VinaCapital AR 2011 by Phan Thanh

Vietnam Infrastructure Limited

Annual Report 2010

VNI Annual Report 2010

Taking Vietnam to the world

Contents Vietnam Infrastructure Limited Annual Report 2010 Section 1

Introduction VinaCapital introduction Financial and performance highlights New investments Chairman’s statement

Section 2

Manager’s report Management team Infrastructure investment environment Portfolio performance Featured investments

11 13 16 24

Section 3

Financial statements and reports Board of Directors Report of the Board of Directors Governance report Independent Auditors’ report Consolidated financial statements and notes

29 30 32 36 38

Section 4

Annex Investing policy VNI overview and details

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

03 04 06 08

73 79

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

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

VNI

USD257 million net assets under management. VNI is the only fund for investment in Vietnam’s emerging infrastructure sector.

VNI offers exposure to transport, telecommunications, energy, environmental and industrial infrastructure assets.

VNI Annual Report 2010

Taking Vietnam to the world

Contents Vietnam Infrastructure Limited Annual Report 2010 Section 1

Introduction VinaCapital introduction Financial and performance highlights New investments Chairman’s statement

Section 2

Manager’s report Management team Infrastructure investment environment Portfolio performance Featured investments

11 13 16 24

Section 3

Financial statements and reports Board of Directors Report of the Board of Directors Governance report Independent Auditors’ report Consolidated financial statements and notes

29 30 32 36 38

Section 4

Annex Investing policy VNI overview and details

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

03 04 06 08

73 79

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

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

VNI

USD257 million net assets under management. VNI is the only fund for investment in Vietnam’s emerging infrastructure sector.

VNI offers exposure to transport, telecommunications, energy, environmental and industrial infrastructure assets.

VNI Annual Report 2010

Financial highlights FY2010

FY2009

Loss from operating activities (USD’000)

(7,280)

(37,933)

Net loss (USD’000)

(4,170)

(33,938)

(0.01)

(0.08)

0.64

0.65

Earnings per share (USD) NAV per share (USD)

Performance highlights Holdings in portfolio:

Total invested to 30 June 2010:

USD287.6m

Capital invested in FY2010:

USD77.6m*

New investments in FY2010:

(*) Includes capital invested into both new and existing investments.

VNI in FY2010 saw unrealised losses in the fund’s capital markets portfolio, with other assets held at cost or recording no significant changes.

VNI invested USD77.6m during FY2010, while carrying no debt at the fund level.

VNI Annual Report 2010

Financial highlights FY2010

FY2009

Loss from operating activities (USD’000)

(7,280)

(37,933)

Net loss (USD’000)

(4,170)

(33,938)

(0.01)

(0.08)

0.64

0.65

Earnings per share (USD) NAV per share (USD)

Performance highlights Holdings in portfolio:

Total invested to 30 June 2010:

USD287.6m

Capital invested in FY2010:

USD77.6m*

New investments in FY2010:

(*) Includes capital invested into both new and existing investments.

VNI in FY2010 saw unrealised losses in the fund’s capital markets portfolio, with other assets held at cost or recording no significant changes.

VNI invested USD77.6m during FY2010, while carrying no debt at the fund level.

VNI Annual Report 2010

New investments

Key new investments during FY2010 included two small hydro operators, an oil refinery and one of Vietnam’s top listed infrastructure firms.

Ho Chi Minh City Infrastructure Investment JSC (CII) CII is Vietnam’s top listed infrastructure developer and operator, with assets including two toll stations, and transport infrastructure and water treatment projects. CII intends to list its operating assets under a trust structure in 2011. Nam Viet Oil Refinery and Petrochemicals JSC (NVO) Nam Viet operates Vietnam’s only private condensate refinery. Nam Viet is positioned to grow its operations significantly, as the refinery is expanding capacity and a petroleum import-export licence has been recently issued. Tay Bac Electricity Investment and Development JSC (Tay Bac) Tay Bac owns three operational hydro power plants in northwestern Vietnam, including one 32MW plant and two smaller plants of 9MW and 10MW. Tay Bac has plans to build three more hydro plants. Hanoi Electrical Equipment-Mechanical Engineering JSC (HNEM) HNEM owns and operates three small hydropower plant projects in northern Vietnam. One 13.5MW plant started operations in September 2010, while two smaller plants of 10MW each will be completed in 2012 and 2013.

VNI Annual Report 2010

New investments

Key new investments during FY2010 included two small hydro operators, an oil refinery and one of Vietnam’s top listed infrastructure firms.

VNI Annual Report 2010

Chairman’s statement

“We believe the strategic decisions will help to close the share price discount, while leaving the company in a strong position to grow its assets and return value to shareholders over the long term.”

Dear Shareholders, We are pleased to present the annual report of Vietnam Infrastructure Limited (AIM: VNI) for the year ended 30 June 2010. In the first half of 2010, Vietnam’s economy grew at a healthy 6.2 percent annualised, buoyed by strong domestic demand and 2009’s effective government stimulus policies, which included increased spending on infrastructure. The government remains interested in spurring private sector investment in infrastructure, and the issue of infrastructure investment is frequently part of policy statements and media reports. However, no public-private framework exists in practice, and some areas of infrastructure development remain unprofitable for private investors. Nonetheless, there remain significant opportunities for VNI’s investment pipeline, and asset values have declined significantly from the fund’s first two years of operation – making new investments more affordable and viable over the long run.

Over the past year, VNI made significant strides in the strategic areas it has identified, primarily telecommunications infrastructure (BTS towers) and small-scale hydropower. Specifically, VNI worked with its investee companies in the telecoms sector to increase the aggregate number of BTS towers owned by 50 percent. In the power sector, VNI acquired significant stakes in two private hydropower assets. VNI will establish holding companies for both its BTS and hydropower assets, in order to create an eventual exit vehicle. In listed and OTC holdings, VNI invested in Nam Viet Oil, which owns Vietnam’s only private condensate refinery. Near the end of the financial year, the fund also invested in CII, one of the most successful Vietnamese infrastructure development companies and a potential strategic partner, given its significant holdings in both operating and pipeline assets. I am pleased to inform shareholders that after the year ended, a satisfactory conclusion was reached with East Asia Commercial Joint Stock Bank and Thai Thinh Capital regarding the

repayment of an outstanding deposit. Under the terms of the settlement agreement, the principal has now been fully repaid and Thai Thinh Capital will repay the accrued interest over the next twelve months.

We believe the above strategic decisions will help to close the share price discount, while leaving the company in a strong position to grow its assets and return value to shareholders over the long term.

At the end of June 2010, VNI had a NAV of USD257 million, or USD0.64 per share, a decrease of 1.5 percent from the end June 2009, when the fund had a NAV of USD261 million, or USD0.65 per share. Including its December 2008 capital distribution, VNI has a total return since inception of -23.6 percent.

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

To improve returns for shareholders, VNI will distribute 5-10 percent of NAV per year, starting in late 2011, in the form of a semi-annual tender for the purchase of shares at NAV. VNI will also seek to limit its capital markets exposure, reducing the target allocation of listed equities to 20-25 percent of NAV, from the 33 percent target as originally contained in the fund’s AIM Admission Document. VNI also intends to broaden its investment focus to new growth areas, such as agriculture-related infrastructure and logistics.

Thank you for your continued support.

Don Lam Chairman Vietnam Infrastructure Limited 17 December 2010

VNI Annual Report 2010

Chairman’s statement

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.

Don Lam Chairman Vietnam Infrastructure Limited 17 December 2010

VNI Annual Report 2010

Management team

VNI’s management team has made over USD7 billion in infrastructure investments in Vietnam and across Asia. The team has expertise in all infrastructure sectors and will look to expand the scope of the fund in the coming years.

Tony Hsun Managing Director

Kenny Low Deputy Managing Director

Tony Hsun has over 25 years of experience with major US energy and Japanese investment companies developing infrastructure projects in Asia, Europe, and South and North America. Previously, he was Senior VP of business development at Orix Corp in Tokyo, responsible for deal sourcing, evaluation and due diligence on over one hundred infrastructure investments in China and Southeast Asia. Tony is the founder and managing director of Asia Crosslink Pte Ltd in Singapore, a consulting firm that advises private equity funds on infrastructure investments. He has worked for Edison Mission Energy Asia Pte Ltd in Singapore and Dynegy Power Corp and Destec Energy Inc in Houston. Tony holds a B.Sc and M.Sc in Mechanical Engineering from the University of Arkansas and an MBA from Houston Baptist University.

Kenny Low has over 20 years of experience in the development and financing of infrastructure projects in the power, telecoms and transport sectors. Kenny was previously with PSA International, the world’s largest container terminal operator, based in Singapore. As Senior Manager in charge of global business development, Kenny led PSA’s first port project in Vietnam, and was subsequently appointed vice-chairman of the joint venture company. Kenny has held senior positions at Banque Nationale de Paris in Los Angeles, Edison Mission Energy, Lucent Technologies, and Hutchison Ports Holdings. He has an MBA from California State University.

VNI Annual Report 2010

Management team

Tony Hsun Managing Director

Kenny Low Deputy Managing Director

VNI Annual Report 2010

Infrastructure investment environment

Private participation is increasingly encouraged in the forms of BOT, BTO and BT contracts. A modern PPP framework is a needed precursor to more private sector investment.

Economy Vietnamâ&#x20AC;&#x2122;s GDP grew by 5.3 percent in 2009, making it one of the worldâ&#x20AC;&#x2122;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.

Energy Energy demand growth from 2006-2009 averaged 13.6 percent yearly, with growth expected to average 12-13 percent from 2011-15. Demand in 2009 was 10 percent below forecast, due to lower production following the global economic recession. Even with lower than expected demand, supply shortages resulted in black-outs at a higher frequency than 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, Vietnamâ&#x20AC;&#x2122;s economy has proven resilient and analysts forecast GDP growth of seven percent or higher in 2011. 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. Going forward, the government needs to restore confidence in the currency to prevent a gradual erosion in its value.

Vietnam produced 86.95Gwh of power in 2009, an increase of 17 percent year-on-year. Hydropower contributed 36 percent, 28 percent by IPP and imports, gas 19 percent, coal 11 percent, and the remainder by oil and diesel-fired plants. During the year, about 1,900MW of new capacity was put into operation, which increased the installed capacity by 12 percent to 17,652MW (including 650MW imported from China). In 2010, it is forecast that about 3,737MW capacity will be added to the network. However, the capacity reserve margin is as low as one percent in the dry season, when hydropower plants can only operate at a fraction of their capacity. Indeed, power supply in early 2010 was significantly affected by widespread drought across the country, reducing hydropower generation.

VNI Annual Report 2010

Infrastructure investment environment

Private participation is increasingly encouraged in the forms of BOT, BTO and BT contracts. A modern PPP framework is a needed precursor to more private sector investment.

VNI Annual Report 2010

The supply shortage was also due to technical problems resulting in frequent operational stops at the 1,200MW Quang Ninh and 1,200MW Hai Phong power plants. Power shortages were mitigated by imports from China and Laos, and by implementing rolling power cuts. The government continues to promote private investment in power generation. By the end of 2009, non-Electricity of Vietnam (EVN) plants supplied nearly 30 percent of production. The regulated electricity price structure, however, remains a challenge to private investment. In March 2010, electricity retail price was increased eight percent and is expected to be increased again in 2011 (the price remains one of the lowest in the region). In December 2009, the Ministry of Industry and Trade (MoIT) approved the design of the Vietnam Competitive Generation Market (VCGM) which will be implemented gradually from 2011. In May 2010, MOIT issued Circular 18/2010 to regulate VCGM operations, in the hope it will attract more private investment into power in Vietnam in the coming years. Telecommunication The first half of 2010 saw dramatic 3G mobile network growth in Vietnam. EVN-Telecom was the last operator to deploy a 3G network, in June 2010. The number of mobile phone subscribers nearly doubled in two years, from 69 million in 2008 to over 117 million by March 2010. Penetration is now over 130 percent. In contrast, in 2009 there were 19.7 million fixed-line users, a modest increase of 30 percent from 2007. The number of internet users increased from 20.8 million in 2008 to 22.8 million in 2009, equal to 25 percent of the population. Going forward, industry analysts expect this growth to continue. By the end of 2010, mobile penetration is expected to surpass the 180 percent threshold, which implies a large portion of the population with two or more wireless numbers. The number of internet users should rise to 27.5 million by 2012, or 28 percent of the population.

