VinaCapital AR 2011

VinaLand Limited

Annual Report 2010

2 VNL Annual Report 2010

Contents

Section 1 Introduction VinaCapital introduction 03 Financial highlights 04 Performance highlights 05 Chairman’s statement 06

Section 2 Manager’s report Management team 08 Real estate investment environment 11 Portfolio performance 16 Featured investments 24

Section 3 Financial statements and reports Board of Directors 28 Report of the Board of Directors 30 Governance report 32 Independent Auditors’ report 36 Consolidated financial statements and notes 38

Section 4 Annex Investing policy 89 Historical financial information 93 VNL overview and details 95

VinaLand Limited (VNL)Annual Report 2010

VNL Annual Report 2010 3

Taking Vietnam to the world

VNL

VinaCapital is an asset management group inspired by the energy, creativity and entrepreneurial spirit of the people of Vietnam.

Formed in 2003, VinaCapital manages USD1.8 billion across all asset classes-listed and private equities, fixed income, infrastructure and real estate.

VinaCapital’s growth is driven by the most experienced asset and fund management teams in Vietnam.

USD682 million net assets under management. Vietnam’s largest real estate investment and development fund.

VNL has the deepest residential sector pipeline of any foreign real estate fund or developer in Vietnam, alongside the top portfolio of operating hotels and landmark mixed-use projects across all major cities.


Financial highlights

FY2010 FY2009 change %

Revenue (USD’000) 17,277 28,014 -38%

Gross profit 7,042 12,303 -43%

Operating profit 102,152 (217,082) 147%

Net profits 75,992 (201,623) 138%

Earnings per share (USD) 0.10 (0.26) 139%

NAV per share (USD) 1.36 1.32 3.2%

VNL’s stable FY2010 financial performance was due to strong results in the launch and sale of residential units, and success in obtaining project financing.

USD1.36NAV per share

40.2% NAV gain since inception

The top performing Vietnam fund over the past three years according to LCF Edmond de Rothschild Securities.


USD1.36 Performance highlights

VNL’s primary driver of investment returns during FY2010 was in the sales of residential villas and apartments to end-users.

FY2010 FY2009

Residential projects with active sales 7 4

New units offered to market 663 413

Total residential sales commitments and reservations (USDm) 115.7m 65.7m

Danang Beach Resort (Ocean Villas and Cham Condominiums), World Trade Center Danang (The Azura), The Garland and Dai Phuoc Lotus all had sales launches during FY2010.

VNL’s USD115.7 million in residential unit sales commitments and reservations during FY2010 represents early returns on the largest pipeline of residential development projects in Vietnam.


Dear Shareholders,

We are pleased to present the annual report of VinaLand Limited (AIM: VNL) for the year ended 30 June 2010.

Vietnam’s real estate market during the financial year saw strong performance in the low and mid-range residential sector, and a much-improved hospitality sector, again with the best performance seen in the mid-range of the market.

The pace of foreign investment into Vietnam’s property sector was slower than the previous year, with Vietnam appearing to miss out on the increased investment into emerging markets around the world. Despite Vietnam’s rapid economic growth, reaching 6.5 percent year-on-year over the first half of 2010, foreign exchange and inflation concerns kept many investors on the sidelines.

In the real estate market, oversupply in the office sector persisted, and retail investment remained slow as large foreign retailers continued a cautious approach to entering a market where site access and branch expansion remain difficult.

Chairman’s statement

“Investors clearly remain concerned about macro issues affecting Vietnam, and they want greater clarity on performance and the ability of the investment manager to realise proceeds and return value to shareholders.”


This distribution policy, in addition to other measures announced at the time, aims to reduce the share price discount while still leaving VNL with the ability to invest in new projects. The Board believes this policy is in the best interests of the shareholders - particularly as it will offer the investment manager the opportunity to continue to demonstrate the value of the fund’s holdings, as more projects move to the development and sales/divestment phases. On 10 December 2010, shareholders voted at an EGM to allow VNL to buy back and tender for shares, a decision that allows the distribution policy to proceed.

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

Nicholas Brooke Chairman VinaLand Limited 17 December 2010

VNL’s strategy, however, saw the fund successfully avoid underperforming sectors. VNL at the end of June 2010 had an NAV of USD682 million, or USD1.36 per share, an increase of 3.2 percent from the end of June 2009, when VNL had an NAV of USD660 million, or USD1.32 per share. The four cent NAV per share gain in FY2010 is a positive turn-around from the 29 cent NAV per share loss the previous year.

The reason for the turn-around is primarily due to progress with the development and sales of several key residential holdings in the portfolio. During the year, VNL brought a total of 663 residential units to market, with residential sales commitments and reservations totalling USD115.7 million.

Another performance highlight is the success in obtaining project financing, with a total of USD197 million in non-recourse construction loans now secured. There were five construction starts during the year. In the hotel portfolio, the Sheraton Nha Trang Hotel and Spa opened near the end of the year, and the Movenpick Hotel Saigon re-opened after a complete renovation in August 2010.

The VNL Board was further strengthened at the end of the year by the addition of independent director Nicholas Allen, who brings valuable accounting expertise to the Board, built on his previous experience with PriceWaterhouseCoopers and his participation in the audit committees of listed companies CLP Holdings Ltd, Lenovo Group Ltd, and Hysan Development Company Ltd.

Despite the wide-ranging progress VNL recorded during FY2010, the company’s share price continued to trade at a significant discount to net asset value. Investors clearly remain concerned about macro issues affecting Vietnam, and they want greater clarity on performance and the ability of the investment manager to realise proceeds and return value to shareholders.

Recognising this, the Board announced on 28 October 2010 that VNL would distribute 50 percent of cash generated from divestments, after providing for future investment commitments, as a semi-annual tender for the repurchase of shares at NAV. The first distribution will occur following finalisation of the 30 December 2010 interim results.


Management team

Don Lam founded VinaCapital in 2003 alongside partners Horst F. Geicke (Group chairman) and Chris Gradel. Don has over 15 years experience in Vietnam, working previously at PricewaterhouseCoopers, Deutsche Bank, and Coopers & Lybrand. Don is one of Vietnam’s most internationally recognised business leaders, having brought over USD1.5 billion in foreign indirect investment into the country since 2003. Don is an active member and regular speaker at the World Economic Forum and other leading international conferences and events. He has a degree in Commerce and Political Science from the University of Toronto, and is a member of the Institute of Chartered Accountants of Canada. He is a Certified Public Accountant and holds a Securities Licence in Vietnam.

Don Lam Chief Executive Officer

1

1

5

3

4

VNL’s management team have a combined 75 years of real estate investment and development experience. They manage Vietnam’s most comprehensive portfolio of direct real estate assets, including complex township and landmark mixed-use developments that span Vietnam’s major cities.

(Left to right: Mr. Brook Taylor; Mr. Anthony House; Mr. David Blackhall; Mr. David Henry; Mr. Don Lam)

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David Henry has over 30 years experience in real estate development. Previously was Director of Springfield Land Corp. Pty Ltd, a member of MUR Group, where he led development of the 2,860ha Greater Springfield township. He was executive board member of MUR Group for past 16 years. His professional experience includes ten years with Australia’s Lend Lease Group, developing projects in Sydney, Brisbane and the Gold Coast. He worked on Riverside Centre Brisbane, the Anchorage Tweed Heads, State Bank Martin Place Sydney, QE 2 Hospital Brisbane, Holiday Inn Cairns, and Times Square Brisbane. David graduated with a first class honours Bachelor of Building degree from the University of New South Wales, and holds an AMDP (GSD Harvard).

David Henry Managing Director Real Estate

David Blackhall has 28 years experience in the property, design and construction sectors, with the last 19 years in real estate fund and asset management. He worked for 12 years with Deutsche Bank - RREEF Funds Management Ltd, one of Australia’s largest property fund managers. Prior to this he was involved in engineering design and management of large-scale civil and structural power generation projects in Australia. David has five years property industry experience in Hanoi and Ho Chi Minh City, Vietnam. He holds a Masters Degree in Design Science from the University of Sydney, Australia and is a Member of the Royal Institution of Chartered Surveyors (MRICS).

David Blackhall Deputy Managing Director Asset Management

Anthony House has over 23 years experience in both the real estate development and construction management sectors, of which the past three years were spent working in Vietnam. Prior to joining VinaCapital, he worked for Watpac Limited, a leading publicly listed Australian company, specialising in property development and construction. Mr. House’s development experience encompasses a range of retail, commercial office and high-rise residential projects. Mr. House holds a Post Graduate Diploma in Project Management and a Bachelor of Applied Science degree in Construction Management, both from the Queensland University of Technology, Australia.

Anthony House Deputy Managing Director Development

Brook Taylor has almost 20 years of management experience, including eight years in Vietnam as a senior partner with major accounting firms. Previously, Brook was deputy managing partner of Deloitte in Vietnam and head of the firm’s audit practice. He was also managing partner of Andersen Vietnam and a senior audit partner at KPMG. Brook has expertise spanning financial audits, internal audits, corporate finance, taxation, business planning and IT systems risk management. He has a B.A. in Commerce and Administration from Victoria University of Wellington, New Zealand, and is a member of the New Zealand Institute of Chartered Accountants.

Brook Taylor Chief Operating Officer

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Real estate investment environment

Economy Vietnam’s GDP grew by 5.3 percent in 2009, making it one of the world’s fastest growing economies during a year of financial crisis in Europe and America. Resilient domestic consumption and effective government stimulus policies helped Vietnam weather the storm, while inflation fell to 6.5 percent from 23 percent in 2008.

The pace of economic growth in Vietnam remained stable in the first half of 2010, even as the government moved to curb inflation and the global economic recovery lost momentum. Monetary policy was tightened in late 2009 and credit growth subsequently fell to 10.5 percent over the first half of 2010. Nonetheless, GDP growth remained healthy at 6.2 percent annualised for H1 2010. With inflation remaining moderate at under nine percent year-on-year, Vietnam’s economy has proven resilient and analysts forecast GDP growth of seven percent or higher in 2011. The trade deficit is less than 10 percent of exports, but currency stability remains a concern. The Vietnam dong was devalued by 2.1 percent in August 2010, a move that aimed to forestall foreign exchange pressure for the remainder of the year.

Real estate market snapshot

Vietnam’s urbanisation trend and the rise of a middle-class keen on modern living space will fuel demand for affordable, high-quality housing for years to come.

Residential sector Strong demand in the mid-range of the market, with supply dependent on domestic developers’ access to construction financing.

Office sector Rents continue to soften across all grades due to oversupply.

Retail sector Significant potential as both international and domestic retailers keen to meet growing demand.

Hospitality sector Visitor numbers recovering, outlook is strong given prospects of Vietnam tourism industry.


Residential The strength of Vietnam’s residential market is a key indicator of domestic demand. Construction and sales activity saw a marked turnaround from 2008, when projects were postponed or stalled due to the economic slowdown and the retreat of some international developers. Over the first half of 2010, the total number of condominiums in Ho Chi Minh City and Hanoi had increased 48 percent over the same point a year prior. Ho Chi Minh City saw the addition of some 10,000 units, still below the estimated yearly demand for 40,000 new households. The UN ranked Vietnam second in urban population growth among Southeast Asian countries over the past five years, with an urbanisation rate of 3.26 percent. Vietnam’s Ministry of Construction says the country needs over 15 million sq.m of new housing each year to accommodate new urban dwellers. Together with income growth and the rise of a middle-class keen on modern living space, Vietnam’s urbanisation trend will fuel demand for affordable and high-quality housing for years to come.

Buying patterns are changing, with end-users now predominant. Developers are shifting from luxury and high-end products to more affordable and mid-range residences. CB Richard Ellis reports that 95 percent of new launches in Ho Chi Minh City in 2009 were mid-range and affordable projects, versus only 60 percent in 2008. High-end projects have struggled to sell, while sales figures have been solid across the lower grades. It is evident that the market has shifted to the growing demand among average Vietnamese for affordable, quality housing.

Office Vietnam’s office market saw substantial new supply come online during the slowdown caused by the global financial crisis. Although absorption rates have started to recover, oversupply across all office grades will continue for the next several years. In 2011, Ho Chi Minh City and Hanoi will see a combined 500,000sq.m of additional office supply come on line which equates to about 40% of total current stock. This is well in excess of the annual absorption rate of 200,000sq.m for both markets alone. The office market is likely to experience further challenges ahead as the market moves into a period of over-supply creating weakened demand that will have downward pressure on rents.

By the end of Q2 2010, Vietnam’s office market was affected by the impact stemming from the global financial crisis and the amount of A to C Grade office buildings being developed. The market remains in favor of tenants where quality long-term tenancies have been negotiated for lower rents and rent incentives have been provided by most local office landlords. Ho Chi Minh City vacancy rates continued to increase across all grades. At Q2 2010, A Grade average rent in Ho Chi Minh City and Hanoi was USD37.5 and USD39.6 per square meter respectively, showing drops of 47 percent and 26 percent from the peak in 2008.

Asking prices of residential apartments in HCM City, Q2 2010USD/sq.m

Net absorption and vacancy rates, HCM CityNet absorption (NLA sq.m) Vacancy rate (%)

6,000

5,000

4,000

3,000

2,000

1,000

0

2004 2005 2006 2007 2008 2009 2010 Q2 Q2 Q2 Q2 Q2 Q2 Q2

High-end

Affordable

Mid-end

Luxury

2004 2005 2006 2007 2008 2009 2010 Q2 Q2 Q2 Q2 Q2 Q2 Q2

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

20

15

10

5

0

Net Absorption, Hanoi

Net Absorption, HCM City

Vacancy rate, HCM City

Vacancy rate, Hanoi


Retail Vietnam’s retail market continues to offer excellent prospects, although the lack of suitable retail premises has slowed the arrival of international chains, and put upward pressure on retail rents. The slower than expected roll-out of foreign brands is one reason Vietnam slipped from first place in A.T Kearney’s 2008 Global Retail Development Index, to eleventh place in 2010. The Index tracks the retail investment attractiveness of 30 emerging markets.

The fundamentals of the market remain strong, however. Over the first half of 2010, retail sales saw a real growth rate of 16.4 percent year-on-year, eight percent higher than the same period in 2009. The mid- to long-term outlook for this sector is very positive, given the large, young population and rising disposable incomes, coupled with a low base of modern shopping facilities. Demand for prime retail space remains high, with many international retailers keen to either enter the market or to expand their current portfolios. Domestic retailers are also expanding their operations to capitalise on the growing market. Fashion, lifestyle and F&B retailers continue to lead the way, as expected in an emerging market. CBD rents have risen as a result of the limited supply of prime shopping destinations in the inner city areas of Ho Chi Minh City and Hanoi. In these two cities, CBD retail rents have increased from USD76 to USD123 per sq.m per month, while average rents in outlying areas have declined slightly.

Hospitality The hospitality sector was heavily affected by the global financial crisis, with declines in occupancy and average room rates starting in mid-2008. Over the first half of 2010, the market began to recover, as occupancy rates at three, four and five-star hotels increased by 9.0, 23.3 and 14.5 percent, year-on-year, respectively. Vietnam welcomed 2.5 million international guests in the first six months of 2010, a 32.6 percent year-on-year increase. Visits from China increased by 92.5 percent. The Vietnam National Administration of Tourism forecasts 4.5 million total visitors in 2010, a 20 percent increase over 2009.

Despite the recovery in international arrivals and domestic travel, however, additional supply will continue to put pressure on occupancy and room rates. In fact, average room rates in HCM City for three, four and five-star hotels fell by 25.0, 7.9 and 10.1 percent year-on-year, respectively, over the first half of 2010. Over the long term, however, the outlook remains strong as Vietnam increasingly becomes a major travel destination for tourists from around the world.

Retail rates in select Asian citiesUSD/sq.m

350

300

250

200

150

100

50

0

HCM City Hanoi Bangkok Manila Kuala Lumpur Singapore


Outlook

The office sector will continue to struggle in the short term, and developers would be wise to secure anchor tenants before starting new projects. The short-term prospects for the hospitality market are also challenging, although longer term the market potential remains strong, with Vietnam expected to be among the world’s top ten tourism destinations in the coming decade. Retail facilities are expected to see substantial growth and development in the coming years, and the residential sector will remain in focus as developers compete to offer compelling mid-range offerings that blend affordability and high quality. Vietnam’s expected high economic growth rate and political stability will sustain it as one of Asia’s best long-term real estate investment opportunities.


VNL has the largest residential project pipeline of any domestic or foreign real estate developer in Vietnam.

Portfolio performance

distributed to investors in the form of a tender for shares. It is anticipated that this policy will greatly reduce the discount during FY2011.

VNL also continued to benefit from the strong ongoing demand for newly built residential housing, a hallmark of Vietnam’s growing middle class and rising urbanisation. This long-term trend plays perfectly into VNL’s investment strategy, which has focused on acquiring township sites in prime suburban locations, along with select city-centre locations for high-end, mixed-use developments. Many of these sites are already under construction. VNL is positioned to bring over 10,000 villas and townhouses, and an equal number of apartment units, to market over the next five years. No foreign or domestic real estate developer or fund has a residential pipeline that compares.

Financing the construction of the residential and mixed-use assets will be an important driver of progress for the fund. At 30 June 2010, VNL had secured USD197 million in project financing from domestic banks, with several more loan agreements in the final stages of negotiation. VNL is supported by an in-house development team that has a strong project delivery track record, boding well for further rounds of financing applications.

VinaLand Limited (VNL) during the year ending 30 June 2010 made significant progress with the development of several top holdings in its portfolio, particularly residential resort and township developments. The sales of villas and apartments recorded during the year were an extremely positive indicator of the fund’s investment and return prospects over the coming years.

VNL at the end of June 2010 had an NAV of USD682 million, or USD1.36 per share. This was an increase of 3.2 percent from the end of June 2009, when VNL had an NAV of USD660 million, or USD1.32 per share. The share price at the end of June 2010 was USD0.77, up 11.6 percent from USD0.69 at the end of June 2009. Despite this improvement, the discount at 30 June remained significant at 43.4 percent, a disappointing result given the comparatively strong performance of the fund over the year.

The discount first emerged in mid-2008, and has persisted until now. Addressing the discount and increasing shareholder value is the manager’s top concern, and an announcement related to the fund’s distribution policy was issued after the period ended, in late October 2010. The policy will see 50 percent of cash generated from divestments, after taxes and expenses,


Beyond the residential market, VNL is also well-positioned in other sectors. The fund holds eight retail assets spread across Hanoi, Danang, Nha Trang and Ho Chi Minh City, and negotiations with anchor tenants are underway at four of these projects. It is expected that 2011 will see construction commence at four of these projects.

In hospitality, VNL continues to hold Vietnam’s top portfolio of operating hotels. The year saw the opening of the Sheraton Nha Trang Hotel and Spa, the first five-star international flag along Vietnam’s coast. Shortly after the financial year ended, the Movenpick Hotel Saigon re-opened after a substantial renovation. The hospitality market in Vietnam continues to recover after the 2008-09 slowdown, with 2010 revenue and gross operating profit of the VNL-owned hotels up an estimated 28.5 and 27.7 percent, respectively, over 2009.

VNL has now divested full or partial stakes in 13 projects, generating total proceeds of USD324.7 million on acquisition costs of USD163.6 million. VNL exited several mature assets in FY2010, and will look to dispose or find co-investors on an estimated eight additional assets in 2011-12. The business plan, agreed by the VNL Board of Directors, is to hold

25-26 assets in the portfolio, and proceed with development on all these assets.

