ANNUAL REPORT 2009 · ANNUAL REPORT 2009 | 5 2009 2008 2007 2006 2005 2004 Fund size (VND billion)...

ANNUAL REPORT 2009VIETNAM SECURITIES INVESTMENT FUND

VF1

2 | VIETNAM SECURITIES INVESTMENT FUND (VF1)

ANNUAL REPORT 2009 | 3

CONTENTS

Abbreviations 4

Financial Highlights 5

Message from the Chairman of the Board of Representatives 6

Message from CEO - VietFund Management company 7

Fund Activities 9NAV Performance 10

Investment Portfolio 11

Investments 12

Divestments 14

Operational Results 16

Top Holdings 19

Board of Representatives Activities 31BOR Profile 32

2009 BOR Activities 34

VietFund Management 36Overview 37

Products - Services 38

Corporate Governance 40

HR development 41

Investor Care Activities 42

VFM’s events and activities 44

Financial Statement 47


ABBREVIATIONS

Annual Report AR

Board of Representatives BOR

Chief Executive Officer CEO

Earning per share EPS

Hanoi Stock Exchange HNX

Hochiminh Stock Exchange HOSE

Investor Relations IR

Joint Stock Company JSC

Net Asset Value NAV

Quarter Q

Return on Investment ROI

VietFund Management VFM

Vietnam Blue-chips Fund VF4 Investment Fund or VF4

Vietnam Dong VND

Vietnam Growth Investment Fund VF2 Fund or VF2

Vietnam Securities Investment Fund VF1 Investment Fund or VF1

Vietnam Acitve Investment Fund VFA


2009 2008 2007 2006 2005 2004

Fund size (VND billion) 1,000 1,000 1,000 500 300 300

NAV (VND billion) 2,479.9* 1,697.0 3,837.1 1,564.1 381.6 304.5

NAV/unit (VND) 24,799* 16,970 38,371 31,281 12,718 10,158

52-week NAV/unit high (VND) 29,158 37,569 52,041 33,552 12,850 10,158

52-week NAV/unit low (VND) 15,423 16,313 33,042 12,957 10,121 10,000

Expenses (%) 2.15 1.9 2.3 14.0 4.0 1.5

Portfolio turnover ratio (%) 63.1 17.9 19.4 45.7 51.5 53.7

Year – to – date growth (%) 53.1* (52.6) 28.1 157.8 27.7 1.6

VN-Index 56.8 (66.0) 23.3 144.5 28.5 (8.5)

Since – Inception growth (%) 159.8 81.7 300.7 227.8 29.7 1.6

VN-Index 89.1 20.7 254.4 187.4 17.6 (8.5)

1 year 2 years 3 years 4 years 5 years Since inception (20 May 2004)

Annual cumulative growth (%)

NAV 53.1* (32.3) (16.9) 104.3 155.8 159.8

VN-Index 56.8 (46.6) (34.2) 60.9 106.8 89.1

Annualized growth (%)

NAV 19.3* 14.5 50.1 63.4 20.1 3.9

VN-Index 12.5 4.4 44.8 54.8 12.1 (19.2)

(*) Exclude 1st dividend of VND 1,200 paid in 30th December 2009.

FINANCIAL HIGHLIGHTS

“ VF1 COURAGEOUSLY DISBURSED STRONGLY IN QUARTER I, WHEN THE VN-INDEX REACHED ITS LOWEST POINT IN FEBRUARY, AND EARLY IN QUARTER II OF 2009 IN ORDER TO POSITION FOR ROBUST GROWTH IN THE POST-CRISIS PERIOD. VF1 APPLIED A DYNAMIC INVESTMENT STRATEGY IN ITS TRADING ACTIVITIES ON THE BOURSE IN ORDER TO INCREASE THE CAPITAL TURNOVER RATE AND TAKE ADVANTAGE OF STRONG MARKET VOLATILITY. “

On behalf of the Board of Representatives, I thank our investors and investment partners for your unwavering trust, confidence and support, and I thank the Ministry of Finance and the State Securities Commission for their enthusiastic support throughout these recent trying times. At the same time, I wish to thank the management and staff of VFM for their tireless efforts in managing the VF1 Fund, for steering it through the financial tribulations of 2009 and achieving a satisfactory result. I wish all VF1 investors the greatest success and strong progress.

My sincerest thanks,

NGUYEN THANH HUNGChairman of Representative

Dear Investors,

With a dynamic strategy to increase the value of the Fund’s investments in the period following the economic crisis which began in 2008, VF1 has fearlessly and flexibly disbursed investments and enhanced its share trading operations aimed at increasing the capital turnover rate and seizing on market fluctuations. 2009 disbursements reached VND 1,425.2 billion, corresponding to 2.9 times that of 2008 and 1.1 times total disbursement value for the year. In parallel with disbursements, VF1 actively carried out divestments to realize profits and restructure the portfolio, and to convert shares in the portfolio. At the end of 2009, VF1 achieved a promising result with the Fund’s net asset value of VND2,599.9 billion, increasing 53.1% compared to the beginning of the year.

In the face of abnormal and unpredictable market fluctuations, conflicting information on post-crisis market recovery and fierce market competition, the tireless efforts of the Board of Management, the Investment Committee and the Board of Representatives, together with the support and sincere contributions of our investors has achieved this outcome and the Fund has come through strong during this period of tribulation.

The Vietnamese economy is still recovering from the general economic crisis and 2010 is shaping up to be a promising year. Therefore, the Board of Representatives will continue to take advantage of market growth opportunities and place priority on disbursements into a number of sectors set to benefit from the global economic recovery. These include Energy, Real Estate and Food & Beverages sectors, and the nation’s important hydro-electric construction sector. At the same time, the Fund will increase the proportion of listed shares and reduce the number of OTC shares with the aim of reflecting market value and reducing the discount between NAV and the trading price.

Moreover, the VF4 and VF1 Funds were the only two funds on the market to make a significant dividend payment to investors. Compared to the Fund’s trading price, the level of these dividends confirms their outstanding performance amongst the many stocks active on the market. This is not only a responsibility but also a gratitude of the leadership and management of VFM towards all of you, the people who have enthusiastically supported us throughout the recent crisis.

In 2010, the global and domestic economic situation will still see considerable instability. However, in general, the Vietnamese Stock Market will show numerous signs of improvement, mostly a result of the many positive factors from Government management of the macro economy. For the VF1 Investment Fund, it will continue to restructure its portfolio, divesting from small-cap stocks and concentrating on shares preparing to list, with the aim of creating a robust return to high growth for the entire portfolio.

The post-crisis period will see fierce competition, so VFM has pro-actively built a professional team, the fundamental materials, a state-of-the-art IT system and comprehensive database to prepare for this competition. Many plans have been prepared, like expanding the scale and types of the Fund’s new operations, comprising an open-ended provident fund, real estate fund, etc. All is ready for this new period, a new time aimed at targeting the development of the fund management sector in general and through that, specifically, to also confirm VFM’s leadership and strong position on the Vietnamese Stock Market.

Your sincerely,

TRAN THANH TANCEO

Dear Investors,

Firstly, on behalf of VietFund Management, I would like to express my sincere thanks to you for showing your confidence in VFM over the recent past.

Influenced by the 2008 financial crisis and global economic recession, 2009 saw the Vietnamese economy facing many difficulties and challenges. When world economies suffered negative growth, Vietnam was one of the few countries to record relatively high growth of 5.3%, with stable macro-economic fundamentals, welfare, social security, etc. being paramount. This economic result had its genesis in the Government’s undeniably clear sighted and timely management of its economic stimulus packages which proved effective right across the economy.

Seeing positive signs in the economy, the Vietnamese Stock Market had an eventful year, experiencing both highs and lows, as it established many record rises and falls for the first time since its establishment. For instance, after the VN-Index fell through its lowest bottom in four years, market volumes and trading values both increased from one trading session to the next. At its peak, total daily trading value reached more than VND 9,500 billion. However, in the final months of the year, in just 40 trading sessions, the VN-Index gave up 190 points in its sharpest decline for the previous four years. All of these movements show us that the Vietnamese Stock Market is in a period of strong and ongoing volatility and corrections, yet investment avenues are extremely attractive.

The VF1 Investment Fund also had a successful year, dynamically seizing market recovery momentum when the Fund’s overall net asset value (NAV) closely mirrored the movements of the VN-Index. In particular, the discount rate between trading price and NAV also narrowed on traditional investor care activities being conducted efficiently to assist investors in better understanding the Fund’s operating plans.

“THE VF1 INVESTMENT FUND HAD A SUCCESSFUL YEAR, DYNAMICALLY SEIZING MARKET RECOVERY MOMENTUM WHEN THE FUND’S OVERALL NET ASSET VALUE (NAV) CLOSELY MIRRORED THE MOVEMENTS OF THE VN-INDEX. IN PARTICULAR, THE DISCOUNT RATE BETWEEN TRADING PRICE AND NAV ALSO NARROWED ON TRADITIONAL INVESTOR CARE ACTIVITIES BEING CONDUCTED EFFICIENTLY TO ASSIST INVESTORS IN BETTER UNDERSTANDING THE FUND’S OPERATING PLANS. “

PERFORMANCE REPORT

Since inception NAV growth (%)

% NAV discount to market price

Cumulative growth since inception

At the end of 2009, VF1 NAV reached VND 2,599.9 billion (including dividend), corresponding to VND 25,999/fund certificate. Compared to the beginning of the year, VF1 NAV grew 53.1%, corresponding to 93.5% of VN-Index growth and 88.5% of HNX-Index growth.

At the beginning of 2009, Vietnamese and global stock markets continued to fall. VF1 increased its holdings of safe assets (bonds, cash) to over 40% NAV, restricting the Fund’s NAV decrease to less than the fall of the market. When the VN-Index rebounded strongly in Quarter II/09, VF1 conducted disbursements and reduced the proportion of cash. However, NAV growth underperformed the VN-Index because the Fund’s asset structure still maintained a minimum cash and bonds ratio.

Cumulatively since inception, VF1 NAV growth reached 147.8% (after deducting dividends paid from inception to the present), equivalent to 1.65 times the VN-Index’s 89.1% growth over the same period.

In 2009, VF1’s Fund certificates continued to trade below net asset value/Fund certificate (NAV/unit). However, the discount rate improved from 54.6% at the beginning of the year, down to 44.3% at year end 2009.


NAV REPORT


The VF1 portfolio consisted of 37 investments across 11 industries as of the 31st of December 2009, two more than the 31st of December 2008. Compared to 2008, the proportions of Real Estate, Banking & Finance and Materials & Resources increased

significantly, as a result of dynamic changes to the portfolio structure to suit market conditions. Finance & Banking, Real Estate, Food & Beverage and Materials & Mining continued to be the four core industries making up 68.2% NAV (2008: 45.2%).

