VIETNAM PROPERTY HOLDING | 2008 ANNUAL...

VIETNAM PROPERTY HOLDING | 2008 ANNUAL REPORTVIETNAM’S #3 PERFORMING PROPERTY FUND

TABLE OF CONTENT

Company Overview 3

Board of Directors 4

Real Estate Market Overview 6

Performance Review 6

Financial Highlights 7

Portfolio Holding 9

Report of the Board of Directors 12

Auditor’s Report 13

Consolidated Balance Sheet 14

Consolidated Statement of Changes in Equity 15

Consolidated Statement of Income 15

Consolidated Statement of Cash Flows 16

Notes to the Consolidated Financial Statements 17

Vietnam property holding 2009 annUal report | 3 |SAIGON ASSET MANAGEMENT

COMPANY OVERVIEW

ABOuT THE COMPANyVietnam property holding (“Vph” or the “Company”) is an exempted company incorporated in the Cayman islands on august 9, 2007. the Company was listed on Frankfurt Stock exchange on november 30, 2007. Vph was placed in the top 3 performing Vietnam property focused funds in 2008 by lCF rothschild. (lCF rothschild report december 29, 2008) the Company is managed by Saigon asset management Corporation (“Sam” or the “investment manager”), an exempted company incorporated under the laws of the Cayman islands. For more information please visit www.saigonam.com

INvESTMENT OBjECTIvEthe principal investment objective of the Company is to seek to maximize capital gains from investing in a diversified portfolio of Vietnamese properties through corporate vehicles or a Vietnamese investment fund that is expected to receive local land use rights, thereby allowing the Company to indirectly participate in attractive projects at early stages. the Vietnamese investment fund will exit its investments by disposing them to institutional and private investors, including real estate investment trusts.

FuND INFORMATION

Structure Cayman islands registered closed-end investment company

Launch date august 9, 2007

Total Net Asset value euro 30mn (as of december 31, 2008)

Duration 5 years

Listed Frankfurt Stock exchange (FSe) & Xetra

Annual Management Fee 2% of naV

NAv Frequency monthly

Performance Fee 20% of gains over 8% hurdle with a high water mark

Investment Manager Saigon asset management

Auditor grant thornton (Vietnam) Company ltd

Legal Counsel reed Smith llp

appleby

Administrator/ Custodian deutsche Bank (Cayman) ltd

deutsche Bank ag (ho Chi minh City Branch, Vietnam)

TRADING

Market FSe and Xetra

Clearing euroclear or Clearstream

Settlement euroclear or Clearstream

ISIN Kyg9361r1074

WKN a0m12W

Bloomberg Symbol 3mt:gr

Reuters Symbol 3mt.de

Price Provider/ 886 ag (www.886ag.de)

Designated Sponsor/Market Maker Jefferies International Limited

Enquiries [email protected]

| 4 | Vietnam property holding 2009 annUal report SAIGON ASSET MANAGEMENT

DR. LEE G. LAMChairman and independent non-executive director

dr. lee g. lam is an experienced Ceo, company director and investment banker and has over 26 years of international corporate management, governance and finance experience in the telecommunications, media and technology, consumer/retail, property and financial services sectors in the Asia Pacific region. Dr. lam holds a Bachelor of Science in mathematics and Sciences, a master of Science in Systems Science, and a master of Business administration, all from the University of ottawa in Canada, a post-graduate diploma in public administration from Carleton University in Canada, a post-graduate diploma in english and hong Kong law and a Bachelor of law (hons) from manchester metropolitan University in the U.K., a pCll in law (and has completed the Bar Course) from the City University of hong Kong, and a doctor of philosophy from the University of hong Kong. he is Chairman of monte Jade Science and technology association of hong Kong, and serves as an independent or non-executive director of several publicly-listed companies and investment funds in the Asia Pacific region. Having served as a part-time member of the Central policy Unit of the government of the hong Kong Special administrative region for two terms, dr. lam is a member of the Jilin province Committee of the Chinese people’s political Consultative Committee (CppCC), a member of the hong Kong institute of Bankers, a Board member of the east-West Center Foundation, a member of the young presidents’ organization, a Fellow of the hong Kong institute of directors and a member of its Corporate governance Committee, a member of the general Committee and the Corporate governance Committee of the Chamber of hong Kong listed Companies, an adjunct professor at the hong Kong Baptist University School of Business, and a Visiting professor at the School of economics & management of tsinghua University in Beijing. He is fluent in English, Cantonese, Chiu Chow, mandarin, and Vietnamese.

MR. HOWARD I. GOLDEN, ESqdirector

Howard I. Golden, Esq. a U.S. Citizen, is the Chairman of the Board of Worldwide opportunity Fund (Cayman) ltd. (“WWoF”) a multi class international investment fund and the president of terra partners, ltd an investment management company he founded in 1989. terra manages money for institutional and qualified investors in a number of countries. he has been investing in stock markets since 1977 and has specialized in global investing since 1991. mr. golden has a B.a. in economics, an m.B.a. in international marketing and a Juris doctorate, all from the University of Wisconsin, madison. mr. golden began practicing law in 1972, and has been actively investing in stock markets since 1977. mr. golden has lectured on closed-end funds in london and prague and at various business schools, including harvard and University of Chicago. he has been quoted as an expert in transition Capital markets and corporate governance in the economist, the Financial times, the new york times, the international herald tribune, newsweek, prague Business Journal and Business Central europe, among other publications. he was asked to participate in a project created by Columbia University and nobel prize winner Joseph Stiglitz to provide a textbook guiding journalists reporting on emerging markets. his article on corporate governance, translated into five languages, can be accessed at http://www-1.gsb.columbia.edu/ipd/j_contrib.html. mr. golden also currently serves as the Chairman of the Board of directors of the romanian investment Fund, agni Systems ltd., a Bangladesh iSp listed on the dhaka Stock exchange, and reconstruction Capital ii, an aimS listed investment fund concentrating on romania and Bulgaria. he also serves on the Boards of Vietnam equity holding and Vietnam property holding, two closed end funds trading on the Frankfurt Stock exchange. he was previously Chairman of the Board of the Kazakhstan investment Fund and the romanian growth Fund, both Cayman island domiciled investment funds listed on the dublin Stock exchange and served on the Board of directors of Framlington Bulgarian Fund until the fund’s voluntary dissolution. his tenure on these boards was a result of his activist policy, which involves close and direct supervision of large investments.