FY2010 saw four construction starts, and FY2011 will see construction commence on five additional assets, including Times Square Hanoi, Norman Estates at the Danang Beach Resort, and VinaSquare Tower, HUD, and Thang Loi in Ho Chi Minh City.

VNL during the year benefited from the establishment of VinaProjects, a project and construction management joint venture with inProjects of Hong Kong. VinaProjects will further strengthen project delivery, providing the most cost-effective support for VinaCapital’s in-house real estate development team.

Outlook Vietnam’s macro economy is expected to be stable in the second half of 2010, with GDP growth topping seven percent in 2011. Liquidity should gradually increase as the cost of debt declines, which will support the real estate market in general. VNL has a pipeline that includes over 4,000 new residential units to bring to market in 2011, most being mid-range offerings. These holdings depend less on acquiring financing, as construction is typically financed via the end-user sales process

FY2010 FY2009

NAV p.s. 1.36 1.32Change on previous year 3.2% (18%)Share price 0.77 0.69Change on previous year 11.6% (43.4%)Premium/(discount) to NAV 43.4% 47.7%Number of projects 38 47

FY2010 FY2009

Hanoi 13% 19%

Central Vietnam 25% 25%HCM City and region 62% 56%

Performance summary

Portfolio by geographic region (% NAV)

(which consists of staged payments). The VNL strategy is to divest mature projects, develop and sell residential holdings, and move forward with retail and office projects only when anchor tenant leases are in place. The assets VNL holds are perfect for this strategy, and the fund moves into 2011 with solid growth prospects.


VNL Portfolio by sector (end June 2010)

NAV vs share price performance

100%

16%

5%

24%

18%

37%

23%

6%

24%

16%

31%

Hospitality

Office

Residential

Mixed use/retail

Township/large-scale

Hospitality

Office

Residential

Mixed use/retail

Township/large-scale

USD682 million FY2010

USD660 millionFY2009

2.0

1.5

1.0

0.5

0.0

Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10

1.36NAV per share

0.77 Share price


Completion in 2009-2010 Construction in 2010 Construction in 2011 (estimate)

Projects Location Refurbishment Construction On-going Start Start

Movenpick Hotel Hanoi Hanoi 2009

Movenpick Hotel Saigon HCM City 2010

Mercure La Gare Hanoi Hotel Hanoi 2009

Sheraton Nha Trang Hotel and Spa Nha Trang 2010

Ocean Villas (Danang Beach Resort) Danang

The Garland HCM City

Azura (Danang WTC) Danang

The Dunes Residences (Danang Beach Resort) Danang

The Ceana Hoi An Hoi An

Dai Phuoc Lotus Township HCM City

My Gia Township Nha Trang

VinaSquare Tower HCM City

Green Park Estate (Thang Loi) HCM City

HUD HCM City

Times Square Hanoi Hanoi

Norman Estates (Danang Beach Resort) Danang

Development progress


Project capital structure Debt to equity ratio of VNL projects

VNL carries no debt at the fund level, and project level debt is conservative.

The highest level of debt is in the operating hotels, where the Movenpick Hanoi and Saigon hotels were recently renovated, and the four-star Mercure Hanoi La Gare and five-star Sheraton Nha Trang Hotel and Spa completed construction and opened in 2009 and 2010, respectively.

* Total 14 assets, including five operating hotels.

Debt to equity ratio

(% debt)

Danang Beach Resort 37%

WTC Danang 17%

My Gia Nha Trang 28%

The Garland 67%

Long Truong 70%

Hospitality portfolio 66%*

Top ten holdings at 30 June 2010

NAV %

Danang Beach Resort 10.0%

Century 21 9.5% Dai Phuoc Lotus Township 9.0% Pavilion Square 7.0% My Gia Nha Trang 6.0% VinaSquare Tower 5.0% Times Square Hanoi 4.3% Aqua City (Long Hung) 4.0% Fideco Binh Duong 3.5% Mövenpick Hotel Saigon 3.0%


Hanoi

Danang

Nha Trang

Ho Chi Minh

Top holdings by region

HanoiType Status

Times Square Hanoi Mixed use Investment licenceMovenpick Hotel Hanoi Hospitality Operating assetMercure La Gare Hanoi Hotel Hospitality Operating asset

Nha TrangType Status

Sheraton Nha Trang Hotel and Spa Hospitality Operating assetMy Gia Nha Trang Township Sales underway

Ho Chi MinhType Status

Dai Phuoc Lotus Township Sales underwayCentury 21 Residential Under construction VinaSquare Tower Mixed use Investment licencePavilion Square Mixed use Investment licenceThe Garland Villas Residential Sales underwayMovenpick Hotel Saigon Hospitality Operating asset

DanangType Status

World Trade Center Danang Mixed use Sales underwayDanang Beach Resort Township Sales underwayCeana Hoi An Villas and Hotel Mixed use Under construction


VNL owns five operating hotels and has reached the construction and sales phase on numerous residential sites in central Vietnam and the Ho Chi Minh City region.


My Gia Nha Trang

My Gia is a 158-hectare township site strategically positioned between the mountains and the famous beaches of Nha Trang, one of the most popular coastal tourist destinations in central Vietnam. The township will offer a complete community of luxury villas, townhouses, apartments, hospital, international school, retail centre and entertainment facilities. A display village is now under construction. Phase 1 and 2 sales of land lots launched in November 2010, with 80 percent of the 1,400 land lots available reserved for sale. VNL holds a 53.25 percent stake in My Gia Nha Trang.

Type Mixed-use township. Location Nha Trang, central Vietnam. Details 88ha of residential lots, plus school, hospital, retail, sports and recreation facilities and administrative offices. Status Sale of cleared land lots underway.

Movenpick Hotel Saigon

The Movenpick Hotel Saigon re-opened in August 2010 after a complete renovation that included a redesign of the lobby and 278 guestrooms, five new interiors for the hotel’s restaurants, a semi-open bar near the third floor pool, and a new rear entrance framed by a massive Cay Da (Banyan) tree. The renovation follows VNL’s strategy of acquiring under-performing hotel assets in prime locations and renovating and re-branding them under international flags. VNL holds a 52.5 percent stake in the Movenpick Hotel Saigon.

Type Five-star hotel. Location Ho Chi Minh City (near Tan Son Nhat airport). Details 278 keys; five food and beverage outlets, five function rooms, swimming pool, fitness centre, spa and e-gaming club. Status Operating asset, newly renovated.

Featured investments


Ceana Villas and Hotel

The Ceana Villas and boutique hotel project is a 100% VNL-owned asset on an 8.6ha site on the beach in Hoi An, central Vietnam. The revised master plan comprises an 82-key boutique hotel and 31 villas for sale. Each of the three- to five-bedroom villas, including eight beachfront units, will be serviced by the hotel operator. Preliminary site infrastructure is completed and construction of the villa foundations is now underway. Marketing efforts will begin once foundations are complete and target buyers looking to pre-purchase villas off-plan. Loan negotiations are underway with two banks for complete financing of the villas and hotel construction.

Type Mixed-use residential and hospitality. Location Hoi An, central Vietnam. Details 31 villas for sale; 82-key boutique hotel. Status Villa foundations under construction, marketing and sales to begin in early 2011.

Danang Beach Resort

The 260-hectare Danang Beach Resort is Vietnam’s first truly integrated luxury beachfront resort. The resort has pioneered the second-home market in Vietnam, with sales of The Ocean Villas, the first residential component, successfully launched to entirely domestic buyers. The Dunes golf course, designed by golf legend Greg Norman, is now open for play and garnering praise as Vietnam’s top championship-level course. Upcoming residential components to launch in 2011 include the Norman Estates and Dunes Residences. The Danang Beach Resort, when fully complete, will set the standard for Vietnam’s fast-growing hospitality industry. At 30 September 2010, total villa and condominium sales and reservations at the Danang Beach Resort stood at USD68 million. VNL holds a 75 percent stake in the Danang Beach Resort, with VOF holding 25 percent.

Type Mixed-use integrated resort. Location Danang, central Vietnam. Details Phase 1 components include: The Dunes Golf Course (18-hole championship course, now open); 115 detached villas (The Ocean Villas); 132 beach condominiums (The Cham); 15 detached golf course villas (The Dunes Residences); 37 branded golf course and oceanfront villas (The Norman Estates); Five-star hotel; The Ocean Villa beach club. Status Under construction, with the first golf course operational and over 80 villas built and handed over to owners.


Dai Phuoc Lotus

Dai Phuoc Lotus is a unique resort-style township project covering 200 hectares on an island of 400 hectares in a branch of the Saigon River. The island township is located in Dong Nai Province, between Ho Chi Minh City and the future Long Thanh International Airport. Construction of several model villas is underway. A total of 332 villas have been launched to date, with 233 sales contracts and reservations signed as of 30 September 2010. VNL holds a 54 percent stake in Dai Phuoc Lotus.

Type Mixed-use township. Location Dong Nai Province, near Ho Chi Minh City. Details 200ha comprising residences, retail, golf course, schools, medical facilities, hotels, parkland and sports facilities. Status Sales underway for Phase 1 villas, covering 20ha.

Green Park Estate (Thang Loi)

The Green Park Estate project (formerly called Thang Loi) development in Ho Chi Minh City is a 26.7 hectare site on a major road link to the Cambodian border and the TransAsia Expressway. The project enjoys a high land value as it is located along a planned MRT line that will connect the site to the central business district. In addition to residential villas and apartments, warehouse retail will supply neighbouring townships, the city centre and even Cambodia. Green Park Estate will be also be a major destination for recreation, as areas under aviation height constraints will be used for sport facilities and parks. The residential sections of the development will comprise 1,250 units, with construction of villas to start in Q4 2011, and construction of the retail components to begin by Q3 2012. VNL holds a 49 percent stake in Green Park Estate.

Type Mixed-use. Location Ho Chi Minh City. Details 26.7ha plot with total approved GFA of 342,377sq.m. Status Investment licence received, 1:500 master plan submitted.


Times Square Hanoi

Times Square is a landmark four-hectare mixed-use project in the new suburban area of My Dinh, in western Hanoi. The site is in a prime location next to Hanoi’s most popular retail hypermarket, Big C, and across from the National Convention Centre. Times Square has a distinctive integrated retail podium and high-rise office, hotel and serviced apartment components. Preparatory work on the site is underway, with the first phase comprising a 30,300sq.m GFA office tower, 20,000sq.m GLA retail podium, and 33,200sq.m GFA serviced apartment. VNL holds a 65 percent stake in this project.

Type Mixed-use urban landmark. Location My Dinh, Hanoi. Details 40,000sq.m land area, with total approved GFA of 351,140sq.m comprised of retail, office, hotel and serviced apartment components. Status Investment licence received, construction to start Q1 2011.

Mercure Hanoi La Gare

The Mercure Hanoi La Gare opened in September 2009 after a complete top-to-bottom renovation and rebranding under Accor’s well-regarded four-star boutique flag. The acquisition of this city-centre property followed VNL’s strategy of targeting domestic business travel and mid-range tourism - which proved timely given the travel downtrend that took hold in 2008. The Mercure has garnered strong operating results since opening, with occupancy and room rates above the average for four-star hotels in Hanoi. VNL holds a 100 percent stake in the Mercure Hanoi La Gare.

Type Four-star boutique hotel. Location Hanoi CBD. Details 102 keys; food and beverage outlets, conference room and fitness centre. Status Operating asset, with 68.8% occupancy and USD70.7 average room rate for 2010 to September.


Horst F. Geicke is one of VinaCapital Group’s three founding partners. He has resided in Asia for almost 30 years and has over 25 years of operating and investing experience in the region, having made several financial and strategic investments in Vietnam, including the establishment of a manufacturing plant for his family business. Mr. Geicke also co-founded Pacific Alliance Group, a fund management group in Hong Kong. Mr. Geicke is the President of the European Chamber of Commerce in Hong Kong and was previously the President of the German Chamber of Commerce in Hong Kong. He is the chairman or board member of numerous public and private companies. Mr. Geicke has a Masters degree in Economics and Business Law from the University of Hamburg, Germany.

Mr. Brooke is the Chairman of Professional Property Services Limited, a Hong Kong-based real estate consultancy that provides a select range of advisory services across the Asia Pacific Region. Mr. Brooke is a former President of the Royal Institution of Chartered Surveyors and was the first overseas surveyor to be accorded that honour. Mr. Brooke is a recognised authority on land administration and planning matters and has provided advice in these areas to several Asian governments as well as the US State Department. He is also a Justice of the Peace, and a former Deputy Chairman of the Hong Kong Town Planning Board and a former member of the Hong Kong Housing Authority. Mr. Brooke also sits as a Non-executive Director on the Boards of a number of public companies including Shanghai Forte Land Company Limited, one of China’s largest residential developers and Majid Al Futtaim Investments, one of Middle East’s leading shopping centre developers. Mr. Brooke has a degree in Estate Management and a Post Graduate Diploma in Business Administration from the University of London.

Don Lam is a founding partner of VinaCapital Group, with over 15 years experience in Vietnam. He has overseen the Group’s growth from manager of a single USD10 million fund in 2003 into a full-featured investment firm managing numerous listed and unlisted funds, and offering a complete range of corporate finance and real estate advisory services. Before founding VinaCapital, Mr. Lam was a partner at PricewaterhouseCoopers (Vietnam), where he led the Corporate Finance and Management Consulting practices throughout the Indochina region. Mr. Lam has also held management positions at Deutsche Bank and Coopers & Lybrand in Vietnam and Canada. He has a degree in Commerce and Political Science from the University of Toronto, and is a member of the Institute of Chartered Accountants of Canada. He is a Certified Public Accountant and holds a Securities Licence in Vietnam.

Board of Directors

Horst F. Geicke Director

Nicholas Brooke Chairman

Don Lam Director


Robert Gordon was British Ambassador to Vietnam from 2003-2007 and to Burma from 1995-1999. He was head of the Foreign and Commonwealth Office’s Southeast Asia Department in London from 1999-2003. He joined the British Diplomatic Service in 1973 and served in Poland, Chile and France. After retiring from the FCO in April 2008, he now advises a number of companies and organisations on issues concerning Southeast Asia. He also provides expert advice to several UK law firms, as well as lecturing at the University of Strasbourg. Mr. Gordon was awarded an OBE in 1983 and a CMG in 1999. He was born in Trieste, Italy and educated at King’s School Canterbury and graduated from Magdalene College, Oxford in 1973 with a BA (later MA) in Modern Languages.

Mr. Arnold is a senior executive with over forty years experience in the property industry, including over thirty years in Asia. He retired as an Executive Director of Hongkong Land in 2002 and is currently Managing Director of Arnco Ltd, which provides an advisory service to the property industry in Asia and the Middle East. Mr. Arnold sits on the boards of a number of companies including The Link, as an Independent Non Executive Director, and The Business Environment Council, as a Non Executive Director. During his career with Hongkong Land, Mr. Arnold was responsible for all project developments in Hong Kong and Asia, spanning from Australia to Southeast Asia and China. Mr. Arnold is a Fellow of the Hong Kong Institute of Surveyors and an Associate of the Royal Institute of Chartered Surveyors.

Nicholas Charles Allen is an independent non-executive director of CLP Holdings Ltd, Lenovo Group Ltd, and Hysan Development Company Ltd. He is chairman or member of the audit committee for all three companies. Mr. Allen joined Coopers & Lybrand in 1977, coming to Hong Kong with that firm in 1983. In 1998 Coopers & Lybrand merged to form PricewaterhouseCoopers, and Mr. Allen worked at PwC until his retirement in 2007. During his 24 years with PwC in Hong Kong, Mr. Allen was the partner-in-charge of the Consumer and Industrial Products Group, the Corporate Finance and Recovery Practice division, and the Hong Kong and China Assurance Practice. He is a fellow of the Chartered Accountants in England and Wales and a member of the Hong Kong Institute of Certified Public Accountants. Mr. Allen has a B.A. from Manchester University in the United Kingdom.

Robert A. E. Gordon Director

Michael Arnold Director

Nicholas Allen Director


Report of the Board of Directors

The Board of Directors submits its report together with the consolidated financial statements of VinaLand Limited (“the Company”) and its subsidiaries (together “the Group”) for the year ended 30 June 2010 (“the year”).

The Group VinaLand Limited is incorporated in the Cayman Islands as a company with limited liability. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.

Particulars of the Group’s principal subsidiaries and associates are set out in Note 7 and Note 13.

Principal activities The Company’s primary objective is to focus on key growth segments within Vietnam’s emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia to provide shareholders with an attractive level of income and capital growth, from investing in a diversified portfolio of mainly property investments.

The principal activities of the subsidiaries are property investment and hospitality management.

Results and dividend The results of the Group for the year ended 30 June 2010 and the state of its affairs as at that date are set out in the consolidated financial statements on pages 38 to 88.

The Board of Directors do not recommend the payment of dividend for the year ended 30 June 2010 (30 June 2009: USD nil).

Board of Directors The members of the Board of Directors of the Company during the year and to the date of this report are as follows:

On 12 March 2010 Mr. Nicholas Brooke replaced Mr. Horst Geicke as Chairman of the Board of Directors.

Auditors The Group’s auditors, Grant Thornton Cayman Islands, with the assistance of Grant Thornton Vietnam Ltd., have expressed their willingness to accept reappointment.

Subsequent events after the reporting date Other than the matter outlined in Note 20, there were no material events after the reporting date that has a bearing on the understanding of these consolidated financial statements.

Name Position Appointed onNicholas Brooke Chairman 13 January 2006Horst Geicke Director 31 August 2005Don Lam Director 13 January 2006Robert Gordon Director 16 February 2009Michael Arnold Director 17 March 2009Nicholas Allen Director 29 June 2010


Directors’ interest in the Company As at 30 June 2010, the interests of the directors in the shares, underlying shares and debentures of the Company are as follows:

Subsequent to the reporting date, Mr. Michael Arnold and Mr. Nicholas Allen purchased 64,500 and 95,627 ordinary shares bringing their total shareholdings to 0.01% and 0.02% respectively.

Subsequent to the reporting date, the Investment Manager of the Group, VinaCapital Investment Management Limited, purchased 660,000 shares on the open market representing 0.13% interest in the Group. As Mr. Don Lam and Mr. Horst Geicke are shareholders in this company, their shareholdings consequently increased to 0.56% and 0.65% respectively.

Board of Directors’ responsibility in respect of the consolidated financial statements The 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 Group as at 30 June 2010 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 judgements 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 Group will continue its operations in the foreseeable future; and

v. control and direct effectively the Group in all material decisions affecting its operations and performance and ascertain that such decisions and/or instructions have been properly reflected in the consolidated financial statements.

The Board of Directors is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board of Directors confirms that the Group has complied with the above requirements in preparing the consolidated financial statements.

Statement by the Board of Directors In the opinion of the Board of Directors, the accompanying Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Income, Consolidated Statement of Comprehensive Income, Consolidated 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 Group as at 30 June 2010 and the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

On behalf of the Board of Directors

Nicholas Brooke Chairman Hong Kong, SAR China 17 December 2010

No. of shares Approximate % of direct

and indirect holdingDirect Indirect

Horst Geicke 2,750,000 184,979 0.59%

Don Lam 2,457,250 122,649 0.52%

Nicholas Brooke 150,000 - 0.03%


Governance report

VNL 2010 Corporate Governance Report

On behalf of the Board, I am pleased to report on the activities of the Board and its Committees during the 2010 financial year. VinaLand Limited (’VNL’ or ‘the Company’) is a Cayman Island company established in 2006 and traded on the AIM Market of the London Stock Exchange.