ASSET ALLOCATION & PORTFOLIO STRUCTURE

Investment by industry

Asset allocation

Since VF1 took advantage of the market recovery in listed stocks during 2009, as well as many companies in the portfolio were listed,, VF1 strongly increased its proportion of listed shares from 34.8% (at 31 December 2008) to 63.5% (at 31 December 2009).

Because of that, the ratio of other assets was reduced, in comparison to the end of 2008. The cash ratio was maintained at 7.5% NAV in order to take advantage of new opportunities during 2010.


DISBURSEMENT

Disbursement scale

Disbursements in 2009 were conducted prudently in the face of the unfolding declines on the stock market of the world and Vietnam. For the first half of 2009, VF1 Fund’s disbursements reached VND 264.8 billion, representing 19% of total disbursement value and 20% of the value of disbursements into shares for the year. In the second half of the year the market showed a definite growth trend and also the macro-economic instability was low. Hence, VF1 invested strongly during that time, disbursing 81% of total disbursement value for 2009.

While disbursements in 2008 were concentrated on defensive industries like Food & Beverage, in 2009 62% of total disbursement value was concentrated in Real Estate, Banking & Finance and

Materials & Resources, industries with robust prospects when the market recovers.

Disbursement volumes increased rapidly in 2009, compared to 2008, causing VF1 to restructure the portfolio – increasing the proportion of listed stocks and concurrently changing the shares in the portfolio. In addition, VF1 trading activities aimed at finding price spreads strengthening the value of disbursements in 2009.

2009 disbursements reached VND 1,425.2 billion, corresponding to 2.9 times that of 2008 and 1.1 times total disbursement value in 2009.


2009 Cumulative disbursement structure

Since listed shares possess good qualities of high liquidity and transparency, 2009 disbursements concentrated on these at a ratio of 87.4%. Bonds comprised 7.0% of total disbursements to take advantage of the changes in basic interest rate throughout the year.

Disbursements were primarily focused on additional investments aimed at rebuilding the portfolio, disbursement value comprised 71.1% of total disbursement value for the year, with disbursements into new investments comprising just 28.9%.

Five industries, Food & Beverage, Materials & Mining, Infrastructure & Real Estate, Energy and Finance & Banking, made up 78.9% of 2009 disbursement value.


The outcome of the 2009 portfolio restructuring saw the divestment of 8 out of 35 companies by the 31st December 2008, at the same time investing in 10 new companies, bringing the total at the 31st of December 2009 to 37, of which 22 were listed and 15 were unlisted.

DIVESTMENT

Divestment scale

2009 Disbursements/Divestments by period

In parallel with disbursements, VF1 divested to realize profits, restructure the portfolio and convert shares focusing on small-caps and low-growth shares.

2009 divestments reached VND 1,365.3 billion, 2.5 times that of 2008, this was concentrated in the final six months of 2009 when Vietnam’s stock markets had their highest levels of growth. With the divestment value reached in 2009, the VF1 portfolio turnover ratio for the year reached 63.1%, 3.5 times the investment capital turnover of 2008 (17.9%).

In 2009 divestment value from small-cap and low-growth shares aimed to restructure the portfolio and share conversions reached VND 173.6 billion or 13%. Divestments targeting profit maximization for the portfolio in 2009 reached VND 1,191.7 billion or 87.3% of total divestment value.


2009 Cumulative divestment structure

Divestment by sectors

Poor liquidity continued to create problems for the divestment of unlisted shares in 2009, VF1 could only divest from two out of 18 companies in 2008. The divestment value of unlisted shares in 2009 reached just 6.1% (3.6 times that of 2008), 75.2% from listed shares and 18.7% from bonds. Bond divestments in 2009 were made in the form of bond yield trading spreads.

VF1 fully divested from small-cap and low-growth shares in non-growth industries like Industrial goods, Pharmaceuticals, Healthcare services and Public utilities in 2009, with divestment value of these industries occupying 16.4% of total divestment value.

T r a d i n g w a s executed primarily i n a n u m b e r o f i n d u s t r i e s : I nfrastruc ture & Real Estate, Food & Beverage, Energy, Finance & Banking, Materials & Mining and Retail, with this trading resulting in reduced capital value of the shares a n d d e l i v e r i n g p r o f i t s t o t h e portfolio.

Infrastructure & R e a l E s t a t e divestment value achieved a high proportion of 32.1% for these shares, due to the rapid price (and profit) growth in this industry, creating profits for the Fund’s price s p r e a d t r a d i n g operations.


PARTICULARS 2009 2008 2007

Realized gain/loss 226.5 (233.4) 352.8

Unrealized gain/loss 648.7 (1,868.1) 383.8

Dividends & interest 61.8 98.5 31.5

Profit/loss from investments 937.0 (2,003.0) 774.1Bank interest 16.9 35.4 39.2

Expenses 51.0 52.6 63.4

Net profit 902.9 (2,020.2) 749.9

In 2009, realized profits from selling assets were VND 226.5 billion, primarily from the divestment of small-cap shares and from capital value trading changes in portfolio shares. Under the influence of a

rising trend, a crucial trend on Vietnam’s stock markets in 2009, unrealized profits for the year reached VND 648.7 billion, returning a net profit of VND 902.9 billion.

Net profit

Return on Invesment (ROI)

On the 31st of December 2009, total value of shares in the portfolio comprised 82.7% NAV and recorded an increase of 83.0%, 26.2% higher than the VN-Index increase of 56.8%.

Real Estate (24.9% NAV) and Finance & Banking (18.7% NAV) occupied the largest proportion of the portfolio, with growth of 82.6% and 192.1% respectively, outperforming the market by 47.8% and 125.2% respectively, contributing 66.8% of total profits from the VF1 Fund’s investment operations. Proportionally, Materials & Resources ranked 3rd in the portfolio (15.3% NAV), underperforming market growth but with a spread of 9.6%. The remaining industries occupied small proportions and did not significantly impact the portfolio.

OPERATIONAL RESULTS


Profit structure by sectors

In 2008, Banking and Real Estate were the two sectors contributed to the portfolio’s loss (27.8% and 26.8% respectively).

However, they create 66.8% to the portfolio’s profit in 2009.

TOP HOLDINGS

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Details 2009(*) 2008

Market capitalization (VND billion)

28,990.45 17,796.28

Total assets (VND billion) 172,113.44 105,306.13

Profit after tax (VND billion) 2,195.50 2,210.68

Loan/Deposit ratio (%) 54.20 53.89

ROE (%) 21.75 28.46

EPS growth (%) (1.67) 5.30

P/E (x) 10.88 10.70

P/B (x) 3.00 3.00

Dividend yield (%) 0.40 8.90

(*) Unaudited figures

Asia Commercial BankVietnam’s leading retail bank

• Asia Commercial Joint Stock Bank (ACB) has enjoyed 16 years of development and is currently aiming to become Vietnam’s leading financial services institutions by 2015.

• In 2009, ACB invested strongly in its branch network, with 244 branches and transaction offices offering more than 200 products and services.

• The bank grew exponentially during 2004-2008, with total asset growth’s soaring 71% while loans and deposits leapt 59% on average. Pre-tax profit growth was almost 11 times that of 2004. ACB’s profit growth averaged 2-3 times that of the entire Vietnamese banking sector.

• In 2009, ACB received more Best Bank awards from international reviewers like Asiamoney, FinanceAsia, Euromoney, Global Finance, The Asset and The Banker than any other Vietnamese banks.

• Vietnam has enjoyed quite high and stable growth rates in recent years. With 2009 seen as the “depth of the crisis”, Vietnam’s GDP growth still outperformed the expectations of many experts, reaching 5.32%. The Government has forecast 6.5% GDP growth for 2010. The finance–banking industry is the impetus to strengthen growth and at the same time can benefit itself from the impact it makes toward the economy.

• Banking services in Vietnam are at an early stage odevelopment. With over 250 branches nationwide, ACB will have many more retail banking advantages over other commercial banks.

• Asia Commercial Bank currently has one of the highest and most stable growth rates in the banking industry, with the highest total assets of the commercial joint stock banks and 5th overall in Vietnam’s banking sector (only behind the 4 state-owned commercial banks).

• 2010 is seen as the year ACB will improve its internal competitiveness capacity, aimed at waiting for opportunities when the economy fully recovers. With the vision of “One of Vietnam’s three leading financial corporations, operating effectively in the core businesses of commercial and investment banking”.

OUTLOOK

ACB share price movements in 2009

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VNM (left column) VNI (right column)


Details 2009 (*) 2008


26,291.35 14,547.88

Turnover (VND billion) 10,425.40 8,208.98


Net profit margin (%) 38.37 31.65

ROE (%) 41.51 28.12

EPS growth (%) (15.47) 23.74

P/E (x) 12.44 10.52

P/B (x) 4.77 2.82


(*) VFM Estimate

Vietnam Dairy Products JSC - VinamilkVietnam’s leading milk producer

• Leads the milk processing and nutritional dairy products industry with more than 200 product lines.

• Products are divided into four principal groups: liquid milk, condensed milk, powdered milk and yoghurt, with the company holding a superior advantage over rivals in terms of scale and production capacity.

• Vinamilk commands 37% of the domestic liquid milk market, while dominating the condensed milk and yoghurt markets with 79% and 90% market share respectively.

• The company fully conforms with stringent food safety and hygiene standards.

• A leading company with strict food safety hygiene requirements together with quality products which have proven themselves with consumers over many years. Strong financial potential and bold marketing strategies will assist Vinamilk’s growth to be rapid and sustainable in the future.

• List on the Singapore Stock Exchange (SGX) when conditions are favorable.

• Focus on core business sectors aimed at building its brands and the Vinamilk name strongly in Vietnam as well as the region.

OUTLOOK

Vinamilk share price movements in 2009

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SJS (left column) VNI (right column)


Details 2009(*) 2008


8,000.00 2,160.00

Turnover (VND billion) 1,141.25 314.15

Profit after tax (VND billion) 653.20 86.39


ROE (%) 44.96 7.25

EPS growth (%) 207.57 (75.96)

P/E (x) 12.04 25.00

P/B (x) 4.38 1.94


(*) VFM Estimate

Song Da Urban & Industrial Zone Investment and Development JSC (SJS)Leading real estate company in the North

• Sudico is a leading real estate company in Vietnam, especially in Northern provinces, with a good brand name and a large land bank. The company’s core business is developing and trading real estate projects. Potential SJS projects are the South An Khanh (250ha), Van Khe (12ha) and Tien Xuan (1,400 ha).

• In 2009, the undergoing South An Khanh project brought about an significantly extra profit for the company as compared to 2008. With abundant land remaining for the South An Khanh project and the start of construction of high-rise apartment projects, it is expected that revenue and profit will increase in the future as large demand for real estate in Northern provinces of Vietnam remain untapped.

OUTLOOK

SJS share price movements in 2009

• As population income is on the rise, demand for high quality apartments and villas will increase accordingly.

• The planning and development of residential zones are gaining more attention from the State and local authorities. Ha Tay and a part of Hoa Binh province have been merged into Hanoi, which may trigger a land price increase in those areas.