bOARd Of dIRECtORS


MR. LOuIS NGuyENdirector

louis nguyen has over 20 years of experience in investment management, mergers and acquisitions. mr. nguyen has been investing in Vietnam since 2003 and currently the Chairman and Ceo of Saigon asset management (Sam). prior to founding Sam, mr. nguyen was managing director at VinaCapital, an investment management firm in Vietnam with approximately $2 billion under management. he was also Founding general partner of idg Ventures Vietnam, a $100 million venture capital fund. Prior to 2003, mr. nguyen was actively working in the U.S. as Vice president at Intelligent Capital, a mergers and acquisitions firm based in San Francisco, California. prior to that, he was partner at osprey Ventures, a $100 million venture capital fund based in Menlo Park, California. mr. nguyen has extensive operating experience as a Controller at neC Computer Systems division in Sacramento, California, where he was responsible for the division’s post merger integration with Packard Bell, a $5 billion transaction. Prior to NEC, he was a financial manager at Apple Computer in Cupertino, California, where he participated in restructuring analysis, cost controls, and total quality management (tQm) at the Fremont manufacturing facilities, the most automated computer factory in the world at the time. prior to that, mr. nguyen was with Kpmg in Silicon Valley, California, where he specialized in audit and m&a advisory work. he is the founder of asia-Silicon Valley Connection, a networking organization with over 3,000 members consisting of technology entrepreneurs, senior executives, and venture investors. mr. nguyen is currently Chairman of the Wto Committee, american Chamber of Commerce in ho Chi minh City. he is also the Chairman of Saigon asset management Foundation, a U.S. nonprofit organization which provides assistance to the underprivileged in Vietnam. mr. nguyen received a Bachelor of Science in accounting from San Jose State University, California. he is fluent in English and Vietnamese

bOARd Of dIRECtORS


The global financial turmoil in 2008 has impacted the real estate markets in Vietnam. increased construction costs fuelled by high inflation, put a halt to many projects under development. In addition, the tight credit environment hit property developers particularly hard as project financing was difficult to obtain. With credit growth tightening, the real estate industry, often considered a barometer of an emerging economy, experienced a slowdown. transaction volumes for both the primary and secondary markets fell sharply and in some cases prices dropped by as much as 40%. a sharp decline in property prices across all sectors resulted in higher losses to banks, specifically construction loan or loans financing property investments. impaired loans, which were estimated to be around 13% of the total loan system, have impacted the larger borrowers, namely state-owned companies and key developers. many property owners are under extreme pressure to find alternative sources of capital or face liquidation. Valuations have become more attractive. properties in Vietnam have experienced a large scale price adjustment with some sectors having decreased significantly from their value since the peak in late 2007. many of the speculators, with the reduced availability of credit, have left the market, and with existing projects not able to compete due to the credit crunch and retreat of investment capital have created a unique opportunity to acquire land and projects at very competitive prices. With the Company’s strong balance sheet and healthy project pipeline, we are prepared and well positioned to take advantage of these opportunities going forward.

the Company’s net asset Value (“naV”) per share decreased by 2.1% in 2008, from eUr2.37 to eUr2.32. this compares with a property market decline up to 40% over the same period. despite the suboptimal naV performance, Vph was placed the third best performing property focused Vietnam fund in 2008 by lCF rothschild. 2008 witnessed unprecedented declines across the global markets. Vph was determined to adopt a defensive strategy, with careful investment timing, selectivity, and diversification which helped to minimize the risks. Concerned about where global market events might lead and to protect our investors’ interests, we refocused our strategy away from green field or suburban projects and allocated a large portion of our investment portfolio into more feasible projects with guaranteed return for downside protection, within major cities where liquidity and demand remain strong as well as more resilient during the downturn. For example, the Company acquired 25% equity stake to develop a 1.4 hectares residential project in district 2, an affluent area of Ho Chi Minh City. VPH was able to obtain a guaranty for the return of investment of 25% per annum in US dollars term, backed by a top-tier commercial bank in Vietnam. this deal protected Vph from the downside risk and also reserved the Company the rights to reenter into the deal at a large discount and upside potentials if the market bounces back. as events unfolded, and our concerns were validated, these decisions contributed to achieving significant better naV performance than the drop of 40% that the real estate market suffered in 2008.

REAl EStAtE MARKEt OVERVIEW PERfORMANCE REVIEW


€ 2.70

€ 2.60

€ 2.50

€ 2.40

€ 2.30

€ 2.20

€ 2.10 monthnaV per Share

otc07

Jan08

apr08

Jul08

oct08

nov07

Feb08

may08

aug08

nov08

dec07

mar08

Jun08

Sep08

dec08

€ 3.0 1200

900

600

300

€ 2.0

€ 1.0

€ 0.0

Jan08

apr08

Jul08

oct08

nov07

Feb08

may08

aug08

nov08

dec07

mar08

Jun08

Sepo8

dec08

Vph’s Share price

Vn index

VPH’s Share Price (Euro) VN Index

fINANCIAl HIGHlIGHtS

As at Dec 31, As at Dec 31, % of change

2007 2008

net asset value 30,612,146 29,964,366 -2.1%

outstanding shares 12,893,972 12,893,972

net asset value per share 2.37 2.32 -2.1%

ordinary share price 2.5 1.2 -52%

discount/premium of Share price to naV 5.3% -48.4%

as at 30 apr 2009, Vph’s net asset value per share was eUr2.40 which increased 3.3% ytd and the share price was traded at eUr 0.82 per share or 65.8% discount to its naV per share

Financial Data (EuR except where otherwise noted)

• NAV per share decreased during 2008 from eUr2.37 to eUr2.32 (-2.1%)• Equity investments valued at eUr7,659,757• Property investment valued at eUr8,585,682• Cash and cash equivalent of eUr13,524,457 (44% of naV)

Capital Structure

Ordinary Shares

placing (november 30, 2007) 12,893,972

movement during the year -

outstanding shares as at december 31 2008 12,893,972

Net Asset value per Share since IPO

Share Price vs. vN Index since IPO

Source: Deutsche Bank’s NAV monthly report and Reuters

Source: Deutsche Bank’s NAV monthly report


PORTFOLIO HOLDINGS AS AT DECEMBER 31, 2008

Share price, NAv per Share & Share Price to NAv Premium/ (Discount) since IPO

premium/ (discount)

