1. VIETNAM OPPORTUNITY FUND
ANNUAL REPORT 2007
1

2. Contents
Overview 4
Chairman’s Statement 7
State of the Economy 11
Investment Environment 12
Portfolio Performance Summary 14
Portfolio Highlights 16
Feature Investments 18
Consolidated Financial Statements
and Auditors’ Report 22
Board of Directors 24
Report of the Board of Directors 26
Auditors’ Report 29
Consolidated Balance Sheet 30
Consolidated Statement of Changes in Equity 32
Consolidated Statement of Income 33
Consolidated Statement of Cash Flows 34
Note to the consolidated financial statements 35
Directory 62

3. “Vietnam is undergoing exciting and
unprecedented change: an annual
growth rate of over 8% (the second
fastest in the world); an increasingly
progressive government; a hardworking
and educated workforce; and new
laws, regulations and WTO accession.
The case for investment in Vietnam has
never been stronger.”
Mr. Don Lam - CEO, VinaCapital Group
3

4. VOF Overview
VOF DETAILS
Size of fund: USD 822 (NAV as of 30 June 2007)
Term of fund: Vote every 5 years to wind up fund
Maximum investment: 20% of NAV in any one project
Geographic focus: Vietnam, Cambodia, Laos and China - at least 70% invested in Vietnam
Fund structure: Cayman company listed on London Stock Exchange (AIM)
Auditor: Grant Thornton (Vietnam)
Nominated Advisor: Grant Thornton Corporate Finance (UK)
Custodian: HSBC Trustee
Lawyers: Lawrence Graham (UK)
Baker and McKenzie (Vietnam)
Maples & Calder (Cayman Islands)
Broker: LCF Rothschild
Manager: VinaCapital Investment Management Limited
Team of 150 investment professionals
Management fee: 2% of NAV
Incentive fee of 20% of total increase of the NAV over a hurdle rate of
8% compound annual returns with high watermark and catch up.
4

5. Vietnam Opportunity Fund (VOF) is a
closed-end fund listed on the London
Stock Exchange’s AIM board (VOF.L).
Launched in 2003, VOF is one of the
largest and most successful Vietnam
funds, with NAV increasing over
225% since its inception. The fund
managers focus on key growth sectors
of the domestic economy, seeking to
capitalise on their broad network of
local business leaders and government
officials to realise sustainable capital
appreciation and provide attractive
levels of return for investors.
5

6. 6

7. Chairman’s Statement
Dear Shareholders,
We are pleased to present the annual financial statements of the Vietnam Opportunity Fund (AIM: VOF.L) for the
year ended 30 June 2007.
The Vietnamese economy has been bolstered by Vietnam’s admission to the World Trade Organisation and it’s
hosting of the APEC heads meeting in late 2006. Real gross domestic product has maintained its growth rate above
8% for the last ten years with 2006 closing at an increase of 8.2%. Industrial production, exports and retail sales are
all increasing as the domestic sector flourishes in the new open commercial environment and the country continues
to attract an ever increasing level of foreign investment, in healthy competition with China, India and other South
East Asian countries.
Economic growth and growing investor confidence in Vietnam energised share prices and propelled the Vietnamese
Stock Index to the number one position (146% increase in 2006) in terms of global stock market returns. Significant
growth has been felt in other sectors of the economy, with land prices in particular doubling and even tripling in
many areas.
We are very pleased to report that VOF has been in a prime position to benefit from these opportunities.
The Company raised an additional USD 304 million in January 2007 through the issuance of 128 million new shares.
Once again the offer was over-subscribed and scaling was applied. Most of the funds raised had already been fully
invested before the end of the financial year, necessitating the launch of VOF Round 7 fund raising in October 2007.
Since 30 June 2006 the net asset value per share has increased from USD 2.00 to USD 3.28 (an increase of 64%)
and earnings per share has risen from USD 0.76 to USD 1.34 (an increase of 76%).
The accelerated equitisation of State Owned Enterprises and listing of private enterprises were catalysts which have
driven the diversification of the Company’s investment portfolio during the year. The Company acquired significant
stakes in a number of very attractive businesses which are expected to provide solid investment returns over the
next few years. At 30 June 2007 the investment portfolio was comprised of over 80 listed and over-the-counter
trade securities spread across most major industrial sectors. The Company also held stakes in over 10 real estate
projects and 6 private companies.
Whilst there will always be challenges, we remain extremely confident that the reforms being undertaken in Vietnam
will continue and that Vietnam will grow in stature and importance within the global arena. We believe that VOF will
continue to be well positioned to seize the opportunities which arise from these changes and that the Company will
continue to perform well.
Thank you for your continued support.
Dr Jonathan Choi
Chairman
Vietnam Opportunity Fund
19 November 2007
7

8. 8
OVER THE
NEXT 5 YEARS
VIETNAM’S GDP
GROWTH IS
EXPECTED TO
CONTINUE TO
%
EXCEED
Rush hour traffic in Ho Chi Minh city
8