• Possessing a large land bank and a professional staff pool, the company has the capacity to grow and strengthen its brand name as a leading real estate company in Vietnam.

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HAG(left column) VNI (right column)


Details 2009(*) 2008


21,056.35 11,328.31


Profit after tax (VND billion) 1,257.62 765.34


ROE (%) 29.62 21.41

EPS growth (%) 62.58 (18.58)

P/E (x) 13.86 13.36

P/B (x) 4.44 3.74


(*) Estimated figures

Hoang Anh Gia Lai JSCReal estate company with the largest capitalization on HOSE

• Hoang Anh Gia Lai Joint Stock Company is a leading private corporation in Vietnam, specializing in developing and trading real estate, furniture, granite, rubber, hydroelectric power plants and mineral exploitation. In addition, the company is also expanding its rubber and minerals operations to Cambodia and Laos.

• Hoang Anh Gia Lai is one of the top 10 companies having the largest market capitalization on Vietnam’s Stock market with more than VND 21 trillion, making up to 4.23% of the whole HCMC Stock Exchange market capitalization.

• The company currently owns 26 real estate projects with a total area of 2.5 million m2; 31,000ha for rubber plantation with 12,000ha under plantation; 13 hydro-electricity plants with the total capacity of 420MW; iron mines with reserves up to 30 million tons; and many hotels and resorts nationwide.

• Hoang Anh Gia Lai is a well–known brand name especially in construction and trading apartments. Along with its strong financial sources and large land bank, Hoang Anh Gia Lai has advantages in price competition compared to its competitors due to the reason that Hoang Anh Gia Lai can self provide construction materials such as timber or granite along with its own construction force which helps lower the cost.

• The company possesses the rights to utilize hydroelectricity plants, iron mines and rubber plantations, which will bring long – term, stable revenues. In 2010, the company will begin to exploit 1 million tons of ore and produce about 42MW from 2 hydro-electricity plants, Daksrong 1 and 2. The company is also on the processing of planning rubber, completing the construction process of other hydro-electricity plants and exploiting iron mines.

OUTLOOK

HAG share price movements in 2009

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AGPPS


Details 2009(*) 2008


2,349.00 1,056.00




ROE (%) 37.79 33.85

EPS growth (%) 2.01 27.40

P/E (x) 10.66 10.87

P/B (x) 4.39 4.06


(*) VFM Estimate

An Giang Plant Protection JSC - AGPPSDistributor of high quality plant protection products (PPP) in Vietnam

OUTLOOK • One of only two exclusive distributors of Syngenta plant protection products (PPP) in Vietnam and Cambodia.

• A leading distributor of agricultural chemicals, holding more than 20% of the domestic market and continuing to successfully take market share from large competitors like Bayer, VFC, HAI and ADC.

• A prestigious brand and broad distribution network of 23 branches and almost 500 level one agents, who successfully expanded its distribution network in 2009.

• The Government’s agricultural stimulus will have a positive effect on the manufacture and export of agricultural products.

• Agricultural chemicals and materials (seed, fertilizer) continue to have enormous potential growth in an economy which relies heavily on agriculture and agricultural exports like Vietnam.

• Invest in developments that embrace the full agricultural value chain: expanding into fertilizer trading, agricultural services and consumer agricultural products.

• Expanding into seed distribution has enormous potential to leverage the company’s traditional customer base and existing distribution network.

• Diversifying to export into the Cambodian market by establishing a representative office in this country.

AGPPP share price movements in 2009

AN GIANG

CTY

CP BAO VE THUCVAT


Details 2009(*) 2008


2,328.80 547.76

Total assets (VND billion) 986.47 371.31



ROE (%) 64.97 23.83

EPS growth (%) 550.56 (65.85)

P/E (x) 5.79 8.86

P/B (x) 3.82 2.13


(*) VFM EstimateNTL share price movements in 2009

Tu Liem Urban Development JSC (NTL)Over expected result in 2009

• This company is the owner of large, new residential area investment projects in Dich Vong (Cau Giay) with 22ha, the Tram Troi (Ha Tay) residential area of 38ha and the Son Dong – Hoai Duc residential area of 109ha.

• The real estate situation in the Western part of Hanoi returned to activity in the second quarter of 2009 due to a stimulus plan of the Government in 2009 and the development plan for the area. Price in the Tram Troi area has increased from VND11 million /m2 to 16-17 million/m2. The company has successfully sold 6.7ha of low-rise land with a total value of over VND 850 billion. The company had a successful 2009 where profit after tax is expected to reach VND 400 billion.

• The company has approximately 10ha of the Tram Troi project remaining for sales in 2010 – 2013.

• The Hanoi real estate market over the long-term will continue to see excess and rising demand.

• The company’s projects are in favorable locations, particularly the projects in the Ha Tay and Tien Xuan (Hoa Binh) regions – now part of the expanded Hanoi city area.

• NTL’S projects are financially efficient thanks to the reasonable price of the land they purchased.

OUTLOOK

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VN INDEX (right column)Details 2009 (*) 2008


21,120.19 12,425.62


Profit after tax (VND billion) 1,083.10 711.01

Loan/Deposit ratio (%) 69.80 61.46

ROE (%) 8.21 5.54

EPS growth (%) 29.70 (43.40)

P/E (x) 19.50 20.75

P/B (x) 1.60 1.35

Dividend yield (%) 3.30 0

(*) VFM Estimate

Vietnam Export Import Commercial Joint Stock BankThe non-state-owned commercial joint stock bank with highest charter capital

OUTLOOK • Establishing in 1989, Vietnam Export Import Commercial Joint Stock Bank (Eximbank) is one of the first commercial banks in Vietnam. Eximbank currently has the highest charter capital among the non-state owned commercial banks.

• Headquartered in HCM City, Eximbank operates throughout the nation with one transaction office, 37 branches and 106 sub-branches in almost all provinces. In addition, Eximbank has established banking relationship with over 735 banks in 72 countries around the world.

• Eximbank’s operations have shown phenomenal growth over the past three years, where total asset growth rates reached 56%; capital deposits grew at 50%; loan growth by 45%; and turnover growth soared by 81%, especially after tax profit growth of 314% on average for the period 2005 - 2008.

• Vietnam has enjoyed quite high and stable growth rates in recent years with 2009 seen as the “depth of the crisis”. Vietnam’s GDP still grew “beyond the expectations” of many experts, reaching 5.32%. The Government has forecast 6.5% GDP growth for 2010. The banking and finance industry, an integral part of the economy, will fuel as well as benefit itself from the growth.

• Banking services in Vietnam are at an early stage of development with banking service penetration estimated at a mere 10% of the population, one of the lowest in the world. This nascent market offers considerable development opportunities for the retail banking business. In 2009, Eximbank increased its chartered capital from VND 7,220 billion to VND 8,800 billion and maintained its position as the highest charter capital non-state banks in Vietnam.

• With a large capital base, together with local and overseas strategic partners who are professional and large corporations, Eximbank has a golden opportunity to strengthen their financial capacity, improve technology and management to create a good base for a rapid and sustainable development in the future.

EIB share price movements in 2009


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DPM (left column) VNI (right column)

Details 2009 (*) 2008


12,920.00 13,110.00




ROE (%) 27.67 30.66

EPS growth (%) 1.98 4.20

P/E (x) 9.20 9.40

P/B (x) 2.30 2.70


(*) VFM Estimate

PetroVietnam General Fertilizer & Chemicals Company (DPM)Vietnam’s leading fertilizer manufacturer and distributor

OUTLOOK • The first company in Vietnam to apply technologies to manufacture fertilizer (urea) from natural gases in a closed process using European technology.

• Vietnam’s leading Urea manufacturer with annual production capacity of 740,000 tons/year. DPM provides 80% of domestic production and holds a 40% national market share for urea fertilizer.

• Revenues and profits increased exceptionally by 113% and 102% respectively in the 2005 – 2009 period. The period 2010 - 2015 is predicted to have a steady yield with an average annual growth of 13%.

• The Phu My Fertilizer plant expansion will increase production capacity to satisfy unmet demand for urea, raising output from 740,000 to 800,000 tons/year when it comes into opertation in 2011.

• Apart from its manufacturing role, DPM is enhancing its position as a leader in the fertilizer sector through a strategy of developing urea imports from overseas, creating a unique brand name for itself as well as growing its significance and domestic market share aimed at occupying approximately 60% of the domestic market.

• DPM’s strategy is to provide a stable source of high quality fertilizer to the domestic market. Aside from Ure, DPM’s production of NH3, CO2 and commercial electricity has contributed to its product diversification. The manufacture and consumption of new products like NPK and sulfuric acid help increasing potential growth for the company in the future.

DPM share price movements in 2009


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PVD (left column) VNI (right column)

Details 2009 (*) 2008


14,280.00 11,234.00




ROE (%) 27.31 44.14

EPS growth (%) (43.83) (47.17)

P/E (x) 14.22 7.99

P/B (x) 3.88 3.85


(*) VFM Estimate

Petro Vietnam Drilling and Well Services JSC (PVD)Leader in the oil & gas services sector – especially drilling services

OUTLOOK • A leader in drilling services and equipment leasing in Vietnam commanding more than 80% of the Vietnam equipment leasing market and approximately 10% market share in drilling services.

• Revenue and profit growth did not reach expectations during 2009 due to the economic climate. Despite this, PVD managed to grow in leaps and bounds. The company brought the PVD 2 and PVD 3 drilling platforms into operation in Quarter III/09, creating high potential growth for 2010. Revenue and profit growth for the period 2007-2009 averaged at 49.4% and 150.7% respectively.

• PVD is proactively developing a profound sector for expertise in drilling platform services in order to become a full-service solution provider in the drilling services.

• In the next 15 years, Vietnam will have approximately 900 terrestrial, continental shelf oil and gas exploration and production wells.

• Over the period 2008-2012, the world will need approximately 700 new drilling platforms. In Asia alone, drilling rig usage rates are currently at 90%. Over the same 2008-2012 period, the Southeast Asia region will need approximately 42 new jack-up platforms/year, with Vietnam requiring 8-10 drilling rigs per year.

• PVD’s target and long-term direction is to be Vietnam’s leading provider of drilling and well-related services. With this direction in mind, PVD has invested in a TAD semi-submersible rig with a total investment of USD 230 million in which PVD is investing 51% (both debt and equity) and the remaining 49% from other PVN partners. Contract (output) commitments of the East Sea JOC: 5 (five) years.

PVD share price movements in 2009


Details 2009 (*) 2008


1,831 603.5

Turnover (VND billion) 696.00 560.22



ROE (%) 11.14 9.59

EPS growth (%) 59.56 (59.27)

P/E (x) 15.08 24.07

P/B (x) 1.40 1.49


(*) Estimated figures

Large and high potential land bank

Investment - Trading Real Estate JSC

OUTLOOK • Investment – Trading Real Estate company (Intresco) has specialized in real estate investment and trading for almost 25 years. The company was equitized in January 2001 from a member company of Saigon General Real Estate Company with an initial charter capital of VND 25 billion. Intresco is currently listed on the Ho Chi Minh City stock market with a charter capital of VND 230 billion.