The Board is committed to meeting the highest standards of corporate governance. The ultimate aim of the corporate governance programme is to protect shareholders’ and other stakeholders. In order to achieve this, the Company has created a clear and effective structure for responsibility and governance.

The responsibility of the Board and its committees is set out in Part 2 of the Company’s Articles of Association. Over time, these responsibilities have been further refined and clarified, as presented in this report.

Compliance to AIM Rules and Corporate Governance best practice The Company complied with the AIM rules and regulations. Furthermore the Company uses as guidelines other relevant best practice corporate governance frameworks, such as the UK Combined Code on Corporate Governance (‘the Combined Code’) and the Association of Investment Companies Code of Corporate Governance (‘the AIC Code’), which adapts the Combined Code specifically for investment companies.

The members of the Board of Directors

At the date of this report, the Board is comprised of four independent non-executive Directors, including the Chairman, and two non-independent Directors. This is in line with the Combined Code recommendations that at least half the Board are independent non-executive Directors. The independent non-executive Directors have all declared that they were, and continue to be, independent from the Company, the manager and any of its managed vehicles.

At the end of the financial year, the annual aggregate director fees amounted to USD120,000.

* Mr. Don Lam is an executive of the Manager, VinaCapital Investment Management Ltd and a director of VinaCapital Group Ltd

** Mr. Horst Geicke is the Chairman of VinaCapital Group Ltd

Current Board Members Independence to the Company

Exec/Non-exec Director

Nicholas Brooke Yes Non-executiveRobert Gordon Yes Non-executiveMichael Arnold Yes Non-executiveNicholas Allen Yes Non-executiveDon Lam No* Non-executiveHorst Geicke No** Non-executive


Organisation of corporate governance

The Board provides strategic direction and has an oversight role over the investment manager to ensure that shareholder returns are maximised.

The investment manager executes the Board’s strategic direction within the agreed framework of reward, incentive and control.

The investment manager cascades down and apply the framework to all investment vehicles.

Shareholders

Board of DirectorsNomination/Remuneration/

Management evaluation committee

Risk

Reporting and accounting

Treasury

Risk and compliance

Reporting and accounting

Investment manager

Operating unitCountry, branch office

Audit committee Investment committee

Valuation committee

Investment teams

Legal

Business development

Corporatecommunications/Investor relations


The responsibility of the Board of Directors

The Board is responsible for managing the Company on behalf of its shareholders. In order to create and deliver sustainable shareholder value, the Board established the objectives and policies of the Company, and ensured throughout the year that the overall strategic direction was delivered within the agreed framework of reward, incentive and control.

Certain responsibilities of the Board are delegated to Board Committees to assist the Board in carrying out its functions and to ensure independent oversight of internal control and risk management. Each Board committee’s terms of reference endeavoured to follow the model terms of reference from the Institute of Chartered Secretaries and Administrators (ICSA). The committee’s terms of reference set out the committee administration requirements, duties and responsibilities of specific areas. The Committee Chairman reports to the Board on matters discussed and any proposals requiring decision making.

The Board has held four scheduled Board meetings during the year, and used a structured agenda to ensure all key areas are reviewed over the course of the year.

Summary of the members’ attendance and fees paid are shown below.

(1) Nicholas Allen was appointed to the Board and Committees in June 2010.

(2) Attendances of Board and Committee are from July 2009 to June 2010.

Attendance (2)

Board Member ElectedCurrent

Board Position

Audit Committee

(AC)

Valuation Committee

(VC)

RNME Committee

(RNME)

Board meetings

(4)

ACmeetings

(4)

VC meetings

(4)

RNME meetings

(1)

Total Fee

USD

Nicholas Brooke 2006 Chairman Member Member Member 4/4 4/4 4/4 2/2 40,000

Robert Gordon 2009 Member Member - Chairman 4/4 4/4 - 2/2 40,000

Michael Arnold 2009 Member - Chairman Member 4/4 - 4/4 2/2 40,000

Nicholas Allen(1) 2010 - Chairman - Member 1/1 1/1 - 1/1 -

Don Lam 2006 Member - - - 4/4 - - - -

Horst Geicke 2006 Member - - - 4/4 - - - -

Total 120,000


Board Delegated Committees

Audit Committee The committee monitored the effectiveness of internal controls, internal audit activities, the risk management system and financial reporting. The committee’s terms of reference are based on The Smith Guidance recommended in the Code. The committee was also kept informed of the annual audit and bi-annual review of the Company’s financial statements. It assessed the external auditor’s independence and approved any non-audit services provided by the external auditor. The committee also evaluated the performance of both the internal and external auditors following each audit cycle. At each Board meeting, the committee’s Chairman presented the committee’s findings and proposals to the Board. The committee met four times during the year (three times in person and once by telephone call).

Valuation Committee The committee ensured the investment manager valuation process and policies are consistent, transparent and valuation results are determined on an appropriate basis. The committee Chairman presented the committee’s findings and recommendations to the Board for final decisions on all valuations. The committee met four times during the year.

Remuneration/ Nomination/ Management Engagement/ Evaluation Committee The committee met twice during the year and performed multiple roles. The committee:

• Determined and agreed the framework for the remuneration of the Board and Committee members;

• Reviewed the structure, size and composition (skill, knowledge and experience) of the Board and recommended changes if necessary;

• Evaluated the performance of the Company’s key third-party service providers, this including the investment manager, nominated advisor, company secretary, corporate broker, custodian and administrator;

• Reviewed and evaluated the Committee’s own performance, duties and responsibilities and concluded that it and its members are effective.

The committee’s Chairman reported the committee’s findings and proposals to the Board for approval.

Investment Committee The committee met many times during the year to consider and approve real estate projects that the Investment Manager felt were suitable for investment by VNL. The committee is comprised of individuals with financial and business backgrounds combined with extensive hands-on local experience. The current committee members include Nicholas Brooke, Horst Geicke, Don Lam and David Henry.

Investment Manager VNL has given VinaCapital, the investment manager, overall responsibility for conducting

the day-to-day management of the Company’s investment portfolio including the acquisition, monitoring and disposal of assets in line with the strategy adopted by the Board. For further information of the investment manager please refer to the AIM admission document.

Internal Controls and Risk Management In 2009, the Board endeavoured to adopt The Turnbull Guidance as recommended by the Code for internal controls and risk management. Thus the internal audit function was introduced to the Company in the third quarter of 2009, as the Board and investment manager sought to strengthen the internal control process to meet the Company’s needs. The Board appointed PricewaterhouseCoopers (PwC) Vietnam as the internal auditor at the time. The internal audit work was performed based on an internal audit plan determined and in agreement with the Audit Committee. The internal auditor participated in all audit committee meetings. The audit committee has decided to continue to outsource the internal audit function and to reappoint PwC as the internal auditor for 2011.

Sincerely,

___________________________________________

Nicholas Brooke Chairman VinaLand Limited


Independent Auditors’ report

To the Shareholders of VinaLand Limited

Introduction We have audited the accompanying consolidated financial statements of VinaLand Limited and its subsidiaries (“the Group”) which are comprised of the Consolidated Statement of Financial Position as of 30 June 2010, and the Consolidated Statement of Changes in Equity, Consolidated Statement of Income, Consolidated Statement of Comprehensive Income and Consolidated Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes from page 38 to page 88.

Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility Our 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 that the consolidated financial statements are free from material misstatement.

This report, including the opinion, has been prepared for and only for the shareholders. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Basis of opinion An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend upon the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, 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 financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements give a true and fair view of the financial position of VinaLand Limited and its subsidiaries as of 30 June 2010, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

GRANT THORNTON Grand Cayman, Cayman Islands 17 December 2010


Consolidated statement of financial positionNote 30 June 2010 30 June 2009

USD’000 USD’000

(Reclassified)

ASSETS

Non-current

Investment properties 9 620,650 446,614

Properties developed for sales 10 80,057 -

Property, plant and equipment 11 111,569 78,908

Intangible assets 12 13,400 12,091

Investments in associates 13 71,789 104,764

Goodwill 7 3,923 -

Prepayments for operating lease assets 14 41,595 53,041

Prepayments for acquisitions of investments 15 52,208 66,097

Other long-term financial assets 16 9,980 1,112

Deferred tax assets 17 18,268 5,024

Non-current assets 1,023,439 767,651

Current

Inventories 712 146

Trade and other receivables 18 112,637 109,901

Receivables from related parties 19 4,389 2,572

Short-term investments 20 15,215 34,888

Financial assets at fair value through Statement of Income 21 32,796 46,298

Cash and cash equivalents 22 79,979 50,274

Current assets 245,728 244,079

Assets classified as held for sale 24 - 85,321

Total assets 1,269,167 1,097,051

The accompanying notes are an integral part of these statements.


Consolidated statement of financial position (cont.)Note 30 June 2010 30 June 2009

USD’000 USD’000

(Reclassified)

EQUITY AND LIABILITIESEQUITYEquity attributable to shareholders of the parentShare capital 25 4,999 4,999 Additional paid-in capital 26 588,870 588,870 Revaluation reserve 27 3,483 10,799 Translation reserve (29,733) (16,147)Retained earnings 114,025 72,008

681,644 660,529

Non-controlling interests 224,269 166,445 Total equity 905,913 826,974

LIABILITIESNon-current Long-term borrowings and debts 28 70,995 21,841 Long-term payables to related parties 31 76,856 65,018 Deferred tax liabilities 29 50,823 19,367Other liabilities 879 912Non-current liabilities 199,553 107,138Current Short-term borrowings and debts 28 21,090 20,584 Trade and other payables 30 116,466 74,354 Payables to related parties 31 26,145 49,943 Current liabilities 163,701 144,881

Liabilities included in disposal group held for sale 24 - 18,058 Total liabilities 363,254 270,077Total equity and liabilities 1,269,167 1,097,051Net assets per share attributable to shareholders of the parent 40 1.36 1.32



Equity attributable to shareholders of the parentNon-controlling

interestsTotal equity

Share capitalAdditional

paid-in capital

Revaluation reserve

Translation reserve

Retained earnings

USD‘000 USD‘000 USD‘000 USD’000 USD’000 USD‘000 USD‘0001 July 2008 4,999 588,870 13,844 (4,623) 201,437 219,868 1,024,395Currency translation - - - (11,524) - (6,129) (17,653)Revaluation losses on buildings (Note 27) - - (3,045) - - (2,544) (5,589)Total other comprehensive income - - (3,045) (11,524) - (8,673) (23,242)Losses for the year ended 30 June 2009 - - - - (129,429) (72,194) (201,623)Total comprehensive income - - (3,045) (11,524) (129,429) (80,867) (224,865)Acquisitions of subsidiaries - - - - - 12,553 12,553 Capital contributions in subsidiaries - - - - - 15,935 15,935 Dividend distributions to non-controlling interests - - - - - (1,044) (1,044)30 June 2009 4,999 588,870 10,799 (16,147) 72,008 166,445 826,974

1 July 2009 4,999 588,870 10,799 (16,147) 72,008 166,445 826,974Currency translation - - - (13,586) - (13,081) (26,668)Gains on acquisition of non-controlling interests - - - - 1,683 - 1,683 Revaluation gains on buildings (Note 27) - - 439 - - 1,387 1,826 Total other comprehensive income - - 439 (13,586) 1,683 (11,694) (23,158)Profits for the year ended 30 June 2010 - - - - 48,451 27,541 75,992 Total comprehensive income - - 439 (13,586) 50,134 15,847 52,834 Acquisitions of subsidiaries - - - - - 44,119 44,119 Capital contributions in subsidiaries - - - - - 37,298 37,298 Acquisitions of non-controlling interests - - - - - (18,133) (18,133)Disposals of subsidiaries (Note 27) - - (7,755) - (8,117) (20,685) (36,557)Dividend distributions to non-controlling interests - - - - - (622) (622)30 June 2010 4,999 588,870 3,483 (29,733) 114,025 224,269 905,913

Consolidated statement of changes in equity



Consolidated statement of income

NoteYear ended

30 June 2010Year ended

30 June 2009USD’000 USD’000

Revenue 17,277 28,014Cost of sales 32 (10,235) (15,711)Gross profit 7,042 12,303

Net gains/(losses) on fair value adjustments of investment properties 33 95,487 (153,544)Operating, selling and administration expenses 32 (46,171) (35,611)Other net changes in fair value of financial assets at fair value through Statement of Income 34 7,695 (4,754)Other income 35 45,809 2,591 Other expenses 36 (7,710) (38,067)Operating profit/(loss) from continuing operations 102,152 (217,082)

Finance income 37 6,860 11,972 Finance expenses 38 (8,244) (6,735)Finance (expenses)/income - net (1,384) 5,237Share of losses of associates 13 (9,609) (3,342)

(10,993) 1,895 Profit/(loss) from continuing operations before tax 91,159 (215,187)Tax (expense)/income 39 (15,167) 13,564 Net profit/(loss) for the year from continuing and total operations 75,992 (201,623)

Attributable to equity shareholders of the parent 48,451 (129,429)Attributable to non-controlling interests 27,541 (72,194)

75,992 (201,623)

Earnings per share - basic and diluted (USD per share) 40 0.10 (0.26)



Consolidated statement of comprehensive income

Year ended 30 June 2010


USD’000 USD’000

Profit/(loss) for the year 75,992 (201,623)

Other comprehensive income/(losses)

Gain/(loss) on revaluation of buildings in the year 1,826 (5,589)

Gains on acquisitions of non-controlling interests 1,683 -

Exchange differences on translating foreign operations (26,668) (17,653)

Other comprehensive income/(losses) for the year (23,158) (23,242)

Total comprehensive income/(losses) for the year 52,834 (224,865)

Attributable to equity shareholders of the parent 36,987 (143,998)

Attributable to non-controlling interests 15,847 (80,867)

52,834 (224,865)



Note 30 June 2010 30 June 2009USD’000 USD’000

Operating activities

Net profit/(loss) for the year before tax 91,159 (215,187)

Adjustments 41 (92,186) 198,636

Net losses before changes in working capital (1,027) (16,551)

Change in trade and other assets (38,972) 48,906

Change in inventory (566) 131

Change in trade and other liabilities 37,958 15,432

Cash and cash equivalents classified as held for sale assets - (19,858)

Corporate income tax paid (1,224) (1,352)

Cash flow from operating activities (3,831) 26,708

Investing activities

Interest received 6,877 7,420

Purchases of investment property, plant, equipment, and other non-current assets (151,948) (80,023)

Acquisitions of subsidiaries, net of cash 7 (18,524) (7,189)

Proceeds from disposals of investments 41,438 5,132

Deposits for acquisitions of investments (12,262) (11,664)

Proceeds from disposals of held for sale assets/liabilities and financial assets 30,600 10,873

Investments in associates (3,768) (61,962)

Acquisitions of long-term assets (210) (5,774)

Net proceeds from short-term investments 27,405 22,139

Net cash receipts from related parties for real estate projects 27,113 16,072

Cash flow from investing activities (53,279) (104,976)

Consolidated statement of cash flows



Note 30 June 2010 30 June 2009USD’000 USD’000

Financing activities

Additional capital contributions from minority shareholders 37,298 15,935

Loan proceeds from banks 76,866 42,305

Loan repayments to banks (26,449) (8,488)

Dividends paid to non-controlling shareholders (622) (1,044)

Loans proceeds from non-controlling shareholders - 1,481

Loan repayments to non-controlling shareholders (278) -

Interest paid - (2,453)

Cash flow from financing activities 86,815 47,736

Net change in cash and cash equivalents 29,705 (30,532)

Cash and cash equivalents at the beginning of the year 50,274 80,806

Cash and cash equivalents at end of the year 22 79,979 50,274

Consolidated statement of cash flows (cont.)



Notes to the consolidated financial statements

1. General information

VinaLand Limited is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The Company’s primary objective is to focus on key growth segments within Vietnam’s emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia. The Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNL.

The consolidated financial statements for the year ended 30 June 2010 were authorised for issue by the Board of Directors on 17 December 2010.

2. Statement of compliance with IFRS and adoption of new and amended standards and interpretations

2.1 Statement of compliance with IFRS The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2.2 Changes in accounting policies 2.2.1 Overall considerations The Group has adopted the following new interpretations, revisions and amendments to IFRS issued by the International Accounting Standards Board, which are relevant to and effective for the Group’s financial statements for the annual period beginning 1 July 2009:

• IAS 1 Presentation of Financial Statements (Revised 2007)

• IFRS 8 Operating Segments

• IFRS 3 Business Combinations (Revised 2008)

• IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

• Amendments to IFRS 7 Financial Instruments: Disclosures - improving disclosures about financial instruments.

2.2.2 Adoptions of revised and amended standards IAS1 Presentation of Financial Statements (Revised 2007) The adoption of IAS 1 (Revised 2007) made certain changes to the format and titles of the primary financial statements and to the presentation of some items within these statements. It also gave rise to additional disclosures. The measurement and recognition of the Group’s assets, liabilities, income and expenses were unchanged. However, some items that were recognised directly in equity were subsequently recognised directly in the Consolidated Statement of Comprehensive Income, for example revaluations of property, plant and equipment and exchange differences on translation of foreign operations. IAS 1 changed the presentation of changes in owner’s equity and introduced a “Statement of Comprehensive Income”.

IAS 1 (Revised 2007) requires an additional comparative statement of financial position to be presented whenever an accounting policy is applied retrospectively. This applies in the current year as IAS 1 (Revised 2007) is applied for the first time, and application is retrospective.


The comparative statement of financial position is unchanged from when it was previously reported. As this is the case for the previously reported statement of financial position as at 30 June 2009 the additional comparative statement of comprehensive income is not required as they are not expected to have a material impact on the Group’s Consolidated Statement of Financial Position.

IFRS 8 Operating Segments This standard has been applied retrospectively. The adoption of IFRS 8 has not affected the identified operating segments for the Group. However, reported segment results are based on internal management reporting information that is regularly reviewed by the Investment Manager. In the previous annual consolidated financial statements, segments were identified by reference to the way the Investment Manager manages and monitors the risks and returns of the Group. As the change in accounting policy only results in additional disclosures, there is no impact on the historic, current or future earnings per share ratio.

IFRS 3 Business Combinations (Revised 2008) The standard is applicable for business combinations occurring in reporting periods beginning on or after 1 July 2009 and has been applied prospectively. The new standard introduced changes to the accounting requirements for business combinations, but still requires use the purchase method with some of significant changes. For example, all acquisition related costs are expensed in the period in which the costs are incurred rather than included in the cost of investment. There is a choice on an acquisition by acquisition basis to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest’s proportionate

share of the acquiree’s net assets. All payments to purchase a business are recorded at fair value at the acquisition date. Some changes in the fair value of contingent consideration that the Group recognises after the acquisition date may be the result of additional information that the Group obtained after the date about facts and circumstances that existed at the acquisition date. Where the changes in fair value of the contingent consideration are not measurement period adjustments, contingent consideration classified as equity is not re-measured, contingent consideration classified as an asset or liability which is a financial instrument within the scope of IAS 39 is measured at fair value with gains and losses recognized either in profit or loss in other comprehensive income according to the requirements of IAS 39 and contingent consideration classified as an asset or a liability outside the scope of IAS 39 is accounted for in accordance with IAS 37 or other IFRSs as appropriate. The Group have applied IFRS 3 (Revised 2008) prospectively to all business combinations from 1 July 2009.