9. 9

10. Ho Chi Minh City at night.
10

11. State of the Economy
Vietnam’s GDP continues to grow with increasing A dark spot on the horizon has emerged as inflation has
vitality. According to official estimates, real GDP grew increased dramatically during 2007, with the CPI rising
by 7.9% on an annual basis in the first half of 2007, by 5.2% in the first six months. Inflationary pressures
compared with 7.4% in the first half of 2006. This became notable through the sharp rise of food and
was led by the continued expansion of the industry imported fuel prices (which account for the bulk of
and construction sector and the services sector. the CPI index), the latter reflecting the impact of avian
Rapid growth was spurred by the diversification of flu, blue ear pig disease and a global increase in grain
the industrial base into more manufacturing products, prices, stemming partly from strong food demand by
booming construction activities and strong textile and neighbouring China. Upward price pressures have been
garment exports; which has proved resilient in the face fed through to other productive sectors, especially the
of a liberalised global trading environment. construction material and services sectors. Inflation is
expected to continue to increase in the second half due
A further acceleration of the growth pace is expected
to further rises in fuel prices and monetary expansion;
in the second half of 2007, with a growth rate forecast
the whole year level for 2007 might double the 6.6%
at 8.5% for the whole of 2007, which is consistent
rate seen last year.
with the official target. This will be fueled by a surge in
the growth of the services sector, particularly tourism Inflation is now a major concern for the Government,
and financial services. With business sentiment and which faces a difficult policy choice.
consumer confidence remaining buoyant, private
The Government has initiated some measures to tame
investment outlays and consumer spending continue to
inflation. These include: decreasing import duties;
support Vietnam’s economic expansion prompted by
tightening monetary policy; and allowing the local
the post-WTO environment.
currency to appreciate slightly. Further considerations
WTO membership has also given rise to favourable which seem to be on the anti-inflation agenda include:
developments which are ushering Vietnam more fully a tighter monetary policy to absorb excess liquidity; tax
toward a market economy rapidly integrated into the measures to calm down real estate speculative fever;
global economy, for example: and a more flexible exchange rate policy to reduce the
pressure on the State Bank to buy foreign currencies.
° The adoption of business laws, like the new Unified
Enterprise Law and Investment Law, which help to Medium Term outlook
create a level playing field for both foreign and local
Over the next five years, real economic growth should
investors.
be maintained in the range of 8%-8.5% yearly, slightly
° The emergence of a strong domestic economy on below the government target of 9%, on account of
account of a robust and fast growing private sector; the containing impact of the anti-inflation policies
which has begun to surpass the State sector in on medium-term growth. We expect that the strong
industrial production. performance of the economy will continue to be led
by exports, but these will also be supported by robust
° The openness of the Vietnamese economy, with total
domestic demand.
trade (exports plus imports) accounting for more than
150% of GDP, ranking second after Malaysia in the With a young population (60% currently below the age
region. of 25), there will emerge a strong domestic economy
with a young and wealthy middle-class which will give
° The foreign direct and indirect investment capital flow
rise to booming retail spending and business and a fast
has continued to swell. FDI recorded more than USD
growing consumer sector, hence the need for more
5 billion in the first half and is expected to more than
shopping centres.
double that in the second half to reach USD 18-20
billion for 2007, compared with USD 12 billion for The fast rising equity and real estate markets
2006. accompanied by the rapid development of the
banking sector will also help to transform the informal
However, the above capital influxes have also led
sector more deeply into a monetised economy. FDI
to increasing imports, predominantly machinery and
is expected to swell to annual flows of USD 15-20
equipment. The worsening trade deficit (expected
billion for the next few years in light of the vigour of
to surpass USD 10 billion in 2007) and intensified
the Vietnamese economy and the “newly found”
inflationary pressures are linked with the sharp increase
attractiveness of its business environment. This FDI
in money supply.
influx will strongly stimulate demand for new real estate
projects, especially for high-end residential, office
spaces, and hotels.
11

12. Investment Environment
Despite record asset prices and excellent returns across owned companies) that have not applied, or not yet
all investment sectors over the last year, Vietnam’s fast been admitted to, the Ho Chi Minh or Hanoi stock
growing economy is expected to continue to provide exchanges. Originally operating in the bars and cafes in
excellent investment opportunities for a number of years Ho Chi Minh City and Hanoi, most transactions are now
to come. VOF remains perfectly positioned to both brokered through the 50 or so securities companies
identify and capitalise on these opportunities through its now operating in Vietnam. The total OTC market
investments in capital markets (both listed and over-the- capitalisation is estimated to be approximately USD
counter), private equity and real estate. 50 billion. OTC stocks tend to trade at a 20% to 30%
discount to listed securities.
Listed securities
The OTC market is not for the faint hearted. Historically,
At 30 November 2007 there were approximately 220
with little or no information available about individual
companies listed on the Ho Chi Minh Stock Exchange
companies or trading activity, market rumours abound.
and the Hanoi Stock Trading Centre. Their combined
The market also suffers from a shortage of liquidity,
market capitalisation is approximately USD 25 billion,
often resulting in significant price movements over
with an average daily turnover of approximately USD
short periods. These problems have become all the
60 million.
more evident over the last few months as OTC share
After increasing 147% in 2006 the Vietnam Index has prices have tended to drift downward as the market has
drifted since April, essentially taking a much needed moved out of favour with local investors.
break until company earnings catch up. Half year results
The authorities have recognised the potential problems
to June 2007 indicated that company earnings had
in the operation of such an unregulated market and
been growing satisfactorily, but this failed to ignite the
have recently implemented several new measures to
market as the Government delayed the equitisation
protect investors. These have included regulations that
of several major State-owned enterprises and moved
require larger OTC companies to: register with the State
to implement reforms to quell speculation across a
Securities Commission; distribute financial information
range of investment sectors. The most significant of
to shareholders; and move to the main exchanges over
these changes being restricting banks’ exposure to
the next few years.
securities lending to 3% (effective from 1 January 2008)
and implementing a capital gains tax on securities The proposed reforms of the OTC market should
trading and real estate (effective from 1 January 2009). improve the quality of this market. However, despite
The much anticipated equitisation of Vietcombank these changes, the market will continue to be plagued
is set for late 2007. This is an important step for the by poor liquidity for all but a few of its leading stocks.
Vietnamese Government as it will help to reconfirm Proper analysis and careful selection of companies will
their commitment to the equitisation of the major State be critical over the next six months, as the overall OTC
companies and should trigger the Vietnam Index to market is unlikely to grow until there is a pick-up in the
move in a positive direction. listed sector.
Despite several challenges, the medium term future Private equity
for listed securities seems very positive. The drift in
Historically there has not been a lot of private equity
the markets over the last six months has lead to a
opportunities in Vietnam, and those that have been
levelling in the PEG (Price Earnings to Growth) ratio,
available have tended to be small (less than USD 5
which for a number of blue chip companies is now very
million). This now seems to be changing as the market
close to, or less than, 1:1. Therefore, some equities
develops.
now seem far more reasonably priced than they have
been for some time; despite the fact that they are still The most significant drivers of change in this sector have
trading at PE (Price Earnings) multiples above 20x. With been Vietnam’s economic growth and reform of the
shares now more reasonably priced, growing GDP, private sector, particularly the new Enterprise Law. As a
the equitisation of major corporations, and improved consequence there is now a growing number of privately-
company performance, listed securities should continue owned medium sized companies (with turnover of
to perform well over the medium term. Vietnam was between USD 30 million to USD 100 million), where in the
recently added to the MSCI Frontier index, positive past there had been none (as all sectors were dominated
news for the country’s stocks. by State corporations). The owners of companies in
these sectors are increasingly recognising the value that
Over the counter securities
private equity managers can bring to their companies and
The over the counter (OTC) market is an unregulated as a result we expect a growing number of private equity
market comprising of several thousand securities deals in Vietnam over the next few years.
in companies (many of which are equitised State-
12

