Grand Cayman KY1-1104

Cayman Islands

Custodian

Deutsche Bank AG, Ho Chi Minh City Branch

Floor 14, Saigon Center

65 Le Loi Boulevard, District 1

Ho Chi Minh City

Vietnam

Saigon Asset Management

TMS Building, 12th Floor

172 Hai Ba Trung, District 1

Ho Chi Minh City, Vietnam

Tel: +84-8-5404 3488

Fax: +84-8-5404 3487

IR@saigonam.com

www.saigonam.com

Annual report

2010

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