Share price

naV per Share

Total Investment by Sector

€ 3.0 20%

10%

0%

10%

-20%

-30%

-40%

-50%

-60%

€ 2.5

€ 2.0

€ 1.5

€ 1.0

€ 0.5

€ 0.0

oct07

Jan08

apr08

Jul08

oct08

nov07

Feb08

may08

aug08

nov08

dec07

mar08

Jun08

Sep08

dec08

Deutsch Bank’s NAV monthly report and Reuters

Mixed-use, 19.4%

Office & Commercial, 21.5%

Infrastructure, 27.7%

Residential 31.4%

Total Investment by Asset Type

Cash & Others, 45.9%

Property, 28.6%

OTC Holdings, 15.0%

Listed Holdings, 8.9%

Private Equity, 1.6%

fINANCIAl HIGHlIGHtS


1. Phu My Bridge Corporation (“PMC”)

PMC is the project owner of the largest suspension bridge (US$180mn BOT project) and Phu My Bridge Approach Roads project (US$90mn BT project) which links District 2 and District 7 through the backbone belt road of ho Chi minh City and offering 26 years of toll fee collection right. pmC is well positioned to dominate infrastructure sector in the South of Vietnam and has deep connection with local government. pmC was recently tasked by the ho Chi minh City’s people Committee of three key projects: the thu thiem Bridge no.3, linking dist 2 to dist 4 of ho Chi minh City, Saigon Bridge ii in ho Chi minh City and Ca pass tunnel on national highway 1a

Sector / Asset Type Infrastructure (OTC)

year acquired 2008

type infrastructure company

location district 7, ho Chi minh City

Size/Area US$180mn Phu My Bridge BOT project US$90mn Phu My Bridge Approach Roads project

Status Construction is 3 months ahead schedule

ownership 3.5%

Book Value eUr4.51mn (as of dec 31, 2008)

highlights expected to be connected in may 2009 and fully operated by early September 2009 to generate stable income from toll fee and advertisement

PORtfOlIO HOldINGS

2. Mo Plaza (“MP”)

Mo Plaza is a mixed-use retail, serviced apartment and office development located on 14,776 square meter land area in hai Ba trung district, towards the South of hanoi. the site is originally a well-established local traditional market with over 700 local tenants in hanoi. this 86,290 square meter commercial project will include two 25-storey office and serviced apartment tower above 5-storey retail podium. The main shareholder is VinaConeX, the top state-owned construction company in Vietnam who has the rights to develop the project on 50-year lease basis.

Sector / Asset Type Office & Commercial (Property)

year acquired 2008

Type mixed-use retail, serviced apartment and office development

location hai Ba trung district, hanoi

Size/area land area: 14,713 sq.m. & total gFa: 86,290 sq.m.

Status Started ground breaking in december 2008, foundation piling in early 2009 and at final step to receive construction permit.

ownership 8%


Highlights Expected to complete the construction in 2011. Entire office block and retail podium is under negotiation for master lease.


3. Thanh Nien Project (“TNP”)

thanh nien project is a 144,000 square meter retail and condominium project located in an phu, district 2, adjacent to the Saigon river and the luxurious thu thiem township, a critical mass of international condominiums and retail complex. Capital appreciation appears attractive upon the completion of the east-West highway.

Sector / Asset Type Residential (Property)

year acquired 2008

type a retail and condominium project

location district 2, ho Chi minh City

Size/area total gFa 144,000 sq.m.

Status Under land compensation process

ownership 25%


highlights Secured with a downside protection through a bank guarantee in USd term, and a put option to acquire considerable equity stake of the project company

PORtfOlIO HOldINGS

4. Tien Sa villas (“TSv”)

tien Sa Villas include a block of pristine mountain-side villa land plots overlooking the amazing sunset and beautiful beach in da nang bay. this unique development was the only resort-styled residential project on da nang’s mountain-side which was granted with perpetual land use rights so far. tSV is located within 5-minute drive from tien Sa tourist port and 10 minutes from da nang international airport. tSV offers a private beach exclusively for its residents.

Sector / Asset Type Residential (Property)

year acquired 2008

type a block of villa land plots

location Son tra peninsula, danang City

Size/area total land area: 11,417 sq.m.

Status Available Land Use Right Certificates

ownership individual land plots


highlights the infrastructure is basically completed. an independent valuation done by one of international property consultants in dec 2008 substantiated the increase of 13% in land price compared to our original cost.


PORtfOlIO HOldINGS

5. SAvIMEX (“SAv”)

Sector / Asset Type Mixed-use (Listed Equity)

year acquired 2008

type one of the leading publicly traded furniture manufacturers, and is listed on the ho Chi minh Stock exchange (hoSe)

location ho Chi minh City

Size / area market capitalization: about eUr6mn (as of dec 31, 2008)

Status target at both wood processing and property development

ownership 17.16%

Book Value eUr1mn (as of dec 31, 2008)

highlights SaV owned a large clear land bank of over 23ha which were recorded at cost in some years ago and expected to potentially provide a hidden capital appreciation upon development

SaV is one of the leading publicly traded furniture manufacturers. it is also a real estate investor and developer. the Company is majority owned by the government and Satra. due to its strong government relationship, SAV has significant land banking assets of over 34 ha in various attractive areas to be developed as residential and mixed-use projects.


REPORt Of tHE bOARd Of dIRECtORS

The Board of Directors submits its report together with the audited consolidated financial statements of vietnam Property Holding (“the Company”) and its subsidiaries (together “the Group”) for the year ended 31 December 2008.

The CompanyVietnam property holding was incorporated in the Cayman islands as a company with limited liability. The registered office of the Company is at deutsche Bank (Cayman) limited at Boundary hall, Cricket Square, po Box 1984, grand Cayman Ky1-1104, Cayman islands . particulars of the Company’s principal subsidiaries are set out in note 6 to the consolidated financial statements. The Company has no associates.

Principal activitiesThe principal activity of the Company is to invest in a diversified portfolio of Vietnamese properties through corporate vehicles or a Vietnamese investment fund that is expected to receive local land use rights, thereby allowing the Company to indirectly participate in attractive projects at early stages aiming at maximizing capital gains and dividend or interest income.

Results and dividendthe results of the Company for the year ended 31 december 2008 and the state of its affairs as at that date are set out in the consolidation financial statements on pages 14 to 24. the Board of directors does not recommend the payment of dividends for the year.