13. Traders in action in Hanoi
Real estate
The State owns all land in Vietnam and thus occupiers Regulatory changes, a strong domestic economy and
of land, both local and foreign, are tenants (albeit very a bright outlook for the future have combined to drive
long term tenants). Many investors view the State’s real estate markets to record highs over the last year.
ownership of all land as an unacceptable investment With many property values doubling and even tripling in
risk, despite the fact that these conditions are similar the space of 12 months, such returns cannot continue
to many developed countries (for example, Hong indefinitely. However, despite the Government’s attempt
Kong, where most land is leasehold). Furthermore, to quash speculation, there are a number of factors
over the last five years the Government has made which should mean that higher property prices and
considerable progress in land reform, to the extent that strong returns will continue; at least for the medium
many Vietnamese companies and individuals now have term. These factors include:
quasi land ownership. The reforms have also benefited 1. A current shortage of quality office space and
foreign investors to the extent that foreign investors’ hotel rooms in Hanoi and Ho Chi Minh City, and no
rights regarding land in Vietnam are far superior to a additional significant capacity becoming available
fair number of neighbouring ASEAN countries. There within the next three years.
are also rumours that foreign individuals will be granted 2. Changing demographics and growing domestic
the same rights as Vietnamese nationals for selected purchasing power which will result in growing demand
properties. It’s fair to say that these reforms are highly for residential developments.
progressive. 3. The growing tourism sector.
13

14. Portfolio
Performance Summary
During the financial year VOF’s total assets increased from USD 259 million to USD 822 million.
Adjusting for new capital raisings, this represents a 64% increase in the net asset value per share;
a 37% compounded annual growth rate since the inception of the Company.
The Company raised an additional USD 304 million in January 2007 through the issuance of 128
million new shares. At the end of June 2007 most of these funds had already been invested, with
only 13% of total assets held in cash and cash equivalents available for investment. The swift
investment of these funds and a pipeline of investment opportunities exceeding USD 100 million
necessitated the launch of VOF Round 7 in October 2007. A further USD 272 million was raised
during that offering and will be quickly put to work.
At June, VOF’s portfolio comprised of investments in capital markets 66% (2006: 57%), real estate
17% (2006: 21%), private equity 3% (2006: 9%) and cash 13% (2006: 13%). The slight increase
in the weighting of the capital markets portfolio is a consequence of the strong performance
of Vietnam’s capital markets over the year. We expect that this swing will be addressed as we
execute the latter half of our strategy which is to trim assets that have recently gone public and
recycle the cash into privately negotiated pre-listed investment opportunities. Further, the capital
market allocation should also decline as we place more emphasis on private equity deals over the
next year, where there is an increasing number of medium to large private companies emerging.
The capital markets component of the VOF portfolio continues to represent the bulk of VOF assets
and generate the greatest level of income. This reflects our strategy at the beginning of the year
to focus on privately negotiated pre-IPO or over-the-counter deals with a view that these assets
will list in 6 to 12 months. Since making these investments, many of these shares have listed on
the Vietnam stock market, a market that has come to be internationally recognised for its potential
growth since Vietnam joined the WTO. These investments are typically done at a considerable
discount to the market value or OTC prices.
Although levels of investment in real estate have declined as a proportion of total funds invested,
the overall investment has increased substantially from USD 58 million to USD 161 million. VOF
continues to exercise its pre-emptive rights to 25% of real estate projects undertaken by its sister
fund, VinaLand Limited. In June the VOF recorded USD 33 million of equity gains and property
revaluations in the real estate portfolio, representing a very good return from this portfolio.
Only a small amount of investment income was recorded in the private equity portfolio. This is
because these assets are normally equity accounted or carried at cost, due to the lack of a market
for such investments. This treatment means that the real value of these investments may not be
fully reflected in the financial statements. If they were sold we would expect to generate quite a
sizable gain on these investments.
14

15. VOF PORTFOLIO BY SECTOR AS OF 30 JUNE 07
Income 2006 Income 2007
2%
1% 9%
Capital markets
25%
89% Real estate
3%
Private equity
71% Cash
Total asset 2006 Total asset 2007
13%
13% Capital markets
3%
9%
Real estate
21% 17% Private equity
Cash
57% 66%
During the year VOF shares have consistently traded on the London Stock Exchange’s AIM Board
at a premium to the net asset value; peaking in January 2007 at well over USD 4.00 per share.
VOF shares are now amongst the most traded securities on the London Stock Exchange’s AIM
Board with an average daily turnover now exceeding USD 8 million. They are also the most liquid
Vietnam focused securities listed on an international stock exchange. As a consequence of
this, the Company’s shareholder base has widened considerably over the last year; with strong
representation across a wide range of investors spanning Europe, the Americas and Asia.
NAV PER SHARE AND SHARE PRICE PERFORMANCE BY QUARTER
US$
3. 90
3. 90
3.41
3. 40
3.28
2. 90
2. 40
1. 9 0
1. 4 0
0. 90
Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun-
03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07
NAV per Share Share Price
15

16. Portfolio Highlights
Top 10 listed
Company Industry Cost of Shares held % Market P/E
Investment by VOF Stake Value 2007
(USD ‘000) (‘000) (USD ‘000)
Vinamilk (VNM) Dairy 36,118 7,298 4.4 81,409 35.1x
Reetech (REE) Engineering 22,311 6,184 10.8 57,485 33.6x
Kinh Do (KDC) Confectionary 13,937 3,067 8.5 44,853 35.2x
Tan Tao Industrial (ITA) Infrastructure 10,783 2,800 4.0 20,823 35.5x
Hau Giang Pharma (DHG) Pharmaceutical 6,380 759 9.5 20,473 39.5x
Can Don Hydropower (SJD) Energy 15,316 6,382 24.5 17,006 18.6x
Bao Minh Insurance (BMI) Insurance 8,785 3,147 4.2 14,041 49.4x
Pha Lai Thermal (PPC) Energy 12,952 3,146 1.0 12,476 20.8x
Domesco Medicine (DMC) Pharmaceutical 8,367 1,447 10.5 10,311 24.6x
Transimex (TMS) Freight 4,994 1,468 22.6 5,730 24.3x
Top 10 OTC
Company Industry Cost of Shares held % Market P/E
Investment by VOF Stake Value 2007
(USD ‘000) (‘000) (USD ‘000)
Hoa Phat Group Manufacturing 47,119 10,560 8.0% 50,064 23.0x
PVFCCo Energy 26,258 8,000 2.1% 32,722 31.3x
Tay Ninh Rubber Rubber 6,943 1,600 5.3% 13,535 20.3x
Masan Manufacturing 2,429 1,666 14.7% 10,325 16.4x
Doruco Rubber 5,335 1,600 4.0% 9,023 18.2x
VinaCafe Food & Beverage 4,123 100 10.4% 8,141 18.9x
Vinaconex Construction 3,283 1,900 1.3% 8,125 25.9x
Kido’s Ice cream Confectionary 892 1,320 22.0% 6,585 28.4x
Minh Hai Seafood 6,149 1,240 10.0% 6,109 16.5x
Halico Food & Beverages 5,296 970 20.0% 6,011 7.5x
16