VNI Annual Report 2010

Service providers like VNPT (which owns Vinaphone and Mobifone), S-Telecom, Viettel, Hanoi Telecom and the newcomer GTel are expanding their network infrastructure to meet the growing demand, to improve and enhance services and coverage, and to maintain competitiveness. In September 2010, the Ministry of Information and Communications (MIC) granted licences for trialing Long Term Evolution (LTE –TTD) technology to operators from VNPT Group, Viettel, FPT Telecom, CMC and VTC, at a spectrum of 2.5-2.69GHz. Transportation Transportation (roads, bridges, railways, ports and airports) accounts for 60 percent of the total infrastructure value in Vietnam, standing at USD2.4 billion in 2009. However, Vietnam’s road system is currently in poor shape, with only 19 percent paved roads. Vietnam has no expressway and only 17,300km of national highways. Improved road and transport infrastructure generally would have an enormous impact on stimulating continued rapid economic growth and international trade. Business Monitor International forecasts vehicle fleets in Vietnam to increase threefold by 2020, requiring more and better roadways. In the Transport Sector Development Strategy to 2020, the government estimates the country needs USD60 billion to fund road infrastructure projects, including USD18 billion on an expressway system and USD15 billion focused on the two major urban centres, Hanoi and Ho Chi Minh City. Another USD20 billion investment is required in the port sector. The government also announced in 2009 that it plans to upgrade and expand Vietnam’s main airports. During 2009 and the first half of 2010, several high-profile transport projects were inaugurated, including the Hanoi-Hai Phong highway (100km, total investment USD1.5 billion), the Ho Chi Minh City-Long Thanh-Dau Giay highway (55km, USD1.2 billion), the Trung Luong-My

Thuan-Can Tho expressway (82km, USD1.8 billion) and a joint venture between A.P. Moller Maersk and Vinalines to develop ports in Vietnam. Given the increasing burden on the state budget, private participation is increasingly encouraged in the forms of BOT, BTO and BT contracts. The government is working on a modern PPP framework, a needed precursor to attract private sector investment. Environment Environmental issues continue to feature prominently in Vietnam’s media and public discourse. While new laws including taxation for environmental protection are under development, the current framework and incentives under existing laws have already spurred increased investments in the sector. Foreign investors ranging from Dragon Capital’s Mekong Brahmaputra Clean Development Fund L.P., the first fund dedicated to developments using clean technology in the Mekong river area, to big-name project developers such as Veolia Water, have initiated new projects or entered the Vietnam market. This trend is expected to increase competition among investors, while at the same time raising public awareness and helping create more attractive legal frameworks. Among notable initiatives, the Vietnam Environment Protection Fund has made preferential loans totaling VND350 billion (USD18 million) and investments of VND17.5 billion (USD900,000) as of March 2010. Meanwhile, strict regulations and strong public reactions followed a landmark settlement by Vedan Vietnam, one of Vietnam’s leading MSG producers, who were caught dumping untreated waste water into a river for many years. This helped send a strong message to companies that do not meet existing environmental standards. Last year saw two major water treatment plants start operations, the 300,000 cu.m/day Thu Duc BOO Water Treatment Plant in Ho Chi Minh City, and the 50,000 cu.m/day Dong Tam BOO Water Treatment Plant in

Tien Giang Province. While Dong Tam BOO has provided excess capacity for Tien Giang Province, Thu Duc BOO will only help Ho Chi Minh City narrow its current supply-demand gap. The current demand for clean water in Ho Chi Minh City is estimated at over two million cu.m/day, while the total capacity of current water plants sits at 1.6 million cu.m/day. Industrial Parks As of August 2010, Vietnam had 254 Industrial Parks (IPs) covering 68,800ha. Of this number, 83 IPs are still under development. The average occupancy rate in operating IPs is about 62 percent. The key conditions for a successful industrial park remain location, infrastructure services, and management capability. Among the operating IPs, the most successful parks are those developed by experienced foreign developers or by well-established local companies such as Vietnam-Singapore IP, AMATA IP, Tan Thuan EPZ, and Nhon Trach IP in the south, and Thang Long IP, Tien Son IP, and Pho Noi IP in the north. Most IPs surround Hanoi and Ho Chi Minh City, the two major economic hubs. Industrial parks continue to play an important role in attracting international manufacturing. During the first eight months of 2010, IPs attracted USD3.5 billion in foreign direct investment, accounting for 35 percent of total FDI. Of this, USD2.6 billion was for 132 new projects, while USD900 million was earmarked for existing projects. To date, the IP sector has attracted 3,841 FDI projects worth USD52.0 billion, and 4,617 domestic projects worth USD15.6 billion.

VNI Annual Report 2010

Portfolio performance

VNI will seek investments in agriculture-related infrastructure that will support the region’s development into a soft-commodities powerhouse.

Vietnam Infrastructure Limited (VNI) at the end of June 2010 had an NAV of USD257 million, or USD0.64 per share, down slightly from USD261 million, or USD0.65 per share, at the end of June 2009. The year saw capital disbursement of USD77.6 million, including nine newly acquired assets. Due to the difficult investment environment over the past two years, VNI is about one year behind schedule in deploying capital. In the wake of both domestic and international economic slowdowns, infrastructure investment was challenging throughout 2009 and 2010 as the cost of capital remained high due to inflation control measures. Many investors remained on the sidelines awaiting the roll-out of new decrees relating to investments in public private partnerships, telecommunications, and energy. In addition, the depreciation of the VND led to cost overruns for infrastructure projects as almost all capital equipment is imported and paid for in USD. Finally, sustained drought and an unusually short rainy season severely impacted the operations of hydropower plants across Vietnam, resulting in significant outages and downtime for many manufacturing facilities.

Despite the difficult investing climate, VNI in FY2010 made progress in areas that were relatively unaffected by the economic crises and which continue to provide capital appreciation as well as stable cash flows and dividend yield. These key growth sectors are telecommunications infrastructure and renewable energy. Cash was deployed during the year into two private, small-scale hydropower developers, and into an OTC energy company, Nam Viet Oil Refinery. Near the end of the year, VNI invested in a listed infrastructure developer, CII. Overall, the capital markets component saw unrealised losses due to the poor stock market performance, while the private equity assets remained stable, with an increase in the value of the telecommunications assets recorded following an independent valuation report. Although no new investments were recorded in telecommunications, progress was made in aggregating base transceiver station (BTS) towers for lease to mobile operators. Having started from scratch in 2008, VNI will have nearly 2,500 towers under lease contracts by the end of 2010, with a site share ratio of 1.1

(ie. an average of 1.1 mobile operators leasing each tower). The towers are managed by four investee companies spread throughout Vietnam. VNI’s strategy will be to consolidate the tower companies, enhance management capability to create economies of scale, and to potentially establish a presence outside Vietnam. The goal for the next few years is to increase the site share ratio and eventually provide value added services to operators, while managing costs and acquiring new towers in dense urban areas where the 3G rollout requires further capacity. As the BTS tower investees are private equity holdings, following the fund’s valuation policy they will be revalued once per year based on an independent valuation report. The FY2010 review found the value of the telecommunications sector holdings had increased, mainly due to the remarkable growth of Global Infrastructure Investment Joint Stock Company (GII), a company founded by VNI and local partners in early 2008, which now has nearly 500 BTS towers under lease. The sharing ratio is over 1.15 and is expected to reach 1.2 in the near future.

In renewable energy, VNI intends to aggregate several hydropower projects under a single holding vehicle for potential exit via listing, either onshore in Vietnam or potentially on a regional stock exchange. Thus far, VNI has acquired minority stakes in two hydropower developers, Tay Bac Electric Investment and Development Joint Stock Company (Tay Bac) and Hanoi Electrical Equipment – Mechanical Engineering Joint Stock Company (HNEM), both of which are located in northwest Vietnam. Tay Bac currently operates three run-of-the-river hydropower plants with total capacity of 51MW, with the most recent two having achieved operational status in the spring of 2010. HNEM is the developer of three hydropower projects with total capacity of 34.5MW, the first of which, Muong Kim, reaching operational status in the summer of 2010. The construction of the second plant is ongoing. VNI has an active pipeline of hydropower projects which are being evaluated for potential investment. VNI’s share price at the end of June 2010 was USD0.34, up slightly from USD0.33 at the end of June 2009. The discount to NAV was

therefore 46.9 percent at 30 June 2010. This is a disappointing result, and addressing the discount and increasing shareholder value is the top concern of the manager going forward in 2011. The Board has resolved to begin distributions in 2011, which will likely have a positive impact and help to reduce or remove the discount. VNI is also expanding its scope of investment, to include agricultural infrastructure, an area with significant growth potential. Performance summary NAV per share Change on previous year Share price Premium / (discount) to NAV

FY2010 FY2009 0.64 0.65 -1.5% -22.6% 0.34 0.33 -46.9% -49.2%

VNI Annual Report 2010

Portfolio performance

VNI will seek investments in agriculture-related infrastructure that will support the region’s development into a soft-commodities powerhouse.

FY2010 FY2009 0.64 0.65 -1.5% -22.6% 0.34 0.33 -46.9% -49.2%

VNI Annual Report 2010

VNI Portfolio by asset class (end June 2010) 100% Cash & equivalents

36.4% 56.2%

Bonds

1.3%

Private equity

19.7%

OTC equity

13.8%

3.1% 16.1% 5.7% Listed equity

Cash & equivalents

28.8%

18.9%

USD257 million 2010

Bonds Private equity OTC equity Listed equity

USD261 million 2009

As liquidity will eventually increase in the medium term, the capital markets holdings are expected to recover slowly. While Vietnamese stocks are the cheapest in the Asian region, there is little liquidity to exit sizable holdings. In this situation, VNI will shift the focus on its capital markets strategy from growth investments to high-yield operating assets (such as the CII acquisition).

VNI Portfolio by sector (end June 2010) 100% Cash & equivalents

36.4% 56.2%

Other sectors

11.8%

Transportation & Logistics

8.5%

Industrial Parks

16.5%

Telecommunications

10.1%

Energy

16.7%

USD257 million 2010

5.6% 4.4% 16.5%

Cash & equivalents

Other sectors Transportation & Logistics Industrial Parks

9.4%

Telecommunications

7.9%

Energy

USD261 million 2009

Outlook As infrastructure life cycles are quite long, VNI will begin major exit activities only after several more years. The fund faces an improved investment terrain as it looks to complete its deployment phase within the next 12 months. Vietnam’s macro economy is expected to continue to recover, and GDP growth targets for 2011 are now topping seven percent. Manufacturing growth has resumed and industrial demand for power and water are continually constrained by supply. The government is expected to continue to support the power privatisation programme, and to encourage the development of mega-thermal power projects. The government has also begun to seriously consider a framework for renewable energy, but thus far the economics of wind, solar and biomass power are unattractive without a clear policy to implement a feed-in tariff and a subsidy of some form.

In addition to developing the BTS tower and renewable energy holding companies, VNI will initiate a new focus sector for investment – agribusiness infrastructure. This sector is being driven by the worldwide trend of rising prices for soft commodities such as food and other agricultural products. The historically agrarian economies of Vietnam and its surrounding countries, rich in fertile land and abundant in water, are well-positioned to benefit from the boom in soft commodities. VNI will seek investments in agriculture-related infrastructure – such as river logistics, and grain elevators and silos – that will support the region’s development into a soft-commodities powerhouse.

VNI Annual Report 2010

VNI Portfolio by asset class (end June 2010) 100% Cash & equivalents

36.4% 56.2%

Bonds

1.3%

Private equity

19.7%

OTC equity

13.8%

3.1% 16.1% 5.7% Listed equity

Cash & equivalents

28.8%

18.9%

USD257 million 2010

Bonds Private equity OTC equity Listed equity

USD261 million 2009

VNI Portfolio by sector (end June 2010) 100% Cash & equivalents

36.4% 56.2%

Other sectors

11.8%

Transportation & Logistics

8.5%

Industrial Parks

16.5%

Telecommunications

10.1%

Energy

16.7%

USD257 million 2010

5.6% 4.4% 16.5%

Cash & equivalents

Other sectors Transportation & Logistics Industrial Parks

9.4%

Telecommunications

7.9%

Energy

USD261 million 2009

VNI Annual Report 2010

Top 3 holdings by sector

NAV vs share price performance

Company

Share price NAV per share

Asset Class

% NAV

OTC Listed Listed

4.3% 3.1% 3.0%

First and largest private oil refinery in Vietnam A coal-fired power plant in Hai Duong province A leading oil and gas drilling company in Vietnam

Transportation and Logistics Phu My Bridge Corporation Vietnam Aircraft Leasing Company (VALC) Vietnam Petroleum Transport JSC (VIP)

OTC Private equity Listed

4.3% 3.2% 0.7%

First cable-stayed bridge in HCM City First aircraft leasing company in Vietnam A petroleum product shipping company in Hai Phong city

Telecommunications VNC-55 Infrastructure Investment JSC (VNC-55) Mobile Infrastructure Development Company (MIDC) Global Infrastructure Investment JSC (GII)

Private equity Private equity Private equity

3.4% 3.1% 1.8%

A BTS building and leasing company in Danang city A BTS building and leasing company in Hanoi A BTS building and leasing company in HCM City

Industrial parks Long An SEA group Tan Tao Investment and Industry Corporation (ITA) Tan Binh Import Export JSC (TIX)

Private equity Listed Listed

7.7% 7.2% 1.5%

A 708ha industrial park, port and industrial park service project A leading industrial park developer in the north of Vietnam An industrial park developer in HCM City

General infrastructure Ho Chi Minh City Infrastructure Investment JSC (CII) DIC Corp (DIG) Vietstar

Listed Listed Private equity

3.1% 2.7% 2.2%

A leading infrastructure investor in HCM City A leading township developer in Vung Tau province A waste treatment facility in HCM City