Board of Directorsthe members of the Board of directors during the year and up to the date of this report were:

Board of Directors: Appointed on/Resigned on

Lee G. Lam Chairman and November 9, 2007 Independent Non-executive Director Howard Golden Director November 9, 2007 Louis T. Nguyen Director August 9, 2007Bui Cong Giang Director October 1, 2007/ May 20, 2008

there were being no provision in the Company’s articles of association to the contrary, all directors shall remain in office for the ensuing period.

AuditorsThe financial statements have been audited by Grant Thornton (Vietnam) ltd. and they have expressed their willingness to accept their re-appointment subject to their reacceptance policies and procedures.

Directors’ interest in the CompanyNo contract of significance to which the company was a party and in which a director of the company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year. at no time during the year was the company a party to any arrangement to enable the directors of the company to acquire

benefits by means of acquisition of shares in or debentures of the company or any other body corporate.

Board of Directors’ responsibility in respect of the consolidated financial statementsthe Board of directors is responsible for ensuring that the consolidated financial statements are properly drawn up so as to give a true and fair view of the financial position of the Company as at 31 December 2008 and of the results of its operations and its cash flows for the year ended on that date. When preparing the consolidated financial statements, the Board of directors is required to: (i) adopt appropriate accounting policies which are supported by reasonable and prudent judgments and estimates and then apply them consistently; (ii) comply with the disclosure requirements of international Financial reporting Standards or, if there have been any departures in the interest of true and fair presentation, ensure that these have been appropriately disclosed, explained and quantified in the consolidated financial statements; (iii) maintain adequate accounting records and an effective system of internal control; (iv) prepare the consolidated financial statements on a going concern basis unless it is inappropriate to assume that the Company will continue its operations in the foreseeable future; and (v) control and direct effectively the Company in all material decisions affecting its operations and performance and ascertain that such decisions and/or instructions have been properly reflected in the financial statements. the Board of directors is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Board of Directors confirms that the Company has complied with the above requirements in preparing the consolidated financial statements.

Statement by the Board of Directorsin the opinion of the Board of directors, the accompanying consolidated balance sheet, consolidated statement of income, statement of changes in equity and statement of cash flows, together with the notes thereto, have been properly drawn up and give a true and fair view of the financial position of the Company as at 31 December 2008 and of its results of operations and cash flows for the year then ended in accordance with international Financial reporting Standards.

on behalf of the Board of directors

__________________________lee g. lam Chairman and independent non-executive directorho Chi minh City, Vietnamdate: may 27, 2009


AUdItOR’S REPORt

To the Shareholders of vietnam Property Holding

We have audited the accompanying consolidated financial statements of Vietnam Property Hold-ing and its subsidiaries (“the group”) which comprise the consolidated balance sheet as at 31 december 2008, and the related consolidated statements of income, changes in shareholders’ equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility for the consolidated financial statementsManagement is responsible for the preparation and fair presentation of these consolidated finan-cial statements in accordance with international Financial reporting Standards. this responsibil-ity includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstate-ment, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with international Standards on auditing. those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from mate-rial misstatement. an audit involves performing procedures to obtain audit evidence about the amounts and dis-closures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. in making those risk assessments, the auditor consid-ers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstanc-es, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. an audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the accompanying financial statements give a true and fair view of the financial position of Vietnam property holding and its subsidiaries as at 31 december 2008 and of its financial performance and its cash flows for the year then ended in accordance with International Financial reporting Standards.

ho Chi minh City, Vietnamdate: may 27, 2009


Notes December 31, 2008 December 31, 2007

EuR EuR

ASSETS

Current assets

Cash and cash equivalents 7 13,524,457 31,197,372

Financial assets at fair value through profit and loss 8 11,146,898 -

loan receivables 9 267,793 -

other current assets 10 5,103,746 796

30,042,894 31,198,168

RESOuRCES

Equity

Share capital 11 25,787,944 25,787,944

Share premium 12 4,881,682 4,881,682

retained earnings (705,260) (57,479)

29,964,366 30,612,147

Current liabilities

other liabilities 78,528 586,021

30,042,894 31,198,168

Net assets per share (EuR per share) 2.324 2.374

Source: Audited Report from Grant Thornton

CONSOLIDATED BALANCE SHEET

AUdItOR’S REPORt


Share capital Share premium Retained earnings Total Equity

EuR EuR EuR EuR

issuance of new shares 25,787,944 5,994,052 - 31,781,996

placement fees - (1,112,370) - (1,112,370)

loss for the period - - (57,479) (57,479)

Balance at 31 December 2007 25,787,944 4,881,682 (57,479) 30,612,147

Balance at 1 january 2008 25,787,944 4,881,682 (57,479) 30,612,147

loss for the year - - (647,781) (647,782)

Balance at 31 December 2008 25,787,944 4,881,682 (705,260) 29,964,366

CONSOLIDATED STATEMENT OF CHANGES IN EquITy

CONSOLIDATED STATEMENT OF INCOME

Notes For the year ended For the period from December 31, 2008 August 9, 2007 to December 31, 2007

EuR EuR

Net changes in fair value of financial asset

at fair value through profit and loss 13 25,899 -

general and administration expenses 14 (806,594) (142,554)

other expense (28,898) -

Loss from operations (809,593) (142,554)

Finance income 15 894,558 85,075

Finance expenses 16 (732,746) -

Loss before tax (647,781) (57,479)

Corporate income tax 17 - -

net loss (647,781) (57,479)

attributable to shareholders of the group (647,781) (57,479)

attributable to minority interest - -

earnings per share – basic and diluted (eUr per share) 18 (0.05) (0.01)


AUdItOR’S REPORt



CONSOLIDATED STATEMENT OF CASH FLOWS

year ended For the period from December 31, 2008 August 9, 2007 to December 31, 2007

EuR EuR

Cash flow from operating activities

net loss before tax (647,781) (57,479)

adjustment for:

Unrealized loss on revaluation of financial assets through profit and loss (25,899) -

Unrealized loss on foreign currency translation 501,395 -

interest and dividend income (727,687) (85,075)

Change in other receivables (1,803,800) -

Change in other liabilities (507,493) 586,021

Net cash generated from (used in) operating activities (3,211,265) 443,467

Cash flow from investing activities

deposits for acquisition of investments (3,295,978) -

Purchase of financial assets (10,923,740) -

interest received 724,515 84,279

loans provided (267,793) -

Net cash inflows/(outflows) from investing activities (13,762,996) 84,279

Cash flow from financing activities

proceeds from issuance of shares of stock - 30,669,626

Net increase/(decrease) in cash and cash equivalents for the year (16,974,261) 31,197,372