IAS 27 Consolidated and Separate Financial Statements (Revised 2008) The revised standard introduced changes in accounting for additional acquisition interests in subsidiaries. Where the Group increases and decreases its interest in subsidiaries but there is no change in control, the effects of all transactions between the Group with non-controlling interests no longer result in goodwill or any gains or losses, but are recorded in equity. When control is lost, any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in the Consolidated Statement of Income.

The revaluation surpluses of disposed subsidiaries previously recognised in equity are transferred directly to retained earnings when control is lost. The Group applied IAS 27 (Revised 2008) prospectively to transactions with non-controlling interests and disposals of subsidiaries from 1 July 2009.

Adoption of IFRS 7 Financial Instruments: Disclosure - improving disclosures about financial instruments The amendment requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurement by level of a fair value measurement hierarchy to be disclosed in the consolidated financial statements. As the changes in accounting policy only result in additional disclosures, there is no impact on the historic, current or future earnings per share ratio.

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

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.

Management anticipates that all of the pronouncements will be adopted in the Group’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group’s financial statements.


IAS 24 Related Party Disclosures (effective from 1 January 2011) The IASB issued a revised version of IAS 24 Related Party Disclosures (IAS 24 (2009)) on 4 November 2009 which supersedes IAS 24 (2003).

The changes introduced by IAS 24 (2009) relate mainly to the related party disclosure requirements for government-related entities and the definition of a related party.

In respect of definition of a related party, the amendments have been made in order to clarify its meaning and to eliminate previous inconsistencies. The changes include:

• It has been clarified that, where a Company has a subsidiary and an associate, for the purposes of the associate’s separate or individual financial statements, the subsidiary is regarded as a related party of the associate as well as the Company itself;

• The definition of a related party has been amended such that in the circumstances in the bullet point above, for the purposes of the subsidiary’s separate or individual financial statements, the associate is a related party;

• An inconsistency has been removed in order that, when considering investments held by individuals rather than entities, two associates are not regarded as being related parties simply because one person has significant influence over one entity, and a close family member of that person has significant influence over another entity;

• The criteria for investments held by key management personnel have been changed, so that where the key management personnel of

a Company have control or joint control over other entities, disclosures are required in both the financial statements of the Company and the financial statements of the other entities;

• In any circumstances where a Company has joint control over a second entity, and joint control or significant influence over a third entity, then the second and third entities are regarded as being related to each other.

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

• References to an associate and a joint venture include their subsidiaries; and

• Two entities are not related parties by virtue of a member of key management personnel of one entity having significant influence over another entity.

The definition of a ‘close member of the family’ has also been amended to state that these ‘include’ a person’s spouse or domestic partner and children, rather than ‘may include’. The Group selects to adopt IAS 24 from the effective date of the standard.

Management have yet to assess the impact that this amendment is likely to have on the financial statements of the Group. However, they do not expect to implement the amendments until all chapters of the IAS 39 replacement have been published and they can comprehensively assess the impact of all changes.

IFRS 9 Financial Instruments (effective from 1 January 2013) The IASB aims to rewrite IAS 39 Financial Instruments: Recognition and Measurement in its entirety by the end of 2010, with the replacement

standards to be effective for annual periods beginning 1 January 2013. IFRS 9 is the first part of Phase 1 of this project. The main phases are:

• Phase 1: Classification and Measurement

• Phase 2: Impairment methodology

• Phase 3: Hedge accounting

In addition, a separate IASB project team is dealing with derecognition.

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective from 1 July 2010) This interpretation clarifies the requirements of International Financial Reporting Standards (IFRSs) when the Group negotiates the terms of a financial liability with its creditor and the creditor agrees to accept the Group’s shares or other equity instruments to settle the financial liability fully or partially. IFRIC 19 clarifies that:

• equity instruments issued to a creditor are part of the consideration paid to extinguish the financial liability.

• equity instruments issued are measured at their fair value. If the fair value cannot be reliably measured, the equity instruments should be measured to reflect the fair value of the financial liability extinguished.

• the difference between carrying amount of the financial liability extinguished and the initial measurement amount of the equity measurements issued is included in the statement of income for the year.

The Group adopt IFRIC 19 from the effective date of the standard.


Management have yet to assess the impact that this amendment is likely to have on the financial statements of the Group. However, they do not expect to implement the amendments until all chapters of the IAS 39 replacement have been published and they can comprehensively assess the impact of all changes.

Annual Improvements 2009 The IASB has issued Improvements for International Financial Reporting Standards 2009. Most of these amendments become effective in annual periods beginning on or after 1 July 2009 or 1 January 2010. The Group expects the amendments to IAS 17 Leases to be relevant to the Group’s accounting policies. This standard is effective for periods beginning on or after 1 January 2010 therefore will apply to the Group’s subsequent consolidated financial statements. Prior to the amendment IAS 17 generally required a lease of land to be classified as an operating lease. The amendment now requires that leases of land are classified as finance lease or operating lease applying the general principles of IAS 17. The Group will need to reassess the classification of the land elements of its unexpired leases for the effective period on the basis of information existing at the inception of those leases. Any newly classified finance leases are recognised retrospectively. Preliminary assessments indicate that the effect on the Group’s financial statements will not be significant.

Annual Improvement 2010 The IASB has issued Improvements for International Financial Reporting Standards 2010. These amendments become effective for annual periods beginning on or after 1 July 2010 or 1 January 2011. The Group expects that the amendments to IFRS 3 Business Combinations, IFRS 7 Financial instruments:

Disclosure, IAS 1 Presentation of Financial Statements, IAS 21 The Effects of Changes in Foreign Exchange Rates, and IAS 28 Investments in Associates will be relevant to the Group’s accounting policies. However preliminary assessments indicate the effect on the Group’s consolidated financial statements will not be significant.

IFRS 3 Business Combinations is effective for the periods beginning on or after 1 July 2010 therefore will apply to subsequent financial statements. In respect of transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS, the improvements clarify that contingent consideration balances arising from business combinations that occurred before an entity’s date of adoption of IFRS 3 (Revised 2008) shall not be adjusted on the adoption date. Guidance is also provided on the subsequent accounting for such contingent balances. In respect of measurement of non-controlling interest (“NCI”), the choice of measuring NCI either at fair value of at the proportionate share in the recognised amounts of an acquiree’s identifiable assets, is now limited to NCI that are present ownership instruments and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation. This clarifies that all other components of NCI shall be measured at their acquisition date fair values, unless another measurement basis is required by IFRS.

IFRS 7 Financial instruments: Disclosure is effective for the periods beginning on or after 1 January 2011 therefore will be disclosed in the accounting policies of the Group’s subsequent financial statements. This clarifies the disclosure requirement of the standards to remove inconsistencies, duplicative disclosure requirements and specific disclosures that may be misleading.

IAS 1 Presentation of Financial Statements is effective for the periods beginning on or after 1 January 2011 therefore will be disclosed in the accounting policies of the Group’s subsequent financial statements. This clarifies that entities may present the required reconciliations for each component of other comprehensive income either in the Consolidated Statement of Changes in Equity or in the notes to financial statements.

IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 28 Investments in Associates are effective for the periods beginning on or after 1 July 2010 therefore will apply to the Group’s subsequent amendments arising from the IAS 27 (Revised 2008) amendments prospectively, to be consistent with the related IAS 27 transition requirement.

3. Summary of significant accounting policies

3.1 Presentation of consolidated financial statements The consolidated financial statements are presented in United States Dollars (USD) and all values are rounded to the nearest thousand (’000) unless otherwise indicated.

The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarised below. These policies have been consistently applied to all the years presented unless otherwise stated.

The consolidated financial statements have been prepared using the historical cost convention, as modified by the revaluation of investment property, leasehold land and certain financial assets and financial liabilities, the measurement bases of which are described in the accounting policies below.


The preparation of 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 consolidation The consolidated financial statements of the Group for the year ended 30 June 2010 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interests in associates.

3.3 Subsidiaries Subsidiaries are all entities over which the Group 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 Group. They are excluded from consolidation from the date that the control ceases. The majority of the Group’s subsidiaries have a reporting date of 30 June. For those subsidiaries with a different reporting date the Group consolidate management information which is subject to audit for the period to 30 June.

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 reporting at their revalued amounts, which are also used as the basis for subsequent measurement in accordance with the Group’s accounting policies. Goodwill represents the excess of acquisition cost over the fair value of the Group’s share of the identifiable net assets of the acquired subsidiary at the date of acquisition. Gain on bargain purchase is immediately allocated to the statement of income as at the acquisition date. All acquisition related costs are expensed in the period in which the costs are incurred and not included in the cost of investment. All payments to purchase a business are recorded at fair value at the acquisition date. Some changes in the fair value of contingent consideration that the Group recognises after the acquisition date may be the result of additional information that after that date, about facts and circumstances that existed at the acquisition date. Where the changes in fair value of the contingent consideration are not measurement period adjustments, contingent consideration classified as equity is not re-measured. Contingent consideration classified as an asset or a liability which is a financial instrument within the scope of IAS 39 is measured at fair value with gains and losses recognised either in the Statement of Income or in other Comprehensive Income according to the requirements of IAS 39 and contingent consideration classified as an asset or a liability outside the scope of IAS 39 is accounted for in accordance with IAS 37 or other IFRSs as appropriate.

All inter-company balances and significant inter-company transactions and resulting unrealised profits or losses (unless losses provide evidence of impairment) are eliminated on consolidation.

A non-controlling 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 Group. It is based upon the minority’s share of post-acquisition fair values of the subsidiary’s identifiable assets and liabilities. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are accounted for as equity transactions 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 directly in the equity and attributable to the owners. No adjustment is made to the carrying value of the subsidiary’s net assets as reported in the consolidated financial statements.

3.4 Associate entities Associates are those entities over which the Group is able to exert significant influence, generally accompanying a shareholding of between 20% to 50% of voting rights, but which are neither subsidiaries nor investments in joint ventures. In the consolidated financial statements, investments in associates are initially recorded at cost and subsequently accounted for using the equity method.

Under the equity method, the Group’s interest in an associate is carried at cost and the carrying amount is then increased or decreased to recognise the Group’s share of the profit or loss of the associate after the date of acquisition plus any changes in


the associate’s other comprehensive income less any identified impairment loss, unless it is classified as held for sale or included in a disposal group that is classified as held for sale. The consolidated Statement of Income includes the Group’s share of the post-acquisition, post-tax results of the associate entity for the year, including any impairment loss on goodwill relating to the investment in associate recognised for the year.

All subsequent changes to the Group’s share of interest in the equity of the associate are recognised in the carrying amount of the investment. Changes resulting from the profit or loss generated by the associate are reported within “Share of profits/(losses) of associates” in the Consolidated Statement of Income. These changes include subsequent depreciation, amortisation or impairment of the fair value adjustments of assets and liabilities.

Adjustments to the carrying value of the associate are necessary for changes in the associate’s other comprehensive income that have not been recognised in their Statement of Income, primarily those arising on the revaluation of plant, property and equipment. The Group’s share of such changes are recognised directly in the Statement of Comprehensive Income.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has legal or constructive obligations, or made payments, on behalf of the associate.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognised at the date of acquisition is recognised as

goodwill. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group, plus any costs directly attributable to the investment.

Goodwill is included within the carrying amount of an investment and is assessed for impairment as part of the investment. After the application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investments in its associates.

At each reporting date, the Group determines whether there is any objective evidence that an investment in an associate is impaired. If such indications are identified, the Group calculates the amount of impairment as being the difference between the recoverable amount of the associate and its respective carrying amount.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in an associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

3.5 Functional and presentation currency The consolidated financial statements are presented in United States Dollars (USD) (“the presentation currency”). The financial statements of each consolidated entity are initially prepared in the currency of the primary economic environment in which the entity operates which may be Vietnamese Dong or USD (“the functional currency”). The financial statements prepared using Vietnamese Dong are then translated into the presentation currency of USD. USD is used as the presentation currency because it is the primary basis for the

measurement of the performance of the Group (specifically changes in the Net Asset Value of the Group) and a large proportion of significant transactions of the Group are denominated in USD.

3.6 Foreign currency translation In the individual financial statements of 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 reporting date. Translation gains and losses and expenses relating to foreign exchange transactions are recognised in the consolidated Statement of Income.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated at the reporting date). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined.

In the consolidated financial statements all individual financial statements of subsidiaries, where the functional currency is different from the Group’s presentation currency, are converted into USD. Assets and liabilities are translated into USD at the closing rate of the reporting date. Income and expenses are translated using the exchange rates at the dates of the transactions. Where the average rates approximate the exchange rates at the dates of the transactions, income and expenses are translated into the Group’s presentation currency at the average rates. Any differences arising from this translation are recognised in other comprehensive income.


3.7 Revenue recognition

Sale of goods and revenues from hotel operations and other related services Revenue from sale of goods is recognised in the Consolidated Statement of Income when the significant risks and rewards of ownership of goods have passed to the buyer. Revenue from hotel operations and other related services is recognised as and when the services are provided.

Rental income Rental income from investment property is recognised in the consolidated Statement of Income on a straight-line basis over the term of the operating lease. Lease incentives granted are recognised as an integral part of the total rental income.

Interest income Interest income is recognised on an accrual and effective yield basis.

Dividend income Dividend income is recorded when the Group’s right to receive the dividend is established.

3.8 Expense recognition Borrowing costs Borrowing costs, comprising interest and related costs, are recognised as an expense in the period in which they are incurred, except for borrowing costs relating to qualifying assets that need a substantial period of time to get ready for their intended use or sale to the extent that they are directly attributable to the acquisition, production or construction of such assets.

Operating lease payments Payments made under operating leases are recognised in the consolidated Statement of Income

on a straight-line basis over the term of the lease. Lease incentives received are recognised in the Statement of Income as an integral part of the total lease expense.

3.9 Goodwill Goodwill represents the excess of the cost of acquisition of subsidiary companies and associated companies over the Group’s share of the fair value of their identifiable net assets at the date of acquisition.

Goodwill is recognised at cost less any accumulated impairment losses. The carrying value of goodwill is subject to an annual impairment review and whenever events or changes in circumstances indicate that it may not be recoverable. An impairment charge will be recognised in the Statement of Income when the results of such a review indicate that the carrying value of goodwill is impaired (see accounting policy 3.16).

Negative goodwill represents the excess of the Group’s interest in the fair value of identifiable net assets and liabilities, and contingent liabilities over costs of acquisition. It is recognised directly in the Statement of Income at the date of acquisition.

Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity disposed of.

3.10 Investment properties Investment properties are properties owned or held under finance lease to earn rentals or capital appreciation, or both, or held for a currently undetermined use. Property held under operating leases (including leasehold land) that would otherwise meet the definition of investment property is

classified as investment property on a property by property basis. If a leased property does not meet this definition it is recorded as an operating lease.

The property under construction or development for future use as investment property is treated as investment property and is measured at fair value where the fair value of the investment property under construction or development for future use is reliably determined.

Investment properties are stated at fair value. Two independent valuation companies with appropriately recognised professional qualifications and recent experience in the location and category being valued undertake a valuation of every property each year. On the valuation date the fair value is estimated assuming there is an agreement between a willing buyer and a willing seller in an arm’s length transaction after proper marketing; wherein the parties have each acted knowledgeably, prudently and without compulsion. The valuations are prepared based upon direct comparison with sales of other similar properties in the area and the expected future discounted cash flows of a property using a yield that reflects the risks inherent therein. Valuations are reviewed by the Valuation Committee and approved by the Board of Directors. Discount rates from 10% to 16% are considered appropriate for properties in different locations. Where the Valuation Committee consider the discount rate applied by the independent valuers to be too low or if there are factors that the external independent valuers have not considered in their determination of a property’s fair value, they will adjust the discount rate upwards in the discounted cash flow projections, thereby decreasing the property’s net present valuation.


Any gain or loss arising from a change in fair value is recognised in the Statement of Income. Rental income from investment property is accounted for as described in the accounting policy 3.7.

When an item of property, plant and equipment is transferred to investment property following a change in its use, any differences arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in other comprehensive income if it is a gain. Upon disposal of the item the gain is transferred to retained earnings. Any loss arising in this manner is recognised in the Statement of Income immediately.

Property where more than 10% of the property is occupied by the Group for the production or supply of goods and services, or for administration purposes, is accounted for as property, plant and equipment (see accounting policy 3.2).

All costs directly associated with the purchase and construction of an investment property, and all subsequent capital expenditures for the development qualifying as acquisition costs are capitalised.

Borrowing costs for property under construction or development are capitalised if they are directly attributable to the acquisition, construction or production of that qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred. Capitalisation of borrowing costs continues until the assets are substantially ready for their intended use. If the resulting carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised. The capitalisation rate is arrived at by

reference to the actual rate payable on borrowings for development purposes or, with regard to that part of the development cost financed out of general funds, to the average rate.

3.11 Property developed for sales Property that is being constructed or developed for sales is classified as investment property developed for sales until construction or development is complete, at which time it is reclassified and subsequently accounted for as inventory.

3.12 Property, plant and equipment Owned assets All property, plant and equipment, except buildings and leasehold land improvements, are stated at cost less accumulated depreciation and impairment losses (see accounting policy 3.16). The cost of self-constructed assets includes the cost of materials, direct labour, overheads and the initial estimate of the costs of dismantling and removing the items and restoring the site on which they are located.

Buildings and leasehold land improvements including hotels and golf courses are revalued to fair value in accordance with the methods set out in accounting policy 3.10. Any surplus arising on the revaluation is recognised in a revaluation reserve within equity, except to the extent that the surplus reverses a previous revaluation deficit on the building charged to the Consolidated Statement of Income, in which case a credit to that extent is recognised in the consolidated Statement of Income. Any deficit on revaluation is charged in the consolidated Statement of Income except to the extent that it reverses a previous revaluation surplus on a building, in which case it is taken directly to the revaluation reserve. Any revaluation surplus remaining in equity on disposal of the asset is transferred to retained earnings.

If an investment property is reclassified as property, plant and equipment its fair value at the date of reclassification becomes its deemed cost for subsequent accounting.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Subsequent expenditure The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. The carrying values of any parts replaced as a result of such replacements are expensed at the time of replacement. All other costs associated with the maintenance of property, plant and equipment are recognised in the Statement of Income as incurred.

Depreciation Depreciation is charged to the Statement of Income on a straight-line basis over the estimated useful lives of property, plant and equipment, and major components that are accounted for separately. The estimated useful lives are as follows:

Buildings, hotels and golf courses 26 to 45 years Machinery and equipment 4 to 12 years Furniture and fixtures 3 to 10 years Motor vehicles 3 to 8 years

Material residual value estimates and estimates of useful lives are reviewed at least annually, irrespective of whether assets are revalued.

Assets held under finance leases which do not transfer title to the assets to the Group at the end


of the lease are depreciated over the shorter of the estimated useful lives shown above and the term of the lease.