• The company’s core activities are residential housing construction and trading. Intresco specializes in developing real estate projects, primarily in residential, apartments and rental offices, for the average and middle income market segments.

• The company has developed almost 30 real estate projects with a total area of nearly 250ha in Districts 2, 3, 9, Nha Be and Binh Chanh.

• In the 2009 – 2013 period, Intresco will invest in and develop residential zone projects, office buildings – commercial centers, high-rise apartments and industrial zones with a total investment capital of over VND 9,700 billion. The company currently owns 280ha of residential development land, 700,000m2 of apartment-office floor space, 350ha of industrial zone land and 28,000m2 of land in central city zones. Intresco is also researching and establishing investments for many other potential projects.

• In 2010, Intresco will continue to operate the An Khang and Thinh Vuong buildings and the Da Phuoc and Long Thoi residential areas. Estimated 2010 revenue will reach VND 950 billion, with profit after tax of approximately VND 150 billion, growth of approximately 25% compared to 2009.

ITC share price movements in 2009

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ITC (left column) VNI (right column)


FUND BOARD AND BOARD ACTIVITIES

Vietnam Securities Investment Fund (VF1) continues its unity and strength, primarily thanks to the collective efforts of the Members of the Board of Representatives and their experience in other industry sectors, especially finance and banking. With expertise, professionalism and devotion to closely monitor the Fund’s operations, the Board of Representatives worked closely with the Board of Management and the Investment Committee to provide the best management to the Fund’s capital resources.

The Fund’s Board of Representatives consisted of seven active members throughout its two terms since 2004. However, Mr. Phan Dao Vu tendered his resignation from the Board on the 20th of April 2009 due to business affairs. Consequently, Mr. Nguyen Thanh Hung, Deputy Chairman, was appointed Chairman of the Board of Representatives pursuant to Decision No. 180.09/QĐ-BĐD/VF1 dated the 8th of June 2009. Thus, the VF1 Board of Representatives consists of the following six members:

FUND BOARD OF REPRESENTATIVES

MR. NGUYEN THANH HUNGChairman

MS. HUYNH QUE HADeputy Chairwoman

MR. PHAN MINH TUANMember

In a highly volatile market, the Board of Representatives was dynamic in monitoring all of the Fund’s operations. The members put forward their considerations and evaluations of the economic market conditions, financial markets, existing securities and mapped out the broad strategies and directions for the Fund. Closely monitoring market movements over time, the BOR together with the Board of Management set their priorities carefully, analyzing the asset allocation ratios of the portfolio, as well as activities in disbursement, divestments and evaluations of sector effectiveness. As a result, the decline in the Fund’s net asset value (NAV) was noticeably restricted during a period of strong market falls.

To assist the Fund’s Board’s of Representatives in obtaining a general overview of the macro economic situation and the latest updated market information, VFM organized a seminar on “Investment opportunities for Vietnamese enterprises after the crisis” featuring presentations and discussions with Dr. Tran Du Lich, Deputy Head of the National Assembly Delegation in HCMC, and Mr. John Hing Vong, Senior Advisor, Corporate Finance at Sacombank Group. At this seminar, business leaders shared their experiences as well as opportunities for their businesses in the face of the crisis.

MR. LE VAN PHUMember

MR. HOANG KIENMember

MR. DANG THAI NGUYENMember


BOARD OF REPRESENTATIVES ACTIVITIES IN 2009

On the 11th of February 2009, the Board of Representatives held its first meeting of 2009, primarily to approve the 2008 operations and directions, the Fund’s operational plan for the New Year, approve amendments to the Charter, prepare for the Annual Report and the Fund’s Annual General Meeting held on the 20th of March 2009. In addition, at this meeting VFM proposed taking advantage of interest rate volatility during the year to divest from a number of low interest bonds and all to buy bonds with greater interest. This was approved by the Board of Representatives with a ratio of bonds to cash of approximately 30% NAV.

On the 20th of April 2009, the Board of Representatives held its 28th meeting in HCMC. Through reports on the Fund’s operations during Quarter I/09, as well as macro economic considerations for 2009, the Board of Representatives unanimously approved the Fund’s strategies and directions for 2009 in general and Quarter II/09 as follows:

1. Construction of a portfolio of balanced investments;

2. Divest from small cap and low growth stocks, especially unlisted shares, and additional disbursements into shares to construct the portfolio;

3. Continue with disbursements aimed at completing the plan put forward for 2009; and

4. Conduct trades to reduce capital value and maximize profits for the portfolio.

In Quarter II/09, the VF1 Investment Fund stuck closely to the plan put forward by the Investment Committee and the Board of Representatives. With sensible accurately timed disbursements and divestments helped optimize profit when the market was very unstable.

28th BOR Meeting


At the end of Quarter II/09, at their meeting on the of 16th July 2009, the Board of Representatives received reports on the performance of the Fund’s disbursement and divestment operations. For three months (April to June 2009) the VF1 Investment Fund took advantage of opportunities from the rapid market recovery to raise net asset value and reduce the discount between the VF1 price and NAV from 51.7% to 44.5% at the end of May 2009. The Board of Representatives also agreed to restructure the membership of the Board of Representatives to a total number of six members, at the same time unanimously choosing PWC as the auditor for the Fund in 2009.

At their 30th meeting, held on the 15th October 2009, the Board of Representatives discussed a proposal from the Board of Management on dividend payment. The members were united in approving a provisional first dividend for 2009 at the level 12% of chartered capital (VND 1,200/fund certificate), which take effect on the

31st of December 2009. VFM was authorized to conduct the registration procedures and pay the 1st dividend of 2009 as well as carry out the planning and preparations for the Annual General Meeting and 2009 Annual Reports.

Calculated on the 30th of September 2009, the total value of investments into shares was 72.6% of VF1 NAV and recorded growth of 105.2%, 21.1% greater than the 84.1% growth of the VN-Index. Together with the Board of Management and Investment Committee, the Board of Representatives was also united in approving the Fund’s strategies and directions for Quarter IV/09 as follows: apply the portfolio structure and divest from small cap stocks into shares preparing to list in order to grow the portfolio and maintain appropriate ratios of cash.

30th BOR Meeting

VisionTo be the leading fund manager in Vietnam in assets under

management and investors’ satisfaction.

MissionTo create value in our investment process through teamwork,

innovation and adaptibility: Our team of professional conduct indepth research to build financial products and strategies that meets the financial needs of our clients.

PhilosophyOur philosophy is to deliver long term growth by consistently

apply a value investing philosophy in all market conditions and to every portfolio we manage. We believe that to maximize performance is a result of identifying and purchasing of securities trading at discounts to their true value. Our commitment is to exceed our client expectations, in terms of both performance and service. We are dedicated to deliver superior investment results to maintain a long term relationships with clients. By focusing on our core disciplines, responsibilities and client interests, we preserve the integrity of our investment process. Our client’s interests remain our top priority.

VIETFUND MANAGEMENT

VIETFUND MANAGEMENT

Overview Established in July 2003, VFM’s precursor was a joint venture between two large financial

organizations in the Vietnamese banking and fund management industry – Sacombank Group and Dragon Capital Group. VietFund Management (VFM) changed its legal status from a joint venture to a joint stock company in January 2009.

We are pioneers in the field of investment fund management in Vietnam, managing two closed-end listed funds and a member fund with the largest capital in Vietnam. In 2009, the Vietnam Active Investment Fund (VFA) - our third closed-end investment fund - plan to list on the HOSE in 2010. This brings VFM’s total assets under management to over VND 5,000 billion.

Our core business is to provide investment fund management and portfolio management services for domestic and overseas institutions and individuals. Our investment funds are in the form of public and member funds licensed by the State Securities Commission. The Fund’s assets are deposited, and closely supervised by a prestigious custodian bank. Also the fund’s are regularly audited by experienced audit firms, and periodic reports on the Fund’s operations are sent to investors. With experience and high-level expertise in the field of fund management, and in close cooperation with our investment partners, VFM delivers growth value to enterprises in the investment portfolio.

We provide diversified investment needs to all investors in the stock market, from 2010, we will expand the scale and types of new funds such as an open-ended supplementary provident fund and real estate fund, furthermore continueing contribute to the development of the fund management industry.

VFM applies risk management principles based on comprehensive coordination between all aspects of the research, investment, trading, accounting and information dissemination processes. The operation defines and resolves conflicts of interest in investment activities and the internal control processes of the company. We have concentrated important amount of time capital resources into a “fund-core” software system used specifically for fund management operations, transactions and interaction with investors. This system is also used in parallel with advanced training for our vibrant staff, the core of our overall development.


INVESTMENT FUND MANAGEMENT

PRODUCTS AND SERVICES

FUND MANAGEMENT IS THE CORE BUSINESS OF VFM, FOCUSING GREATLY ON SUSTAINABLE LONG-TERM PROFITS.

INVESTMENT PORTFOLIO MANAGEMENT SERVICESASIDE FROM DYNAMIC AND PROFESSIONAL FUND MANAGEMENT, VFM IS ALSO BUILDING ON ITS STANDARD PORTFOLIO PRODUCTS WITH THE AIM OF SATISFYING THE DESIRED INVESTMENT NEEDS OF PRIVATE AND INSTITUTIONAL INVESTORS IN THE POST-ECONOMIC CRISIS PERIOD.

Asset Management is a service which VFM designed specifically for organizations and high net worth individuals. With a specialized investment strategy required to pass through discussion, advice and analysis for each investment objective.

The investment strategy is actively directed towards making return on investment greater than the market average and the benchmark set by the investor. We actively seek out information on high-value investments and implement a trading strategy directed towards those investments. Attractive bonds and shares with high growth potential make up the bulk of the investment portfolio. However, market and economic situations are ever changing and

this will affect the attractiveness of these asset types. Therefore, changing structure of shares and bonds in the portfolio will help optimize results.

In addition, actions are also taken to integrate different investment analysis techniques comprising fundamental, technical and macro analysis aimed at identifying profit trends in the future.

The products of VFM have attracted participation from domesticand overseas investors through these funds:

• Vietnam Securities Investment Fund (VF1) – listed on the Ho Chi Minh City Stock Exchange since November 2004.

• Vietnam Growth Investment Fund (VF2) – a member fund established by large Vietnamese and international financial organizations.

• Vietnam Blue–chips Investment Fund (VF4) – listed on the Ho Chi Minh City Stock Exchange since June 2008.

In 2009 VFM actively improved and applied the best investment tools, aimed at not only increasing the effectiveness of existing products to survive the economic crisis brought on by 2008, but also to launch new products aimed at satisfying the expectations of investors.