Cash and cash equivalents at the beginning of the year 31,197,372 -

Effects of fluctuations in foreign exchange rates (698,654) -

Cash and cash equivalents at end of the year 13,524,457 31,197,372


AUdItOR’S REPORt


1 GENERAL INFORMATIONVietnam property holding was incorporated in the Cayman islands as a limited liability company. The registered office of the Company is at deutsche Bank (Cayman) limited at Boundary hall, Cricket Square, po Box 1984, grand Cayman Ky1-1104, Cayman islands. the principal activity of the Company is investing in a diversified portfolio of Vietnamese properties through corporate vehicles or Vietnamese investment funds. its shares are listed on german stock exchanges (Frankfurt and Xetra)

2 STATEMENT OF COMPLIANCE WITH IFRS AND ADOPTION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

2.1 Statement of compliance with IFRSThe consolidated financial statements (the “financial statements”) have been prepared in accordance with international Financial reporting Standards (“iFrS”) as issued by the international accounting Standards Board (“iaSB”).

2.2 Changes in accounting policies

2.2.1 Overall considerationsthe iaSB and the international Financial reporting interpretations Committee have issued various standards and interpretations with an effective date after the date of this financial information. The Group has not elected for early adoption of the standards and interpretations that have been issued as they are not yet effective. the most relevant for the group are iaS 1 (revised 2007) “presentation of the Financial Statements” (effective for annual periods beginning on or after 1 January 2009) and iFrS 8 “operating Segments” (effective for annual periods beginning on or after 1 January 2009). Upon adoption of iaS 1 (revised 2007), the group will disclose its capital management objectives, policies and procedures in each annual financial report and will have its capital movements and other gains and losses presented separately in the statement of changes in equity and statement of recognized income and expenses. Upon adoption of iFrS 8, the group will disclose segmental information when evaluating performance and deciding how to allocate resources to operations. the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the financial statements in the period of initial application.

2.2.2 Adoption of IFRS 7, Financial Instruments: Disclosures iFrS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. the group has applied iFrS 7 from the period beginning 9 august 2007.

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

NOtES tO tHE CONSOlIdAtEd fINANCIAl StAtEMENtS

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the group. IFRS 3 Business Combinations (Revised 2008) (effective from 1 July 2009) the standard is applicable for business combinations occurring in reporting periods beginning on or after 1 July 2009 and will be applied prospectively. the new standard introduces changes to the accounting requirements for business combinations, but still requires use of the purchase method, and will have a significant effect on business combinations occurring in reporting periods beginning on or after 1 July 2009. the Company is required to adopt revised iFrS 3 for business combinations when the acquisition date is on or after 1 July 2009, with prospective application required. IAS 27 Consolidated and Separate Financial Statements (Revised 2008)(effective from 1 July 2009) the revised standard introduces changes to the accounting requirements for the loss of control of a subsidiary and for changes in the Company’s interest in subsidiaries. management does not expect the standard to have a material effect on the Company’s financial statements. Annual Improvements 2008 the iaSB has issued improvements for international Financial reporting Standards 2008. most of these amendments become effective in annual periods beginning on or after 1 January 2009. the Company expects the amendment to iaS 23 Borrowing Costs to be relevant to the Company’s accounting policies. the amendment clarifies the definition of borrowing costs by reference to the effective interest method. This definition will be applied for reporting periods beginning on or after 1 January 2009, however forecasts indicate the effect to be insignificant. Smaller amendments are made to several other standards; however, these amendments are not expected to have a material impact on the Company’s financial statements.

3 SuMMARy OF SIGNIFICANT ACCOuNTING POLICIES

3.1 Presentation of consolidated financial statements The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarized below. these policies have been consistently applied to all the years presented unless otherwise stated. The preparation of the consolidated financial statements in accordance with iFrS requires the use of certain accounting estimates and assumptions. although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates. the areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4 to the consolidated financial statements.

3.2 Basis of consolidationThe consolidated financial statements of the Company for the year


ended 31 december 2008 comprise the Company and its wholly-owned subsidiary, aC housing development (together referred to as “the group”).

3.3 SubsidiariesSubsidiaries are all entities over which the Company has the power to control the financial and operating policies so as to obtain benefits from their activities. In assessing control, potential voting rights that presently are exercisable or convertible, along with contractual arrangements, are taken into account. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. they are excluded from consolidation from the date that the control ceases. majority subsidiaries of the Company have a reporting date of 31 december. in addition, acquired subsidiaries are subject to application of the purchase method. this involves the revaluation at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. on initial recognition, the assets and liabilities of the subsidiary are included in the consolidated balance sheet at their revalued amounts, which are also used as the basis for subsequent measurement in accordance with the Company’s accounting policies. goodwill represents the excess of acquisition cost over the fair value of the Company’s share of the identifiable net assets of the acquired subsidiary at the date of acquisition. negative goodwill is immediately allocated to the statement of income as at the acquisition date. All inter-company balances and significant inter-company transactions and resulting unrealized profits or losses (unless losses provide evidence of impairment) are eliminated on consolidation. A minority interest represents the portion of the profit or loss and net assets of a subsidiary attributable to an equity interest that is not owned by the Company. it is based upon the minority’s share of post-acquisition fair values of the subsidiary’s identifiable assets and liabilities, except where the losses applicable to the minority in the subsidiary exceed the minority interest in the equity of that subsidiary. in such cases, the excess and further losses applicable to the minority are taken to the consolidated statement of income, unless the minority has a binding obligation to, and is able to, make good the losses. When the subsidiary subsequently reports profits, the profits applicable to the minority are taken to the consolidated statement of income until the minority’s share of losses previously taken to the consolidated statement of income is fully recovered.Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are accounted for using the parent entity method of accounting whereby the difference between the consideration paid and the proportionate change in the parent entity’s interest in the carrying value of the subsidiary’s net assets is recorded as additional goodwill. no adjustment is made to the carrying value of the subsidiary’s net assets as reported in the consolidated financial statements. the Company has purchased a nominal subsidiary as special purpose vehicle during the year.