Energy Nam Viet Oil Pha Lai Thermal Power JSC (PPC) PV Drilling (PVD)

1.2

1.0

0.8 0.64 NAV per share

0.6

0.4 0.34 Share price

0.2

0 Jun Sep Dec Mar Jun Sep Dec Mar 07 07 07 08 08 08 08 09

Jun Sep Dec Mar Jun 09 09 09 10 10

Description

VNI Annual Report 2010

Top 3 holdings by sector

NAV vs share price performance

Company

Share price NAV per share

Asset Class

% NAV

OTC Listed Listed

4.3% 3.1% 3.0%

First and largest private oil refinery in Vietnam A coal-fired power plant in Hai Duong province A leading oil and gas drilling company in Vietnam

Transportation and Logistics Phu My Bridge Corporation Vietnam Aircraft Leasing Company (VALC) Vietnam Petroleum Transport JSC (VIP)

OTC Private equity Listed

4.3% 3.2% 0.7%

First cable-stayed bridge in HCM City First aircraft leasing company in Vietnam A petroleum product shipping company in Hai Phong city

Telecommunications VNC-55 Infrastructure Investment JSC (VNC-55) Mobile Infrastructure Development Company (MIDC) Global Infrastructure Investment JSC (GII)

Private equity Private equity Private equity

3.4% 3.1% 1.8%

A BTS building and leasing company in Danang city A BTS building and leasing company in Hanoi A BTS building and leasing company in HCM City

Industrial parks Long An SEA group Tan Tao Investment and Industry Corporation (ITA) Tan Binh Import Export JSC (TIX)

Private equity Listed Listed

7.7% 7.2% 1.5%

A 708ha industrial park, port and industrial park service project A leading industrial park developer in the north of Vietnam An industrial park developer in HCM City

General infrastructure Ho Chi Minh City Infrastructure Investment JSC (CII) DIC Corp (DIG) Vietstar

Listed Listed Private equity

3.1% 2.7% 2.2%

A leading infrastructure investor in HCM City A leading township developer in Vung Tau province A waste treatment facility in HCM City

Energy Nam Viet Oil Pha Lai Thermal Power JSC (PPC) PV Drilling (PVD)

1.2

1.0

0.8 0.64 NAV per share

0.6

0.4 0.34 Share price

0.2

0 Jun Sep Dec Mar Jun Sep Dec Mar 07 07 07 08 08 08 08 09

Jun Sep Dec Mar Jun 09 09 09 10 10

Description

VNI Annual Report 2010

VNI over its first three years has built a diversified portfolio of infrastructure assets that will ensure stable, long-term investment returns.

VNI Annual Report 2010

VNI over its first three years has built a diversified portfolio of infrastructure assets that will ensure stable, long-term investment returns.

VNI Annual Report 2010

Featured investments Transportation

Industrial Parks

Ho Chi Minh City Infrastructure Investment JSC (CII) VNI started acquiring shares in CII beginning in late 2009. CII, listed on the Ho Chi Minh City stock exchange, is one of Vietnam’s leading infrastructure investment companies, whose core assets include toll roads located in Ho Chi Minh City. In addition, the company invests in other infrastructure projects, such as water treatment, and develops real estate. The company was established in 2001 and listed in 2006, quickly becoming one of the fastest growing infrastructure firms in the country, with an earnings per share CAGR of 61 percent from 2005-2009. In FY2009, CII increased net profit by 138 percent year-on-year to VND315.9 billion (USD17.1 million), and in H1 2010 it increased net profit by 157 percent year-on-year to VND292.9 billion (USD15.1 million). Its current portfolio consists of seven investments in transportation infrastructure, four real estate holdings, three water treatment projects and three toll stations, among other assets. At 30 June 2010, VNI held a five percent stake in CII.

Long An SEA Industrial Park Service Area (Long An project) VNI invested in this large-scale mixed-use industrial park and port project in March 2008. The Long An project lies in a strategic location along the Soai Rap River, able to serve Ho Chi Minh City and the Mekong Delta. Investment licences were granted in March 2009 for the 396ha industrial park and in August 2010 for the 145ha port components. A new partner, Dong Tam Group, entered the project in November 2009. Dong Tam Group is a well-established company with a strong reputation as a supplier of building materials and as a property developer, including industrial parks. Their participation is expected to improve operations, and reduce VNI’s exposure in the project as it progresses. Dong Tam will eventually hold 50 percent in all the project components. VNI currently holds a 37.5 percent stake in the industrial park, a 50 percent stake in the port, and eventually a 37.5 percent stake in the industrial service area. Significant stakes are also held by Vietnam Opportunity Fund and VinaLand Limited. Ba Thien 2 Industrial Park VNI invested in Ba Thien 2 Industrial Park in 2008 together with partner CPK Vinh Phuc. The project covers 308ha in Vinh Phuc province, 50km from Hanoi. Nearby areas include Noi Bai International Airport, Hai Phong Port and Cai Lan Port. The project’s strategic location is enhanced by the expansion and construction of new expressways, which will help improve surrounding infrastructure and facilitate transport to, and development of, the area. The project was granted an investment licence in February 2009, and a land-use right was granted for the first 29ha in October 2010. Compensation continues for the remaining area, with development of the first stage now underway. VNI recently signed an agreement with CPK Vinh Phuc to increase its stake by 10 percent to 90 percent, subject to approval by the authorities. VNI has also started marketing the project and has been approached by several interested parties.

VNI Annual Report 2010

Featured investments Transportation

Industrial Parks

VNI Annual Report 2010

Energy

Telecommunication

Nam Viet Oil Refinery and Petrochemicals JSC (NVO) NVO is the only private condensate refinery in Vietnam. NVO benefits from secure, long-term supply of raw material from its strategic shareholder PetroVietnam Oil Corporation. NVO also has a strong wholesale distribution arrangement with PetroMekong, a dominant gasoline retailer in southern Vietnam. The company has recently received a petroleum import-export licence, and has completed upgrading its plant capacity from 2,000 to 5,000 barrels per day. These developments will allow the company to diversify its condensate supply and expand its customer base from pure wholesale to industrial and retail customers. NVO is on track to achieve net income of USD4.3 million in FY2010, a substantial increase over the FY2009 net income of USD0.7 million. The company trades at a P/E 2010 of 11.6x and a P/B of 3.6x. VOF acquired 11.63 percent of Nam Viet Oil Refinery and Petrochemicals JSC (NVO) at the end of 2009.

Global Electrical Technologies Corporation (GLT) GLT focuses on telecommunications infrastructure and data centre solutions. It was established in October 1996 by Innovative Technology Development Corporation (ITD), a leading toll road equipment and solution provider (and also a VNI investee company). GLT listed on the Hanoi Stock Exchange in November 2009. Over the past five years, GLT’s chartered capital has increased almost eleven-fold to VND92.4 billion (USD4.7 million) to meet the company’s expansion plans. VNI currently holds an 18 percent stake in GLT. In FY2009, GLT increased its revenue by 21 percent to VND283.1 billion (USD15.3 million), and its net profit by 10 percent to VND49.5 billion (USD2.7 million). However, the performance in H1 2010 was below expectations, as sales dropped by 13 percent to VND80.3 billion (USD4.2 million) and net profit increased by only two percent to VND11.9 billion (USD0.6 million) compared to H1 2009. As sales are mostly generated during the last quarter of the year, GLT expects to achieve its FY2010 targeted sales of VND320.0 billion (USD16.5 million) and net profit of VND40.0 billion (USD2.0 million).

Hanoi Electrical Equipment Mechanical Engineering JSC (HNEM) HNEM is a developer and operator of small hydropower plants in northern Vietnam. In September 2010, HNEM’s first hydropower plant, the 13.5MW Muong Kim 1, began producing electricity and was connected to the national power grid. Annual output is expected at 55 million kWh. HNEM has also started construction on a second plant, Muong Kim 2, with a designed capacity of 10.5MW, with plans to acquire and build more hydropower plants in the north. Muong Kim 1 is the fifth operational hydropower plant in Yen Bai province. VNI holds a 35 percent stake in HNEM as a strategic investor. The company expects to have positive operating results in FY2011 thanks to stable water flow, sound infrastructure, low debt-financing investment costs, and a capable management team.

Global Infrastructure Investment Ltd (GII) GII was established by VNI and partners ITD and GLT in March 2008 to invest in Base Transceiver Station (BTS) towers and lease the towers to major mobile operators such as VMS and VNPT. VNI holds a 49 percent stake in GII, with plans to increase this holding. In FY2009, GII’s second year of operations, revenue increased by 10.8x to VND35.6 billion (USD1.9 million) and net profit increased by 134.7x to VND9.1 billion (USD0.5 million) compared to FY2008. By the end of 2009, GII had built and owned 326 BTS towers. In H1 2010, GII has secured 124 new locations and is in the final stage of acquiring over 80 BTS towers in southern Vietnam. Due to this expansion, the company increased revenue by 105 percent to VND25.6 billion (USD1.3 million) and net profit by 45 percent to VND5.0 billion (USD0.3 million) compared to H1 2009.

VNI Annual Report 2010

Energy

Telecommunication

VNI Annual Report 2010

Board of Directors 1

Don Lam, Chairman

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. 2

(Left to right: Mr. Horst F. Geicke; Mr. Ekkehard Goetting; Mr. Luong Van Ly; Mr. Paul Cheng; Mr. Don Lam)

Horst F. Geicke, Director

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.

Paul Cheng, Director

Mr. Cheng is an independent non-executive director of Esprit Holdings Limited and Kingboard Chemical Holdings Limited – both listed companies on the Hong Kong Stock Exchange. He is a member of the International Advisory Board of Abdul Latif Jameel Co. Ltd., one of the largest private companies in Saudi Arabia, and is an advisor to Steelcase Corporation in the U.S. He was formerly Chairman of The Link Management Ltd., which manages a portfolio of previously government-owned retail and car parking assets, valued at over HK$30 billion. The privatisation in late November 2005 was the world’s largest Real Estate Investment Trust (REIT) IPO. Born in China, Mr. Cheng was raised in Hong Kong and received his higher education in the United States. He has a B.A. degree from Lake Forest College (Illinois, U.S.A) and received his M.B.A. degree from the Wharton Graduate School of Business at the University of Pennsylvania. 4

Luong Van Ly, Director

Mr. Luong is currently the CEO of DNL Partners, an investment consultancy company. He has also held the position of Deputy Director of the Department of Planning and Investment in Ho Chi Minh City for six years and before that he was the Deputy Director of Foreign Affairs. He has had over 25 years of experience in Vietnam giving him a good understanding of both the government and the market. He attended the Graduate Institute of International Studies in Geneva, Switzerland.

Ekkehard Goetting, Director

Mr. Goetting is currently Chairman and CEO of German Industry of Commerce Ltd. (GIC), Hong Kong, South China, Vietnam, and a member of the Board, GIC Taicang Ltd., Taicang, PRC. He is also Vice President of the German Chamber of Commerce in Hong Kong. Mr. Goetting was born in Germany and attended the University of Hamburg where he studied law and computer science. He has over 17 years of business experience in Asia, and has worked to increase business ties between his native Germany and Asia. He established a Representative office of German Industry and Commerce in Hanoi and he has led multiple German and International business missions to Vietnam and Cambodia starting as early as 1990. He has served on many Asia-specific Advisory Boards, most notably the Asia-Pacific Committee of German Industry, the Federation of German Industries, the East Asia Business Association and the Association of German Banks. Currently he also holds the position of Chief Representative for the German National Tourist Office, Hong Kong and South China as well as Messe Berlin, Hong Kong, PRC and Port of Hamburg, Hong Kong, PRC, Vietnam.

VNI Annual Report 2010

Board of Directors 1

Don Lam, Chairman

(Left to right: Mr. Horst F. Geicke; Mr. Ekkehard Goetting; Mr. Luong Van Ly; Mr. Paul Cheng; Mr. Don Lam)

Horst F. Geicke, Director

Paul Cheng, Director

Luong Van Ly, Director

Ekkehard Goetting, Director

VNI Annual Report 2010

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

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 72.

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

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

Particulars of the Group’s principal subsidiaries and associates are set out in Note 6 and Note 9 of the consolidated financial statements. Principal activities The Company’s principal activity is to invest in a diversified portfolio of entities owning infrastructure projects and assets in Vietnam and the surrounding Asian countries. The Company mainly invests and holds equity, debt and hybrid instruments in unquoted companies that themselves hold, develop or operate infrastructure assets. The Company may also invest in entities whose shares or other instruments are listed on a stock exchange, or traded on OTC markets. The Company also may invest in other funds that invest in infrastructure.