3.13 Intangible assets Intangible assets comprise software and hotel gaming licences. Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses, except for hotel gaming licences. The carrying value of the assets is reviewed annually for impairment.

Hotel gaming licences are revalued to fair value in accordance with the methods set out in accounting policy 3.10. Any surplus arising on the revaluation is recognised in a revaluation reserve within equity, except to the extent that the surplus reverses a previous revaluation deficit on the licence charged to the Consolidated Statement of Income, in which case a credit to that extent is recognised in the consolidated Statement of Income. Any deficit on revaluation is charged in the consolidated Statement of Income except to the extent that it reverses a previous revaluation surplus on a licence, in which case it is taken directly to the revaluation reserve.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. The estimated useful lives are as follows:

Gaming licences 16 to 30 years Software 3 to 5 years

3.14 Leases Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases and stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.

Leases which do not transfer substantially all the risks and rewards of ownership to the Group are classified as operating leases. Where the Group has the use of an asset held under an operating lease, payments made under the lease are charged to the Statement of Income on a straight line basis over the term of the lease. Prepayments for operating leases represent property held under operating leases where a portion, or all, of the lease payments have been paid in advance, and the properties cannot be classified as an investment property.

3.15 Financial assets Financial assets are divided into the following categories: loans and receivables, financial assets at fair value through the Statement of Income.

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. The designation of financial assets is based on the investment strategy set out in the Group’s Admission Document to the London Stock Exchange’s Alternative Investment Market, dated 16 March 2006.

All financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the instrument.

Derecognition of financial assets occurs when the rights 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 reporting date, financial assets are reviewed to assess whether there is objective evidence of impairment. If any such evidence exists, any impairment loss is determined and recognised based on the classification of the financial assets.

The Group’s financial assets consist primarily of unlisted equities, loans and receivables.

Loans and receivables All loans and receivables, except trustee loans, are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is recognised in the Statement of Income. Discounting, however, is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Significant receivables are considered for impairment when they are overdue or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and other available features of shared credit risk characteristics. The percentage of the write down is then based on recent historical counterparty default rates for each identified group. Impairment of trade and other receivables are presented within “other expenses”.


Financial assets at fair value through Statement of Income Financial assets at fair value through Statement of Income include financial assets that are either classified as held for trading or are designated by the entity to be carried at fair value through Statement of Income upon initial recognition. Financial assets at fair value through Statement of Income held by the Group include unlisted securities and trustee loans. Purchase or sale of financial assets is recognised using trade date accounting. The trade date is the date that an entity commits itself to purchase or sell an asset.

Trustee loans are loans provided to banks and other parties where the Group 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.

Net changes in fair value of financial assets at fair value through Statement of Income include net unrealised gains in fair value of financial assets and net gains from realisation of financial assets during the year.

3.16 Impairment of assets The Group’s goodwill, operating lease prepayments, property, plant and equipment, intangible assets and interests in associates are subject to impairment testing.

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill in particular is allocated to those cash-generating

units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management controls the related cash flows.

Goodwill and intangible assets with an indefinite life are tested for impairment annually, while other assets are tested when there is an indicator of impairment.

An impairment loss is recognised in profit or loss immediately for the amount by which the asset’s carrying amount exceeds its recoverable amount unless the relevant asset is carried at a revalued amount under the Group’s accounting policy. An impairment loss on a revalued asset is treated as a revaluation decrease, but only to the extent of the revaluation surplus for that same asset. Further impairment losses are recognised in profit or loss. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets.

3.17 Prepayments for acquisitions of investments Prepayments for acquisition of investments are initially measured at cost until such times as approval is obtained or the conditions are met, at which point they are transferred to investment properties and accounted for accordingly. Such payments are made to vendors for land clearance and other related costs, professional fees directly attributed to the projects where the final transfer of the property is pending the approval of the relevant authorities and/or is subject to either the Group or the vendor completing certain performance conditions. The prepayments

are presented within Prepayments for acquisitions of investments in the Consolidated Statement of Financial Position.

3.18 Income taxes Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting 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. Current and deferred tax shall be recognised as income or expense and included in profit or loss for the year. Current tax and deferred tax shall be charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity, and if the tax relates to items recognised in other comprehensive income, it is recognised in other comprehensive income.

Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets. However, deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and associates is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.


Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that they will be able to be offset against future taxable income. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the reporting date. Most changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Statement of Income. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that is charged directly to other comprehensive income are charged or credited directly to other comprehensive income.

3.19 Cash and cash equivalents Cash and cash equivalents include cash at banks 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.

3.20 Non-current assets and liabilities classified as held for sale When the Group intends to sell a non-current asset or a group of assets (a disposal group), if the carrying amount will principally be recovered through the sale; they are available for immediate sale in their present condition subject only to terms that are usual and customary for sale of such assets and sale is highly probable at the reporting date, the asset

or disposal group is classified as “held for sale” and presented separately in the consolidated financial statements in accordance to IFRS 5 “Non-current assets held for sale and discontinued operations”.

Liabilities are classified as “held for sale” and presented as such in the consolidated reporting if they are directly associated with a disposal group.

Assets classified as “held for sale” are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair values less costs to sell. However, some “held for sale” assets such as financial assets or deferred tax assets, continue to be measured in accordance with the Group’s accounting policy for those assets. No assets classified as “held for sale” are subject to depreciation or amortisation, subsequent to their classification as “held for sale”.

3.21 Equity Share capital is determined using the nominal value of shares that have been issued. Additional paid-in capital includes any premiums received on the initial issuance of the share capital. Any transaction costs associated with the issuing of shares are deducted from additional paid-in capital, net of any related income tax benefits.

Revaluation reserve represents the surplus arising on the revaluation of the Group’s owned buildings which are classified under property, plant and equipment.

Currency translation differences on net investment in foreign operations are included in the translation reserve.

Retained earnings include all current and prior period results as disclosed in the Consolidated Statement of Changes in Equity.

Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are accounted for as equity transactions and recorded in the Consolidated Statement of Changes in Equity.

3.22 Financial liabilities The Group’s financial liabilities include trade and other payables, borrowings and other liabilities.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognised as an expense in finance costs in the Statement of Income.

Trade payables are recognised initially at their fair value and subsequently measured at amortised cost, using the effective interest rate method.

Borrowings are raised for support of long-term funding of the Group’s investments and are recognised at fair value plus direct transaction costs on initial recognition and thereafter at amortised cost under the effective interest rate method.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

3.23 Provisions, contingent liabilities and contingent assets Provisions are recognised when present obligations will probably lead to an outflow of economic resources from the Group that can be reliably estimated. A present obligation arises from the presence of a legal or constructive obligation that has resulted from past events. Provisions are not recognised for future operating losses.


3.24 Provisions, contingent liabilities and contingent assets (cont.) Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation and where there is uncertainty about the timing or amount of the future expenditure require in settlement. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Long-term provisions are discounted to their present values, where the time value of money is material.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate of Group’s management.

The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.

A contingent asset is a possible asset that arises from past events that’s existence will be confirmed by uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses their existence when inflows of economic benefits are probable, but not virtually certain.

3.25 Related parties Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Parties are considered to be related to the Group if:

1. directly or indirectly, a party controls, is controlled by, or is under common control with the Group; has an interest in the Group that gives it significant influence over the Group; or has joint control over the Group;

2. a party is a jointly-controlled entity;

3. a party is an associate;

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

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

3.26 Earnings per share and net asset value per share The Group presents basic earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

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

3.27 Segment reporting An operating segment is a component of the Group:


In making its judgement, the Valuation Committee considers information from a variety of sources, including:

(i) current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;

(ii) recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices;

(iii) recent developments and changes in laws and regulations that might affect zoning and/or the Group’s ability to exercise its rights in respect to properties and therefore fully realise the estimated values of such properties; and

(iv) discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of external evidence such as current market rents and sales prices for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

Impairment Investment properties, leasehold land, hotels and golf courses Whenever there is an indication of impairment of an investment property, leasehold land and buildings the Valuation Committee and management will assess the need for an impairment adjustment. The estimation of impairment adjustments is based on the same principles used to adjust the periodic independent valuations mentioned above.

Trade and other receivables The Group’s management determines the provision for impairment of trade and other receivables on a regular basis. This estimate is based on the credit history of its customers and prevailing market conditions.

Other assets The Group’s goodwill, intangible assets, operating lease prepayments, other assets and interests in associates is subject to impairment testing in accordance with the accounting policy 3.16.

Business combinations On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial position at their fair values. In measuring fair value management uses estimates about future cash flows and discount rates or independent valuation for investment properties and buildings.

Useful lives of depreciable assets Management reviews useful lives of depreciable assets at each reporting date. Management assesses that the useful lives represent the expected utility of the assets to the Group. The carrying amounts are analysed in Note 11 and Note 12.

5. Comparative figures

The figures for the year ended 30 June 2009, which are included in this year’s financial statements for comparative purpose, have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on the Company’s net worth as at 30 June 2009 or Statement of Income for the year. Details of the reclassifications and the effect on related items on the financial statements are as follows:

1. that engages in investment activities from which it may earn revenues and incur expenses;

2. whose operating results are based on internal management reporting information that is regularly reviewed by the Investment Manager to make decisions about resources to be allocated to the segment and assess its performance; and

3. for which discrete financial information is available.

4. Critical accounting estimates and judgements

When 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 may not 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:

Fair value of investment properties, leasehold land, hotels and golf courses The investment properties, leasehold land, hotels and golf courses of the Group are stated at fair value in accordance with accounting policies 3.10 and 3.11. The fair values of investment properties, leasehold land and buildings have been determined by independent professional valuers including: CB Richard Ellis, Savills, Jones Lang LaSalle, Colliers, Sallmanns and HVS. These valuations are based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results.


Statement of financial position as at 30 June 2009 (extracted):

As previously reported Reclassifications

Restated

USD‘000 USD‘000 USD‘000ASSETSNon-current assetsInvestment properties 489,068 (42,454) 446,614 Property, plant and equipment 72,161 6,747 78,908 Prepayments for operating lease assets 17,334 35,707 53,041 Deferred tax assets 286 4,738 5,024

578,849 4,738 583,587

RESOURCESLiabilitiesNon-current liabilitiesDeferred tax liabilities 14,629 4,738 19,367

14,629 4,738 19,367

6. Segment reporting

In identifying its operating segments, management generally follows the Group’s sectors of investment which are based on internal management reporting information for the Investment Manager’s management, monitoring of investments and decision making. The operating segment by investment portfolio include Commercial, Undetermined use, Hospitality, Mixed-use and Cash and short-term investments.

The activities undertaken by the Commercial segment includes the development and operation of investment properties. Investment, construction and sales of residential properties such as apartments and villas are included in the Undetermined use segment. The Hospitality segment includes the development and operation of hotels and other related services. Remaining investments are included in the Mixed-use segment. Strategic decisions are made on the basis of segment operating results.

Each of the operating segments are managed and monitored separately by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental Statement of Income, the majority of expenses are common to all segments and therefore cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment Statement of Income.

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


Consolidated Statement of Income


CommercialUndetermined

use Hospitality Mixed use Total

USD‘000 USD‘000 USD‘000 USD’000 USD’000

Revenue - - 17,125 152 17,277

Other income - 31,677 1,760 12,372 45,809

Finance income 16 3,338 919 2,587 6,860

Net gain/(loss) on fair value adjustments of investment properties (1,051) 60,594 (2,813) 38,757 95,487

Net changes in fair value of financial assets at fair value through Statement of Income - 7,695 - - 7,695

Share of profit/(losses) of associates (3,305) (5,913) (391) - (9,609)

Total (4,340) 97,391 16,600 53,868 163,519

Cost of sales (10,235)

Operating, selling and administration expenses (46,171)

Other expenses (7,710)

Finance expenses (8,244)

Profit/(loss) before tax 91,159

Income tax (expenses)/income (15,167)

Net profit/(loss) for the year 75,992




use Hospitality Mixed use Total

USD‘000 USD‘000 USD‘000 USD’000 USD’000

Revenue - 537 27,477 - 28,014

Other income - 2,503 88 - 2,591

Finance income 16 6,973 1,535 3,448 11,972

Net gain/(loss) on fair value adjustments of investment properties 1,781 (56,613) (21,486) (77,226) (153,544)

Net changes in fair value of financial assets at fair value through Statement of Income - 1,084 - (5,838) (4,754)

Share of profits/(losses) of associates 6,803 (12,920) (2,366) 5,141 (3,342)

Total 8,600 (58,436) 5,248 (74,475) (119,063)

Cost of sales (15,711)

Operating, selling and administration expenses (35,611)

Other expenses (38,067)

Finance expenses (6,735)

Profit/(loss) before tax (215,187)

Income tax (expense)/income 13,564

Net profit/(loss) for the year (201,623)

For the comparative year:


Consolidated statement of financial position

As at 30 June 2010


use Hospitality Mixed useCash and short-term

investments Total

USD‘000 USD‘000 USD‘000 USD‘000 USD‘000 USD‘000

Investment properties 7,852 381,450 51,444 179,904 - 620,650

Investment properties developed for sales - 29,185 44,336 6,536 - 80,057

Property, plant and equipment 23 114 97,401 14,031 - 111,569

Goodwill and intangible assets 1 3,925 13,301 96 - 17,323

Cash and cash equivalents - - - - 79,979 79,979

Trade and other receivables 578 86,224 18,401 7,434 - 112,637

Investment in associates 14,153 51,701 5,935 - - 71,789

Prepayments for acquisitions of investments 20 41,966 6,498 3,724 - 52,208

Financial assets at fair value through Statement of Income - 13,859 - 18,937 - 32,796

Short-term investments - - - - 15,215 15,215

Other assets 412 17,633 13,469 43,430 - 74,944

Total assets 23,039 626,057 250,785 274,092 95,194 1,269,167


The Group’s revenues, investment income and its non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax assets and post-employment benefit assets) are attributable to the following geographic areas:

Revenues and investment income include operating revenue, finance income, net gains/(losses) on fair value adjustments of investment properties and financial assets at fair value through Statement of Income. These have been identified on the basis of the operation and investment location. Non-current assets are allocated based on their physical location.

As at 30 June 2009


use Hospitality Mixed useCash and short-term

investments Total

USD‘000 USD‘000 USD‘000 USD‘000 USD‘000 USD‘000

Investment properties 12,136 288,278 70,182 76,018 - 446,614

Property, plant and equipment 34 187 71,871 6,816 - 78,908

Goodwill and intangible assets 1 4 12,079 7 - 12,091

Cash and cash equivalents - - - - 50,274 50,274

Trade and other receivables 504 83,399 21,421 4,577 - 109,901

Investment in associates 17,458 53,846 6,327 27,133 - 104,764

Prepayments for acquisitions of investments 20 36,763 1,196 28,118 - 66,097

Financial assets at fair value through Statement of Income - 7,588 - 38,710 - 46,298

Short-term investments - - - - 34,888 34,888

Assets and disposal group classified as held for sale - - 85,321 - - 85,321

Other assets 34 6,722 15,987 39,152 - 61,895

Total assets 30,187 476,787 284,384 220,531 85,162 1,097,051

For the comparative year end (reclassified):

Year ended 30 June 2010 Year ended 30 June 2009

Revenue and income Non-current assets Revenue and income Non-current assets

USD’000 USD’000 USD’000 USD’000

Vietnam 126,622 787,214 (119,433) 590,654

Other countries 65 - 24 -

Total 126,687 787,214 (119,409) 590,654


7. Subsidiaries

Additional acquisition of Vina Alliance Company Limited At 30 June 2009, the Group held 49% equity interest in Vina Alliance Company Limited, a subsidiary incorporated in Vietnam. The principal activity of this company is to build and sell an office building and retail centre. In October 2009, the Group acquired a further 13% equity interest for consideration of USD7.2 million which was settled in cash and brings the Group’s total interest in the project to 62% at the reporting date. The Group’s share of the fair value of the assets acquired was USD12.2 million resulting in negative goodwill of USD5.0 million which has been recognised in the Statement of Income (Note 35). The company has not yet started operation.

Acquisition of Phu Hoi City Company Limited The Group previously made a deposit of USD9 million in respect of this project which was classified as a Prepayment for acquisition of investments at 30 June 2009. In addition to the 22.5% interest in the project held by the Group through the investment licence, in September 2009 the Group acquired a further 30% interest from a local partner. An amount of USD5.1 million was reclassified from Prepayment for acquisition of investments as part of the consideration of USD16.0 million. The Group’s share of the fair value of the assets acquired was USD12.1 million resulting in goodwill of USD3.9 million which has been recognised in the Statement of Financial Position. The two key factors which support recognition of goodwill are the value added in granting of the investment licence and master plan approval by the local authorities. As a result, the Group’s total interest in the project is 52.5% at the reporting date. The company has not yet started operation.

Disposal of 85% in Golden Gain Vietnam Limited During the year, the Group disposed of an 85% equity interest in Golden Gain Vietnam Limited for USD36.4 million. The book value of the net assets as the disposal date was USD24.5 million resulting in a gain on disposal which has been recognised in the Statement of Financial Performance. The remaining stake of 15% was valued in line with the Sale and Purchase Agreement at the date of losing control after the reporting date (Note 21).

Additional acquisition of Vinh Thai Urban Development Corporation At 30 June 2009 the Group held 51% equity interest of Vinh Thai Urban Development Corporation, a subsidiary incorporated in Vietnam. The principal activity of this company is to build and operate a large scale township. In January 2010, the Group acquired a further 2.25% equity interest for USD2.8 million which was settled in cash and brings the Group’s total interest in the project to 53.25%. The difference of USD0.2 million between the percentage change in non-controlling interests and the consideration paid has been recognised directly in equity and attributed to the owners of the Group.

Additional acquisition of Viet Land Development Corporation At 30 June 2009, the Group held 60% equity interest of Viet Land Development Corporation, a subsidiary incorporated in Vietnam. The principal activity of this company is to build and operate a residential building. In January 2010, the Group acquired a further 30% equity interest for USD13.5 million. Of the consideration amount, USD11.0 million has been accrued at the reporting date and is included in Trade and other payables in the Statement of Financial Position (Note 30). The difference between the percentage change in non-controlling interest of USD16.6 million and the consideration paid of USD3.1 million has been recognised directly in equity and attributed to the owners of the Group.