17. Top private equity
Company Industry Cost of % Market
Investment Stake Value
Zedex Minerals Mining 8,334 20.0% 11,427
Olympus Pacific Minerals Mining 9,112 7.8% 11,397
Axiom Mining Mining 4,952 21.1% 8,620
IBS Construction 2,956 100.0% n/a
Pho 24 Food & Beverage 2,349 30.0% n/a
International School, HCMC Education 1,602 35.0% n/a
AA Decor Furniture 526 5.1% n/a
Top 10 real estate
Project Investment Type Cost of %
Investment Stake
(USD ‘000)
Indotel (Sofitel Metropole) Hotel 5,738 28.9%
Hilton Hanoi Hotel 5,106 17.5%
Guoman Hotel Hotel 4,786 18.5%
Omni Hotel Hotel 6,210 17.5%
Century 21 project Mixed use 8,202 20.5%
Hung Vuong Corp Mixed use 4,858 30.0%
SCREC Apartments 5,943 100.0%
Kinh Do Real Estate Investment Company 5,237 30.0%
Saigon Water Park project Residential 3,616 100.0%
A&B Office Building Office Building 6,700 50.1%
17

18. Feature Investments
Mr. Don Lam - CEO, VinaCapital (on left) and Mr. Andy Ho - Head of Investment, VinaCapital.
18

19. Vietnam Dairy Products Hoa Phat Group
(Vinamilk)
Ho Chi Minh City-based Vinamilk produces a Hoa Phat Group Joint Stock Company was
wide range of dairy products and beverages the first private company established just after
that accounts for 75% of the domestic market. the implementation of the Enterprise Law, in
Vinamilk’s main business lines include: the August 1992. Hoa Phat is emerging as Vietnam’s
production and trading of milk powder, cereal leading private industrial group, operating mainly
with milk powder, condensed milk, fresh milk; in steel production. The group activities cover
production and trading of cakes, soybean milk, manufacturing and distribution of many types of
carbonated water, pure water and fresh fruit equipment and machinery for the construction
juice; trading industrial foods and equipment and and mining industry. It has over 5,000 staff and
materials. workers.
Vinamilk has entered into a joint venture with The Hoa Phat officially listed its shares on the
South African SABMiller, the second largest Ho Chi Minh City Stock Exchange (HoSE) in
brewery company in the world by volume, and November 2007, offering 132 million shares to
together they formally opened a brewery in My investors.
Phuoc II Industrial Zone which is situated in Binh
Hoa Phat is currently constructing a new cement
Duong Province with a capacity of 100 million
factory and a cast iron and steel factory. Total
litres per year. SAB Miller will utilise Vinamilk’s
investment for the cement factory is USD 37.5
nationwide distribution network. Vinamilk has
million, while total investment for the cast iron and
also recently increased its financial investments in
steel factory is more than USD 62.5 million.
Bourbon Tay Ninh, VF1 and Bao Viet Bank and
Tien Son Milk Factory.
81.4 million 50.0 million
USD 468 million USD 468 million USD 323 million USD 321 million
USD 53.12 million USD 45.68 million USD 21 million USD 12.56 million
19

20. Pho 24 Refrigeration Electrical
Engineering Corporation
Pho 24 is Vietnam’s most successful domestic Refrigeration Electrical Engineering Corporation
restaurant chain, having grown from a single (REE) was a State-owned company established
location in 2003 into a 64 branch chain spanning in 1977. In 1993, REE became the first equitised
Vietnam, as well as Indonesia, the Philippines company in Vietnam. Its main business activities
and Singapore. The restaurant offers a set range include: M&E engineering and contracting
of ‘Pho’ (or noodle soups) which is the national for industrial, commercial and civil projects;
Vietnamese dish. The company opened an manufacturing of Reetech air-conditioners,
additional three branches during the last quarter. home appliances, electrical panels and industrial
Pho 24’s aggressive expansion remains on plan mechanical products; developing and operating real
and the chain should have 80 domestic venues estate and investing in joint-stock companies and
opened by the end of 2008. banks. REE’s shares are listed on HoSE.
VOF currently hold a 32.5% interest in Pho E-Town 3 with a total construction area of 16,300m2
24, which was purchased in August 2006 and has just completed its land clearance phase. The
October 2007 at a cost of USD 3.55 million. company plans to start construction at the end of
2007 and complete at the end of 2008. REE has
many other projects in the pipeline which are still in
the process of obtaining construction licences.
REE has begun construction on its E-town 4 office
building, with a total construction area of 18,800m2,
in August, which is also expected to be completed
in 2008.
7.02 million 22.3 million
62.5 million 51.5 million
15.3 million 13.9 million
20

21. Sofitel Metropole Hotel A&B Office Building
The Sofitel Metropole Hotel is located in the centre The A&B office building is a 25 storey Grade
of Vietnam’s capital city, Hanoi. It is a 5 star French B+ office building which is currently under
colonial style hotel which covers a site area of construction. Although still 2 years from
7,468m2. The Sofitel Metropole Hotel first opened completion this will be one of the next completed
its doors in 1901. Throughout the Metropole’s rich office buildings in Ho Chi Minh City’s CBD area.
history it has seen service as the residence for The site area covers 1,832m2 and is situated on
official visitors to the country following Vietnam’s the corner of Le Lai and Nguyen Thi Nghia Street,
independence in the 1950s, and during the next to the 5 star New World Hotel. The location
American war as the base for journalists and is excellent with good proximity to the central
diplomats. The hotel recently converted office business district, local amenities and facilities such
space into 80 additional five-star rooms. The total as a central city park, restaurants and hotels. The
investment in the Sofitel Metropole Hotel to date total amount of investment to date is USD 6.7
is USD 5.7 million. VOF currently holds a 28.8% million. VOF currently own 50.1% of the A&B Joint
stake in this project. Stock Company with Saigon Tourist (25%) and
A&B Limited (24.9%).
Cost 5.7 million Cost 6.7 million
* Under construction
21