3.4 Functional and presentation currencyThe consolidated financial statements are presented in Euro (EUR)

(“the presentation currency”). The financial statements of each consolidated entity are prepared in either eUr or the currency of the primary economic environment in which the entity operates (“the functional currency”), which for most investments is Vietnamese dong. eUr is used as the presentation currency because it is the primary basis for the measurement of the performance of the Company (specifically changes in the Net Asset Value of the Company)

3.5 Foreign currency translationIn the individual financial statements of the consolidated entities, transactions arising in currencies other than the functional currency of the individual entity are translated at exchange rates in effect on the transaction dates. monetary assets and liabilities denominated in currencies other than the functional currency of the individual entity are translated at the exchange rates in effect at the balance sheet date. translation gains and losses and expenses relating to foreign exchange transactions are recorded in the statement of income. In the consolidated financial statements all separate financial statements of subsidiaries, if originally presented in a currency different from the Company’s presentation currency, are converted into eUr. assets and liabilities are translated into eUr at the closing rate of the balance sheet date. income and expenses are converted into the Company’s presentation currency at the average rates over the reporting period. any differences arising from this translation are charged to the currency translation reserve in equity.

3.6 Financial assetsFinancial assets, other than hedging instruments, are divided into the following categories: loans and receivables; financial assets at fair value through profit or loss; available-for-sale financial assets; and held-to-maturity investments. Management determines the classification of its financial assets at initial recognition depending on the purpose for which the financial assets were acquired. Where allowed and appropriate management re-evaluates this designation at each reporting date. All financial assets are recognized when, and only when, the Company becomes a party to the contractual provisions of the instrument. When financial assets are recognized initially, they are measured at fair value, plus, in the case of investments not at a fair value through profit or loss, directly attributable transaction costs. Derecognition of financial assets occurs when the right to receive cash flows from the investments expires or are transferred and substantially all of the risks and rewards of ownership have been transferred. At each balance sheet date, financial assets are reviewed to assess whether there is objective evidence of impairment. if any such evidence exits, any impairment loss is determined and recognized based on the classification of the financial assets. The Company’s financial assets consist of the following categories: Receivables All receivables are non-derivative financial assets with fixed or determinable pay¬ments that are not quoted in an active market. after initial recognition these are measured at amortized cost using the effective interest method, less provision for impairment. Any change in their value is recognized in profit or loss. All of the Company’s receivables fall into this category of financial instruments. discounting, however, is omitted where the effect of discounting is immaterial.



Significant receivables are considered for impairment on a case-by-case basis when they are overdue at the balance sheet date or when objective evidence is received that a specific counterparty will default Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or are designated by the entity to be carried at fair value through profit or loss upon initial recognition. By definition, all derivative financial instruments that do not qualify for hedge accounting fall into this category. Other financial assets at fair value through profit or loss held by the Company include listed and unlisted securities. Any gain or loss arising from derivative financial instruments is based on changes in fair value, which is determined by direct reference to active market transactions or valuation determined by the securities companies where no active market exists.Financial assets at fair value through profit and loss include trustee loans to banks and other parties where the Company receives interest and other income on the loans calculated based on the proceeds from the sales of specific assets held by the counterparties. Fair value is determined based on the expected future discounted cash flows from each loan.

3.7 Income taxesCurrent income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods that are unpaid at the balance sheet date. they are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year. all changes to current tax assets or liabilities are recognized as a component of tax expense in the statement of income. deferred income taxes are calculated using the liability method on temporary differences. this involves the comparison of the carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. in addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets. deferred tax liabilities are always provided for in full. deferred tax assets are recognized to the extent that it is probable that they will be able to be offset against future taxable income. however, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted at the balance sheet date. most changes in deferred tax assets or liabilities are recognized as a component of tax expense in the statement of income. only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is charged directly to equity are charged or credited directly to equity.

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

3.9 EquityShare capital is determined using the nominal value of shares that have been issued. Share premium includes any premiums received on the initial issuance of the share capital. any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.retained earnings include all current and prior period results as disclosed in the consolidated statement of changes in equity.

3.10 Financial liabilitiesThe Company’s financial liabilities include trade and other payables and other liabilities. Financial liabilities are recognized when the Company becomes a party to the contractual agreements of the instrument. all interest related charges are recognized as an expense in finance costs in the statement of income. payables are recognized initially at their fair value and subsequently measured at amortized cost, using the effective interest rate method. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired.

3.11 Provisionsprovisions are recognized when present obligations will probably lead to an outflow of economic resources from the Group that can be reliably estimated. a present obligation arises from the presence of a legal or constructive obligation that has resulted from past events. provisions are not re¬cognized for future operating losses. provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the balance sheet date, including the risks and uncertainties associated with the present obligation. Where there are a num¬ber of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. long term pro¬vi¬sions are discounted to their present values, where the time value of money is material. all provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate of Company’s management.

3.12 Related partiesparties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Parties are considered to be related to the Company if: 1. directly or indirectly, a party controls, is controlled by, or is under common control with the Company; has an interest in the Company that gives it significant influence over the Company; or has joint control over the Company; 2. a party is a jointly-controlled entity; 3. a party is an associate; 4. a party is a member of the key management personnel of the Company; or 5. a party is a close family member of the above categories.



3.13 Segment reportingan investment segment is a group of assets that are subject to risks and returns that are different from those of other business segments. a geographical segment is a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.

3.14 Earnings per share and net asset value per share the Company presents basic earnings (loss) per share (“epS”) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. net asset value (naV) per share is calculated by dividing the net asset value attributable to ordinary shareholders of the Company by the number of outstanding ordinary shares as at the balance sheet date. net asset value is determined as total assets less total liabilities and minority interest.

4 CRITICAL ACCOuNTING ESTIMATES AND juDGEMENTSWhen preparing the consolidated financial statements management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. the actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below.

Impairment of trade and other receivablesthe Company’s management determines the provision for impairment of trade and other receivables on a regular basis. this estimate is based on the credit history of its customers and prevailing market conditions. in the process of impairment review, the Company’s management makes assumptions about future cash flow and discount rate associating with market risk and asset specific risk factors. The actual results of the impairment assessment to the Company’s assets may vary and may cause significant adjustments to the Company’s assets within the next financial year.

Fair value of financial instrumentslisted securities are valued at their closing bid prices as of the last official close of the applicable exchange on the relevant valuation day. Securities traded on a securities exchange for which there has been no sale that day are valued at the closing bid price on the relevant Valuation day. investments in unlisted securities for which an active otC market exists are stated at fair value based upon price quotations received from at least three independent brokers. other unlisted securities, for which no active otC market exists, are valued at fair value using a valuation technique determined by the Company and in accordance with international accounting standards and international financial reporting standards.