At the end of 2009, the Vietnam Active Fund (VFA) with the initial mobilized capital of VND 300 billion, was officially licensed by the State Securities Commission to issue fund certificates to the public. The Fund’s goal and strategy is to return net profits by seizing the markets golden opportunities presented by the economic crisis and taking advantage of Vietnam’s Stock market growth trends by using the trend-following quantitative analysis investment methodology. Besides that, VFA will steadfastly preserve its capital when market movements are unfavorable. VFA has inherited the advantages of its predecessor funds, in particular an effective investor dividend strategy with at least 50% of annual realized return, VFA will be closing in March, 2010.


Investors are able to choose a portfolio from the following products, commensurate with their profit expectations and appetite for risk: • Maximum price growth of shares in the portfolio; • Price growth and profit; • Aimed at a balanced income between dividends and interest, with profits from an increase in share value; • Maximum capital security; • 100% bonds portfolio; and • Dynamic quantitative analysis portfolio. By entrusting your assets to our management, you can rest assured your portfolio will be managed pro-fessionally - leaving you more time for yourself.

VFA is the first public fund on the Vietnamese securities markets to apply the quantitative analysis method to direct its investment strategy. Quantitative analysis is a scientific combination of fundamental, technical and statistical analysis techniques. VFA uses artificial intelligence like quantitative analysis, which combines analysis and data management in a state-of-the-art computational system that identifies investment opportunities on the markets. These opportunities are defined by buy-sell orders and provide a suitable investment allocation strategy. The quantitative analysis model is based upon a computer system processing massive volumes of data, where investment decisions are not influenced by human sentiment or emotion.

VFA’s use of the quantitative analysis model on the Vietnamese markets not only introduces a new investment tool to Vietnam, but also contributes to an increasingly attractive and appetizing securities market.

In addition, VFM continues to introduce many other pre-eminent products which apply new and progressive investment models aimed at optimizing and diversifying investor’s capital resources.


VFM IS COMMITTED TO ENTERPRISE CONSULTANCY AND CORPORATE GOVERNANCE, AIMED AT IMPROVING THE VALUE OF THE INVESTMENTS WE MANAGE.

WITH A DYNAMIC AND EXPERIENCED CONSULTANCY TEAM, WE CONTINUALLY DELIVER THE BEST CONSULTING FOR ENTERPRISES, FOCUSING ON THE SPECIFIC TARGETS OF THE ENTERPRISE AND ITS CLIENTS.

• Create added value for the enterprises in the Fund portfolios VFM manages;• Establish effective management, introduce sources of capital and facilitate the sharing

of financial support information between members of VFM’s Investment community, the Funds VFM manages and partner companies where VFM has an interest; and

• Create investment opportunities, connections and facilitate the sharing of investment information within the VFM investor community.

TARGETS

VFM CONSULTANCY SERVICES1. Financial Advisory• Capital structuring;• Efficient use of capital resources; and• Financial restructuring.

2. Corporate Governance Consultancy• Corporate strategy and business development consultancy;• Effective corporate governance and Boards of Management;• Human resource management;• Organization of enterprises manufacturing operations; and• Support for investors/clients through topical workshops.

3. Financial Management Consulting• Mergers and acquisitions;• Business restructuring; and• Corporate project management.

Our consultancy team comprises of experts with many years of experience in the financial advisory field, they are totally committed to adding value to enterprises through the most professional and effective consultancy services.

VFM has and will continue, to focus on promoting its enterprise consultancy operations for clients and investors.

CORPORATE GOVERNANCE


EMPLOYMENT AND HR DEVELOPMENT ENVIRONMENT

VFM leadership training

SINCE BEING FOUNDED IN 2003 WE HAVE ACHIEVED AND MAINTAINED OUR POSITION AS VIETNAM’S PARAMOUNT FUND MANAGEMENT COMPANY WITH THE GREATEST VALUE OF TOTAL ASSETS UNDER MANAGEMENT AND WE ARE FOREVER PROVIDING THE MOST EFFECTIVE INVESTMENTS. VFM HAS ALWAYS BELIEVED THAT ONE OF THE DECISIVE FACTORS IN OUR SUCCESS IS OUR CAPACITY TO EMPLOY AND RETAIN PROFESSIONAL, DYNAMIC AND CREATIVE PEOPLE.

By employing the “right person for the right job”, with the aim of optimizing training and creating job satisfaction and employee retention, VFM always headhunts the right people – people with potential, integrity, a liking for business and an enjoyment for the work they do. We use efficient evaluations to employ staff, as well as identifying the latent potential of internal staff to have an adaptable training policy suitable for the future. VFM currently possesses a strong workforce of dynamic and professional financial experts.

To maintain and develop a skilled team, the highest ethical standards and professional approach to their work is always implemented. Staff is encouraged to tap into their own personal potential and financial savvy, while creating the conditions for greater in-depth professional training to improve soft-skills and the exchange of experiences. Each year, we conduct training courses on investment, finance, presentation skills, leadership and organize seminars to enhance expertise and psychology. Through

this we can fully understand and structure our human resources appropriately and effectively. VFM also encourages the importance of staff to be dynamic, creative, perceptive, and have independent problem solving skills to do their jobs well, which prepares them for greater responsibilities in the future.

Our company culture respects and values staff, promotes professionalism and camaraderie in the workplace, encourages information sharing and exchanges. We also volunteer in community and social development activities. Furthermore VFM is always consciously building a friendly, professional working environment with opportunities for study and advancement. With merit-based performance policies founded on the competence of each individual we can improve on the foundations already established.

We continuously upgrade equipment to meet the infrastructure demands to best serve professional work like planning. Standardized network models, implementation of solutions to enhance confidentiality, and core fund software systems function to manage the basic technology for opening funds. As well as that we always routinely check and enforce regulations on evaluating competence, work results and performance policies for staff and their families. We regularly schedule general activities like company trips, VFM family days or monthly collective activities for staff, families and the company to bond and find time for relaxation away from work. Through this, our staff has the support of their families who are regarded as members of the VFM family, and are encouraged to be active, enthusiastic and dedicated to the success of the company.


INVESTOR RELATIONS ACTIVITIES (IR)

Meeting with investors at VDSC HCMC

Investor relations, together with long-term development is always to the fore when VFM is building it’s operating strategies. In 2009, we made a concerted effort to create linkages between VFM, investors and the Fund’s we manage. During the economic crisis with the securities markets fluctuating, effective IR became the most imperative and practical means of bolstering investor’s faith and trust in the funds and the markets.

Since the introduction of our website (www.vinafund.com), it has become an important and effective communication tool between investors and VFM. Investors need only visit the Investor Relations page for full and instant access to weekly and monthly NAV reports, monthly summaries, quarterly and annual reports and other information on the Funds as well as our operations.

The +84 (8) 3825 1480 hotline gives investors a direct and effective way to have their queries answered and receive specific information relating to the operations of the Funds. In addition, our exclusive email address ([email protected]) is reserved for

investors to provide their feedback and input. VFM expects to raise its IR efforts to the level of a Client Care Center dedicated to meeting the needs of investors.

To keep investors fully informed, we will continue to maintain and enhance the channels through which we provide reports:• Via email and post;• At the information desk’s of securities

companies; and• Downloads from the VFM and securities

company’s websites.

With investor numbers and contact information constantly changing, in Quarters I and II of 2009, we requested investors to update their contact information and feedback through consultation, via the website or through direct telephone contact. Through this process we have had the opportunity to understand investor’s needs more clearly, improve the quality of our reports and monitor investor’s information requirements more closely.


2009 INVESTOR RELATIONS ACTIVITIES

Meeting with investors at BVSC Hanoi

We provide necessary information on the activities of our Funds. In cooperation with the HCMC Stock Exchange and securities companies VFM conducted investor meetings and seminars with the theme of “VFM – Sharing information, Catching opportunities” in HCMC and Hanoi from the 10th to the 25th of June 2009. At these events, VFM’s leaders discussed the operations of VF1 and VF4 Funds with investors, and provided in-depth analysis of their investment operating results, divestments and the orientations of the Funds.

Through these seminars investors were given the overall picture of the effectiveness of the Fund’s operations, a clearer understanding of the value of the assets the investors hold and all queries in relating to the Fund’s future policies, strategies and directions were answered.

In 2009, the economy and securities markets continually fluctuated. To assist institutional investors in understanding the

macro-economic overview, we supplied the most up-to-date information on the operations of our Funds, with the aim of grasping opportunities presented during the crisis. VFM organized a seminar on “Investment opportunities for Vietnamese enterprises in the post-crisis period” for institutional investors on the 19th of August 2009 at the Sofitel Hotel in Saigon. The seminar attracted over 50 leaders from large and small enterprises alike, including famous presenters like Dr. Tran Du Lich, Deputy Head of the National Assembly Delegation in HCMC and Mr. John Hing Vong, Senior Advisor, Corporate Finance at Sacombank.

At the seminar, we presented our Enterprise Consultancy division, which assists VFM to further develop its assets in enterprises and companies in which it holds shares. Furthermore this seminar added value to enterprises through discussions of strengthening leadership potential and assisting enterprises on how to approach business opportunities.


VFM’S OPERATIONS

1. TYPICAL ACTIVITIES FOR THE YEAR On the 19th of August 2009, VFM held

The seminar “Investment opportunities for Vietnamese Enterprises after the crisis” featuring presentations and discussion with Dr. Tran Du Lich and Mr. John Hinh Vong - Senior Advisor of Sacombank Group.

The “Meeting post-crisis opportunities” seminar held on the 22nd of October 2009 introduced the Quantitative Analysis Model. This event saw the participation of individual investors, organizations, securities companies and press agencies.

The launch of the Vietnam Active Investment Fund (VFA), which uses the quantitative analysis model for investing, was held on the 8th of January 2010 to officially introduce the VFA Fund to the public.

On the 14th of January 2010, the VFA Fund was introduced to investors, attracting over 300 participants.

The VFA Fund has also attracted the attention of overseas investors, especially Taiwanese businessmen working in Vietnam.


2. SOCIAL RESPONSIBILITY

VFM built bridge in Dong Nai province

After establishing the Charity Committee, consisting of volunteer staff from VFM, we continued organizing and participating in social welfare activities during the year. As always, each quarter, we continued to support the Bao Hoa charity kitchen which provides meals to poverty-stricken patients being treated in the city’s hospitals.

In Quarter II/2009, we also assisted in financing the construction of a new wooden bridge for the poor, isolated village in rural Dong Nai province. This bridge is a gift for the poor assist them in more convenient accessibility while crossing the stream during the rainy season floods.

In addition, at the end of the year, all our company staff and their families participated in the annual “Terry Fox Charity Run” in Hochiminh City and “Run for children 2009” in Hanoi organized by the Canadian Consulate. This is not only an enjoyable event aimed at improving health and bringing staff and families closer together, but also makes a contribution to those less fortunate, in the hope they will enjoy a better quality of life.

Furthermore, throughout the year we participated in assisting with scholarships for the poor and disabled children to attend school. As well as that we visited and gave gifts to the orphanage in the Amata industrial zone as well as impoverished children, and to poor patients being treated at the HCMC Hematology Hospital.