22. Consolidated
financial statements
and auditors’ report
8
$
22

23. 822 million
Net asset value at 30 June 2007 (USD 3.28 per share)
23

24. Board of Directors
From left to right: Mr. William Vanderfelt - Mr. Philip S.R. Skevington - Mr. Jonathan Choi - Mr. Horst Geicke - Mr. Bernard C. Grigsby
24

25. JONATHAN CHOI, CHAIRMAN PHILIP S.R. SKEVINGTON, DIRECTOR
Mr. Choi is the President of the Sun Wah Group, Mr. Skevington has nearly two decades of experience
a financial services, technology, infrastructure and as an executive in the international banking and financial
foodstuff conglomerate. He is also Chairman of Kingsway services industry. He worked in Asia for Standard
International Holdings, a Toronto listed company, and Chartered Bank for over sixteen years. From 2002 to
SW Kingsway, a Hong Kong listed investment bank and 2004 he was based in Hanoi as the Chief Executive
fund manager. Mr. Choi is also the Vice Chairman of the Officer for Standard Chartered’s operations in Vietnam,
Chinese General Chamber of Commerce in Hong Kong Cambodia and Laos. He has also worked for the bank
and a member of the National Committee of the Chinese in Hong Kong, South Korea, Indonesia, the Philippines
People’s Political Consultative Conference (CPPCC) of the and Singapore and is now an independent consultant.
People’s Republic of China. Mr. Choi has been an active Mr. Skevington holds a Bachelor of Arts from Durham
investor in Vietnam since 1971. University, a Bachelor of Science in Financial Services
from Manchester Business School and is an Associate of
the UK Chartered Institute of Bankers.
HORST GEICKE, DIRECTOR
Mr. Geicke is Chairman and Co-Founder of VinaCapital
BERNARD (‘BEN’) C. GRIGSBY, DIRECTOR
Group Limited, the immediate parent company of the
Investment Manager, and has resided in Asia for 25 Mr. Grigsby has more than three decades of experience
years. He has over 22 years of operating and investing as a senior and board level executive in the international
experience in the region, having made several financial capital markets and financial services industry.
and strategic investments in Vietnam, including the Mr. Grigsby retired from the Swiss Re-Insurance Group in
establishment of a manufacturing plant for his family December 2005, and currently serves as a non-executive
business which is headquartered in Hong Kong, and director of JP Morgan Fleming Japan Smaller Companies
establishing the Vietnam Opportunity Fund in 2003. Investment Trust Plc, Tudor BVI Global Fund Ltd.,
Mr. Geicke also co-founded the Pacific Alliance fund The Raptor Global Fund Ltd., Corney & Barrow Group
management group, which has more than USD 1.5 Limited, and is a member of the Board of Trustees of
billion in assets under management. Mr. Geicke was Washington & Lee University, amongst other interests.
the President of the German Chamber of Commerce Mr. Grigsby joined Swiss Re in 2001 as the inaugural
in Hong Kong for four years and in 2005 became the Chief Executive of Swiss Re Financial Products and
president of the European Chamber of Commerce in served as the Joint Chief Executive and then as Vice
Hong Kong. He is a founding and active Director of the Chairman of Swiss Re Capital Management and Advisory.
Hong Kong-Thailand Business Council. He is a member He also held positions as Chairman of Swiss Re Capital
of the Hong Kong-EU Business Cooperation Committee Markets Limited and Swiss Re Capital Markets (Japan)
and a past member of the Trade and Industry advisory Corporation as well as Vice Chairman of Fox-Pitt,
panel of the government of the Hong Kong Special Kelton Limited, amongst other Swiss Re appointments.
Administrative Region from 2004 to 2006. Mr. Geicke is a Previously, Mr. Grigsby was the Joint Chief Executive of
director of Vietnam Opportunity Fund, VinaLand, Vietnam Tokai Bank Europe Plc from 1995 to 2001, and spent
Infrastructure Limited, ARC Capital Holdings Limited and eight years with the Barclays Group from 1987, managing
Pacific Alliance Asia Opportunity Fund Limited, five AIM businesses in New York, Tokyo, and London. A dual USA
traded investment companies. He is also a director of and UK citizen born in Virginia, Mr. Grigsby graduated
the Omni Saigon Hotel, Hilton Hanoi Opera and Sofitel in economics and psychology from Washington & Lee
Metropole Hotel Hanoi, as well as several other listed and University.
private companies in Asia and the USA. Mr. Geicke has a
Master degree in Economics and Business Law from the
University of Hamburg, Germany.
WILLIAM VANDERFELT, DIRECTOR
Mr. Vanderfelt has over 30 years of experience as
Managing Partner of Petercam, the leading Benelux
investment bank, in charge of Institutional Research and
Sales. Mr. Vanderfelt is an experienced fund investor and
acts as a board director of several listed funds. He is a
passionate proponent of good corporate governance
and will help the Company ensure that it maintains best
practice in its corporate governance.
25