NamePlace of incorporation/

operations

Share capital (USD/

USD equivalents)

Percentage interest held by

the GroupPrincipal activities

Onshine Investments Limited BVI 1 100% Property investmentVietnam Property Holdings Limited BVI 100 75% Property investmentProsper Big Investment Limited BVI 50,000 75% Property investmentVinaCapital Danang Resorts Limited BVI 4 75% Property investmentVinaCapital Commercial Center Limited - Class A Shares BVI 28,094,769 38.25% Property investmentVinaCapital Commercial Center Limited - Class B Shares BVI 1,623,702 75% Property investmentBates Assets Limited BVI 4 100% Property investmentProforma Asia Limited BVI 4 100% Property investmentCypress Assets Limited BVI 10,000 77% Property investmentRoxy Assets Limited BVI 4 75% Property investmentVinaCapital Hoi An Resort Limited Vietnam 5,900,000 80% HospitalityVinaCapital Danang Golf Course Limited Vietnam 18,083,192 75% Property investmentMaplecity Investments Limited BVI 4 75% Property investmentHenry Enterprise Group Limited BVI 11,460,100 61.5% Property investmentVinaCapital Danang Resort Limited Vietnam 13,502,000 75% Property investmentVinaCapital Commercial Center Limited (Vietnam) – Class A Shares Vietnam 27,428,535 38.25% Property investmentVinaCapital Commercial Center Limited (Vietnam) – Class B Shares Vietnam - 75% Property investmentTungshing International Investment Limited BVI 1,915,345 100% Property investmentInternational Consultant Company Limited Vietnam 1,237,241 100% Property investmentDien Phuoc Long Real Estate Company Limited Vietnam 2,474,482 100% Property investmentVinaCapital Phuoc Dien Co. Limited Vietnam 2,827,500 100% Property investmentVinaCapital Long Dien Co. Limited Vietnam 3,142,375 100% Property investmentEast Ocean Real Estate and Tourism Joint Stock Company Vietnam 22,439,160 62.55% HospitalityVina Properties (Singapore) Pte. Limited Singapore 1 75% Property investment21st Century International Development Company Inc. Vietnam 35,369,206 61.5% Property investmentRoxy Vietnam Co. Limited Vietnam 6,748,923 55.6% HospitalityTop Star International Limited Hong Kong 13 75% Hospitality

Particulars of principal subsidiaries of the Group as of 30 June 2010 are as follows:


NamePlace of incorporation/

operations

Share capital (USD/

USD equivalents)

Percentage interest held by

the GroupPrincipal activities

A-1 International (Vietnam) Corporation Limited Vietnam 16,700,000 52.5% HospitalityDong Binh Duong Urban Development Co. Limited Vietnam 7,324,043 70% Property investmentNam Phat Villas and Hotel Company Limited (formerly known as Ha Trading Co. Limited)

Vietnam 2,337,516 100% Hospitality

Orchid House Co. Limited Vietnam 565,206 55.56% HospitalityVina Dai Phuoc Corporation Limited Vietnam 73,046,074 54% Property investmentProdigy Pacific Vietnam Co. Limited Vietnam 1,500,000 100% Property investmentPavia Properties Limited BVI 1,896,462 100% Property investmentNguyen Du Joint Venture Company Vietnam 2,324,834 65% HospitalitySIH Investment Limited Singapore 8,379,168 63.75% Property investmentSAS Hanoi Royal Hotel Limited (*) Vietnam 12,000,000 44.63% HospitalityViet Land Development Corporation Limited Vietnam 2,500,000 90% Property investmentVinaLand Espero Limited BVI 100 75% Property investmentVinh Thai Urban Development Corporation Limited Vietnam 37,348,756 53.25% Property investmentThang Long Property Company Limited Vietnam 4,908,979 65% Property investmentHoang Phat Investment Joint Stock Company Vietnam 2,985,075 60% HospitalityAA VinaCapital Co. Limited Vietnam 8,102,160 80% Property investmentVina Alliance Company Limited Vietnam 38,006,734 62% Property investmentPhu Hoi City Company Limited Vietnam 43,651,074 52.5% Property investment

Particulars of principal subsidiaries of the Group as of 30 June 2010 (cont.)

(*) At the reporting date, the Group has a 44.63% equity interest in SAS Hanoi Royal Hotel Ltd., but it has control through the majority voting rights in this company. Therefore, the Group’s management considers this company as a subsidiary holding.


30 June 2010 30 June 2009

USD’000 USD’000

Cash payments for acquisitions of subsidiaries: Vina Alliance Company Limited 7,181 -Phu Hoi City Company Limited 5,443 -Vinh Thai Urban Development Corporation Limited

2,800 -

Vietland Development Corporation Limited 13,500 -SIH Investment Limited 600 -Vindemia Property Limited - 24,767Hoang Phat Investment Joint Stock Company - 5,250Cam Ranh Tourism Development Corporation Limited

- 1,817

29,524 31,834Less:Cash and cash equivalents at the date of acquisition

- (43)

Cost of acquisitions settled in prior years (13,618)Acquisition costs not yet settled (11,000) (10,984)

18,524 7,189

8 Net cash for acquisitions of subsidiaries

30 June 2010 30 June 2009

USD’000 USD’000

(Reclassified)Opening balance 446,614 579,356 Acquisitions of subsidiaries 84,097 41,074Additions during the year 79,133 31,166 Net gains/(losses) on fair value adjustments of investmentproperties (Note 33) 95,487 (153,544)Disposals of investment properties (23,052) (4,332)Transferred from prepayments for operating lease assets (Note 14)

5,391 2,589

Transferred from prepayments for acquisition of investment (Note 13)

27,134 -

Transferred to investment properties developed for sales (Note 10)

(80,057) -

Transferred to prepayments for acquisition of investment (*) (Note 14)

- (35,707)

Transferred to property, plant and equipment (*) - (6,747)Translation differences (14,097) (7,241)Closing balance (**) 620,650 446,614

9. Investment properties

(*) The amounts represent the reclassifications of properties at subsidiary to conform to current year representation.

(**) The Group and the local partner have agreed to swap their interests in the Binh Trung Tay and Nam Rach Chiec sites, which belong to 21st Century International Development Company Inc. (Century 21 Project). After the swap, the Group will control the Nam Rach Chiec site but have no interest in the Binh Trung Tay site.

Nam Rach Chiec is a 30.11 hectares residential and commercial development located near the future Long Thanh – Dau Giay highway in district 2, Ho Chi Minh City.

Binh Trung Tay is a 12.52 hectares residential development, located near the Diamond Island, Binh Khanh township and other residential areas.

As at 30 June 2010, the Group used the fair value of 100% of Nam Rach Chiec to value its interest in the Century 21 Project.


11. Property, plant and equipment

Buildings which belong to East Ocean Real Estate and Tourism Joint Stock Company with a carrying value of USD29.0 million as at 30 June 2010 (30 June 2009: USD14.8 million) are pledged as security for bank borrowings disclosed in Note 28.

Buildings, equipment and construction in progress, which belong to Roxy Vietnam Co. Ltd. with a carrying value of USD16.0 million as at 30 June 2010 (30 June 2009: USD19.9 million), are pledged as security for bank borrowings disclosed in Note 28.

Buildings, hotels and golf courses

Machinery and equipment

Furniture and fixtures Motor vehicles

Constructionin progress Total

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

Gross carrying amount1 July 2009 70,743 14,866 2,016 892 51,323 139,840 Additions 72 1,869 186 814 34,602 37,543 Reclassifications 32,563 9,613 708 2 (42,886) - Disposals and written-off (3) (2,356) (507) (23) - (2,889)Revaluation gains 903 - - - 4,356 5,259 Translation differences - (2) (13) (13) (2,569) (2,597)30 June 2010 104,278 23,990 2,390 1,672 44,826 177,156

Depreciation and impairment1 July 2009 (26,129) (8,709) (776) (273) (25,045) (60,932)Charge for the year (2,361) (1,746) (421) (153) - (4,681)Disposals and written-off 29 2,027 486 2 - 2,544 Asset impairments (2,523) - - - - (2,523)Translation differences - - 5 - - 5 30 June 2010 (30,984) (8,428) (706) (424) (25,045) (65,587)

Carrying amount 1 July 2009 44,614 6,157 1,240 619 26,278 78,908 Carrying amount 30 June 2010 73,294 15,562 1,684 1,248 19,781 111,569

30 June 2010 30 June 2009

USD’000 USD’000

Opening balance - - Transferred from investment properties (Note 9) (*) 80,057 -Closing balance 80,057 -

10. Properties developed for sales

(*) The amount represents the value of investments properties held by subsidiaries of the Group being developed for sales.


11. Property, plant and equipment (cont.)

Prior year comparatives:

Buildings, hotels and golf courses

Machinery and equipment

Furniture and fixtures

Motor vehicles

Construction in progress Total

USD’000 USD’000 USD’000 USD’000 USD’000 USD’000

(Reclassified)

Gross carrying amount

1 July 2008 137,808 17,858 1,875 1,385 17,550 176,476

Additions 4,029 5,857 1,197 115 36,717 47,915

Classified as held for sale (70,668) (9,564) (8) - (718) (80,958)

Property exchanged (Note 18) - - - - (8,592) (8,592)

Reclassifications (*) 209 551 (10) (551) 6,538 6,737

Disposals (635) 165 (1,026) (52) 593 (955)

Translation differences - (1) (12) (5) (765) (783)

30 June 2009 70,743 14,866 2,016 892 51,323 139,840

Depreciation and impairment

1 July 2008 (24,796) (14,726) (1,623) (225) - (41,370)

Charge for the year (3,673) (2,167) (107) (103) - (6,050)

Asset impairments (10,868) - - - (25,045) (35,913)

Classified as held for sale 12,996 7,631 4 - - 20,631

Reclassifications - (50) 23 27 - -

Disposals 212 603 924 27 - 1,766

Translation differences - - 3 1 - 4

30 June 2009 (26,129) (8,709) (776) (273) (25,045) (60,932)

Carrying amount 1 July 2008 113,012 3,132 252 1,160 17,550 135,106

Carrying amount 30 June 2009 44,614 6,157 1,240 619 26,278 78,908

(*) The amount included USD6.7 million reclassified from investment property relating to construction in progress and buildings at subsidiary to conform to current year presentation.


USD’000

(Reclassified)

Buildings at 30 June 2010 At cost 132,512 Accumulated depreciation (13,345) Net carrying amount 119,167

Buildings at 30 June 2009 At cost 79,673 Accumulated depreciation (11,739) Net carrying amount 67,934

If the cost model had been used, the carrying amount of buildings would be as follows:

12. Intangible assets

Gaming licences Software Total

USD’000 USD’000 USD’000


1 July 2009 12,700 239 12,939

Additions - 182 182

Revaluation gains 1,750 - 1,750

Reclassifications - 87 87

Translation differences - (8) (8)

30 June 2010 14,450 500 14,950

Amortisation and impairment

1 July 2009 (796) (52) (848)

Charge for the year (653) (49) (702)

30 June 2010 (1,449) (101) (1,550)

Carrying amount 1 July 2009 11,904 187 12,091

Carrying amount 30 June 2010 13,001 399 13,400


Prior year comparatives:

Gaming licences Software Total

USD’000 USD’000 USD’000


1 July 2008 6,802 8 6,810

Additions - 223 223

Revaluation gains 5,898 - 5,898

Reclassifications - 10 10

Translation differences - (2) (2)

30 June 2009 12,700 239 12,939

Amortisation and impairment

1 July 2008 (388) (1) (389)

Charge for the year (408) (51) (459)

30 June 2009 (796) (52) (848)

Carrying amount 1 July 2008 6,414 7 6,421

Carrying amount 30 June 2009 11,904 187 12,091

30 June 2010 30 June 2009

USD’000 USD’000

Opening balance 104,764 26,270Additions during the year, net 3,768 61,962Transferred to subsidiary (Note 7) (*) (27,134) -Transferred from prepayments for acquisitions of investments (Note 15) - 19,874 Share of associates’ losses (9,609) (3,342)Closing balance 71,789 104,764

13. Investments in associates

(*) The amount represents the carrying value of the investment in the equity interest of 49% in Vina Alliance Company Limited.


30 June 2010 30 June 2009

USD’000 USD’000

(Reclassified)Opening balance 53,041 19,635Acquisitions of subsidiaries - 9,083 Additions during the year 210 5,774 Charge for the year (2,417) (2,270)Transferred to investment properties (Note 9) (5,391) (2,589)Transferred from investment properties (Note 9) - 35,707Classified as held for sale - (4,474)Impairment of leasehold land (1,688) (5,431)Leasehold land exchanged (Note 18) (1,335) (2,130)Translation differences (825) (264)Closing balance 41,595 53,041

14. Prepayments for operating lease assets

(*) At 30 June 2009, the Group held 18% equity interest in Long An S.E.A Industrial Park Development Co. Ltd. which was changed from a limited company to a joint stock company – Long An Industrial Park Joint Stock Company during the year. At the same time a local partner became a shareholder in this company. This resulted in the dilution of the Group’s interest from 18% to 11.25%. However, the Group still has significant influence since it has power to participate in the financial and operating policies of this company, therefore it is considered appropriate to treat this interest as an associate holding.

(**) The Group has a 50% equity interest in Aqua City Joint Stock Company and Romana Resort and Spa JSC but does not have control or joint control due to its limited representation on the Boards. Therefore it is considered appropriate to treat these interests as associate holdings.

Particulars of operating associates and their summarised financial information, extracted from their financial statements as at 30 June 2010 are as follows:

IncorporationEquity

interest heldPrincipal

activity Assets Liabilities Revenue Profit/(loss)

Share of (losses)/profit to

the Group

% USD’000 USD’000 USD’000 USD’000 USD’000

Long An S.E.A Industrial Park Development Co. Ltd. (*) Vietnam 11.25 Property 7,469 3,318 - (250) (50)Aqua City Joint Stock Company (**) Vietnam 50 Property 55,763 579 102 (11,732) (5,866)Thang Loi Land Joint Stock Company Vietnam 49 Property 12,157 705 171 6 3 Romana Resort and Spa JSC (**) Vietnam 50 Hospitality 4,909 2,193 1,485 (782) (391)Savico-Vinaland Co. Ltd. Vietnam 49.5 Property 17,569 476 71 (6,675) (3,305)

97,867 7,271 1,829 (19,433) (9,609)

Prepayments for operating leases relates to leasehold land occupied by subsidiaries of the Group. Leasehold land held by Roxy Vietnam Co. Ltd. with a carrying value of USD1.6 million as at 30 June 2010 (30 June 2009: USD1.9 million) is pledged as security for bank borrowing disclosed in Note 28.

Leasehold land held by East Ocean Real Estate and Tourism Joint Stock Company with a carrying value of USD2.5 million as at 30 June 2010 (30 June 2009: USD3.8 million) is pledged as security for bank borrowing disclosed in Note 28.

13. Investments in associates (cont.)


15. Prepayments for acquisitions of investments

These prepayments are payments made by the Group to property vendors where the final transfer of the property is pending the approval of the relevant authorities and/or is subject to either the Group or the vendor completing certain performance conditions set out in agreements.

During the year, the Group disposed of the right to invest in a project with a carrying value of USD10.5 million which resulted in a gain on disposal of investment rights of USD7.5 million which has been included in the Statement of Income for the year.

16. Other long-term financial assets

17. Deferred tax assets

(*) The increase in the year of USD13.2 million arose from provision for tax losses on fair value adjustments of investment properties during the year.

Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences and the carry forward of unused tax losses and credits.

18. Trade and other receivables

30 June 2010 30 June 2009

USD’000 USD’000

Prepayments for acquisitions of investments 61,648 91,131 Transferred to investments in subsidiary (4,280) (19,874)

57,368 71,257

Allowance for loss on prepayments for acquisitions of investments (5,160) (5,160)

52,208 66,097

30 June 2010 30 June 2009

USD’000 USD’000

(Reclassified)Opening balance 5,024 310 Increase in the year, net (*) 13,244 4,714Closing balance 18,268 5,024

30 June 2010 30 June 2009

USD’000 USD’000

Trade receivables 566 294 Loans to third parties (*) 31,467 42,922 Advances to property vendors and contractors 9,665 20,644

Receivable as compensation for property exchanged (**)

27,004 10,723

Receivables from minority shareholders 10,752 16,366 Receivable from disposal of subsidiary (***) 18,227 -Interest receivables 6,482 7,132 Other receivables 9,978 13,318 Other current assets 47 56 114,188 111,455 Receivables allowance (1,551) (1,554)

112,637 109,901

30 June 2010 30 June 2009

USD’000 USD’000

Deposits in banks 4,042 25Loans to non-controlling interest shareholders 5,252 1,087Others 1,050 -

10,344 1,112

Allowance for impairment of long-term financial assets (364) -

9,980 1,112


19. Receivables from related parties

All receivables from related parties are short-term in nature. Their carrying value is considered a reasonable approximation of their fair value at reporting date.

20. Short-term investments

As short-term deposits have terms to maturity between than three months and one year, their carrying value is considered a reasonable approximation of their fair value as at reporting date.

(*) On 8 December 2007, the Group deposited VND560.8 billion (equivalent to USD35 million) with East Asia Commercial Joint Stock Bank (EAC). Under the terms of the original agreement, the deposit would earn interest at 13% and was repayable within one year. Under the terms of the agreement, the deposit could be withdrawn by Thai Thinh Capital Joint Stock Company (TTC), provided that it was fully replenished before the due date. The bank guaranteed to ensure the full repayment of the deposit and associated accrued interest thereon to the Group upon expiry of the deposit term.

On expiry of the deposit term, TTC was unable to replenish the deposit account and associated accrued interest. By 30 June 2010 VND470.4 billion (equivalent to USD27.2 million) had been repaid to the Group under this arrangement and the parties had held formal negotiations to enable the full recovery of the remaining outstanding balance. On 26 November 2010 the Group, TTC and the principal shareholder of TTC, signed a Repayment Agreement to facilitate the recovery of the remaining outstanding amount. Under the agreement and the subsequent guarantee waiver agreement signed with EAC on 3 December 2010 the remaining outstanding principal balance was paid to the Group on 7 December 2010 in return for the Group waiving EAC from any liability under its bank guarantee obligations. The Group expects to fully recover the outstanding accrued interest of VND115.6 billion (equivalent to USD6.1 million) included within Note 18 prior to 30 September 2011 in the form of cash and other assets with a fair value at least equal to the carrying value of the outstanding accrued interest. The Group has arranged for certain assets of TTC and TTC’s principal shareholder to be held as security until the outstanding accrued interest has been fully settled. The outstanding amount will be subject to 12% interest during the repayment period.

30 June 2010 30 June 2009

Relationship Transactions USD’000 USD’000

VinaCapital Vietnam Opportunity Fund Limited

Under common management

Expenses paid for projects

3,644 1,863

Romana Resort and Spa JSC Associate Shareholder loan 710 709 VinaCapital Real Estate Vietnam Co. Ltd.

Under common management

Expenses paid for projects

35 -

4,389 2,572

30 June 2010 30 June 2009

USD’000 USD’000

Short-term deposits at banks 10,466 21,865Bank secured deposit (*) 4,749 13,023

15,215 34,888

18. Trade and other receivables (cont.)

(*) This represents short-term loans to third parties, which are to be repaid in the next 12 months. The loans are unsecured, interest free or bear interest rates ranging from 7.5% to 15% per annum. Their carrying value is considered a reasonable approximation of their expected recovery.

(**) Receivable as compensation for property exchanged represents:

- an amount of USD12.5 million comprising USD1.3 million relating to prepayments for leasehold land and USD11.2 million relating to construction costs incurred by SAS Hanoi Royal Hotel Ltd.. As at 30 June 2010, the Group owned 52.5% of SIH Investment Ltd. which has a 70% interest in SAS Hanoi Royal Hotel Ltd.. The planned project was to build and manage a four-star hotel on 10,331 square metres of land in Hanoi, Vietnam. However, as the site has been reserved as a public area, the Hanoi People’s Committee requested the Group swap the land for another site. On 28 August 2009, the Group received a letter from the Hanoi People’s Committee granting it an alternative site. The Investment Manager is considering this offer and has estimated that the value and future potential benefits of the new land and any other compensation granted is not less than costs incurred on the properties which will be exchanged.