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

Position

Date of appointment

Don Lam

Chairman

29 June 2007

Horst Geicke

Director

29 June 2007

Paul Ming Fun Cheng Director

29 June 2007

Ekkehard Goetting

Director

29 June 2007

Luong Van Ly

Director

29 June 2007

Auditors The Group’s auditors, Grant Thornton Cayman Islands with the assistance of Grant Thornton (Vietnam) Ltd., have expressed their willingness to accept reappointment. Events after the reporting date Details of significant subsequent events which impact on the financial position of the Group are

set out in Note 6, Note 13 and Director’s interests in the Company in this page. Directors’ interests 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: No. of shares 30 June 2010

30 June 2009

Approximate % of shares on issue 30 June 30 June 2010 2009

Horst Geicke 1,000,000 1,000,000

0.25%

Don Lam

0.17%

0.15%

700,000

600,000

During August 2010, VinaCapital Investment Management Limited, a subsidiary of VinaCapital Group Limited, purchased 4,000,000 ordinary shares of the Company. As a consequence, the indirect interests of Mr Horst Geicke and Mr Don Lam increased to 1,806,823 shares and 1,198,002 shares, which represents 0.45% and 0.3% holding, 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 Statements of Income and Comprehensive Income, Consolidated Statement of Changes in Equity and 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 of the results of its operation and its cash flows for the year then ended in accordance with International Financial Reporting Standards. On behalf of the Board of Directors

Don Lam Chairman Hong Kong, SAR China 17 December 2010

VNI Annual Report 2010

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 72.

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

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

Position

Date of appointment

Don Lam

Chairman

29 June 2007

Horst Geicke

Director

29 June 2007

Paul Ming Fun Cheng Director

29 June 2007

Ekkehard Goetting

Director

29 June 2007

Luong Van Ly

Director

29 June 2007

30 June 2009

Approximate % of shares on issue 30 June 30 June 2010 2009

Horst Geicke 1,000,000 1,000,000

0.25%

Don Lam

0.17%

0.15%

700,000

600,000

Don Lam Chairman Hong Kong, SAR China 17 December 2010

VNI Annual Report 2010

Governance report

Organisation of corporate governance

VNI 2010 governance report

The members of the Board of Directors

On behalf of the Board, I am pleased to report for the first time the corporate governance activities of the Board and its Committees during the 2010 financial year. Vietnam Infrastructure Ltd (’VNI’ or ‘the Company’) is a Cayman Island company established in 2007 and traded on the AIM Market of the London Stock Exchange.

The Board has a total of five members, of which three are independent non-executive 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.

The Board is committed to ensuring that the Company maintains a high standard of corporate governance, with the aim to protect shareholders’ and other stakeholders. In order to achieve this, the Investment Manager and the Company have created a clear and effective structure for responsibility and governance.

At the end of the financial year, the aggregate annual directors’ fee amounted to USD130,000.

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’).

Current Board Members Don Lam (Chairman) Paul Cheng Ekkehard Geotting Ly Luong Horst Geicke

Independence to the Company No* Yes Yes Yes No**

Exec/Non-exec Director Non-executive Non-executive Non-executive Non-executive Non executive

* 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.

Shareholders

Audit committee

Investment committee

Board of Directors Valuation committee

Nomination/remuneration/ Management evaluation committee

Investment teams

Reporting and accounting

Corporate communications/ Investor relations

Investment manager

Treasury

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

Risk and compliance

Legal

Reporting and accounting Business development

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

Operating unit

Country, branch office Risk

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

VNI Annual Report 2010

Governance report

Organisation of corporate governance

VNI 2010 governance report

The members of the Board of Directors

At the end of the financial year, the aggregate annual directors’ fee amounted to USD130,000.

Current Board Members Don Lam (Chairman) Paul Cheng Ekkehard Geotting Ly Luong Horst Geicke

Independence to the Company No* Yes Yes Yes No**

Exec/Non-exec Director Non-executive Non-executive Non-executive Non-executive Non executive

* 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.

Shareholders

Audit committee

Investment committee

Board of Directors Valuation committee

Nomination/remuneration/ Management evaluation committee

Investment teams

Reporting and accounting

Corporate communications/ Investor relations

Investment manager

Treasury

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

Risk and compliance

Legal

Reporting and accounting Business development

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

Operating unit

Country, branch office Risk

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

VNI Annual Report 2010

The responsibilities of the Board of Directors

Board Delegated Committees

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 the overall strategic direction was delivered within the agreed framework of reward, incentive and control.

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 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 the Board meeting, the committee Chairman presented the committee’s finding and proposals to the Board. The committee met two times during the financial year.

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. This year, each of the Board committee’s terms of reference endeavour 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 two scheduled Board meetings during the year. The meetings used a structured agenda to ensure all key areas are reviewed over the course of the year. In addition to formal Board meetings, the directors met in Vietnam at least twice each year to review the Company’s activities. Summary of the members’ attendance and fees paid are shown below. Attendance (1) Appointed

Current Board Position

Audit Committee (AC)

Valuation Committee (VC)

RNME Committee (RNME)

Board meetings (2)

AC meetings (1)

VC meetings (1)

RNME meetings (1)

Total Fee USD

Don Lam

2007

Chairman

2/2

15,000

Paul Cheng

2007

Member

Chairman

Member

2/2

1/1

40,000

Ekkehard Goetting

2007

Member

Chairman

Member

2/2

1/1

30,000

Luong Ly Horst Geicke

2007

Member

Chairman

1/2

2/2

1/1

30,000

2007

Member

2/2

15,000

Board Member

Total (1) Attendances of Board and Committee are from July 2009 to June 2010.

130,000

Valuation Committee The committee ensured the investment manager valuation process and policies are consistent, transparent and result in valuations determined on an appropriate basis. The committee Chairman reported the committee’s findings and recommendations to the Board for final decisions on all valuations. The committee met once during the financial year. Remuneration/ Nomination/ Management Engagement/ Evaluation Committee The committee met once during the year and performed multiple roles. The committee:

• Determined and agreed on 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 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 projects that the Investment Manager felt were suitable for investment by the Company. The committee is comprised of individuals with financial and business backgrounds combined with extensive hands-on local experience. The current Investment Committee members include Ekkehard Geotting, Horst Geicke, Don Lam and Tony Hsun.

Investment Manager VNI 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, Don Lam Chairman Vietnam Infrastructure Limited

VNI Annual Report 2010

The responsibilities of the Board of Directors

Board Delegated Committees

Current Board Position

Audit Committee (AC)

Valuation Committee (VC)

RNME Committee (RNME)

Board meetings (2)

AC meetings (1)

VC meetings (1)

RNME meetings (1)

Total Fee USD

Don Lam

2007

Chairman

2/2

15,000

Paul Cheng

2007

Member

Chairman

Member

2/2

1/1

40,000

Ekkehard Goetting

2007

Member

Chairman

Member

2/2

1/1

30,000

Luong Ly Horst Geicke

2007

Member

Chairman

1/2

2/2

1/1

30,000

2007

Member

2/2

15,000

Board Member

Total (1) Attendances of Board and Committee are from July 2009 to June 2010.

130,000

VNI Annual Report 2010

Independent Auditors’ report

To the Shareholders of Vietnam Infrastructure Limited We have audited the accompanying Consolidated Statement of Financial Position of Vietnam Infrastructure Limited and its subsidiaries (“the Group”) as of 30 June 2010, and the related Consolidated Statements of Income and Comprehensive Income, Consolidated Statement of Changes in Equity 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 72. 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 whether 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 consolidated financial statements. The procedures selected depend upon the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to

the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the 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 consolidated 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 Infrastructure Limited and its subsidiaries as at 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

VNI Annual Report 2010

Independent Auditors’ report

GRANT THORNTON Grand Cayman, Cayman Islands 17 December 2010

VNI Annual Report 2010

Consolidated statement of financial position

Consolidated statement of financial position (cont.) Note

ASSETS Non-current Investment property Prepayments for acquisitions of investments Investments in associates Property, plant and equipment Long-term prepayments Non-current assets Current Trade and other receivables Financial assets at fair value through Statement of Income Short-term investments Receivables from related parties Cash and cash equivalents Current assets Total assets

The accompanying notes are an integral part of these consolidated financial statements.

30 June 2010 USD’000

7 8 9

3,538 16,159 30,624 21 272 50,614

3,812 15,292 23,057 30 42,191

10 11 13

10,910 112,776 8,819 79,938 212,484 263,098

7,820 72,372 24,185 2,800 114,503 221,680 263,871

Note

30 June 2009 USD’000 EQUITY AND LIABILITIES EQUITY Equity attributable to shareholders of the parent: Share capital Additional paid-in capital Treasury shares Translation reserve Other reserves Retained earnings

15 16 17

Non-controlling interests Total equity LIABILITIES Current Payables to related parties Other liabilities Total liabilities Total equity and liabilities Net assets value per share attributable to equity shareholders of the parent (USD per share)

The accompanying notes are an integral part of these consolidated financial statements.

30 June 2010 USD’000

30 June 2009 USD’000

4,021 346,157 (635) (378) 60 (92,216) 257,009

4,021 346,157 (635) (139) (88,141) 261,263

624 257,633

885 262,148

974 4,491 5,465 263,098 0.64

966 757 1,723 263,871 0.65

VNI Annual Report 2010

Consolidated statement of financial position

Consolidated statement of financial position (cont.) Note

The accompanying notes are an integral part of these consolidated financial statements.

30 June 2010 USD’000

7 8 9

3,538 16,159 30,624 21 272 50,614

3,812 15,292 23,057 30 42,191

10 11 13

10,910 112,776 8,819 79,938 212,484 263,098

7,820 72,372 24,185 2,800 114,503 221,680 263,871

Note

15 16 17

The accompanying notes are an integral part of these consolidated financial statements.

30 June 2010 USD’000

30 June 2009 USD’000

4,021 346,157 (635) (378) 60 (92,216) 257,009

4,021 346,157 (635) (139) (88,141) 261,263

624 257,633

885 262,148

974 4,491 5,465 263,098 0.64

966 757 1,723 263,871 0.65

VNI Annual Report 2010

Consolidated statement of changes in equity

Consolidated statement of income

Equity attributable to shareholders of the parent

Total equity

4,021 -

Additional paid-in capital USD‘000 386,367 (40,210) -

Treasury shares USD‘000 (729) 94 -

Translation reserve USD‘000 -

Other reserve USD’000 -

Retained earnings USD’000 (54,327) (33,814)

USD‘000 335,332 (40,116) (33,814)

USD‘000 906 (124)

USD‘000 336,238 (40,116) (33,938)

Share capital Balance at 1 July 2008 Capital distributions Loss for the year ended 30 June 2009

Non-controlling interests Total

Other comprehensive income/ (loss) Foreign exchange difference from translations of foreign operations Total other comprehensive income/ (loss) Total comprehensive income/ (loss) Balance at 30 June 2009

(139)

103

(36)

4,021

346,157

(635)

(139) (139) (139)

(33,814) (88,141)

(139) (33,953) 261,263

103 (21) 885

(36) (33,974) 262,148

Balance at 1 July 2009 Loss for the year ended 30 June 2010 Change in non-controlling interests

4,021 -

346,157 -

(635) -

(139) -

(88,141) (4,075) -

261,263 (4,075) 60

885 (95) -

262,148 (4,170) 60

(239)

(166)

(405)

4,021

346,157

(635)

(239) (239) (378)

(4,075) (92,216)

(239) (4,314) 257,009

(166) (261) 624

(405) (4,575) 257,633

The accompanying notes are an integral part of these consolidated financial statements.

Notes

Net changes in fair value of financial assets at fair value through Statement of Income Administration expenses Loss from operating activities

19 20

Finance income Foreign exchange losses Share of profit of associates Other income

Loss before tax from continuing operations Income tax Net loss from continuing and total operations Attributable to equity shareholders of the parent Attributable to non-controlling interests Earnings per share (from continuing and total) – basic and diluted (USD per share)

The accompanying notes are an integral part of these consolidated financial statements.

Year ended 30 June 2010 USD’000 33 (7,313) (7,280)

30 June 2009 USD’000 (29,710) (8,223) (37,933)

5,805 (3,582) 426 461 3,110

9,038 (5,176) 133 3,995

(4,170) (4,170)

(33,938) (33,938)

(4,075) (95) (0.01)

(33,814) (124) (0.08)

VNI Annual Report 2010

Consolidated statement of changes in equity

Consolidated statement of income

Equity attributable to shareholders of the parent

Total equity

4,021 -

Additional paid-in capital USD‘000 386,367 (40,210) -

Treasury shares USD‘000 (729) 94 -

Translation reserve USD‘000 -

Other reserve USD’000 -

Retained earnings USD’000 (54,327) (33,814)

USD‘000 335,332 (40,116) (33,814)

USD‘000 906 (124)

USD‘000 336,238 (40,116) (33,938)

Share capital Balance at 1 July 2008 Capital distributions Loss for the year ended 30 June 2009

Non-controlling interests Total

(139)

103

(36)

4,021

346,157

(635)

(139) (139) (139)

(33,814) (88,141)

(139) (33,953) 261,263

103 (21) 885

(36) (33,974) 262,148

Balance at 1 July 2009 Loss for the year ended 30 June 2010 Change in non-controlling interests

4,021 -

346,157 -

(635) -

(139) -

(88,141) (4,075) -

261,263 (4,075) 60

885 (95) -

262,148 (4,170) 60

(239)

(166)

(405)

4,021

346,157

(635)

(239) (239) (378)

(4,075) (92,216)

(239) (4,314) 257,009

(166) (261) 624

(405) (4,575) 257,633

The accompanying notes are an integral part of these consolidated financial statements.