26. Report of
the Board of Directors
The Board of Directors submits its report together with the audited consolidated financial statements of Vietnam
Opportunity Fund Limited (“the Company”) and its subsidiaries (together “the Group”) for the year ended 30 June
2007.
The Group
Vietnam Opportunity Fund 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 notes 7 and 11.
Principal activities
The Company’s principal activity is to undertake various forms of investment in Vietnam, Cambodia, Laos and
Southern China. The Company mainly invests in listed and unlisted companies, debt instruments, assets and other
opportunities with the objective of achieving medium to long-term capital appreciation and providing investors with
an attractive level of investment income.
The principal activities of the subsidiaries are financial services, property investment, hospitality management and
retailing. Other particulars of the subsidiaries are set out in notes 7 and 11 to the consolidated financial statements.
Results and dividends
The results of the Group for the year ended 30 June 2007 and the state of its affairs as at that date are set out in
the consolidated financial statements on pages 30 to 61.
The Board of Directors do not recommend the payment of a dividend.
Directors
The directors of the company during the year were as follows:
Name Position Appointed/resigned on
Jonathan Choi Chairman 29 July 2003
Horst Geicke Director 14 March 2003
William Vanderfelt Director 10 December 2004
Robert Knapp Director 29 July 2003/ 1 July 2006
Bernard Grigsby Director 16 October 2006
Philip Skevington Director 16 October 2006
Auditors
The Group’s auditors, Grant Thornton (Vietnam) Ltd., have expressed their willingness to accept re-appointment.
Subsequent events
On 9 October 2007, the Company announced its intention to raise USD 200 million by way of a placement of
approximately 54 million new Ordinary Shares at a price of USD 3.68 per share (“the Placement”). The closing date
for subscriptions for the Placement was 14 November 2007. On 15 November 2007 the Company announced
that the capital raising had been significantly over-subscribed and that the Placement would be increased to
approximately 77 million new Ordinary Shares for a consideration of approximately USD 285 million. At the date of
this report the allotment of shares is still pending. After allotment an application will be made to begin trading the
new Ordinary Shares on the London Stock Exchange’s Alternative Investment Market.
26

27. Directors’ interest in the Company
As at 30 June 2007, the interests of the Directors in the shares, underlying shares and debentures of the Company
were as follows:
No. of shares Approximate % of holding
Horst Geicke 1,775,000 0.7%
Jonathan Choi 1,500,000 0.598%
Philip Skevington 10,000 0.004%
Bernard Grigsby 100,000 0.040%
At the date of this report there had been no further changes in the above holdings.
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 2007 and of the results of its
operations and its cash flows for the year ended on that date. When preparing the 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 financial statements;
(iii) maintain adequate accounting records and an effective system of internal control;
(iv) prepare the 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 effectively direct 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 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 balance sheet, statement of income,
statement of changes in equity and statement of cash flows, together with the notes thereto, have been properly
drawn up and give a true and fair view of the financial position of the Group as at 30 June 2007 and the results of
its operations and cash flows for the year ended 30 June 2007 in accordance with International Financial Reporting
Standards.
On behalf of the Board of Directors
Chairman
Ho Chi Minh City, Vietnam
19 November 2007
27

28. 28

29. Auditors’ report
To the Shareholders
Vietnam Opportunity Fund Limited
We have audited the accompanying consolidated balance sheet of Vietnam Opportunity Fund Limited and its
subsidiaries (“the Group”) as of 30 June 2007, and the related consolidated statements of income, changes in equity
and cash flows for the year then ended and a summary of significant accounting policies and other explanatory
notes. These consolidated financial statements are the responsibility of the Group’s management.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these 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.
Auditor’s 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 whether the
financial statements are free from material misstatement.
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 Vietnam
Opportunity Fund Limited and its subsidiaries as of 30 June 2007, and of its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards.
GRANT THORNTON (VIETNAM) LTD.
Ho Chi Minh City, Vietnam
Date: 19 November 2007
29

30. Consolidated balance sheet
Unit: USD
Notes 30 June 2007 30 June 2006
Assets
Non-current
Investment property 8 15,124,235 -
Property, plant and equipment 9 3,026,951 4,274,135
Investment properties under development 10 3,967,424 2,271,821
Investments in associates 11 69,176,640 23,844,581
Other long term investments 12 1,954,485 9,183,209
Loan receivables 13 41,459,674 19,659,480
Prepayments for operating leases 14 1,971,024 2,109,491
Other non-current assets 129,210 1,375,513
Goodwill 15 1,752,688 1,719,231
138,562,331 64,437,461
Current
Inventories 16 4,755,153 4,319,823
Receivables from related parties 33 1,019,604 -
Trade and other receivables 17 26,113,564 8,445,696
Financial assets at fair value through profit and loss 18 624,575,488 168,032,453
Held to maturity investments 19 47,940,593 -
Deposits for acquisitions of investments 20 10,442,162 -
Cash and cash equivalents 21 71,376,594 32,706,460
786,223,158 213,504,432
Total assets 924,785,489 277,941,893
30

31. Consolidated balance sheet
Unit: USD
Notes 30 June 2007 30 June 2006
Equity
Equity attributable to shareholders
Share capital 22 2,506,483 1,226,572
Additional paid-in capital 23 459,150,780 164,950,181
Revaluation reserve 24 17,716,945 -
Translation reserve (663,801) (34,084)
Retained earnings 342,954,144 78,787,207
821,664,551 244,929,876
Minority interests 22,137,688 14,084,467
Total equity 843,802,239 259,014,343
Liabilities
Current
Payables to related parties 33 4,790,326 -
Trade and other payables 25,33 75,016,283 17,476,172
Borrowings - 118,772
Other liabilities 1,176,641 1,332,606
Total liabilities 80,983,250 18,927,550
Total equity and liabilities 924,785,489 277,941,893
Net asset per share (USD per share) 3.278 1.997
31

32. Consolidated statement
of changes in equity
Unit: USD
Equity attributable to equity holders of the Group Minority Total
interests equity
Share capital Additional paid-in Translation Revaluation Retained
capital reserve reserve earnings
1 July 2005 751,547 91,634,442 - - 3,854,607 - 96,240,596
Currency translation - - (34,084) - - - (34,084)
Profit for the year ended
- - - - 74,932,600 522,792 75,455,392
30 June 2006
Total gains/(losses) for the year - - (34,084) - 74,932,600 522,792 75,421,308
Issue of new shares 475,025 73,315,739 - - - - 73,790,764
Acquisition of - - - - - 13,561,675 13,561,675
subsidiaries
30 June 2006/1 July 2006 1,226,572 164,950,181 (34,084) 78,787,207 14,084,467 259,014,343
Currency translation - - (629,717) - - - (629,717)
Profit for the year ended
- - - - 264,166,937 1,195,667 265,362,604
30 June 2007
Total gains/(losses) for the year - - (629,717) - 264,166,937 1,195,667 264,732,887
Issue of new shares 1,279,911 294,200,599 - - - - 295,480,510
Acquisition of subsidiaries - - - - - 6,857,554 6,857,554
Revaluation reserves - - - 17,716,945 - - 17,716,945
30 June 2007 2,506,483 459,150,780 (663,801) 17,716,945 342,954,144 22,137,688 843,802,239
32