- an amount of USD17.4 million relating to the Binh Khanh project. The Ho Chi Minh People’s Committee required the land for development as a public residential area and request the Group to swap the land for another site and negotiations are at an advanced stage. The Investment Manager has estimated that the value and future potential benefits of the new land and any other compensation and benefits granted is not less than costs incurred on the property which will be exchanged. Refer to Note 9 for further information.

(***) Receivable from disposal of investment in subsidiary represents the amounts due from the disposal of an 85% in Golden Gain Vietnam Limited (Note 7).

All other trade and other receivables are short-term in nature. Their carrying value is considered a reasonable approximation of their fair value at reporting date.


21. Financial assets held at fair value through Statement of Income

These financial assets are denominated in the following currencies:

The carrying amounts disclosed above are the Group’s maximum possible credit risk exposure in relation to these instruments. See Note 46 for further information on the Group’s exposure to credit risk.

22. Cash and cash equivalents

30 June 2010 30 June 2009

USD’000 USD’000

Designated at fair value through Statement of Income:

Financial assets in VietnamTrustee loans 16,690 41,266 Ordinary shares - unlisted (Note 7) 11,073 -Ordinary shares - unlisted 5,033 5,032

Total financial assets designated at fair value through Statement of Income 32,796 46,298

30 June 2010 30 June 2009

USD’000 USD’000

United States Dollars 16,690 41,266 Vietnam Dong 16,106 5,032 32,796 46,298

30 June 2010 30 June 2009

USD’000 USD’000

Cash on hand 337 139 Cash at banks 57,219 33,972 Cash equivalents 22,423 16,163 79,979 50,274


23. Categories of financial assets and liabilities

The carrying amounts presented in the statement of financial position relate to the following categories of assets and liabilities:

23. Categories of financial assets and liabilities (cont.)

The fair values are presented in the related notes. A description of the Group’s risk management objectives and policies for financial instruments is given in Note 46.

Note 30 June 2010 30 June 2009

USD’000 USD’000

Financial assets

Financial assets held for trading (carried at fair value through Statement of Income)

- Ordinary shares - unlisted 21 5,033 5,032

- Ordinary shares - unlisted, selling price determined subsequent to reporting date

21 11,073 -

- Trustee loans 21 16,690 41,266 32,796 46,298

Loans and receivablesNon-current: - Other long-term financial assets 16 9,980 1,112Current: - Trade and other receivables 18 112,637 109,901 - Receivable from related parties 19 4,389 2,572 - Short-term investments 20 15,215 34,888 - Cash and cash equivalents 22 79,979 50,274

222,200 198,747 254,996 245,045

Note 30 June 2010 30 June 2009

USD’000 USD’000

Financial liabilities

Financial liabilities measured at amortised cost:

Non-current: - Debts and borrowings 28 69,792 20,360

- Debts payable to non-controlling interests shareholders 28 1,203 1,481

- Payable to related parties 31 76,856 65,018 - Other liabilities 879 912

148,730 87,771 Current: - Debts and borrowings 28 21,090 20,584 - Trade and other payables 30 116,466 74,354 - Payable to related parties 31 26,145 49,943

163,701 144,881 312,431 232,652


24. Assets and liabilities classified as held for sale

Summary of the assets/(liabilities) held for sale at the reporting date is as follows:

There were no assets and liabilities classified as held for sale at 30 June 2010.

25. Share capital

26. Additional paid-in capital

Additional paid-in capital represents the excess of consideration received over the par value of shares issued.

30 June 2009

Attributable to

Assets classified as held for sale

Liabilities classified as held for sale

Net assets classified as held

for sale

Non-controlling interests

Equity shareholders of

the parent

USD’000 USD’000 USD’000 USD’000 USD’000

Opera Holel Ltd. 85,321 (33,892) 51,429 24,429 27,000

Long-term loan in Opera Hotel Ltd. transferred to the Purchaser (*) - 15,834 15,834 - 15,834

85,321 (18,058) 67,263 24,429 42,834

30 June 2010 30 June 2009

Number of shares USD’000 Number of shares USD’000

Authorised:

Ordinary shares of USD0.01 each 500,000,000 5,000 500,000,000 5,000

Issued and fully paid:

Opening balance 499,967,622 4,999 499,967,622 4,999

Closing balance 499,967,622 4,999 499,967,622 4,999

30 June 2010 30 June 2009

USD’000 USD’000

Opening balance 588,870 588,870

Closing balance 588,870 588,870


27. Revaluation reserve

The Group’s share of valuation gains/(losses) resulting from the revaluation of subsidiaries’ hospitality properties has been recorded directly in the Group’s revaluation reserve under shareholders’ equity.

(*) The amount represents the transfer of the revaluation reverse surplus arising on Opera Hotel Ltd. to retained earnings when control of the subsidiary transferred to the buyer in the year.

28. Borrowings and debts

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

30 June 2010 30 June 2009

USD’000 USD’000


Revaluation gains/(reversal) on buildings 1,826 (5,589)

Share of revaluation (gain)/reversal attributable to non-controlling interests

(1,387) 2,544

Disposal of subsidiary (*) (7,755) -


30 June 2010 30 June 2009

USD’000 USD’000

Non-current financial liabilities carrying at amortised cost at the reporting date:

Bank borrowings (*) 79,204 40,944

Debts borrowed from non-controlling interest shareholders 1,203 1,481

80,407 42,425

Less:

Current portions of long-term borrowings and debts (9,412) (20,584)

70,995 21,841

Current

Bank borrowings (*) 11,678 -

Current portions of long-term borrowings (*) 9,412 20,584

21,090 20,584

Total borrowings and debts 92,085 42,425


28. Borrowings and debts (cont.)

For all borrowings, the lenders have security over the assets of the respective Group subsidiary.

During the year, the Group’s subsidiaries borrowed USD70.3 million from banks and non-controlling interests shareholders to finance working capital and property development activities.

Lenders USD’000 Loan period Repayment term Interest

Non-current

Eximbank - Ho Chi Minh City branch, Vietnam 37,128 Fifteen years Quarterly 12-month lender saving rate plus a 4% margin for VND and 2% margin for USD

SeaBank - Ho Chi Minh City branch, Vietnam 29,813 Five to six years Repayable in 7-12 semi-annual amounts

12-month lender saving rate plus a 2.5% margin

Dong A bank - Ho Chi Minh City branch, Vietnam 7,354 Three years Quarterly from March 2010 at base rate of State Bank of Vietnam

BIDV - Ho Chi Minh branch, Vietnam 4,909 Five years Repaid in 12 instalments from 27th month from the first drawdown

USD reference interest rate and 3% for loan in US Dollar and VND reference interest rate and fee loan in Vietnamese Dong

79,204

Current

Bank borrowings

SHB bank - Da Nang branch, Vietnam 11,607 One year 20 October 2010 0.875%/month

Eximbank - Nha Trang branch, Vietnam 71 One year 22 January 2010 1%/month

11,678

Current portions of long-term borrowings:

Seabank - Ho Chi Minh City branch, Vietnam 3,700 One year Monthly 12-month lender saving rate plus a 2.5% margin

Dong A bank - Ho Chi Minh City branch, Vietnam 5,712 One year Quarterly from March 2010 at base rate of State Bank of Vietnam

9,412

21,090


29. Deferred tax liabilities

On recognition of investment properties, leasehold land and buildings at their fair value, the future recovery of the carrying amount of these assets may result in a taxable flow of economic benefits to the entity and the amount that will be deductible for tax purposes will differ from the amount of those economic benefits. The difference between the carrying amount of the revalued asset and its tax base is a temporary difference and gives rise to a deferred tax liability.

30. Trade and other payables

(*) Included in this balance is an amount of USD11.0 million due to the vendors for the purchase of

an additional 30% in Viet Land Development Corporation (Note 7).

All trade and other payables are short-term in nature. Their carrying values are considered a reasonable approximation of their fair values as at reporting date.

30 June 2010 30 June 2009

USD’000 USD’000

(Reclassified)


Increased/(utilised) during the year from fair value adjustments of investment properties

31,476 (15,354)

Reclassified to deferred tax assets (Note 5) - 4,738

(Decrease)/addition (20) 24


30 June 2010 30 June 2009

USD’000 USD’000

Trade payables 12,987 8,549

Payables for property acquisitions and land compensation 41,873 37,739

Advances from property buyers - 8,967

Payables to minority shareholders (*) 18,288 6,471

Tax payables 12,346 1,015

Payables to suppliers 238 728

Deposits from customers on residential projects 17,812 -

Other accrued liabilities 7,207 8,020

Other payables 5,715 2,865

116,466 74,354


31. Payables to related parties

(*) This represents shareholder loans granted by VinaCapital Vietnam Opportunity Fund Limited (VOF) to subsidiaries of the Group. VOF is a minority shareholder in these subsidiaries. The loans are to finance real estate projects which are co-invested with VOF. The amount of each loan is based on the respective ownership of VOF and the Group in each subsidiary. The loans are carried at amortised cost in the Statement of Financial Position.

32. Cost of sales, operation, selling and administration expenses

(*) These costs primarily relate to the operating activities of the Group’s subsidiaries.

30 June 2010 30 June 2009

Relationship Transactions USD’000 USD’000

Non-current VinaCapital Investment Management Ltd. Investment Manager Management fees and

performance fee 13,000 -

VinaCapital Vietnam Opportunity Fund Limited Under common management Shareholder loans payable (*) 63,856 65,01876,856 65,018

CurrentVinaCapital Vietnam Opportunity Fund Limited Under common management Dividends from a subsidiary 613 613

Advances for real estate projects - 2,971VinaSecurities Co. Ltd. Affiliate of Investment Manager Professional fee 55 -VinaCapital Investment Management Ltd. Investment Manager Management fees 981 2,158

Performance fees 20,218 43,218Advances for real estate projects 4,278 983

26,145 49,943



USD’000 USD’000

Management fees 13,472 14,889 Professional fees 11,804 4,578 Depreciation and amortisation (*) 7,856 9,364 General and administration expenses (*) 10,657 7,912 Staff costs (*) 6,075 7,331 Outside service costs (*) 4,769 4,777 Material costs (*) 1,773 2,471 56,406 51,322


33. Net gains/(losses) on fair value adjustments of investment properties

34. Other net changes in fair value of financial assets at fair value through Statement of Income

35. Other income

36. Other expenses



USD’000 USD’000

By real estate sector:Commercial 6,704 13,136 Undetermined use 27,091 (81,594)Hospitality 777 (5,522)Mixed use 60,915 (79,564)

Net gains/(losses) on fair value adjustments of investment properties 95,487 (153,544)



USD’000 USD’000

Gains on fair value adjustments of held for sale asset and valuations of corporate bonds 7,673 1,084 Unrealised gains/(losses) from trustee loans’ revalued 22 (5,838) 7,695 (4,754)



USD’000 USD’000

Gain on bargain purchase (Note 7) 4,986 941 Gain on disposals of investments 20,358 -Gain on disposals of fixed assets 96 99 Other income 20,369 1,551 45,809 2,591



USD’000 USD’000

Allowances for impairments of assets 5,110 31,402 Goodwill impairments - 3,511Losses from liquidation of investment property, net 662 1,618 Losses on disposals of investments and property, plant and equipment - 1,040 Other expenses 1,938 496 7,710 38,067


(*) This amount represents the deferred income tax income/(expense) which arose from the

(losses)/gains on fair value adjustments of investment properties in the year.

Under the law of Vietnam, tax losses can be carried forward to offset against future taxable income for five years from the year a loss is incurred. Unrecognised deferred tax assets for the current year tax losses of USD26,526,000 (30 June 2009: USD10,402,000) relating to losses carried forward have not been recognised due to uncertainties as to their recoverability.

40. Earnings per share

(a) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to shareholders of the Group by the weighted average number of ordinary shares on issue during the year.

37. Finance income

38. Finance expenses

39. Corporate income tax

VinaLand Limited 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.

The majority of the Group’s subsidiaries are domiciled in the British Virgin Islands (BVI) and under BVI rules are not subject to Corporate Income Tax. A number of subsidiaries are established in Vietnam and are subject to corporate income tax in Vietnam at the regular tax rate of 25% (30 June 2009: 25%). A current tax provision of USD1,372,000 has been made for these Vietnamese subsidiaries of the Group for the year ended 30 June 2010 (30 June 2009: USD1,790,000).

The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense actually recognised in the Consolidated Statement of Income can be reconciled as follows:



USD’000 USD’000Interest income 6,227 10,874 Realised gains on foreign exchange differences 633 850 Other finance income - 248

6,860 11,972



Profit/(loss) attributable to equity shareholders of the Company from continuing and total operations (USD’000)

48,451 (129,429)

Weighted average number of ordinary shares on issue

499,967,622 499,967,622

Basic earnings/(loss) per share from continuing and total operations

0.10 (0.26)



USD’000 USD’000Realised losses on foreign exchange differences 1,490 3,069 Unrealised losses on foreign exchange differences 3,309 1,983 Interest expense 3,407 1,683 Other finance expenses 38 -

8,244 6,735



USD’000 USD’000Group profit/(loss) before tax 91,159 (215,187)Group profit/(loss) multiplied by applicable tax rate (0%)

- -

Current income tax expenses on Vietnamese subsidiaries

(1,372) (1,790)

Deferred income tax income/(expense) (*) (13,795) 15,354Tax (expense)/income (15,167) 13,564


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

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

41. Operating cash flows

The following non-cash flow adjustments have been made to the pre-tax result for the year to arrive at operating cash flow:

30 June 2010 30 June 2009

Net asset value attributable to ordinary shareholders of the Company (USD’000) 681,644 660,529

Number of outstanding ordinary shares 499,967,622 499,967,622

Net asset value per share (USD/share) 1.36 1.32

30 June 2010 30 June 2009

USD’000 USD’000

Depreciation and amortisation 7,856 8,779

Other net changes in fair value of financial assets at fair value through Statement of Income (7,695) 5,838

(Gains)/losses on fair value adjustments of investment properties (95,487) 153,544

Gain on realisations of financial assets - (1,084)

Loss/(gains) from liquidations of investments and subsidiaries (8,445) (128)

Losses from written-off/disposed investment properties - 1,618

Allowances for impairments of assets 5,813 31,402

Negative goodwill (4,986) (941)

Goodwill impairments - 2,939

Losses from written-off account balances 660 267

Share of associates losses/(gains) 9,609 3,342

Losses on disposals and written-off property, plant and equipment - 268

Unrealised losses on foreign exchange differences 3,309 1,983

Interest expense 3,407 1,683

Interest income (6,227) (10,874)

(92,186) 198,636


42. Directors and management remuneration

The directors’ fees payable to members of the Board of Directors during the year were as follows:

The Board of Management and certain other individuals who act on behalf of the Group are remunerated by the Investment Manager. However it is not possible to specifically allocate their cost to the Group. Part of the management fees disclosed in Note 43 can be allocated to remuneration of these individuals.

43. Related party transactions

Management fees The Group is managed by VinaCapital Investment Management Limited (the “Investment Manager”), an investment management company incorporated in the British Virgin Islands (“BVI”), under a management agreement dated 16 March 2006 (the “Management Agreement”). The Investment Manager receives a fee based on the net asset value of the Group, payable monthly in arrears, at an annual rate of 2% (30 June 2009: 2%).

Total management fees for the year amounted to USD13,471,000 (30 June 2009: USD14,889,000), with USD981,000 (30 June 2009: USD2,158,000) in outstanding accrued fees due to the Investment Manager at the reporting date.

30 June 2010 30 June 2009

USD’000 USD’000Nicholas Brooke 40 40Robert Gordon 40 15Michael Arnold 40 12Nguen Khoong Tong - 28Bruno Schoepfer - 8Nicholas Allen - -

120 103

Performance fees In accordance with the Management Agreement, the Investment Manager is also entitled to a performance fee equal to 20% of the annual increase in net asset value over the higher of an realised returns over an annualised hurdle rate of 8% (30 June 2009: hurdle rate of 8%) and a high water-mark.

There was no performance fee charged for the year (30 June 2009: nil) with USD33,218,000 (30 June 2009: USD43,218,000) in outstanding accrued fees due to the Investment Manager at this date.

Other related party transactions and balances Mr. Don Lam, a director and the CEO of the Investment Manager, purchased 50,000 shares in the year on the open market. As a result of this transaction, Mr. Don Lam has a direct and indirect interest of 2,457,250 and 122,649 shares bringing his total share holding to 0.52% at the reporting date.

Subsequent to the reporting date, Mr. Michael Arnold and Mr. Nicholas Allen, directors of the Company, purchased 64,000 shares and 95,627 shares, respectively, bringing their total share holdings to 0.01% and 0.02% respectively.

Subsequent to the reporting date, the Investment Manager of the Group, VinaCapital Investment Management Limited, purchased 660,000 shares on the open market representing a 0.13% interest in the Group. As Mr. Don Lam and Mr. Horst Geicke are shareholders in this company, their shareholdings consequently increased to 0.56% and 0.65% respectively.

During the year, a local company owned by Mr. Don Lam and Mr. Horst Geicke, the Company’s directors, paid a deposit to purchase a villa in the Ocean Villas Project in Danang, Vietnam at the market value in an arm’s length transaction.

During the year, VinaSecurities Joint Stock Company, a related party of the Group, provided advisory services to the Group and charged USD0.09 million. All services were conducted at arm’s length and charged accordingly.

44. Contingent liabilities

East Ocean Real Estate and Tourist Joint Stock Company In 2007 East Ocean Real Estate and Tourist Joint Stock Company (“East Ocean JSC”), a subsidiary of the Group, engaged AIC Management Co. Ltd. (“AIC”) to supply project management and associated services in respect of the Sheraton


Nha Trang Resort and Spa Project. The scope of work was expanded in 2008 to include construction management and associated services. During 2010, various disputes arose between East Ocean JSC and AIC relating to AIC’s performance, the scope of work and amounts payable to AIC. In March 2010 all contracts between the two parties were terminated. Negotiations between the parties to reach a settlement of the disputes have been unsuccessful and in June 2010 AIC filed a Statement of Claim with the Vietnam International Arbitration Centre (“VIAC”) for alleged breach of contractual obligations and outstanding payments, with total claimed amount of USD5.6 million. In September 2010 East Ocean JSC filed a Statement of Defence denying all claims by AIC and also filed the Statement of Counter-Claim against AIC for breach of contract and law with the counter-claim amount of USD4.4 million. The outcome of the Statement of Claim, Statement of Defence and Statement of Counter-Claim is uncertain.

45. Commitments

At the reporting date, the Group was committed under non-cancellable operating lease agreements to paying the following future amounts:

As at 30 June 2010, the Group was also committed under construction agreements to paying USD14.1 million (30 June 2009: USD17.9 million) for future construction works of the Group’s properties held by subsidiaries.

The Group has a broad range of commitments under investment licences it has received, and other agreements it has entered into, to acquire and develop, or make additional investments in investment properties and leasehold land in Vietnam. Further investment in any of these arrangements is at the Group’s discretion.

46. Risk management objectives and policies

The Group invests in a diversified property portfolio in Vietnam and neighbouring countries with the objective of providing investors with an attractive level of investment income, together with the potential for capital growth.

The Group is exposed to a variety of financial risks: market risk (including currency risk and interest rate risk); credit risk; and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group’s risk management is coordinated by its Investment Manager who manages the distribution of the assets to achieve the investment objectives. The most significant financial risks to which the Group is exposed are described below:

Foreign currency sensitivity The Group’s exposure to risk resulting from changes in foreign currency exchange rates is moderate as although transactions in Vietnam are settled in Vietnam Dong (VND), the value of the Vietnam Dong has historically been closely linked to that of USD, the presentation currency.