Notes

Net changes in fair value of financial assets at fair value through Statement of Income Administration expenses Loss from operating activities

19 20

Finance income Foreign exchange losses Share of profit of associates Other income

The accompanying notes are an integral part of these consolidated financial statements.

Year ended 30 June 2010 USD’000 33 (7,313) (7,280)

30 June 2009 USD’000 (29,710) (8,223) (37,933)

5,805 (3,582) 426 461 3,110

9,038 (5,176) 133 3,995

(4,170) (4,170)

(33,938) (33,938)

(4,075) (95) (0.01)

(33,814) (124) (0.08)

VNI Annual Report 2010

Consolidated statement of comprehensive income

Consolidated statement of cash flows Year ended 30 June 2010 USD’000

Year ended

Losses for the year

30 June 2010

30 June 2009

USD’000

(4,170)

(33,938)

30 June 2009 USD’000

Operating activities Net losses before tax

(4,170)

(33,938)

(3,948)

1,819

Share of associates’ gains

(426)

(133)

9,451

9,636

Adjustments for:

Other comprehensive incomes (losses)

(Gain) loss on disposal of financial assets

Foreign exchange differences from translations of foreign operations

(405)

(36)

Other comprehensive losses for the year

(405)

(36)

Total comprehensive losses for the year

(4,575)

(33,974)

Unrealised foreign exchange losses Unrealised (gain) losses on revaluation of financial assets

(1,725)

23,284

Attributable to equity shareholders of the parent

(4,314)

(33,953)

Interest income

(4,145)

(7,950)

(261)

(21)

Dividend income

(1,660)

(1,088)

(4,575)

(33,974)

Net losses before changes in working capital

(6,623)

(8,370)

Change in short-term investments

13,850

37,643

Change in trade and other receivables

2,904

(2,836)

Change in trade and other payables

2,694

114

Change in prepayments

(868)

215

11,957

26,766

Attributable to non-controlling interests

Cash flow from operating activities

The accompanying notes are an integral part of these consolidated financial statements.

VNI Annual Report 2010

Consolidated statement of comprehensive income

Consolidated statement of cash flows Year ended 30 June 2010 USD’000

Year ended

Losses for the year

30 June 2010

30 June 2009

USD’000

(4,170)

(33,938)

30 June 2009 USD’000

Operating activities Net losses before tax

(4,170)

(33,938)

(3,948)

1,819

Share of associates’ gains

(426)

(133)

9,451

9,636

Adjustments for:

Other comprehensive incomes (losses)

(Gain) loss on disposal of financial assets

Foreign exchange differences from translations of foreign operations

(405)

(36)

Other comprehensive losses for the year

(405)

(36)

Total comprehensive losses for the year

(4,575)

(33,974)

Unrealised foreign exchange losses Unrealised (gain) losses on revaluation of financial assets

(1,725)

23,284

Attributable to equity shareholders of the parent

(4,314)

(33,953)

Interest income

(4,145)

(7,950)

(261)

(21)

Dividend income

(1,660)

(1,088)

(4,575)

(33,974)

Net losses before changes in working capital

(6,623)

(8,370)

Change in short-term investments

13,850

37,643

Change in trade and other receivables

2,904

(2,836)

Change in trade and other payables

2,694

114

Change in prepayments

(868)

215

11,957

26,766

Attributable to non-controlling interests

Cash flow from operating activities

The accompanying notes are an integral part of these consolidated financial statements.

VNI Annual Report 2010

Consolidated statement of cash flows (cont.)

Notes to the consolidated financial statements Year ended 30 June 2010

30 June 2009

USD’000

Interest received

1,958

5,267

Dividends received

1,660

995

Acquisitions of investment property

(248)

Other acquisitions of property, plant and equipment

(30)

(7,988)

(18,267)

(63,623)

(18,617)

22,618

27,761

Investing activities

Investments in associates Acquisitions of financial assets Proceeds from disposals of financial assets Other cash outflows for investing activities Cash flow from investing activities

(272)

(45,647)

(3,139)

Financing activities Capital reduction

(40,210)

Capital reduction recovered for treasury shares

Cash flow from financing activities

(40,116)

(33,690)

(16,489)

(875)

(4,256)

114,503

135,248

79,938

114,503

Net change in cash and cash equivalents from continuing operations Unrealised foreign exchange differences of cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

1. General information Vietnam Infrastructure Limited (“the Company”) 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 principal activity is to invest in a diversified portfolio of entities owning infrastructure projects and assets in Vietnam and the surrounding countries. The Company mainly invests and holds equity, debt and hybrid instruments of unquoted companies that themselves hold, develop or operate infrastructure assets. The Company may also invest in entities whose shares or other instruments are listed on a stock exchange, or traded on the OTC markets. The Company also may invest in other funds that invest in infrastructure. The Company’s shares are listed on the London Stock Exchange’s Alternative Investment Market under the ticker symbol VNI.

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 IASB, which are relevant to and effective for the Group’s Consolidated Financial Statements for the annual period beginning 1 July 2009. These revised, amended and new standards were adopted in the Interim Consolidated Financial Statements for the period from 1 July 2009 to 31 December 2009.

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

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

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 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The accompanying notes are an integral part of these consolidated financial statements.

• IAS 40 Investment Property (Amended) (*) • IAS 23 Borrowing Costs (Revised 2007) (*) • IAS 1 Presentation of Financial Statements (Revised 2007) • IFRS 8 Operating Segments • IFRS 3 Business Combinations (Revised 2008)

• Amendments to IFRS 7 Financial Instruments: Disclosures – improving disclosures about financial instruments (*) These standards were adopted early by the Group in the consolidated financial statements for the year ended 30 June 2009. For further information refer to said consolidated financial statements.

VNI Annual Report 2010

Consolidated statement of cash flows (cont.)

Notes to the consolidated financial statements Year ended 30 June 2010

30 June 2009

USD’000

Interest received

1,958

5,267

Dividends received

1,660

995

Acquisitions of investment property

(248)

Other acquisitions of property, plant and equipment

(30)

(7,988)

(18,267)

(63,623)

(18,617)

22,618

27,761

Investing activities

Investments in associates Acquisitions of financial assets Proceeds from disposals of financial assets Other cash outflows for investing activities Cash flow from investing activities

(272)

(45,647)

(3,139)

Financing activities Capital reduction

(40,210)

Capital reduction recovered for treasury shares

Cash flow from financing activities

(40,116)

(33,690)

(16,489)

(875)

(4,256)

114,503

135,248

79,938

114,503

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

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

VNI Annual Report 2010

2.2.2 Adoptions of revised and amended standards IAS 1 Presentation of Financial Statements (Revised 2007) The adoption of IAS 1 (Revised 2007) made certain changes to the format and titles of the primary consolidated 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 was unchanged. However, some items that were recognised directly in equity were subsequently recognised 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 affected the presentation of changes in owners’ equity and introduces 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 financial position is not required. IFRS 8 Operating Segments The adoption of IFRS 8 has not affected the identified operating segments for the Group. However, reported segment results are based on

VNI Annual Report 2010

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 of the purchase method with some 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 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 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. 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 interest no longer result in goodwill on 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 IAS27 (Revised 2008) prospectively to transactions with non-controlling interests and disposals of subsidiaries from 1 July 2009. 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: Disclosures – 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 consolidated 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 consolidated 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 consolidated financial statements.

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

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

• Phase 1: Classification and Measurement • Phase 2: Impairment methodology • Phase 3: Hedge accounting In addition, a separate project is dealing with derecognition.

The changes introduced by IAS 4 (2009) relate mainly to the related party disclosure requirements for government-related entities and the definition of a related party.

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 period.

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

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;

VNI Annual Report 2010

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

• Phase 1: Classification and Measurement • Phase 2: Impairment methodology • Phase 3: Hedge accounting In addition, a separate project is dealing with derecognition.

The changes introduced by IAS 4 (2009) relate mainly to the related party disclosure requirements for government-related entities and the definition of a related party.

VNI Annual Report 2010

• 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.

VNI Annual Report 2010

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 or operating applying the general principles of IAS 17. The Group will need to reassess the classification of the land elements of its unexpired leases at 1 January 2010 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 consolidated financial statements will not be significant. Annual Improvements 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 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 accounting policies however preliminary

assessments indicate that 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 or 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 consolidated 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 financial statements. These amend the transition requirements to apply certain consequential amendments arising from the IAS 27 (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 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 judgement 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, 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 subsidiaries of the Group 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 statement of financial position at their fair value 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 the Group obtained 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 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.

VNI Annual Report 2010

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 Statement of Income and net assets of a subsidiary attributable to an equity interest that is not owned by the Group. It is based upon the non-controlling interest’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 noncontrolling interests even if this results in the noncontrolling 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 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 Associates 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.

VNI Annual Report 2010

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 Statement of Income of the associate after the date of acquisition and 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 postacquisition, post-tax results of the associate for the year, including any impairment loss on goodwill relating to the investment in associate recognised for the year. 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 specifically in other comprehensive come. 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 treated 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.

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.

3.6 Foreign currency translation In the individual financial statements of the consolidated entities, transactions arising in currencies other than the functional currency of the individual entity are translated at exchange rates in effect on the transaction dates. Monetary assets and liabilities denominated in currencies other than the functional currency of the individual entity are translated at the exchange rates in effect at the reporting date. Translation gains and losses and expenses relating to foreign exchange transactions are recognised in Statement of Income.

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.

In the consolidated financial statements all separate 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 over the reporting period. Any differences arising from this translation are recognised in other comprehensive income.

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.

3.7 Revenue recognition Interest income Interest income is recognised on the effective interest rate basis. Dividend income Dividend income is recorded when the Group’s right to receive the dividend is established.

3.8 Expense recognition All expenses, including management fees and custodian fees, are recognised in the Statement of Income on an accruals basis.

Any gain or loss arising from a change in fair value is recognised in Statement of Income.

3.9 Investment properties Investment properties are properties owned or held under finance leases to earn rentals or capital appreciation, or both, or land 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.

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

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 by the Valuation Committee and approved by 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.

3.10 Financial assets

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 reclassifies 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 29 June 2007. 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 Statement of Income, 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 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.

VNI Annual Report 2010

3.8 Expense recognition All expenses, including management fees and custodian fees, are recognised in the Statement of Income on an accruals basis.

Any gain or loss arising from a change in fair value is recognised in Statement of Income.

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

3.10 Financial assets

VNI Annual Report 2010

The Group’s financial assets consist primarily of listed and unlisted equities, bonds, 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 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

VNI Annual Report 2010

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 listed and unlisted securities and bonds. 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 sale of an asset. Trade date accounting refers to (a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) de-recognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date. 3.11 Prepayments for acquisitions of investments These prepayments made by the Group to property vendors for land compensation and other related costs, and 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 set out in agreements, are treated as prepayments. Such prepayments are measured initially at cost until such time as the approval is obtained or conditions are met, at which point they are transferred to investment properties and accounted for accordingly. 3.12 Long-term prepayments These prepayments represent the costs incurred for an establishment of a subsidiary. Such amounts are measured at cost and will be considered as contributed capital by the Group once the approval is obtained.

3.13 Impairment of assets Where there is objective evidence of impairment, the amount of the impairment loss is the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The Group’s investment properties 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 the cash-generating unit level. All individual assets or cash generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in Statement of Income 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 Statement of Income. 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.

3.14 Income tax 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 an expense and included in Statement of Income 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. 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 equity are charged or credited directly to equity. 3.15 Cash and cash equivalents Cash and cash equivalents include cash at bank and in hand as well as short term highly liquid investments such as money market instruments and bank deposits with an original maturity term of not more than three months. 3.16 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. Currency translation differences on net investments 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 is recorded in other reserve in Equity.

Treasury shares represent the shares repurchased by the Group. These repurchases have the effect of reducing total issued capital. 3.17 Financial liabilities The Group’s financial liabilities include trade and other payables, payables to related parties 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 consolidated Statement of Income. Trade and other payables, payables to related parties and other liabilities are recognised initially at their fair value and subsequently measured at amortised cost, using the effective interest rate method. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. 3.18 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. 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

VNI Annual Report 2010

obligation and any 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.

VNI Annual Report 2010

3.19 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: • 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; • a party is a jointly-controlled entity;

The Group does not recognise a contingent liability but discloses its existence in the consolidated 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 party is an associate;

A contingent asset is a possible asset that arises from past events, the existence of which 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.

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

• a party is a member of the key management personnel of the Group; or • a party is a close family member of the above categories. 3.20 Segment analysis An operating segment is a component of the Group: 1. that engages in investment activities from which it may earn revenues and incur expenses;

3. for which discrete financial information is available.

3.21 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 Statement of Income attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Net asset value (NAV) per share is calculated by dividing the net asset value attributable to ordinary shareholders of the Company by the number of outstanding ordinary shares as at the reporting date. Net asset value is determined as total assets less total liabilities and non-controlling interests. 4. Critical accounting estimates and judgements When preparing the consolidated financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by the Company’s management, and may not equal the estimated results. Information about significant judgments, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below: Fair value of financial assets Listed securities are quoted at the bid price at each reporting date. For unlisted securities which are traded in an active market, the fair value is the average quoted bid price obtained from a minimum sample of three reputable securities companies at the reporting date.