33. Consolidated statement of income
Unit: USD
Note Year ended 30 June 2007 Year ended 30 June 2006
Revenue 9,451,988 14,218,400
Cost of sale (8,118,799) (9,614,287)
Gross profit 1,333,189 4,604,113
Other income 26 3,581,928 14,167,754
Administration expenses 27 (86,353,598) (26,343,605)
Other operating expenses (691,983) (116,191)
Other net changes in fair value on financial assets
28 315,206,185 78,236,372
at fair value through profit or loss
Gain on fair value adjustments of investment properties 1,124,235 -
Profit from operations 234,199,956 70,548,443
Financial income 29 13,266,332 4,893,303
Finance costs (3,142,073) (371,372)
Share of profit gain (losses) of associates, net 21,038,389 385,018
31,162,648 4,906,949
Profit before tax 265,362,604 75,455,392
Income tax 30 - -
Net profit 265,362,604 75,455,392
Attributable to shareholders 264,166,937 74,932,600
Attributable to minority interests 1,195,667 522,792
Earnings per share – basic and diluted
31 1.34 0.76
(USD per share)
33

34. Consolidated statement of cash flows
Unit: USD
Year ended 30 June 2007 Year ended 30 June 2006
Operating activities
Net profit before tax 265,362,604 75,455,392
Adjustment for:
Depreciation and amortisation 635,302 492,004
Reversal of impairment loss (232,360) -
Impairment loss 593,728 -
Gain on revaluation of financial assets (255,441,202) (62,112,662)
Gain on disposal of financial assets (59,764,983) (16,123,710)
Gain on revaluation of investment properties (1,124,235) -
Share of associates’ profits (21,038,389) (385,018)
Negative goodwill (2,984,094) (13,685,855)
Unrealised foreign exchange losses 2,276,911 201,202
Interest and dividend income (13,007,466) (4,664,935)
Net loss before changes in working capital (84,724,184) (20,823,582)
Change in trade and other receivables (3,351,412) (3,433,015)
Change in inventory (435,330) -
Change in trade and other payables (2,772,556) 18,014,659
(91,283,482) (6,241,938)
Investing activities
Interest received 7,376,864 1,579,775
Dividends received 5,687,464 2,477,631
Purchases of property, plant and equipment and other non-current assets (1,650,986) (2,667,274)
Acquisition of a subsidiary, net of cash (2,716,323) (1,666,751)
Purchases of financial assets (319,786,440) (116,109,932)
Proceeds from disposals of financial assets 179,896,126 48,786,145
Proceeds from disposals of investments and fixed assets 2,770 -
Proceeds from loans repaid 177,033 -
Loans provided (34,513,402) (19,659,480)
(165,526,894) (87,259,886)
Financing activities
Proceeds from shares issued 295,480,510 73,790,764
295,480,510 73,790,764
Net increase in cash and cash equivalents for the year 38,670,134 (19,711,060)
Cash and cash equivalents at the beginning of the year 32,706,460 52,417,520
Cash and cash equivalents at end of the year 71,376,594 32,706,460
34

35. Notes to the consolidated
financial statements
1 General information
Vietnam Opportunity Fund 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 undertake various forms of investment in Vietnam, Cambodia, Laos and
Southern China. The Company is listed on the London Stock Exchange’s Alternative Investment Market under the ticker
symbol VOF. The principle activities of its subsidiaries are set out in Note 7 to the financial statements.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
(including International Accounting Standards (IAS)) as developed and published by the International Accounting
Standards Board (IASB). The financial statements for the year ended 30 June 2007 were approved for issue by the
Board of Directors on 19 November 2007.
2 Adoption of new and amended standards and interpretations
The IASB and the International Financial reporting Interpretations Committee have issued various standards and
interpretations with an effective date after the date of this financial information. The Group has not elected for early
adoption of the standards and interpretations that have been issued as they are not yet effective. The most relevant for
the Group are amended IAS 1 “Presentation of the Financial Statements” (effective for annual periods beginning on or
after 1 January 2007), IFRS 7 “Financial Instruments: Disclosures” (effective for annual periods beginning on or after 1
January 2007) and IFRS 8 “Operating Segments” (effective for annual periods beginning on or after 1 January 2009).
Upon adoption of amended IAS 1, the Group will disclose its capital management objectives, policies and procedures
in each annual financial report and will have its capital movements and other gains and losses presented separately in
the statement of changes in equity and statement of recognised income and expenses. Upon adoption of IFRS 7, the
Group will disclose additional information about its financial instruments, their significance and the nature and extent
of risks to which they give rise. More specifically, the Group will be required to disclose the fair value of its financial
instruments and its risk exposure in greater detail. There will be no impact on reported income or net assets. Upon
adoption of IFRS 8, the Group will disclose segmental information when evaluating performance and deciding how to
allocate resources to operations.
The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on
the financial statements in the period of initial application.
3 Summary of significant accounting policies
3.1 Basis of presentation
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 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 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 financial statements, are disclosed in Note 4 to the
consolidated financial statements.
35

36. 3.2 Basis of consolidation
The consolidated financial statements of the Company for the year ended 30 June 2007 comprise the Company and its
subsidiaries (together referred to as the “Group”) and the Group’s interests in associates and jointly controlled entities.
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.
In addition, acquired subsidiaries are subject to application of the purchase method. This involves the revaluation at
fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date,
regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition.
On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated balance sheet at their
revalued amounts, which are also used as the basis for subsequent measurement in accordance with the 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. Negative goodwill is immediately allocated
to the statement of income as at the acquisition date. All inter-company balances and significant inter-company
transactions and resulting unrealised profits or losses (unless losses provide evidence of impairment) are eliminated on
consolidation.
A minority interest represents the portion of the profit or loss and net assets of a subsidiary attributable to an equity
interest that is not owned by the Group. It is based upon the minority’s share of post-acquisition fair values of the
subsidiary’s identifiable assets and liabilities, except where the losses applicable to the minority in the subsidiary exceed
the minority interest in the equity of that subsidiary. In such cases, the excess and further losses applicable to the
minority are taken to the consolidated statement of income, unless the minority has a binding obligation to, and is able
to, make good the losses. When the subsidiary subsequently reports profits, the profits applicable to the minority are
taken to the consolidated statement of income until the minority’s share of losses previously taken to the consolidated
statement of income is fully recovered.
Changes in ownership interests in a subsidiary that do not result in gaining or losing control of the subsidiary are
accounted for using the parent entity method of accounting whereby the difference between the consideration paid and
the proportionate change in the parent entity’s interest in the carrying value of the subsidiary’s net assets is recorded
as additional goodwill. No adjustment is made to the carrying value of the subsidiary’s net assets as reported in the
consolidated financial statements.
3.4 Associates and jointly controlled 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.
A jointly controlled entity is a contractual arrangement whereby two or more parties undertake an economic activity
where the strategic, financial and operating decisions relating to the activity require the unanimous consent of the
venturers.
36