We will continue with these activities and hope more kind-hearted organizations can programs can be broadened across the community by kind-hearted organizations and individuals. In 2010, this charity program will be strengthened when we establish a Charity Fund with the participation of domestic and overseas organizations. With this, VFM will seek out, select and organize an annual charity program. In particular, VFM will voluntarily manage the charity’s investment assets, and the income will continue to contribute to the Fund, helping fund stable, long-term operations.

VFM participated in Terry Fox Run in November 2009

FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009


LICENCE ISSUING FUND CERTIFICATES TO THE PUBLIC No. 01/UBCK-QDT dated 24 March 2004

LICENCE LISTING FUND CERTIFICATES No. 01/UBCK-NYQDT dated 22 September 2004

ESTABLISHMENT REGISTRATION CERTIFICATE N o. 0 1 / U B C K - D K Q DT d a t e d 2 0 M a y 2 0 0 4 Establishment Registration Certificate was issued by the State Securities Commission and valid for a period of 10 years.

BOARD OF REPRESENTATIVES Mr. Phan Dao Vu Chairman (resigned on 8 June 2009)

Mr. Nguyen Thanh Hung Chairman (appointed on 8 June 2009)

Mr. Nguyen Thanh Hung Vice Chairman (resigned on 8 June 2009)

Ms. Huynh Que Ha Vice Chairwoman

Mr. Hoang Kien Member

Mr. Phan Minh Tuan Member

Mr. Le Van Phu Member

Mr. Dang Thai Nguyen Member

CUSTODIAN BANK Joint Stock Commercial Bank for Foreign Trade of Vietnam

REGISTERED HEAD OFFICE 10th Floor, Central Plaza Building, 17 Le Duan Street, Ben Nghe Ward, District 1, Ho Chi Minh City

AUDITOR PricewaterhouseCoopers (Vietnam) Limited

GENERAL INFORMATION

REPORT OF THE BOARD OF REPRESENTATIVES


STATEMENT OF THE RESPONSIBILITY OF THE FUND MANAGEMENT COMPANY IN RESPECT OF THE FINANCIAL STATEMENTS Management of Vietnam Investment Fund Management Company is responsible for the financial statements presented in accordance with Vietnam Accounting Standards, Decision 63/2005/QD-BTC and Decision 45/2007/QD-BTC providing guidance on the accounting system and financial statements to securities investment funds. These financial statements give a true and fair view of the financial position of the Fund as at 31 December 2009 and the results of its operations for the year then ended. In preparing these financial statements, the Fund Man-agement Company is required to:

• select suitable accounting policies and then apply them consistently;• make judgments and estimates that are reasonable and prudent;• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Fund

will continue in business.

Management of the Fund Management Company is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the financial position of the Fund and which enable financial statements to be prepared which comply with the basis of accounting set out in Note 2 to the financial statements. Management of the Fund Management Company is also responsible for safeguarding the assets of the Fund and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Vietnam Investment Fund Management Joint Stock Company committed that the company complied with the above-mentioned requirements in the preparation of financial statements of the Fund for the year ended 31 December 2009.

APPROVAL OF THE FINANCIAL STATEMENTSWe hereby approve the accompanying financial statements as set out on pages 52 to 72 which give a true and fair view of the financial position of the Fund as at 31 December 2009 and of the results of its operations for the year then ended in accordance with Vietnamese Accounting Standards, Decision 63/2005/QD-BTC and Decision 45/2007/QD-BTC providing guidance on the accounting system and financial statements to securities investment funds.

On behalf of the Board of Representatives

Nguyen Thanh HungChairman29 January 2010

The notes on pages 61 to 72 are an integral part of these financial statements.52 | VIETNAM SECURITIES INVESTMENT FUND (VF1)

BALANCE SHEETAS AT 31 DECEMBER 2009

Code Items Note2009

VND

2008

VND

A. ASSETS

110 1. Cash in banks 3.1 146,471,377,499 287,741,562,949

120 2. Investments in securities 3.2 2,266,372,884,979 1,302,363,749,189

121 3. Other investment 3.3 81,500,000,000 81,500,000,000

130 4. Receivables from securities trading 3.4 17,790,076,200 25,188,226,400

131 5. Other receivables 3.5 15,896,257,889 12,724,274,444

200 TOTAL ASSETS 2,528,030,596,567 1,709,517,812,982

B. RESOURCES

300 I. LIABILITIES 48,160,042,446 12,545,769,634

311 1. Payables for investing activities 3.6 38,036,770,514 8,755,648,212

314 2. Remunerations payable to the Board of Representatives 92,000,000 108,000,000

315 3. Payables to the Fund Management Company and the Custodian Bank

3.7 4,312,825,480 3,003,289,755

316 4. BIT payable on dividends paid 3.8 3,985,166,812 -

318 5. Other payables 3.9 1,733,279,640 678,831,667

400 II. OWNERS’ EQUITY 2,479,870,554,121 1,696,972,043,348

410 1. Capital contributed by investors 2,224,170,820,910 2,224,170,820,910

In which:

411 1.1 Capital contributed 3.10.1 1,000,000,000,000 1,000,000,000,000

412 1.2 Capital surplus 3.10.2 1,224,170,820,910 1,224,170,820,910

420 2. Undistributed earnings (accumulated losses)

3.11 255,699,733,211 (527,198,777,562)

430 TOTAL OWNERS’ EQUITY 2,528,030,596,567 1,709,517,812,982

The notes on pages 61 to 72 are an integral part of these financial statements.

Code Note2009

VND

2008

VND

Securities at par value 600,940,930,000 661,213,260,000

Joint Stock Commercial Bank for Vietnam Investment Fund Foreign Trade of Vietnam - Ho Chi Minh City Branch Management Joint Stock CompanyMs. Ha Thi Thuy Vinh Ms. Le Thi Thanh TamChief Accountant Chief Financial Officer

Joint Stock Commercial Bank for Vietnam Investment Fund Foreign Trade of Vietnam - Ho Chi Minh City Branch Management Joint Stock CompanyMs. Truong Thi Thuy Nga Mr. Tran Thanh TanDeputy General Director Chairman cum General Director


OFF BALANCE SHEET TIEMSAS AT 31 DECEMBER 2009


INCOME STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2009

Code Items Note

2009

VND

2008

VND

(Restated)

A. REALISED TRANSACTIONS

10 I. Profit/(loss) from investing activities 305,232,407,984 (99,470,138,652)

11 1. Dividends 45,755,232,898 71,614,552,445

12 2. Coupons 16,032,254,424 26,921,037,133

13 3. Interest income from deposits 16,938,535,078 35,442,400,356

14 4. Profit/(loss) from securities trading 226,505,685,919 (233,448,128,586)

18 5. Other incomes 699,665 -

30 II. Expenses 50,997,609,610 52,624,978,733

31 1. Fund management fees and incentive fees 3.13 (i) 43,724,806,268 44,204,136,713

32 2. Administration and custodian fees 3.13 (ii) 1,856,576,787 2,652,248,203

33 3. Annual General Meeting fees 1,901,433,531 1,355,677,977

34 4. Audit fees 283,742,041 397,314,226

38 5. Other fees and expenses 3.12 3,231,050,983 4,015,601,614

50 III. Net realised profit/(loss) for the year 254,234,798,374 (152,095,117,385)





INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2009 (CONTINUED)

Code Items Note

2009

VND

2008

VND

(Restated)B. UNREALISED TRANSACTIONS

60 I. Income 737,508,533,359 12,654,184,552

61 1. Gain from revaluation of investments 681,417,533,359 12,654,184,552

63 2. Unrealised gain on right subscription 56,091,000,000 -

70 II. Expenses 88,844,820,960 1,880,728,554,933

71 1. Loss from revaluation of investments 88,844,820,960 1,863,403,554,933

73 2. Unrealised loss on right subscription - 17,325,000,000

80 III. Net unrealised profit/(loss) for the year 648,663,712,399 (1,868,074,370,381)

90 Net profit/(loss) for the year 902,898,510,773 (2,020,169,487,766)




STATEMENT OF ASSETSAS AT 31 DECEMBER 2009

Code Items2009

VND

2008

VND

1 Cash 146,471,377,499 287,741,562,949

2 Investments 2,347,872,884,979 1,383,863,749,189

2.1 Bonds 160,523,350,000 326,905,857,276

2.2 Shares 2,049,758,534,979 975,457,891,913

2.2.1 Listed shares 1,572,847,332,500 590,861,293,600

2.2.2 Unlisted shares 476,911,202,479 384,596,598,313

2.3 Right to purchase listed shares 56,091,000,000 -

2.4 Others 81,500,000,000 81,500,000,000

3 Dividends receivable 3,023,934,000 538,680,000

4 Interest receivable 7,822,323,889 12,185,594,444

5 Receivables from securities trading 17,790,076,200 25,188,226,400

6 Other receivables 5,050,000,000 -

Total assets 2,528,030,596,567 1,709,517,812,982

7 Payables for securities trading (38,036,770,514) (8,755,648,212)

8 Other payables (10,123,271,932) (3,790,121,422)

Total liabilities (48,160,042,446) (12,545,769,634)

Net assets 2,479,870,554,121 1,696,972,043,348

9 Total number of fund certificates 100,000,000 100,000,000

10 Net asset per fund certificate 24,799 16,970





STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 DECEMBER 2009

Code Items2009

VND

2008

VND

I Beginning net assets 1,696,972,043,348 3,837,141,531,114

II Changes in net assets in the year 782,898,510,773 (2,140,169,487,766)

In which:

1 Changes in net assets due to investment activities during the year 902,898,510,773 (2,020,169,487,766)

2 Changes in net assets due to distribution of earnings to investors during the year (120,000,000,000) (120,000,000,000)

III Ending net assets 2,479,870,554,121 1,696,972,043,348


No. ItemsQuantity

held

Quoted price as at 31.12.2009

VND

Total value

VND

Percentage of total assets

%

I LISTED SHARES 1,572,847,332,500 62.22

1 ACB 4,651,500 37,100 172,570,650,000 6.83

2 BCI 473,860 61,000 28,905,460,000 1.14

3 BVS 1,426,380 38,700 55,200,906,000 2.18

4 DIG 484,328 75,500 36,566,764,000 1.45

5 DPM 2,519,060 34,000 85,648,040,000 3.39

6 DPR 854,560 58,000 49,564,480,000 1.96

7 EIB 3,931,310 24,000 94,351,440,000 3.73

8 FPT 852,150 79,000 67,319,850,000 2.66

9 GMD 427,300 78,000 33,329,400,000 1.32

10 HAG 1,628,650 78,000 127,034,700,000 5.03

11 HPG 1,010,940 58,500 59,139,990,000 2.34

12 IMP 145,600 84,500 12,303,200,000 0.49

13 ITC 920,000 79,500 73,140,000,000 2.89

14 LSS 836,340 42,000 35,126,280,000 1.39

15 NTL 795,840 142,000 113,009,280,000 4.47

16 PVD 1,190,413 67,500 80,352,877,500 3.18

17 REE 200,000 44,500 8,900,000,000 0.35

18 SD5 320,700 69,400 22,256,580,000 0.88

19 SDT 723,800 55,200 39,953,760,000 1.58

20 SJS 2,855,200 80,000 228,416,000,000 9.04

21 VIS 211,590 82,500 17,456,175,000 0.69

22 VNM 1,764,020 75,000 132,301,500,000 5.23

STATEMENT OF INVESTMENT PORTFOLIOAS AT 31 DECEMBER 2009

The notes on pages 61 to 72 are an integral part of these financial statements.ANNUAL REPORT 2009 | 59