5 SEGMENT REPORTINGSegment information is presented in respect of the Company’s investment and geographical segments. the primary format, investment segments, is based on the investment manager’s management and monitoring of investments. investments are allocated into the following main segments: commercials, infrastructure, residential and other sectors and cash (including term deposits). to determine the geographical segments for assets the following rules are applied: • Listed shares − place of primary listing; • Unlisted shares − place of incorporation of the issuer; • Cash − place of deposit; Segmental liabilities are not disclosed as they were not material..

6 INvESTMENT IN A SuBSIDIARyduring the year, the Company has purchased aC housing development based on its par value and the details of such subsidiary are shown below:

Name Place of Nominal value Percentage Principal incorporation/ of registered interest held activities operations capital by the Group uSD

aC housing Cayman 4,693,000 100 property

development island investment

7 CASH AND CASH EquIvALENTS

December 31, 2008 December 31, 2007

EuR EuR

Cash at bank 1,739,626 23,347,372

money market

instruments (*) 11,784,831 7,850,000

13,524,457 31,197,372

(*) Money market instruments with an original maturity term of three months or less

earn interest at rates ranging from 6.46% to 8.13% per annum for Vietnam Dong

and from 1.33% to 2.18% per annum for Euro.

8 FINANCIAL ASSETS HELD AT FAIR vALuE THROuGH PROFIT AND LOSS

December 31, 2008

EuR

Financial assets at fair value through profit and loss

ordinary shares – listed 2,658,134

ordinary shares – unlisted 8,488,764

Total financial assets at fair value

through profit or loss 11,146,898



9 LOAN RECEIvABLES

Related parties Relationship uSD

louis t. nguyen executive director 300,000

of the Company and

Ceo of the investment

manager

luong Van trung legal Counsel of 37,000

the investment manager

Vu Quang hien investment director 37,000

of the investment manager

in charge of real estate

investment

374,000

Loans receivable of US$374,000 (equivalent to EUR267,793) represents convertible loans to certain related parties. Such convertible loans were granted for the purpose of setting up a Special Purpose Vehicle (SPV) which can hold land use rights certificates for the Company and carry a term of 1 year. the Company holds the right to convert such loans into proprietary ownership as soon as it is allowed and as soon as practicable. the said SpV was established in July 2008. no interest was accrued as the primary intention of the Company is to convert such loan receivable into equity in the future. the borrowers signed a deed of trust declaring their trustee position regarding the loan and the SpV.

10 OTHER CuRRENT ASSETS


EuR EuR

Cash in escrow 3,295,978 -

deposit for acquisition of

an investment 1,802,563 -

other current assets 5,205 796

5,103,746 796

Cash in escrow represent cash deposited with a bank in trust for the Company. Such amount is planned to capitalize a new entity. the Company has the option to convert said amount into equity in said new entity or the right to receive back the original amount along with an agreed interest equivalent to US$1,173,250 derived from guaranteed interest rate of 25% on investment if the Company decides not to pursue its planned investment in the said new entity. deposit for acquisition of an investment represents a deposit to an investment delegation contract with a local investment company to acquire certain lots at Bien tien Sa project. Said investment was aborted and the deposit was subsequently returned to the Company in march 2009.

11 SHARE CAPITAL

December 31, December 31,

2008 2007

Number of Number of

shares EuR shares EuR

Authorized: ordinary shares of eUr2.00 each 50,000,000 100,000,000 50,000,000 100,000,000 Issued and fully paid: opening balance 12,893,972 25,787,944 - - new shares issued in the period - - 12,893,972 25,787,944Closing balance 12,893,972 25,787,944 12,893,972 25,787,944

12 SHARE PREMIuMShare premium represents the excess of consideration received over the par value of shares issued.


2008 2007

EuR EuR

at 1 January 4,881,682 -

Share premium during the year - 5,994,052

placement fee - (1,112,370)

4,881,682 4,881,682

13 NET CHANGES IN FAIR vALuE ON FINANCIAL ASSETS AT FAIR vALuE THROuGH PROFIT OR LOSS

year ended For the period December 31, 2008 from August 9, 2007

to December 31, 2007

EuR EuR

Unrealized gain 25,899 -

14 ADMINISTRATION EXPENSES



year ended For the period December 31, 2008 from August 9, 2007 to December 31, 2007

EuR EuR

administrator fees 55,622 19,831

management fees

(note 19) 649,470 113,149

director fees (note 19) 16,745 2,813

general administration

expenses 70,483 5,990

other expenses 14,274 771

806,594 142,554

15 FINANCE INCOME

year ended For the period December 31, 2008 from August 9, 2007 to December 31, 2007

EuR EuR

interest income

from bank deposits 727,687 85,075

Unrealized gain

from foreign exchange 166,871 -

894,558 85,075

16 FINANCE EXPENSE

year ended For the period December 31, 2008 from August 9, 2007

to December 31, 2007

EuR EuR

loss on fair value of

Cash in escrow 64,326 -

realized loss from

foreign exchange 154 -

Unrealized loss from

foreign exchange 668,266 -

732,746 -

17 CORPORATE INCOME TAXthe Company is domiciled in the Cayman islands. Under the current laws of the Cayman islands, there is no income, state, corporation, capital gains or other taxes payable by the Company.

18 EARNINGS PER SHARE

(a) Basic Basic earnings per share is calculated by dividing the profit (loss) attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.


2008 2007

EuR EuR

earnings attributable to

equity holders of the Company (647,781) (57,479)

Weighted average number of

ordinary shares issued 12,893,972 9,032,296

Basic earnings

per share (eUr per share) (0.05) (0.01)

(b) Diluteddiluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. the Company has no category of potentially dilutive ordinary shares. therefore, diluted earnings per share is equal to basic earnings per share.

19 RELATED PARTy TRANSACTIONS

Management feesthe Company is managed by Saigon asset management (the “investment manager”), an exempted company which was formed under the law of the Cayman islands and changed its old name from anpha Capital group on 3 July 2008. Under the investment management agreement dated 1 october 2007 between the Company and investment manager (the “management agreement”), the investment manager is entitled to receive a management fee based on the net asset Value of the Company, payable monthly in arrears, at an annual rate of 2%. total management fees for the period amounted to eUr649,470 with eUr50,005 in outstanding accrued fees due to the investment manager at the end of the period.

Performance feesin accordance with the management agreement, the investment manager is also entitled to a performance fee equal to 20% of the realized returns over an annualized compounding hurdle rate of 8%. total performance fee is nil for the period due to the Company’s performance has not met with above requirement.