The fair value of financial assets that are not traded in an active market (for example, unlisted securities where market prices are not readily available) is determined by using valuation techniques. The Group uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at reporting date. Independent valuations are also obtained from appropriately qualified independent valuation firms to evaluate and adjust valuations. The outcomes may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date. Impairment Short-term investments The Group’s management considers the need to provide for the impairment of short-term investment on a regular basis. This estimate is based on the recoverability of the investment depending on underlying security and timing of repayment. Other assets The Group’s interests in associates and investment properties are subject to impairment testing in accordance with the accounting policy 3.13. Impairment of investment properties Whenever there is an indication of impairment of an investment property, the Valuation Committee and Group’s management will assess the need for an impairment adjustment.

5. Segment analysis 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 energy, property and infrastructure developers, telecommunications, transportation and logistics, general infrastructure, environment and others. Each of the operating segments are managed and monitored separately by the Investment Manager as each requires different resources and approaches. The Investment Manager assesses segment profit or loss using a measure of operating profit or loss from the investment assets. Although IFRS 8 requires measurement of segmental profit or loss, the majority of expenses are common to all segments therefore cannot be individually allocated. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss. Segment information can be analysed as follows for the reporting periods under review:

VNI Annual Report 2010

• a party is an associate;

3. for which discrete financial information is available.

VNI Annual Report 2010

In comparison with the last year end:

Consolidated Statement of Financial Position 30 June 2010

Energy USD‘000

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Cash and others USD’000

Total USD’000

Total assets Vietnam Financial assets at fair value through Statement of Income - Held for trading - Designated at fair value through Statement of Income Investment property Prepayments for acquisitions of investments Investments in associates

38,320

22,313

2,789

2,680

21,073

3,298

90,473

2,731

19,227

345

22,303

3,538

16,159

1,839

23,185

5,600

30,624

Property, plant and equipment

Long-term prepayments

272

Trade and other receivables

10,910

Short-term investments

8,819

Receivables from related parties

Cash and cash equivalents

14,625

65,313

42,890

42,303

25,974

21,907

21,073

5,600

3,643

99,708

263,098

Outside Vietnam Cash and cash equivalents Total assets

Energy USD‘000

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Total USD’000

Vietnam Net changes in fair value of financial assets at fair value through Statement of Income - Held for trading

(4,700)

1,422

2,560

(1,199)

3,573

(213)

1,443

- Designated at fair value through Statement of Income

(79)

(1,307)

(24)

(1,410)

Foreign exchange losses

(21)

(64)

(1,005)

(444)

(7)

(1,541)

Financial income - Dividend income

870

117

156

118

372

1,659

426

(3,930)

1,475

2,137

(2,388)

3,501

(218)

577

Share of profit of associates Total Administration expenses Financial income - Interest income Foreign exchange losses Other income Net loss for the year

(7,313) 4,146 (2,041) 461 (4,170)

VNI Annual Report 2010

In comparison with the last year end:

Consolidated Statement of Financial Position 30 June 2010

Energy USD‘000

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Cash and others USD’000

Total USD’000

38,320

22,313

2,789

2,680

21,073

3,298

90,473

2,731

19,227

345

22,303

3,538

16,159

1,839

23,185

5,600

30,624

Property, plant and equipment

Long-term prepayments

272

Trade and other receivables

10,910

Short-term investments

8,819

Receivables from related parties

Cash and cash equivalents

14,625

65,313

42,890

42,303

25,974

21,907

21,073

5,600

3,643

99,708

263,098

Outside Vietnam Cash and cash equivalents Total assets

Energy USD‘000

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Total USD’000

Vietnam Net changes in fair value of financial assets at fair value through Statement of Income - Held for trading

(4,700)

1,422

2,560

(1,199)

3,573

(213)

1,443

- Designated at fair value through Statement of Income

(79)

(1,307)

(24)

(1,410)

Foreign exchange losses

(21)

(64)

(1,005)

(444)

(7)

(1,541)

Financial income - Dividend income

870

117

156

118

372

1,659

426

(3,930)

1,475

2,137

(2,388)

3,501

(218)

577

Share of profit of associates Total Administration expenses Financial income - Interest income Foreign exchange losses Other income Net loss for the year

(7,313) 4,146 (2,041) 461 (4,170)

VNI Annual Report 2010

In comparison with the last year end:

5. Segment analysis (cont.) 30 June 2009

Energy USD‘000

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Cash and others USD’000

Total USD’000

Energy USD‘000 Net changes in fair value of financial assets at fair value

Vietnam Financial assets at fair value through Statement of Income - Held for trading - Designated at fair value through Statement of Income Investment property Prepayments for acquisitions of investments Investments in associates

through Statement of Income Held for trading 24,076

4,724

8,128

57,662

1,550

11,488

1,304

368

14,710

3,812

15,292

23,057

Property, plant and equipment

Long-term prepayments

Trade and other receivables

7,777

Short-term investments

24,185

Cash and cash equivalents

110,134

Receivables from related parties

2,800

Cash and cash equivalents

4,369

Trade and other receivables

20,732

43,210

24,607

11,490

6,028

8,496

149,308

263,871

Outside Vietnam

Total assets

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Total USD’000

Vietnam

Total assets

20,732

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

(2,109)

(16,172)

3,376

967

(13,938)

(88)

(13,752)

(74)

(1,858)

(15,772)

Foreign exchange losses

321

(3,089)

1,189

659

(920)

Financial income - Dividend income

270

321

398

1,088

133

(1,518)

(19,162)

366

(13,752)

4,889

(232)

(29,409)

Designated at fair value through Statement of Income

Share of profit of associates Total Administration expenses Financial income - Interest income Foreign exchange losses Other income Net loss for the year

(8,223) 7,950 (4,256) (33,938)

VNI Annual Report 2010

In comparison with the last year end:

5. Segment analysis (cont.) 30 June 2009

Energy USD‘000

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Cash and others USD’000

Total USD’000

Energy USD‘000 Net changes in fair value of financial assets at fair value

through Statement of Income Held for trading 24,076

4,724

8,128

57,662

1,550

11,488

1,304

368

14,710

3,812

15,292

23,057

Property, plant and equipment

Long-term prepayments

Trade and other receivables

7,777

Short-term investments

24,185

Cash and cash equivalents

110,134

Receivables from related parties

2,800

Cash and cash equivalents

4,369

Trade and other receivables

20,732

43,210

24,607

11,490

6,028

8,496

149,308

263,871

Outside Vietnam

Total assets

General infrastructure USD‘000

Environment USD‘000

Other sectors USD‘000

Total USD’000

Vietnam

Total assets

20,732

Property and infrastructure Telecom- Transportation developers munications and logistics USD‘000 USD‘000 USD’000

(2,109)

(16,172)

3,376

967

(13,938)

(88)

(13,752)

(74)

(1,858)

(15,772)

Foreign exchange losses

321

(3,089)

1,189

659

(920)

Financial income - Dividend income

270

321

398

1,088

133

(1,518)

(19,162)

366

(13,752)

4,889

(232)

(29,409)

Designated at fair value through Statement of Income

Share of profit of associates Total Administration expenses Financial income - Interest income Foreign exchange losses Other income Net loss for the year

(8,223) 7,950 (4,256) (33,938)

VNI Annual Report 2010

5. Segment analysis (cont.) The Group’s revenues and investment income and non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax assets and post-employment benefit assets) are divided into the following geographical areas: Year ended 30 June 2010 Revenue and Non-current income assets USD’000 USD’000 Vietnam Other countries Total

Year ended 30 June 2009 Revenue and Non-current income assets USD’000 USD’000

4,606

19,990

7,580

19,134

370

4,606

19,990

7,950

19,134

Revenues and investment income include operating revenue, financial income and net gain/(loss) on fair value adjustments of investment properties and financial assets at fair value through profit or loss, have been identified on the basis of the operation and investment location. Non-current assets are allocated based on their physical location. 6. Subsidiaries Additional acquisitions and disposal of Long An projects At 30 June 2009, the Group held 60%, 60% and 80% in Long An S.E.A Industrial Park Development Company, the Long An Services project and the Long An Port project, respectively. On 24 September 2009, the Group acquired a further 15%, 15% and 20% interest in the above projects for total consideration of USD1.2 million, bringing its total interests in these projects to 75%, 75% and 100%, respectively. The purchase prices were equivalent to the estimated fair value of these projects at the acquisition date. On 7 May 2010, Long An S.E.A Industrial Park Development Company was granted a new Certificate of Investment by The Management Board of Long An Industrial Zones. According to the new Certificate of Investment, the Company’s incorporation was changed from a limited liability company to a joint stock company named Long An Industrial Park Joint Stock Company. In addition, Dong Tam Joint Stock Company became a shareholder with a 5% interest in the Company. This resulted in a decrease in the Group’s the interest in this entity from 75% to 69%. Subsequent to the year end, on 7 August 2010, the interest held by the Group in Long An Industrial Park Joint Stock Company was reduced to 37.5% when Dong Tam Joint Stock Company increased its stake in the Company though the issuance of new share capital.

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

Name VIL Investment Ltd. Vietnam Infrastructure Investment Ltd. Vietnam Infrastructure Development Ltd. Vietnam Infrastructure Enterprise Ltd. Vietnam Infrastructure Holding Ltd. Vietnam Infrastructure Strategic Ltd. Vietnam Infrastructure Privilege Ltd. Vietnam Infrastructure Heritage Ltd. Vietnam Infrastructure Espero Ltd. VIL Glorious Investment Ltd. Coastal Pacific Ltd Goldrise Global Ltd Richluck International Ltd Scepter Asia Ltd Fairson Ventures Ltd Vietnam Infrastructure Civilis Ltd Vietnam Infrastructure Millennium Ltd. Vietnam Infrastructure Civic Ltd. Vietnam Infrastructure Supero Ltd. Vietnam Infrastructure Pyramid Ltd. Vietnam Infrastructure Conventus Ltd. Vietnam Infrastructure Pacific Ltd. VinaCapital Long An Industrial Ltd. Reckon Developments Ltd. Bellport Developments Ltd. Long An Industrial Park Joint Stock Company Stand Out Investments Ltd. The Pillar Ltd. Vina CPK Ltd. (*)

Place of incorporation/ operations BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI

Contributed share capital (USD) 20,000,000 174,000,000 150,000,000 1,680,000 10,500,000 10,500,000 6,200,000 15,000,000 -

Percentage interest held by the Group 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Principal activities Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment

BVI BVI BVI BVI BVI BVI BVI Vietnam BVI BVI Vietnam

3,523,984 8,519,564 6,834,810 5,255,390 500,000

100% 100% 100% 100% 100% 100% 100% 69% 75% 75% 60%

Investment Investment Investment Investment Investment Investment Investment Industrial Park and services Industrial Park and services Industrial Park and services Industrial Park

(*) Vina CPK Ltd. received the first capital contribution of USD0.5 million from the Group on 9 September 2009 and became a subsidiary of the Group from that date.

VNI Annual Report 2010

Year ended 30 June 2009 Revenue and Non-current income assets USD’000 USD’000

4,606

19,990

7,580

19,134

370

4,606

19,990

7,950

19,134

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

Place of incorporation/ operations BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI BVI

Contributed share capital (USD) 20,000,000 174,000,000 150,000,000 1,680,000 10,500,000 10,500,000 6,200,000 15,000,000 -

Percentage interest held by the Group 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

BVI BVI BVI BVI BVI BVI BVI Vietnam BVI BVI Vietnam

3,523,984 8,519,564 6,834,810 5,255,390 500,000

100% 100% 100% 100% 100% 100% 100% 69% 75% 75% 60%

Investment Investment Investment Investment Investment Investment Investment Industrial Park and services Industrial Park and services Industrial Park and services Industrial Park

(*) Vina CPK Ltd. received the first capital contribution of USD0.5 million from the Group on 9 September 2009 and became a subsidiary of the Group from that date.

VNI Annual Report 2010

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

7. Investment properties

Country of Incorporation

Direct equity interest held %

Global Infrastructure Investment Ltd.

Vietnam

Mobile Infrastructure Development Co., Ltd.

Investment property represents investment in an industrial park project. The project is in its early stage of development. At present the Group is in the process of completing the acquisition of various parcels of land within the project.