37. Under the equity method, the Group’s interest in an associate or jointly controlled entity is carried at cost and adjusted
for the post-acquisition changes in the Group’s share of the associate’s or jointly controlled entity’s net assets 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 or jointly controlled entity for the year, including any impairment loss on goodwill relating to the investment
in associate or jointly controlled entity recognised for the year.
When the Group’s share of losses in an associate or jointly controlled entity equals or exceeds its interest in the
associate or jointly controlled entity, the Group does not recognise further losses, unless it has legal or constructive
obligations, or made payments, on behalf of the associate or jointly controlled entity.
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 or jointly controlled entity 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 and jointly controlled entities. At each balance
sheet date, the Group determines whether there is any objective evidence that an investment in an associate or jointly
controlled entity 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 or jointly control entity and its respective carrying
amount.
Unrealised gains on transactions between the Group and its associates and jointly controlled entities are eliminated to
the extent of the Group’s interest in an associate or jointly controlled entity. 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 prepared in either USD or the currency of the primary economic
environment in which the entity operates (“the functional currency”), which for most investments is Vietnamese Dong.
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 the consolidated entities, transactions arising in currencies other than the
reporting 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 reporting currency of the individual entity are translated
at the exchange rates in effect at the balance sheet date. Translation gains and losses and expenses relating to foreign
exchange transactions are recorded in the statement of income.
In the consolidated financial statements all separate financial statements of subsidiaries, if originally presented in a
currency different from the Group’s presentation currency, are converted into USD. Assets and liabilities are translated
into USD at the closing rate of the balance sheet date. Income and expenses are converted into the Group’s
presentation currency at the average rates over the reporting period. Any differences arising from this translation are
charged to the currency translation reserve in equity.
37

38. 3.7 Revenue recognition
Goods and services rendered
Revenue from sale of goods and provision of services is recognised in the combined statement of income when the
significant risks and rewards of ownership have been transferred to the buyer or the services have been provided.
No revenue is recognised if there are significant uncertainties regarding the ultimate receipt of the proceeds or the
reasonable estimation of the associated costs of the sale, or the possibility of the return of the goods.
Rental income
Rental income from investment property is recognised in the statement of income on a straight-line basis over the
term of the 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, if applicable, 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 the construction of property, plant and equipment and
investment property under development, which are capitalised as a cost of the related assets.
Operating lease payments
Payments made under operating leases are recognised in the 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.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability.
The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
3.9 Intangible assets
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment
losses. Expenditure on internally generated goodwill and brands is recognised in the statement of income as an
expense when incurred.
Amortisation
Amortisation is charged to the statement of income on a straight-line basis over the estimated useful lives of
intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life are systematically
tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are
available for use. The estimated useful lives are as follows:
Software 3 to 5 years
38

39. 3.10 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 3.18).
Negative goodwill represents the excess of the Group’s interest in the fair value of identifiable net assets and
liabilities over cost 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.
3.11 Investment property
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.
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, value each property
each year. On the valuation date, the fair value is estimated assuming that there is an agreement between a willing
buyer and a willing seller in an arm’s length transaction after proper marketing; wherein the parties had 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 in those cash flows. Valuations are reviewed and approved by the Valuation
Committee of the Board of Directors. The Valuation Committee may adjust valuations if there are factors that the
external independent valuers have not considered in their determination of a property’s fair value.
Any gain or loss arising from a change in fair value is recognised in the income statement. 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 equity 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.
Properties 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 3.13).
3.12 Investment property under development
Property that is being constructed or developed for future use as investment property is classified as investment
property under development (development projects) and stated at cost until construction or development is
complete, at which time it is reclassified and subsequently accounted for as investment property. At the date of
transfer, the difference between fair value and cost is recorded as income in the consolidated statement of income.
All costs directly associated with the purchase and construction of a property, and all subsequent capital
expenditures for the development qualifying as acquisition costs are capitalised.
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40. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a
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.
3.13 Property, plant and equipment
Owned assets
All property, plant and equipment, except buildings, are stated at cost less accumulated depreciation and impairment
losses (see accounting policy 3.18). 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 are revalued to fair value in accordance with the methods set out in accounting policy 3.11. 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 statement of income, in which case a credit to
that extent is recognised in the statement of income. Any deficit on revaluation is charged in the 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.
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.
Leased assets
Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified
as finance leases. Property, plant and equipment and investment property acquired by way of a finance lease is 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.
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:
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41. Leasehold improvements 5 to 20 years
Plant, machinery and equipment 5 to 10 years
Office furniture and fittings 4 to 9 years
Motor vehicles 5 to 10 years
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.
3.14 Property held for sale
Property intended for sale in the ordinary business or property developed for sale is classified as trading property and
is accounted for as inventory. Leasehold land upon which trading properties are constructed, or are in the process of
construction, is classified as investment property.
Property held for sale is stated at the lower of cost and net realisable value. Cost includes development costs and other
direct costs attributable to the properties concerned until they reach a saleable state. Net realisable value represents
the estimated selling price in the ordinary course of business less all estimated costs of completion and the estimated
costs necessary to make the sale.
3.15 Leases
Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified
as finance leases (see accounting policy 3.13).
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.
3.16 Financial assets
Financial assets, other than hedging instruments, are divided into the following categories: loans and receivables;
financial assets at fair value through profit or loss; available-for-sale financial assets; and held-to-maturity investments.
Management determines the classification of its financial assets at initial recognition depending on the purpose for
which the financial assets were acquired. Where allowed and appropriate, 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 24 September 2003.
All financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions
of the instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of
investments not at a fair value through profit or loss, directly attributable transaction costs.
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 balance sheet
date, financial assets are reviewed to assess whether there is objective evidence of impairment. If any such evidence
exits, any impairment loss is determined and recognised based on the classification of the financial assets.
The Group’s financial assets consist primarily of listed and unlisted equities, bonds, loans and receivables.
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