The Group’s financial assets and liabilities exposure to risk of fluctuations in foreign currency exchange rates at the reporting date are as follows:

30 June 2010 30 June 2009USD’000 USD’000

Within one year 906 919 From two to five years 3,440 3,407 Over five years 12,463 12,776

16,809 17,102 Short-term exposure Long-term exposure

VND Others VND OthersUSD’000 USD’000 USD’000 USD’000

30 June 2010Financial assets 144,252 100,764 9,980 - Financial liabilities (54,823) (108,878) (44,400) (103,451)Net exposure 89,429 (8,114) (34,420) (103,451)

30 June 2009Financial assets 103,131 140,802 1,112 - Financial liabilities (71,498) (73,383) (19,753) (68,018)Net exposure 31,633 67,419 (18,641) (68,018)


Sensitivity analysis to a reasonably possible change in exchange rates Assets valuations in Vietnam are based on a combination of factors linked to both the USD and VND. Assuming all properties are valued based on VND cash flow, a 5% weakening of the VND against USD at the end of the year ended 30 June 2010 and 30 June 2009 would have impacted net income of the Group’s equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

A 5% strengthening of the VND against USD would have had the equal but opposite effect to the amount shown above, on the basis that all other variables remain constant.

Price risk sensitivity Price risk is the risk that the value of the instrument will 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 Group’s financial instruments are carried at fair value with fair value changes recognised in the Statement of Income, all changes in market conditions will directly affect net investment income.

The Group invests in real estate projects and is exposed to market price risk. If the prices of the real estate were to fluctuate by 10%, the impact on Statement of Income and equity would amount to approximately USD46.5 million (2009: USD51.6 million).

Cash flow and fair value interest rate sensitivity The Group’s exposure to interest rate risk is related to interest bearing financial assets and financial liabilities. Cash and cash equivalents, bank deposits and bonds are subject to interest at fixed rates. They are exposed to fair value changes due to interest rate changes. The Group currently has some financial liabilities with floating interest rates which are disclosed in the Notes to the consolidated financial statements. This is the maximum exposure of the Group to cash flow interest rate risk.

Credit risk analysis Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Impairment provisions are provided for losses that have been incurred by the Group at the reporting date.

The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below:

The carrying amount of trade and other receivables and loans represent the Group’s maximum exposure to credit risk in relation to its financial assets.

At 30 June 2010, the amounts of trade receivables that are overdue but not impaired are insignificant. The Group has no other significant concentrations of credit risk.

In accordance with the Group’s policy, the Investment Manager continuously monitors the Group’s credit position on a monthly basis, identified either individually or by group, and incorporates this information into its credit controls.

The Group’s Investment Manager reconsiders the valuations of financial assets that are impaired or overdue at each reporting date based on the payment status of the counterparties, recoverability of receivables, and prevailing market conditions.

30 June 2010 30 June 2009USD’000 USD’000Net loss Net loss

5% devaluation of the Vietnam Dong (2,750) (650)

30 June 2010 30 June 2009USD’000 USD’000

Classes of financial assets - carrying amounts: Ordinary shares - unlisted 5,033 5,032 Trustee loans 16,690 41,266 Held for sale asset 11,073 -Other long-term financial assets 9,980 1,112 Short-term investments 15,215 34,888Cash and cash equivalents 79,979 50,274 Trade and other receivables 117,026 112,473

254,996 245,045


Liquidity risk analysis Liquidity risk is the risk that the Group will experience difficulty in either realising assets or otherwise raising sufficient funds to satisfy commitments associated with investments and financial instruments. There is an inherent liquidity risk associated with the Company’s primary business, being property investment. As a consequence, the value of the majority of the Company’s investments cannot be realised as quickly as other investments such as cash or listed equities. Furthermore, the development and realisation of the Company’s property investments will normally require access to debt financing at a reasonable cost or shareholder loans from the Company’s surplus funds and its co-investors.

The Company seeks to minimise liquidity risk through:

• Preparing and monitoring cash flow forecasts for each investment project and the Company on a consolidated basis;

• Arranging financing to fund real estate developments as required; and

• Providing ample lead times for the disposal of assets and realisation of cash.

At the reporting date, the Group’s financial liabilities have contractual maturities which are summarised follows:

This compares to the maturity of the Group’s financial liabilities in the previous year as follows:

(*) Payables to related parties are primarily shareholder loans from related parties to jointly owned subsidiaries. These loans are not repayable until the respective subsidiaries have sufficient cash to repay these obligations.

The above contractual maturities reflect the gross cash flows, which may differ to the carrying value of the liabilities at the reporting date.

Capital management The Group’s capital management objectives are:

• To ensure the Group’s ability to continue as a going concern;

• To provide investors with an attractive level of investment income; and

• To preserve a potential capital growth level.

The Group considers the capital to be managed as equal to the net assets attributable to the holders of ordinary shares. The Group has engaged the Investment Manager to allocate the net assets in such a way so as to generate investment returns that are commensurate with the investment objectives outlined in the Group’s offering documents.

Current Non-current

Within 6 months

6 to 12 months

From 1 to 5 years

Over 5 years

USD’000 USD’000 USD’000 USD’00030 June 2010

Trade and other payables 116,466 - - -Short-term borrowings 21,090 - - -

Payables to related parties (*) 26,145 - 76,856 -

Long-term borrowings and debts - - 39,603 31,392Other liabilities - - 879 -

163,701 - 117,338 31,392

Current Non-current

Within 6 months

6 to 12 months

From 1 to 5 years

Over 5 years

USD’000 USD’000 USD’000 USD’00030 June 2009

Trade and other payables 74,354

-

-

-

Short-term borrowings 20,584 - - -

Payables to related parties (*) 49,943

-

65,018

-

Long-term borrowings and debts

-

-

5,765

14,595

Long-term payables to minority shareholders - - 1,481 - Other liabilities - - 912 -

144,881 - 73,176 14,595


47. Fair value hierarchy

The Group adopted the amendments to IFRS 7 Improving Disclosures about Financial Instruments effective from 1 January 2009. These amendments require the Group to present certain information about financial instruments measured at fair value in the Consolidated Statement of Financial Position. In the first year of application, comparative information need not be presented for the disclosures required by the amendment. Accordingly, the disclosure for the fair value hierarchy is only presented for the 30 June 2010 year end.

The following table presents financial assets and liabilities measured at fair value in the Consolidated Statement of Financial Position in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

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

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

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

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

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

There have been no transfers between Level 1 and 2 during the year.

Level 1 Level 2 Level 3 Total

USD’000 USD’000 USD’000 USD’000

Financial assets at fair value through Statement of Income- Ordinary share - unlisted - 5,033 - 5,033 - Held for sale asset 11,073 11,073 - Trustee loans - 16,690 - 16,690 Other long-term financial assets - 9,980 - 9,980Short-term investments - 15,215 - 15,215Trade and other receivables - 117,026 - 117,026

- 175,017 - 175,015


Investing policy

1. Investment objectives

VinaLand Limited (“VNL” or “the Company”) is a closed-end investment company incorporated in the Cayman Islands with the primary objective of achieving medium to long-term (3-5 years) capital appreciation and providing an attractive level of income (from interest and dividends) through investing in a diversified portfolio of mainly Vietnamese property and development projects.

Investment manager: VNL is managed by VinaCapital Investment Management Ltd (“VCIM” or the “Investment Manager”), a BVI company. VCIM was established in 2003 and manages three listed and several unlisted investment companies. In addition, VCIM employs a Development Advisor, VinaCapital Real Estate Ltd (VCRE), to manage and develop property assets, and employs a planning and project management company, VinaProjects, a 50/50 joint venture with inProjects, a Hong Kong-based project and construction management firm.

2. Investing policy

The Company will adhere to the following investment policies and restrictions:

Type of investment: The Company is permitted to engage in all forms of property investment and property development as allowed under the laws of each jurisdiction in which it operates, utilising instruments

and structures that may be suitable to allow participation in selected investment opportunities. These investments will be made directly or through investee companies (which are special purpose vehicles established specifically for each project) or by way of joint venture partnerships with other reputable developers.

Geographical focus: At least 70 percent of the Gross Asset Value of the Company will be invested in Vietnam. Up to a maximum of 30 percent of the Gross Asset Value may also be invested in neighbouring Asian countries (namely China, Cambodia and Laos), should the Directors consider that such investments would offer potentially attractive returns.

Sector focus: The Company will target five property sectors: office, retail, residential, industrial and hospitality/leisure. The Company’s primary focus will be Ho Chi Minh City, with a secondary focus on Hanoi and key leisure areas, including but not limited to Nha Trang, Hoi An, and Danang.

Control of investments: The Company will seek to own a controlling interest in its investments, either by owning a direct controlling participating interest in the project or by controlling the investee companies through which the investments are made. In the event that the Company holds a minority interest in a project, it will seek to secure adequate minority protection rights.


Realisation of investments: The Company is a publicly listed investment company on the London Stock Exchange’s AIM Market. Investors are free to purchase and sell shares whenever they please. The Company will aim to realise individual investments when the Board, with the advice of the Investment Manager, the Investment Committee and the Development Adviser, believes the realisation would be in the best interests of the Company and fulfil its investment objectives. The Company intends to affect exits through disposals of its projects or interests in investee companies to institutional and private investors.

Investment size: No single investment may, at the time of investment, exceed 20 percent of the Gross Asset Value.

Cross holdings: If the Investment Manager and the Directors deem it appropriate, the Company may also invest up to 20 percent of its Gross Asset Value in other property funds which themselves invest in property in the target region. All investments must be approved by the Investment Committee and, where a project or investment exceeds ten percent of the Net Asset Value, in addition, the approval of a majority of the Board must also be obtained.

Leverage: There is no limit in the Company’s articles of association to the amount of borrowings that it may incur. As is typical with real estate development and investment, investee companies may use leverage for individual projects. All leverage will be non-recourse to the Company and will be incurred by the investee companies. The level of the debt incurred will vary depending on the laws and regulations pertaining to the debt market with regard to the particular type of project and the ability of the relevant Investee Company to service the debt.

Other information:

• The Directors will review the investment policies on an annual basis.

• Changes to the investment policies may be prompted, inter alia, by changes in government policies or economic conditions which alter or introduce additional investment opportunities. In the event of a breach of any investment restrictions, the Investment Manager shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification shall be made to a Regulatory Information Service Provider.

• Cash pending investment, reinvestment or distribution will be placed in bank deposits, bonds, government-issued treasury securities or in local money market funds for the purpose of protecting the capital value of the Company’s cash assets.

• In order to hedge against interest rate risks or currency risk, the Company may, where appropriate, also enter into forward interest rate agreements, forward currency agreements, interest rates and bond futures contracts and interest rate swaps and purchase and write (sell) put or call options on interest rates and put or call options on futures on interest rates.

3. Valuation policy

The Investment Manager will present reports prepared by independent external valuers to the valuation sub-committee (“Valuation Committee”) on at least an annual basis. The Valuation Committee will accept, reject, apply a discount to asset valuations or may require the Investment Manager to obtain other third party valuation reports if deemed necessary. Every real estate investment which is required to be recorded at fair value will be revalued at least annually by two independent appropriately qualified valuers.

The Net Asset Value and the Net Asset Value per share shall be calculated (and rounded to two decimal places), in US dollars by the Administrator (or such other person as the Directors may appoint for such purpose from time to time) on a quarterly basis

The Net Asset Value shall be the value of all assets of the Company less the liabilities of the Company determined in accordance with the valuation guidelines adopted by the Directors from time to time.


Under current valuation guidelines adopted by the Directors, such values shall be determined as follows:

• The value of any cash in hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet, received shall be deemed to be the full amount thereof, unless in any case the Directors shall have determined that the same is unlikely to be paid or received in full, in which case the value thereof shall be arrived at after making such discount as the Directors may consider appropriate in such case to reflect the true value thereof;

• The value of securities which are quoted or dealt in on any stock exchange (including any securities traded on an “over the counter market”) shall be based on the last traded prices on such stock exchange, or if there is more than one stock exchange on which the securities are traded or admitted for trading, that which is normally the principal stock exchange for such security, provided that any such securities which are not freely transferable, or which are not regularly traded, or which for any other reason are subject to limited marketability, shall be valued at a discount (the amount of such discount being determined by the Directors in their absolute discretion or in a manner so approved by the Directors);

• As regards unquoted securities;

- Unquoted investments will initially be valued at cost price, which will include any expenses relating to their acquisition;

- A revaluation of unquoted investments to a value in excess of or below cost may be made in the circumstances provided by and in accordance with the guidelines issued by the British Investment Fund Association or any successor body;

• All other assets and liabilities shall be valued at their respective fair values as determined in good faith by the Directors and in accordance with generally accepted valuation principles and procedures;

• Any value other than in US dollars shall be translated at any officially set exchange rate or appropriate spot market rate as the Directors deem appropriate in the circumstances having regard, inter alia, to any premium or discount which may be relevant and to costs of exchange.

If the Directors consider that any of the above bases of valuation are inappropriate in any particular case or generally, they may adopt such other valuation or valuation procedure as they consider is reasonable in the circumstances provided that such other valuation or valuation procedure has been approved by the Company’s auditors. The Directors may delegate to the Investment Manager any of their discretions under the valuation guidelines.

4. Co-investments

The Investment Manager may from time to time manage other funds which have a similar or different investment objective and policy to that of the Company. Nevertheless, circumstances may arise where investment opportunities will be available to the Company and which are also suitable for one or more of the other funds managed by the Investment Manager. Where a conflict arises in respect of an investment opportunity, the Investment Manager will allocate the opportunity on a fair basis. In such event, the allocations will normally be made on a pro-rata basis between the Company and the other funds based on the amounts available for investment in each fund at the time the investment opportunity arises. However, the Investment Manager will be entitled to recommend to the Board the allocation of investment opportunities on a basis otherwise than as set out above if it deems it appropriate. In those circumstances the Board will determine what level of investment the Investment Manager may make on behalf of the Company.

The Investment Manager may also from time to time manage one or more funds incorporated in Vietnam. If appropriate, therefore, the Company may be able to invest in local companies or projects up to the foreign ownership restriction then existing with the local fund making additional investment in order to gain control of that company or project. This facility would allow the Company to benefit from majority participation in local projects thereby reducing the risks which may be associated with the use of locally established co-investors/partners and thereby also allowing effective overall control to be exercised by the Manager alone.


5. Ordinary Shares

It is intended that the Company’s income will consist wholly or mainly of investment income. The Directors currently intend to reinvest a large part of income to take advantage of opportunities meeting the Company’s investment and return objectives, and where suitable opportunities are not available to distribute substantially all of the Company’s income and capital gains after administrative expenses and tax to holders of the Ordinary Shares, and aim to increase dividends over the life of the Company.

6. Distributions

Until further notice, the Board of Directors of the Company has resolved to distribute approximately 50 percent of cash generated from divestments, after providing for tax and investment commitments. The Board will make distributions following the finalisation of the interim (six month) and annual financial statements. Distributions will be made in the form of a tender for the repurchase of shares.

7. Life of the Company

The Company does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends that a special resolution will be proposed every seventh year that the Company ceases to continue as presently constituted. If the resolution is not passed, the Company will continue to operate. If the resolution is passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.


Historical financial information

Years ended 30 June 2006 2007 2008 2009 2010

Income statement (USD'000)

Total income from ordinary activities 1,873 78,612 379,172 (157,130) 155,809

Total expenses from ordinary activities (1,752) (28,390) (101,415) (58,057) (64,650)

Operating profit before income tax 121 50,222 277,757 (215,187) 91,159

Income tax expense - (245) (29,574) 13,564 (15,167)

Profit for the year 121 49,976 248,183 (201,623) 75,992

Minority interests - (15,341) (80,485) 72,194 (27,541)

Profit attributable to ordinary equity holders 121 34,635 167,698 (129,429) 48,451

Statement of financial position (USD'000)

Total assets 200,146 741,090 1,228,373 1,097,051 1,269,167

Total liabilities (1,563) (112,218) (423,846) (436,522) (587,523)

Net assets 198,583 628,872 804,527 660,529 681,644

Share information

Basic earnings per share (cents per share) 0.00 0.12 0.34 (0.26) 0.10

Share price at 30 June 0.98 1.49 1.22 0.68 0.77

Ordinary share capital (thousand shares) 204,845 499,968 499,968 499,968 499,968

Market capitalisation at 30 June (USD'000) 200,748 744,952 609,960 339,978 384,975

Net assets value per ordinary share (USD) 0.98 1.26 1.61 1.32 1.36

Ratio

Return on average ordinary shareholders' funds 0.1% 11.6% 33.5% -25.9% 9.7%

Investment management fees/avr. NAV 3.6% 7.8% 8.5% 2.0% 2.0%


VinaLand Limited (‘VNL’)is a closed-end fund tradingon the AIM Market of theLondon Stock Exchange.Launched in 2006, VNL isthe largest listed fund forinvestment in Vietnam’semerging real estatesector. The fund invests inresidential, office, retail,hospitality, and township/industrial properties. Themanager’s objective is toprovide shareholders with anattractive level of income aswell as creating a potentialfor capital growth.


VNL Details

Fund size USD682 million (NAV as of 30 June 2010).

Fund launch 22 March 2006.

Term of fund Seven years subject to shareholder vote for liquidation.

Fund domicile Cayman Islands.

Legal form Exempted company limited by shares.

Structure Single class of ordinary shares trading on the AIM market of the London Stock Exchange plc.

Auditor Grant Thornton (Vietnam).

Nominated advisor (Nomad) Grant Thornton Corporate Finance (UK).

Custodian HSBC Trustee (HK).

Broker LCF Edmond de Rothschild (UK)

Lawyers Lawrence Graham (UK). Maples and Calder (Cayman Islands).

Management and performance fee Management fee of 2 percent of NAV. Performance fee of 20 percent of total NAV increase over the higher of an 8 percent compound annual return and the high watermark.

Investment manager VinaCapital Investment Management Ltd.

Investment policy Medium to long-term capital gains with some recurring income through investment in the following real estate sectors: Office; Residential; Retail; Township/Industrial (large scale); and Hospitality and Leisure.

Investment focus by geography Greater Indochina comprising: Vietnam (minimum of 70 percent), Cambodia, Laos, and southern China.

Registered office PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.

VNL overview and details

www.vinacapital.com

Ho Chi Minh City17th Floor, Sun Wah Tower115 Nguyen Hue Blvd., District 1Ho Chi Minh City, VietnamPhone: +84-8 3821 9930Fax: +84-8 3821 9931

Hanoi5th Floor, Sun City Building13 Hai Ba Trung Street,Hoan Kiem Dist., Hanoi, VietnamPhone: +84-4 3936 4630Fax: +84-4 3936 4629

CambodiaCanadia Tower, 20th floorNo. 315, Ang Duong Street Phnom-Penh, CambodiaPhone: +855 2399 6688Fax: +855 2399 6050

Singapore6 Temasek Boulevard#42-01 Suntec Tower 4Singapore 038986Phone: +65 6332 9081Fax: +65 6333 9081

VinaCapital AR 2011

Documents

Transcript of VinaCapital AR 2011