Principal activity

Assets USD’000

Liabilities USD’000

Telecommunications

12,715

3,734

2,657

5,106

2,502

Vietnam

Telecommunications

5,457

1,640

3,745

(4,743)

(2,324)

Mobile Information Service JSC

Vietnam

Telecommunications

7,713

1,816

2,567

(380)

(114)

8. Prepayments for acquisitions of investments

Land compensation costs Advances to the People’s Committee of Long An Province, Vietnam Others Closing balance

30 June 2010

30 June 2009

USD’000

15,354

14,406

797

725

VNC – 55 Infrastructure Investment Joint Stock Company

Vietnam

Telecommunications

19,177

2,642

905

362

161

Vietstar Joint Stock Company (*)

Vietnam

Solid waste treatment

4,520

16,159

15,292

Hanoi Electricity Equipment – Mechanical Engineering JSC (*)

Vietnam

Energy

16,753

11,489

61,815

21,321

14,394

888

426

9. Investments in associates

Opening balance Acquisitions of associates Share of associates’ profits Translation differences Closing balance

Revenue Profit (loss) USD’000 USD’000

Share of profit (loss) to the Group USD’000

30 June 2010

30 June 2009

USD’000

23,057

5,257

7,988

18,376

426

133

(847)

(709)

30,624

23,057

(*) During the year, the Group acquired a 34% interest in Vietstar Joint Stock Company for USD5.6 million and a 35% interest in Hanoi Electricity Equipment – Mechanical Engineering JSC for USD1.8 million which were approximately equal to the fair value of the net assets acquired.

VNI Annual Report 2010

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

7. Investment properties

Country of Incorporation

Direct equity interest held %

Global Infrastructure Investment Ltd.

Vietnam

Mobile Infrastructure Development Co., Ltd.

Principal activity

Assets USD’000

Liabilities USD’000

Telecommunications

12,715

3,734

2,657

5,106

2,502

Vietnam

Telecommunications

5,457

1,640

3,745

(4,743)

(2,324)

Mobile Information Service JSC

Vietnam

Telecommunications

7,713

1,816

2,567

(380)

(114)

8. Prepayments for acquisitions of investments

Land compensation costs Advances to the People’s Committee of Long An Province, Vietnam Others Closing balance

30 June 2010

30 June 2009

USD’000

15,354

14,406

797

725

VNC – 55 Infrastructure Investment Joint Stock Company

Vietnam

Telecommunications

19,177

2,642

905

362

161

Vietstar Joint Stock Company (*)

Vietnam

Solid waste treatment

4,520

16,159

15,292

Hanoi Electricity Equipment – Mechanical Engineering JSC (*)

Vietnam

Energy

16,753

11,489

61,815

21,321

14,394

888

426

9. Investments in associates

Opening balance Acquisitions of associates Share of associates’ profits Translation differences Closing balance

Revenue Profit (loss) USD’000 USD’000

Share of profit (loss) to the Group USD’000

30 June 2010

30 June 2009

USD’000

23,057

5,257

7,988

18,376

426

133

(847)

(709)

30,624

23,057

VNI Annual Report 2010

10. Trade and other receivables

12. Categories of financial assets and liabilities 30 June 2010

30 June 2009

USD’000

10,910

7,675

10,951

7,820

Interest receivables Dividend receivables Others Closing balance

As trade and other receivables are short-term in nature, their carrying values are considered a reasonable approximation of their values at the reporting date. 11. Financial assets held at fair value through Statement of Income 30 June 2010

30 June 2009

USD’000

Ordinary shares – listed

76,080

44,379

Ordinary shares – unlisted based on fair values using quoted market prices

11,094

5,152

3,299

8,130

22,303

14,711

112,776

72,372

Financial assets held for trading

Corporate bonds Financial assets designated at fair value through Statement of Income: Ordinary shares – unlisted based on fair values using valuation techniques (*) Total Statement of Income

(*) Included in investments in unlisted shares were investments in private equities of USD22.3 million which were measured at cost because the fair value of these investments could not be reliably assessed as at 30 June 2010. However, there were also no factors which would indicate that the value of these investments has been impaired. Certain comparative unlisted shares have been reclassified between unlisted based on fair values using quoted market prices and unlisted based on fair values using valuation techniques to correspond with current year’s presentation.

The financial assets are denominated in Vietnam Dong (30 June 2009: denominated in Vietnam Dong).

The carrying amounts disclosed above are the Group’s maximum possible credit risk exposure in relation to these instruments. See Note 25 for further information on the Group’s exposure to financial risk.

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

Financial assets Financial assets held for trading (carried at fair value through Statement of Income) Ordinary shares – listed and unlisted Corporate bonds Financial assets designated at fair value through Statement of Income: Ordinary shares – unlisted based on fair values using valuation techniques Loans and receivables Trade and other receivables Short-term investments Receivables from related parties Cash and cash equivalents

Financial liabilities Financial liabilities measured at amortised cost: Current: Payables to related parties Other liabilities (*)

Notes

30 June 2010 USD’000

30 June 2009 USD’000

11 11

87,174 3,299

49,531 8,130

22,303 112,776

14,711 72,372

10 13

10,910 8,819 79,938 99,708 212,484

7,820 24,185 2,800 114,503 149,308 221,680

974 4,491 5,465

966 757 1,723

(*) Included in other liabilities, there is an amount of USD3.2 million which relates to the deposit from Dong Tam Joint Stock Company, a local partner, participating in the Long An projects as disclosed in Note 6.

The fair values of financial assets and liabilities are presented in the related notes. The Group’s risk management objectives and policies for financial instruments are set out in Note 25.

VNI Annual Report 2010

10. Trade and other receivables

12. Categories of financial assets and liabilities 30 June 2010

30 June 2009

USD’000

10,910

7,675

10,951

7,820

Interest receivables Dividend receivables Others Closing balance

30 June 2009

USD’000

Ordinary shares – listed

76,080

44,379

Ordinary shares – unlisted based on fair values using quoted market prices

11,094

5,152

3,299

8,130

22,303

14,711

112,776

72,372

Financial assets held for trading

Corporate bonds Financial assets designated at fair value through Statement of Income: Ordinary shares – unlisted based on fair values using valuation techniques (*) Total Statement of Income

The financial assets are denominated in Vietnam Dong (30 June 2009: denominated in Vietnam Dong).

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

Financial liabilities Financial liabilities measured at amortised cost: Current: Payables to related parties Other liabilities (*)

Notes

30 June 2010 USD’000

30 June 2009 USD’000

11 11

87,174 3,299

49,531 8,130

22,303 112,776

14,711 72,372

10 13

10,910 8,819 79,938 99,708 212,484

7,820 24,185 2,800 114,503 149,308 221,680

974 4,491 5,465

966 757 1,723

The fair values of financial assets and liabilities are presented in the related notes. The Group’s risk management objectives and policies for financial instruments are set out in Note 25.

VNI Annual Report 2010

13. Short-term investments

Short-term investments

17. Treasury shares

14. Cash and cash equivalents 30 June 2010 30 June 2009 USD’000 USD’000 8,819 24,185 8,819 24,185

On 8 December 2007, the Group deposited VND1,041.4 billion (equivalent to USD65 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 VND941.5 billion (equivalent to USD54.8 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 03 December 2010 the remaining outstanding principal balance was paid to the Group on 07 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 VND199.5billion (equivalent to USD10.5 million) (see Note 10) 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.

30 June 2010 30 June 2009 USD’000 USD’000 45,602 28,335 34,336 86,168 79,938 114,503

Cash in banks Cash equivalents (*)

(*) Cash equivalents are short-term deposits with banks, with original terms to maturity of less than three months and bearing interest at rate 7.5% for Vietnam Dong and from 0.4% to 4.5% for US Dollars during the year.

Opening balance Capital distribution received Closing balance

30 June 2010 30 June 2009 USD’000 USD’000 (635) (729) 94 (635) (635)

18. Payables to related parties 30 June 2010 30 June 2009 USD’000 USD’000

15. Share capital 30 June 2010 Number of shares Authorised: Ordinary shares of USD0.01 each

20. Administration expenses

10,000,000,000

Issued and fully paid: Opening balance Closing balance

402,100,000 402,100,000

30 June 2009 Number of shares

USD’000

100,000 10,000,000,000

100,000

USD’000

4,021 4,021

402,100,000 402,100,000

4,021 4,021

VinaCapital Investment Management Ltd. – management fees

866

875

VinaCapital Investment Management Ltd. – other payables

65 6 974

33 6 966

Payables to related parties Payables to shareholders

19. Net changes in fair value of financial assets at fair value through Statement of Income Year ended 30 June 2010 30 June 2009 USD’000 USD’000

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

Opening balance Capital distribution to shareholders Closing balance

30 June 2010 30 June 2009 USD’000 USD’000 346,157 386,367 (40,210) 346,157 346,157

Unrealised gain (loss) based on fair values using quoted market prices Unrealised losses based on fair values using valuation techniques Gain (loss) from realisation of financial assets during the year Unrealised losses on foreign exchange translation differences

1,725

(8,529)

(14,755)

4,583

(899)

(6,275)

(5,527)

(29,710)

Management fees (Note 24)

Year ended 30 June 2010 30 June 2009 USD’000 USD’000 5,241 5,809

Professional fees

887

1,599

Custodian fees

408

456

Directors’ fees

130

General administration expenses (*)

546

229

Other expenses

101

7,313

8,223

(*) The majority of these expenses relate to operating expenses incurred by subsidiaries of the Group.

21. Finance income

Interest income Dividend income

Year ended 30 June 2010 30 June 2009 USD’000 USD’000 4,145 7,950 1,660

1,088

5,805

9,038

VNI Annual Report 2010

13. Short-term investments

Short-term investments

17. Treasury shares

14. Cash and cash equivalents 30 June 2010 30 June 2009 USD’000 USD’000 8,819 24,185 8,819 24,185

30 June 2010 30 June 2009 USD’000 USD’000 45,602 28,335 34,336 86,168 79,938 114,503

Cash in banks Cash equivalents (*)

Opening balance Capital distribution received Closing balance

30 June 2010 30 June 2009 USD’000 USD’000 (635) (729) 94 (635) (635)

18. Payables to related parties 30 June 2010 30 June 2009 USD’000 USD’000

15. Share capital 30 June 2010 Number of shares Authorised: Ordinary shares of USD0.01 each

20. Administration expenses

10,000,000,000

Issued and fully paid: Opening balance Closing balance

402,100,000 402,100,000

30 June 2009 Number of shares

USD’000

100,000 10,000,000,000

100,000

USD’000

4,021 4,021

402,100,000 402,100,000

4,021 4,021

VinaCapital Investment Management Ltd. – management fees

866

875

VinaCapital Investment Management Ltd. – other payables

65 6 974

33 6 966

Payables to related parties Payables to shareholders

19. Net changes in fair value of financial assets at fair value through Statement of Income Year ended 30 June 2010 30 June 2009 USD’000 USD’000

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

Opening balance Capital distribution to shareholders Closing balance

30 June 2010 30 June 2009 USD’000 USD’000 346,157 386,367 (40,210) 346,157 346,157

1,725

(8,529)

(14,755)

4,583

(899)

(6,275)

(5,527)

(29,710)

Management fees (Note 24)

Year ended 30 June 2010 30 June 2009 USD’000 USD’000 5,241 5,809

Professional fees

887

1,599

Custodian fees

408

456

Directors’ fees

130

General administration expenses (*)

546

229

Other expenses

101

7,313

8,223

(*) The majority of these expenses relate to operating expenses incurred by subsidiaries of the Group.

21. Finance income

Interest income Dividend income

Year ended 30 June 2010 30 June 2009 USD’000 USD’000 4,145 7,950 1,660

1,088

5,805

9,038

VNI Annual Report 2010

22 Corporate income tax

23. Earnings per share

24. Related party transactions and balances

Other related party transactions and balances

Vietnam Infrastructure 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.

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

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 29 June 2007 (the “Management Agreement”). The Investment Manager receives a fee based on the gross asset value of the Group, payable monthly in arrears, at an annual rate of 2% (30 June 2009: 2%).

Shares purchase During the year, VinaCapital Vietnam Opportunity Fund Limited (“VOF”), a fund under common control and management, purchased 12,050,000 ordinary shares of the Company for USD4,535,000. As a result, VOF had a 3% interest in the Company as at 30 June 2010.