Director feesthe aggregate director fees payable to the directors of the Company for the current period was eUr16,745 (period from 9 august 2007 to 31 december 2007: eUr2,813)

Acquisitions of unlisted shares from related partiesduring the year, the Company acquired the 264,000 shares of phu my Bridge Company for eUr4,166,997 from desmond lin, managing director of the investment manager. the said transaction was presented to the investment Committee and was approved based on



full disclosure of conflict of interest, reasonable due diligence and competitive price valuation.

20 RISK MANAGEMENT OBjECTIvES AND POLICIESthe Company invests in equity instruments and property project with the objective of achieving medium to long-term capital appreciation and providing investors with an attractive level of investment income from dividends. The Company is exposed to a variety of financial risks: market risk (including currency risk, interest rate risk, and price risk); credit risk; and liquidity risk. the Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial performance. the Company’s risk management is coordinated by its investment manager who manages the distribution of the assets to achieve the investment objectives. The most significant financial risks to which the Company is exposed are described below:

Foreign currency risk The Company invests in financial instruments and enter into transactions denominated in currencies other than its reporting currency of euro. Consequently, the Company is exposed to risks that the exchange rate of its currency relative to other currencies may change and have an adverse effect on the value of the Company’s assets or liabilities denominated in currencies other than euro. the Company may enter into arrangements to hedge currency risks if such arrangements become desirable and practicable in the future in the interest of efficient portfolio management. The Company’s exposure to fluctuations in foreign currency exchange rates at the balance sheet date were as follows:


EuR EuR

assets denominated in

Vietnamese dong 11,715,417 6,427,976

Price riskPrice risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. as the majority of the Company’s financial instruments are carried at fair value with fair value changes recognized in the income statement, all changes in market conditions will directly affect net investment income. the Company’s equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. the investment manager provides the Company with investment proposals that are consistent with the Company’s objectives. the investment manager’s recommendations are approved by an investment Committee before investment decisions are implemented. all securities investments and property investments present a risk of loss of capital. the investment manager manages this risk through the careful selection of equity and property investments within specified limits and by holding a diversified portfolio of both listed and unlisted shares and property projects. in addition, the

performance of investments held by the Company is monitored by the investment manager on a monthly basis and reviewed by the Board of directors on a quarterly basis.

Cash flow and fair value interest rate risksThe majority of the Group’s financial assets are non-interest bearing. The Group currently has no financial liabilities with floating interest rates. As a result, the Group is not exposed to cash flow interest rate risk. any excess cash and cash equivalents are invested at short-term market based interest rates.

Credit risk Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. impairment provisions are provided for losses that have been incurred by the group at the balance sheet date. all transactions in listed securities are settled/paid for upon delivery using approved brokers. the risk of default is considered low, as delivery of securities sold is only made once the broker has received payment. payment is made for purchases once the securities have been received by the broker. the trade will be unwound if either party fails to meet its obligations. the carrying amount of other receivables and loans represent the Company’s maximum exposure to credit risk in relation to its financial assets. The Company has no other significant concentrations of credit risk.

Liquidity riskLiquidity risk is defined as the risk that the Company may not be able to settle or meet its obligations on time or at a reasonable price. the Company adopts its risk management guidelines which are designed to minimize its liquidity risk through: • Monitoring its exposure to illiquid or thinly traded investments and financial instruments, and • Applying limits to ensure there is no concentration of liquidity risk with a particular counterparty or market. the Company also regularly monitors current and expected liquidity requirements to ensure that the Company maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term. the Company is domiciled in the Cayman islands. Under the current laws of the Cayman islands, there is no income, state, corporation, capital gains or other taxes payable by the Company.

21 SuBSEquENT EvENTSSubsequent to the year ended 31 december 2008, global markets were sharply affected by the the worldwide financial crisis . As the extent of the credit crisis became clear the market turmoil spread to emerging markets including the Vietnam stock market. As of the date of issuance of the consolidated financial statements, the aggregate fair value of the Fund’s investment in securities has increased to eUr11,147,536 from the aggregate fair value of eUr11,146,898 as of 31 december 2008. the increase was mainly due to the appreciation of Vnd against eUr during Q1 2009. No adjustment has been made in the financial information as at 31 december 2008 and for the year ended 31 december 2008. the details are as follows:



Fair value at Fair value at Movement 31 December 31 March

2008 2009

EuR EuR EuR

Financial assets at fair value through profit and loss:

ordinary

shares – listed 2,658,134 2,356,672 (301,462)

ordinary

shares – unlisted 8,488,764 8,790,864 302,100

11,146,898 11,147,536 638

Subsequent to the year ended 31 december 2008, the deposit for acquisition of an investment amounting to eUr1,802,563 (see note 10) was subsequently refunded to the Company in march 2009.

22 COMPARATIvE FIGuRESThe comparative figures for the consolidated statements of income, cash flow, statement of changes in equity and related notes, included for comparative purpose are for the period from 9 august 2007 to 31 december 2007.

23 AuTHORISATION OF CONSOLIDATED FINANCIAL STATEMENTSThe consolidated financial statements were authorized for issue by the directors on may 27, 2009.


COPORATE INFORMATION

Directors lee g. lam, Chairmanhoward goldenlouis nguyen

Registered Officec/o deutsche Bank (Cayman) limitedBoundary hall, Cricket Square, p.o. Box 1984, grand Cayman Ky1-1104Cayman islands

Investment Manager Saigon asset management Corporationmilitary Bank Building75-77 Calmette St., nguyen thai Binh Ward,district 1, hCmC, Vietnam

Legal adviser to the Company as to uS and German lawreed Smith llp599 lexington avenue, 29th Floornew york, new york 10022USa

Legal adviser to the Company as to Cayman law applebyClifton house, Fort Streetpo Box 190 george town grand Cayman Ky1 1104, Cayman islands

Legal adviser to the Company as vietnamese law dC lawSun Wah tower, Suite 2003115 nguyen hue Boulevarddistrict 1, ho Chi minh CityVietnam

Auditors grant thornton (Vietnam) Company ltd.28th Floor Saigon trade Center37 ton duc thang Street, district 1ho Chi minh CityVietnam

Administrator deutsche Bank (Cayman) limitedBoundary hall, Cricket Square, p.o. Box 1984, grand Cayman Ky1-1104, Cayman islands

Custodian deutsche Bank ag, ho Chi minch City BranchFloor 14, Saigon Centre65 le loi Boulevard, district 1ho Chi minh CityVietnam

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