STATEMENT OF INVESTMENT PORTFOLIOAS AT 31 DECEMBER 2009 (CONTINUED)

No. ItemsQuantity

held

Quoted price as at

31.12.2009 VND

Total value

VND

Percentageof total

assets %

II UNLISTED SHARES 476,911,202,479 18.86

1 Bien Hoa Coffee Joint Stock Company 401,110 77,500 31,086,025,000 1.23

2 Military Commercial Joint-Stock Bank 2,645,907 27,167 71,881,355,469 2.84

3 An Giang Plant Protection Joint-Stock Company 1,433,490 87,000 124,713,630,000 4.94

4 Hanoi Housing Commercial Joint Stock Bank 1,800,430 12,833 23,104,918,190 0.91

5 Maritime Commercial Joint Stock Bank 2,008,950 17,667 35,492,119,650 1.40

6 Binh Duong Mineral and Building Joint Stock Company 1,072,800 40,752 43,718,730,000 1.73

7 Soc Trang Sea Food Import Export Joint Stock Company 770,000 24,376 18,769,480,000 0.74

8 Vietnam Maritime Agent Joint Stock Company 221,638 15,833 3,509,194,454 0.14

9 Nha Be Water Supply Joint Stock Company 550,000 12,917 7,104,350,000 0.28

10 Can Tho Agricultural and Animal Products Imex Company 292,108 22,167 6,475,158,036 0.26

11 Eastern Asia Commercial Joint Stock Bank 539,920 19,833 10,708,233,360 0.42

12 Central Pharmaceutical Joint-stock Company No. 25 (UPHACE) 300,000 48,000 14,400,000,000 0.57

13 Kido Corporation 115,000 50,000 5,750,000,000 0.23

14 Vietnam Electric Cable Corporation 99,979 22,000 2,199,538,000 0.09

15 Vietnam Ocean Shipping Company 2,500,000 17,000 42,500,000,000 1.68

16 A&B Development Joint Stock Company 11,922 2,977,560 35,498,470,320 1.40

III Right to purchase listed shares 56,091,000,000 2.22

1 Right to purchase SJS 801,300 70,000 56,091,000,000 2.22





STATEMENT OF INVESTMENT PORTFOLIOAS AT 31 DECEMBER 2009 (CONTINUED)

No. ItemsQuantity

held

Quoted price as at

31.12.2009 VND

Total value

VND

Percentageof total

assets %

IV Government bonds 160,523,350,000 6.35

1Ho Chi Minh City Investment Fund for Urban Development 15 years bond (HIFU0307)

1,700,000 94,426 160,523,350,000 6.35

V Other assets 115,186,334,089 4.56

1 Dividends receivable 3,023,934,000 0.12

2 Interest receivable 7,822,323,889 0.31

3 Receivables from securities trading 17,790,076,200 0.70

4 Others 86,550,000,000 3.43

VI Cash 146,471,377,499 5.79

1 Cash in banks 146,471,377,499 5.79

VII Grand total 2,528,030,596,567 100.00

1. GENERAL INFORMATIONVietnam Securities Investment Fund was established as a closed-end investment fund in Vietnam in accordance with License No. 01/GP-QDT issued by the State Securities Commission (“SSC”) on 24 March 2004. According to this License, the Fund is authorised to issue 30,000,000 fund units to the public with par value of VND 10,000 per unit. The Fund was licensed to operate for a period of ten years, according to Decision No. 01/UBCK- DKQDT dated 20 May 2004 by the SSC.

The Fund is listed on the Ho Chi Minh City Stock Exchange in accordance with License No. 01/UBCK-NYQDT issued by the SSC dated 22 September 2004.

Pursuant to Decision No. 468/QD-UBCK issued by the SSC dated 5 July 2006, the Fund increased its authorised fund units by 20,000,000 to 50,000,000 fund units with a par value of VND 10,000 per unit to increase its charter capital to VND500 billion.

According to Decision 144/QD-UBCK issued by the SSC dated 15 March 2007, the Fund is authorised to issue additional 50,000,000 fund units with par value of VND10,000 per unit to increase number of fund units from 50,000,000 to 100,000,000, The Fund’s charter capital increased to VND1,000 billion accordingly.

The Fund has no employees and is managed by Vietnam Investment Fund Management Joint Stock Company (“Fund Management Company”) and Joint Stock Commercial Bank for Foreign Trade of Vietnam was appointed as the custodian bank of the Fund.

The principal activities of the Fund are to invest and achieve a balanced and diversified portfolio of investments capable of yielding maximum earnings and/or capital gains while minimising risks. Most investments will be in listed and to-be-listed securities on the Vietnamese stock exchange. These would include listed shares, government bonds, corporate bonds and to-be-listed shares. In addition, another objective of the Fund is to add value to these investments by financial restructuring, developing corporate governance, increasing competitiveness, etc., to increase the investors’ value and the Fund’s investments.

2. SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with Vietnamese Accounting Standards, Decision 63/2005/QD-BTC and Decision 45/2007/QD-BTC providing guidance on the accounting system and financial statements to securities investment funds.

The accompanying financial statements are not intended to present the financial position and results of operations in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than SR Vietnam. The accounting principles and practices utilised in SR Vietnam may differ from those generally accepted in countries and jurisdictions other than SR Vietnam.

In accordance with Decision No. 63/2005/QD-BTC dated 14 September 2005 of the Ministry of Finance, the Fund’s financial statements include the following reports:

1. Balance sheet

2. Income statement

3. Statement of assets

4. Statement of changes in net assets

5. Statement of investment portfolio

6. Notes to the financial statements


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009

2.2 CurrencyThe financial statements are measured and presented in Vietnamese Dong.

Transactions arising in foreign currencies are translated at exchange rates ruling at the transaction dates. Foreign exchange differences arising from these transactions are recognised in the income statement.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at the balance sheet date. Foreign exchange differences arising from these translations are recognised in the income statement.

2.3 Fiscal yearThe Fund’s fiscal year starts on 1 January and ends on 31 December.

2.4 Registered accounting documentation systemThe registered accounting documentation system is the general journal system.

2.5 InvestmentsInvestments are initially recognised at the purchase price plus expenditures attributable to such purchase of investments. The investments are revalued periodically at fair value and gains/losses from revaluation of these investments are recorded into the income statement as required by Decision 63/2005/QD-BTC dated 14 September 2005 of the Ministry of Finance. The revaluation methods applied by the Fund are in compliance with Decision 45/2007/QD-BTC issued by the Ministry of Finance on 5 June 2007.

ClassificationThe Fund classifies listed shares and unlisted shares purchased for trading purposes as trading securities.

RecognitionThe Fund recognises trading securities and other investments at the signing date of investment contracts.

DerecognitionThe securities investments are derecognised when the right to receive cash flows from such securities investments was terminated or the Fund no longer holds a majority of risks and rewards attributable to securities ownership.

The cost of trading securities is determined by weighted average method.

2.6 Capital and capital surplusThe Fund’s share certificates with discretionary dividends are classified as equity.

Capital surplus represents the difference between the actually received cash in issue and par value for the issued share certificates.

2.7 Net asset per fund unitThe value of fund unit is calculated by dividing the total net assets of the Fund by the number of fund certificates at the date of financial statements.

2.8 CashCash comprises cash in banks.

2.9 ReceivablesReceivables are presented in the financial statements at the carrying amount of receivables from the activities of securities trading, dividends, interest income from bonds, interest incomes from deposits and other debtors. These accounts are reflected at historical cost less provisions for doubtful receivables.

2.10 PayablesThe payables represents at historical cost.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2009 (CONTINUED)


2.11 ProvisionsProvisions are recognised when: the Fund has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the expenditures expected to be required to settle the obligation. If the time value of money is material, provisions will be measured at their present value using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expenses.

2.12 Income taxAccording to the prevailing regulations, the Fund is not subject to business income tax.

2.13 ExpensesExpenses are accounted on an accruals basis. Expenses are charged to the income statement except for expenses incurred for investments which are recorded into the cost of such investments.

2.14 Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

InterestRevenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectability is in doubt.

DividendsDividends are recognised in the income statement when the Fund’s right to receive the dividends is established.

2.15 Bonus shares and stock dividendsBonus shares and stock dividends are recorded as investments at nil cost and are revaluated at the reporting date.

2.16 Securities right subscriptions Securities right subscriptions are recorded at market value less purchase price. Securities right subscriptions are revalued at the reporting date.

2.17 Related partiesEnterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Fund, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Fund. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Fund that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Fund and close members of the family of these individuals and companies associated with these individuals also constitute related parties.

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.



2.18 Off-balance-sheet itemsAccording to the definition of Decision 63/2005/QD-BTC dated 14 September 2005 of Ministry of Finance providing accounting policies applicable to securities investment funds, off-balance-sheet items are presented in respective notes to these financial statements.

2.19 Balances equal to zero (0)According to Decision 63/2005/QD-BTC dated 14 September 2005 of Ministry of Finance providing accounting policies applicable to securities investment, the items or balances, which are not presented in these financial statements, should be understood that they are of balances of zero (0).

3. ADDITIONAL INFORMATION3.1 Cash in banks

Cash in banks represent cash in Vietnamese Dong deposited at the following banks at year end:

3.2 Investments in securities All the invested companies (listed and unlisted) as stated in the Statement of investment portfolio are incorporated in Vietnam.

The Fund does not involve in making daily financial and operating decisions of the invested companies. Accordingly, the Fund has no intention of controlling or having significant influence on invested companies. Therefore, the investments of the Fund are recognised on the basis which is presented in Note 2.5, instead of by equity method or combination method.

2009

VND

2008

VND1. Demand deposits at the Custodian Bank- Vietcombank 54,471,377,499 24,741,562,949

2. Term deposits:

Vietnam Bank for Agriculture and Rural Development 30,000,000,000 123,000,000,000

Technological and Commercial Joint Stock Bank 20,000,000,000 70,000,000,000

Saigon Thuong Tin Commercial Joint Stock Bank - 45,000,000,000

Bank for Investment and Development of Vietnam 25,000,000,000 25,000,000,000

Global Petroleum Joint Stock Bank 17,000,000,000 -

146,471,377,499 287,741,562,949



Details of investments in securities are as follows:

3.3 Other investment Other investment represents the cost of a right to buy 1,500,000 shares in an unlisted investee. The Fund acquired this right from a shareholder of the investee on 14 December 2007.

3.4 Receivables from investing activities Receivables from investing activities represent proceeds from disposal of investments which are received after three working days from the date of transaction (T+3) according to prevailing securities trading practice in Vietnam.

(*) This item represents a right to buy 801,300 shares of Song Da Corporation (SJS).



At Cost

VND

Revaluation gain/(loss)

VND

Fair value as at 31.12.2009

VND

Listed shares 1,532,935,742,446 39,911,590,054 1,572,847,332,500

Unlisted shares 409,237,745,677 67,673,456,802 476,911,202,479

Government bonds 170,000,000,000 (9,476,650,000) 160,523,350,000

Right to purchase listed shares (*) - 56,091,000,000 56,091,000,000

2,112,173,488,123 154,199,396,856 2,266,372,884,979

At Cost

VND

Revaluation gain/(loss)

VND

Fair value as at 31.12.2008

VND

Listed shares 968,165,029,661 (377,303,736,061) 590,861,293,600

Unlisted shares 490,358,535,071 (105,761,936,758) 384,596,598,313

Convertible bonds 18,304,500,000 5,817,805,276 24,122,305,276

Government bonds 320,000,000,000 (17,216,448,000) 302,783,552,000

1,796,828,064,732 (494,464,315,543) 1,302,363,749,189

3.5 Other receivables

3.6 Payables for investing activities

3. 7 Payable to the Fund Management Company and the Custodian Bank

2009

VND

2008

VND

Bond interest receivable 7,684,935,000 10,918,090,000

Bank deposit interest receivable 137,388,889 1,267,504,444

Dividends receivable 3,023,934,000 538,680,000

Other receivables (*) 5,050,000,000 -

15,896,257,889 12,724,274,444

2009

VND

2008

VND

Investments awaiting for settlement (*) 37,517,280,000 8,492,260,000

Brokerage fee payable 519,490,514 263,388,212

38,036,770,514 8,755,648,212

(*) Other receivables represent a deposit of 10% for the auction to buy 1 million shares of Song Da No. 5 Joint Stock Company (SD5).

(*) This item represents amount payable for acquiring of investments which are settled after three working days from the date of transaction (T+3) according to prevailing securities trading practice in Vietnam.

2009

VND

2008

VND

Fund management fees 4,146,947,577 2,833,292,222

Custodian fees 165,877,903 169,997,533

4,312,825,480 3,003,289,755

3.8 BIT payable on dividend paid This is the amount of BIT retained over dividends payable to foreign corporate investors. This amount will be transferred to the Fund Management Company for the procedures of year end tax finalisation.



3.11 Undistributed profits/(accumulated losses)

3.10.2 Capital surplus

(*) Based on the Resolution of the Board of Representatives dated 15 October 2009, it was determined to pay the first instalment dividends in cash of 2009 to investors at a rate of 12%. The final list of investors for dividend entitlement was finalised on 8 December 2009 and the payment was made on 30 December 2009.

3.10.1 Capital transactions

3.9 Other payablesThis amount represents outstanding audit fees and other miscellaneous payables as at 31 December 2009.

3.10 Capital contributed by investors

Each fund unit has a par value of VND10,000. All fund units have the same rights, whether in regard to voting, dividends, return of capital and otherwise. Each issued and fully paid fund unit is entitled to dividends when declared and carries one voting right.

2009

VND

2008

VND

Beginning capital 1,000,000,000,000 1,000,000,000,000

Increase for the year - -

Decrease for the year - -

Ending capital 1,000,000,000,000 1,000,000,000,000

2009

VND

2008

VND

Beginning balance 1,224,170,820,910 1,224,170,820,910

Increase for the year - -

Decrease for the year - -

Ending balance 1,224,170,820,910 1,224,170,820,910

2009

VND

2008

VND

Beginning (accumulated losses)/undistributed profit (527,198,777,562) 1,612,970,710,204

Profit/(loss) for the year 902,898,510,773 (2,020,169,487,766)

Distributed dividends for the year (*) (120,000,000,000) (120,000,000,000)

Closing undistributed profit/(accumulated losses) 255,699,733,211 (527,198,777,562)



3.12 Fees and other expenses



2009

VND

2008

VND

Design, printing and delivery fees 339,158,370 1,395,774,254

Board of Representatives meeting fees 158,473,405 520,238,667

Brokerage fees 1,927,319,514 1,121,185,344

Board of Representatives’ remunerations (Note 3.13.iii) 638,000,000 702,000,000

Others 168,099,694 276,403,349

3,231,050,983 4,015,601,614

3.13 Related parties

2009

VND

2008

VND

Fund management fee 43,724,806,268 44,204,136,713

2009

VND

2008

VND

Custodian fee 1,856,576,787 2,652,248,203

i) Vietnam Investment Fund Management Joint Stock Company, the fund managerAccording to the Charter of the Fund, Vietnam Investment Fund Management Joint Stock Company is entitled to annual management and incentive fees. Annual fund management fee is two percent (2%) of net asset value of the Fund. Incentive fee is only payable if the increase in the net asset value of the Fund is higher than a basis threshold indicated in the Fund’s Charter. No incentive fee for the year was incurred.

ii) Joint Stock Commercial Bank for Foreign Trade of Vietnam (“Vietcombank”), the custodianThe Fund has appointed Vietcombank to be the custodian of the Fund. The Fund pays to the custodian a yearly custodian fee equal to 0.08% (reduced from 0.12%) of the net asset value of the Fund, effective since 1 March 2009.

2009

VND

2008

VND

Board of Representatives’ remunerations 638,000,000 702,000,000

iii) Board of Representatives’ remunerations Other than the remunerations, there is no other contracts to which the Fund and any member of the Board of Representatives is a party to where a member of Board of Representatives has a material interest. The Board of Representatives’ remunerations are recorded as expense of the Fund.

iv) Fund’s certificates held by related partiesAs at 31 December 2009, the following related parties held Fund’s certificates as follows:

Related parties PositionNumber of certificates held

31.12.2009 31.12.2008

I. Members of Board of Representatives

1. Phan Dao Vu Chairman (up to 8 June 2009) - -

2. Nguyen Thanh Hung

Vice Chairman (up to 8 June 2009)Chairman (from

8 June 2009)

131,900 130,410

3. Sai Gon Thuong Tin Bank 826,330 2,826,330

Representative: Huynh Que Ha Vice Chairwoman 166,660 166,660

4. Bac A Bank 168,140 168,140

Representative: Dang Thai Nguyen Member - -

5. Indovina Bank 2,005,140 2,005,140

Representative: Le Van Phu Member - -

6. Dragon Capital Markets Limited 5,000,000 5,000,000

Representative: Pham Minh Tuan Member 21,660 21,660

7. Vietnam Enterprise Investments Ltd 7,625,300 17,000,000

Representative: Hoang Kien Member - -

15,944,830 27,318,340



Related parties PositionNumber of certificates held

31.12.2009 31.12.2008

II. Board of Directors of Viet Fund Management

1. Tran Thanh Tan General Director 250,000 200,000

2. Pham Khanh Lynh Deputy General Director 56,000 56,000

3. Doan Pham Hong Duc Deputy General Director - -

4. Le Thi Thanh Tam Chief Financial Officer - -

III. Shareholders of the Fund Management Company

1. Sai Gon Thuong Tin Commercial Bank 826,330 2,826,330

2. Dragon Capital Management Limited 5,000,000 5,000,000

Investment ratiosHolding

period Quantity

Fair value

VNĐ

Bao Viet Securities Joint Stock Company (BVS) Investee’s policies 334,660 12,951,342,000

Other investment (Note 3.3) 12/2010 1,500,000 81,500,000,000

94,451,342,000

4. COMMITMENTSAs at 31 December 2009, the Fund has investments that are not available for trading mainly because of contractually holding periods and investees’ policy as follows:



5. INDICESI. Investment ratios

II. Market ratios

2009

%

2008

%1. Value of securities/Total assets 89.65 76.18

2. Value of shares/Total assets 81.08 57.06

3. Value of listed shares/Total assets 62.22 34.56

4. Value of unlisted shares/Total assets 18.86 22.05

5. Value of bonds/Total assets 6.35 19.12

6. Value of other securities/Total assets 2.22 4.77

7. Cash/ Total assets 5.79 16.83

8. Value of investments in real estates/Total assets 0.00 0.00

9. Incomes/Total assets 3.14 (115.09)

10. Expenses/Total assets 0.17 3.08

2009 2008

1. Number of fund certificates circulating in the market 100,000,000 100,000,000

2. Number of fund certificates held by employees of

VietFund Management Company /Total fund certificates 0.316% 0.281%

3. Number of fund certificates held by foreign investors/ Total fund certificates 38.0% 48.4%

4. Unit value of fund certificate (VND) 24,799 16,970



7. COMPARATIVE FIGURES Certain comparative figures in the financial statements have been reclassified to conform the current year’s presentation.

8. APPROVAL FOR ISSUE OF THE FINANCIAL STATEMENTSThe financial statements as at and for the year ended 31 December 2009 were authorised for issue by the Board of Representatives on 29 January 2010.

6. SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATEAs at the date of financial statements, the total fair value of investments of the Fund decreased by VND507.8 million to VND2,265,865 million as to compared to the carrying amount of the investments as at 31 December 2009 reflecting the common trend of securities market in Vietnam.

31.12.2009

VND

29.1.2010

VND

Fluctuations

VND

Listed shares 1,572,847,332,500 1,575,202,793,000 2,355,460,500

Unlisted shares 476,911,202,479 478,815,032,898 1,903,830,419

Government bonds 160,523,350,000 160,564,065,000 40,715,000

Securities right subscription (exercised on 12 January 2010) 56,091,000,000

51,283,200,000 (4,807,800,000)

2,266,372,884,979 2,265,865,090,898 (507,794,081)






DISCLAIMER

This Annual report is issued by VietFund Management (VFM). All statistics relating to Fund’s financial report are approved by Custodian. This Annual report is aimed to provide information on activities of VF1, VF4 investment funds and other services. The other mentioned statistics relating to Vietnam stock market are collected from reliable sources; however, VFM does not ensure that all these statistics are totally adequate and exact. Any opinion or estimate contained in this material is subject to change without notice and accordingly, no warranty is given and no liability is accepted for any loss arising whether directly or indirectly. The use of any information herein (partly or totally), except for reference purpose, shall be approved in writing by VFM.


Head quarter10th floor, Central Plaza Building 17 Le Duan St., District 1 Ho Chi Minh City Tel: (84.8) 3825 1488 | Fax: (84.8) 3825 1489 [email protected] | www.vinafund.com

Branch in Ha NoiSuite 1208, 12th Floor, Pacific Place Building, 83B Ly Thuong Kiet Street, Hoan Kiem District, Hanoi Tel: (84.4) 3942 8168 | Fax: (84.4) 3942 8169

ANNUAL REPORT 2009 · ANNUAL REPORT 2009 | 5 2009 2008 2007 2006 2005 2004 Fund size (VND billion)...

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