The majority of the Group’s subsidiaries are domiciled in the British Virgin Islands (BVI) and so have a tax exempt status. A small number of subsidiaries are established in Vietnam and are subject to corporate income tax in Vietnam, however no provision for corporate income tax has been made for these Vietnamese subsidiaries of the Group for the year ended 30 June 2010 (30 June 2009: nil). All of the Vietnamese subsidiaries are in a position where there are no corporate income taxes payable because they are in the pre-operating stage and have incurred losses. Under the laws of Vietnam, tax losses can be carried forward to offset against future taxable income for five years from the year the loss was incurred. The Company did not recognise deferred income tax arising from tax loss since the amount is considered immaterial. The relationship between the expected income tax expense based on the applicable income tax rate (stated below) and the tax expenses actually recognised in the Consolidated Statement of Income can be reconciled as follows:

Group profit/(loss) before tax

30 June 2010 30 June 2009 USD’000 USD’000 (4,170) (33,938)

Group profit/(loss) multiplied by applicable tax rate (0%)

Income tax on Vietnamese subsidiaries Tax expenses

30 June 2010 30 June 2009 USD’000 USD’000 Losses attributable to equity holders of the Company from continuing and total operations (USD’000) Number of outstanding ordinary shares Basic earnings per share from continuing and total operations (USD per share)

(4,075)

(33,814)

401,169,300

(0.01)

(0.08)

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

Net asset value (USD’000) Number of outstanding ordinary shares on issue Net asset value per share (USD per share)

Total management fees for the year amounted to USD5,241,682 (30 June 2009: USD5,809,169), of which USD866,294 (30 June 2009: USD875,425) were payable to the Investment Manager at the reporting date. Performance fees In accordance with the Management Agreement, the Investment Manager is also entitled to a performance fee equal to 20% of the realised returns over an annualised compounding hurdle rate of 8% (30 June 2009: hurdle rate of 8%). There were no performance fees for the year ended 30 June 2010 (year ended 30 June 2009: Nil), with no outstanding accrued fees due to the Investment Manager as at the reporting date (30 June 2009: Nil) Directors’ fees The aggregate directors’ fees amounted to USD130,000 (year ended 30 June 2009: USD130,000), of which USD65,000 (30 June 2009: USD33,000) were payable at the reporting date. Details of directors’ fees for each director are summarised below: Year ended 30 June 2010 30 June 2009 USD’000 USD’000

30 June 2010 30 June 2009 257,009 261,263 401,169,300

401,169,300

0.64

0.65

Don Lam

15,000

Horst Geicke

15,000

Paul Ming Fun Cheng

40,000

Ekkehard Goetting

30,000

Luong Van Ly

30,000

130,000

Cross funding During the year, the Group purchased an additional interest in the Long An projects and in respect to this purchase it made payments on behalf of VinaLand Limited and VinaCapital Vietnam Opportunity Fund Limited of USD561,458 and USD187,153, respectively. As at 30 June 2010, all outstanding receivables in respect to these transactions had been settled. Broker fees During the year, the Group paid to VinaSecurities, a subsidiary of Vinacapital Group, a brokerage fee of USD20,543. Other related parties balances are disclosed in Note 18 to the consolidated financial statements. 25. Risk management objectives and policies The Group invests in listed and unlisted equity instruments, debt instruments, assets and other opportunities in Vietnam, overseas and neighbouring countries with the objective of achieving medium to long-term capital appreciation and providing investment income. The Group is exposed to a variety of financial risks: market risk (including currency risk, interest rate risk, and price risk); credit risk; and liquidity risk. The 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 the Group is exposed to are described below: Foreign currency risk 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, the value of the Vietnam Dong has historically been closely linked to that of USD, the reporting currency.

VNI Annual Report 2010

22 Corporate income tax

23. Earnings per share

24. Related party transactions and balances

Other related party transactions and balances

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

Group profit/(loss) before tax

30 June 2010 30 June 2009 USD’000 USD’000 (4,170) (33,938)

Group profit/(loss) multiplied by applicable tax rate (0%)

Income tax on Vietnamese subsidiaries Tax expenses

(4,075)

(33,814)

401,169,300

(0.01)

(0.08)

Net asset value (USD’000) Number of outstanding ordinary shares on issue Net asset value per share (USD per share)

30 June 2010 30 June 2009 257,009 261,263 401,169,300

401,169,300

0.64

0.65

Don Lam

15,000

Horst Geicke

15,000

Paul Ming Fun Cheng

40,000

Ekkehard Goetting

30,000

Luong Van Ly

30,000

130,000

VNI Annual Report 2010

The Group’s financial assets and liabilities exposure to risk of fluctuations in foreign currency exchange rates at the reporting date were as follows: Short-term exposure VND USD USD'000 USD'000

Long-term exposure VND USD USD'000 USD'000

30 June 2010 Financial assets Financial liabilities Net exposure

72,202 (2,148) 70,054

140,282 (3,318) 136,964

30 June 2009 Financial assets Financial liabilities Net exposure

119,340 (664) 118,676

102,340 (1,059) 101,281

Sensitivity analysis to a reasonably possible change in exchange rates 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 loss of the Group’s equity by the amounts shown below. This percentage has been determined based on the average market volatility in exchange rates in the previous twelve months. This analysis assumes that all other variables, in particular interest rates, remain constant. 30 June 2010 30 June 2009 Loss (net of Loss (net of taxation) taxation) Devaluation of the Vietnam Dong

USD’000 3,503

USD’000 5,967

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 consolidated statements of income and Statement of Income, all changes in market conditions will directly affect net investment income. The Group’s unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Investment Manager provides the Group with investment recommendations that are consistent with the Group’s objectives. The Investment Manager’s recommendations are approved by an Investment Committee of the Investment Manager and/or the Board of Directors before investment decisions are implemented. All securities investments present a risk of loss of capital. The Investment Manager manages this risk through the careful selection of securities and other financial instruments within specified limits and by holding a diversified portfolio of listed and unlisted instruments. In addition, the performance of investments held by the Group is monitored by the Investment Manager on a monthly basis and reviewed by the Board of Directors on a quarterly basis. The Group invests in listed and unlisted equity securities and is exposed to market price risk of these securities. If the prices of the securities were to fluctuate by 10%, the impact on Statement of Income and Equity would amount to approximately USD11.3 million (2009: USD4.6 million). Cash flow and fair value interest rate risk 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 no financial liabilities with floating interest rates. As a result, the Group has limited exposure to cash flow and interest rate risk. Credit risk analysis Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Impairment provisions are provided for losses that have been incurred by the Group at the reporting date.

30 June 2010 30 June 2009 USD’000 USD’000 Classes of financial assets – carrying amounts Short-term investment Bonds

8,819

24,185

3,299

8,130

109,477

64,242

2,800

Cash and cash equivalents

79,938

114,503

Trade and other receivables

10,910

7,820

Ordinary shares – listed and unlisted Receivable from related parties

All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered low, as delivery of securities sold is only made once the broker has received payment. Payment is made for purchases once the securities have been received by the broker. The trade will be unwound if either party fails to meet its obligations. The carrying amount of trade and other receivables and receivables from related parties represent the Group’s maximum exposure to credit risk in relation to its financial assets. Cash and cash equivalents and bonds also represent the Group’s maximum exposure to credit risk. The Group’s management considers that all the above financial assets that are not impaired or past due for each of the reporting dates under review are of good credit quality. 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. Liquidity risk analysis The Group invests in both listed securities that are traded in active markets and unlisted securities that are not actively traded. The Group’s listed securities are considered to be readily realisable, as they are mainly listed on the Vietnam Stock Exchange.

Unlisted securities, which are not traded in an organised public market, may be illiquid. As a result, the Group may not be able to quickly liquidate its investments in these instruments at an amount close to fair value in order to respond to its liquidity requirements or to other specific events such as deterioration in the creditworthiness of a particular issuer. However, the Group has the ability to borrow in the short-term to ensure sufficient cash is available for any settlements due. At the reporting date, the Group’s liabilities have contractual maturities which are summarised below: Current Within 6 6 to 12 months months USD'000 USD'000

Non-current From 1 to Over 5 5 years years USD'000 USD'000

30 June 2010 Payable to related parties Other liabilities

975 -

4,491

30 June 2009 Payable to related parties Other liabilities

966 757

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 AIM Admission Documentations.

VNI Annual Report 2010

The Group’s financial assets and liabilities exposure to risk of fluctuations in foreign currency exchange rates at the reporting date were as follows: Short-term exposure VND USD USD'000 USD'000

Long-term exposure VND USD USD'000 USD'000

30 June 2010 Financial assets Financial liabilities Net exposure

72,202 (2,148) 70,054

140,282 (3,318) 136,964

30 June 2009 Financial assets Financial liabilities Net exposure

119,340 (664) 118,676

102,340 (1,059) 101,281

USD’000 3,503

USD’000 5,967

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.

30 June 2010 30 June 2009 USD’000 USD’000 Classes of financial assets – carrying amounts Short-term investment Bonds

8,819

24,185

3,299

8,130

109,477

64,242

2,800

Cash and cash equivalents

79,938

114,503

Trade and other receivables

10,910

7,820

Ordinary shares – listed and unlisted Receivable from related parties

Non-current From 1 to Over 5 5 years years USD'000 USD'000

30 June 2010 Payable to related parties Other liabilities

975 -

4,491

30 June 2009 Payable to related parties Other liabilities

966 757

VNI Annual Report 2010

26. 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 markets for identical assets or liabilities; - Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices); and - Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The level within which the financial asset 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:

Assets Financial assets at fair value through Statement of Income Financial assets in Vietnam - Ordinary share - listed - Ordinary share - unlisted - Corporate bonds Liabilities

Level 1 USD’000

Level 2 USD’000

Level 3 USD’000

Total USD’000

76,080

11,094

25,602

112,776

76,080 76,080

11,094 11,094

22,303 3,299 25,602

76,080 33,397 3,299 112,776

Investing policy Vietnam Infrastructure Limited last updated its investing policy in November 2009 in accordance with AIM Rule 8.

The Company and the Investment Manager intend to allocate investments spread among the following key areas:

1. Investment objectives Vietnam Infrastructure Limited (“VNI” or “the Company”) is a closed-end investment company incorporated in the Cayman Islands with the primary objective of achieving medium to long-term (4-6 years) capital appreciation and providing an attractive level of income (from interest and dividends) through investing in a diversified portfolio of mainly Vietnamese infrastructure and infrastructure-related assets.

Operating projects: Operating infrastructure projects which may become available through a secondary sale or the equitisation of State Owned Enterprises (“SOEs”). These assets generally already demonstrate existing revenue streams and therefore may provide predictable returns at lower risk. Stakes in the form of listed and OTC shares may also be acquired on the market where they are believed to be significantly undervalued and offer good potential for medium-term returns.

Investment manager: VNI is managed by VinaCapital Investment Management Ltd (“VCIM” or the “Investment Manager”), a BVI company. VCIM was established in 2003 and currently manages three listed and a few unlisted investment companies.

Distressed or stalled projects: Entering into partnerships with credible and reputable infrastructure developers to exploit distressed or stalled infrastructure projects. The Investment Manager believes these projects have the potential for substantial returns and may be acquired at a discount to price.

2. Investing policy The Company will adhere to the following investment policies and restrictions: Type of investment: The Company intends to invest and hold equity, debt and hybrid instruments in unquoted companies that themselves hold, develop or operate infrastructure assets. The Company may also invest in entities whose shares or other instruments are listed on a stock exchange, including the OTC market. The Company may also invest in other funds that invest in infrastructure assets.

Greenfield development projects: Developing of new infrastructure projects required to service growing populations or to replace existing infrastructure developments on greenfield sites (for example land which has not been previously developed) will be considered only when projects meet investment criteria. These types of investments will typically be undertaken in partnership with credible and reputable infrastructure developers or through hiring a dedicated project team.

VNI Annual Report 2010

Assets Financial assets at fair value through Statement of Income Financial assets in Vietnam - Ordinary share - listed - Ordinary share - unlisted - Corporate bonds Liabilities

Level 1 USD’000

Level 2 USD’000

Level 3 USD’000

Total USD’000

76,080

11,094

25,602

112,776

76,080 76,080

11,094 11,094

22,303 3,299 25,602

76,080 33,397 3,299 112,776

Investing policy Vietnam Infrastructure Limited last updated its investing policy in November 2009 in accordance with AIM Rule 8.

The Company and the Investment Manager intend to allocate investments spread among the following key areas:

VNI Annual Report 2010

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 Investment Committee / Directors consider that such investments would offer potentially attractive returns. Sector focus: The Company will not be restricted as to the infrastructure asset classes in which it may invest. However, VNI intends to focus primarily on the following four infrastructure asset classes in Vietnam: energy, transportation, telecommunication, and water and environmental management. In addition, the Company may invest in industrial parks and in infrastructurerelated technologies and services. 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 will aim to realise individual investments when the Investment Manager and the Investment Committee believe the realisation would be in the best interests of the Company

VNI Annual Report 2010

and would fulfill its investment objective. In the event that the potential value of the investment to be disposed of is equal to or exceeds 20 percent of the Net Asset Value, majority Board approval will also be required. The Company intends to effect exits through disposals of its interests to institutional and private investors or through a trade sale. Investment size: The Company intends that each investment will be a minimum of USD5 million per investment, but initial investments may be smaller if the Company anticipates that follow-on investments will be required. No one initial investment will exceed 30 percent of the Company’s Net Asset Value at the time of investment and no investment in any other fund will exceed 10 percent of the Company’s Net Asset Value at the time of investment Cross holdings: If the Investment Manager and the Directors deem it appropriate, the Company may also invest in other funds which themselves invest in infrastructure assets 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 the Company may incur. As is typical with

infrastructure development and investment, investee companies may use leverage for individual projects. 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. In addition, the Investment Manager has authority under the terms of the Investment Management Agreement to arrange borrowings on behalf of the Company up to an aggregate maximum of 30 percent of the Net Asset Value from time to time, calculated at the time such borrowings are entered into. The incurring of any recourse borrowings on behalf of the Company above this level will require the approval of the Board. Other information: • The Directors will review the investment policies on an annual basis and, subject to their review and in the absence of unforeseen circumstances, the Company intends to adhere to the above investment policies for at least three years following Admission. • 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

VNI Annual Report 2010

Information Service Provider. • Investors should note that while it is the intention of the Company to invest its funds as far as practicable in accordance with the investment strategy, objectives and policies outlined in this document, due to market and other investment considerations, it may take some time before the funds of the Company are fully invested. • 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 and earning interest. • 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 and reporting 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 monthly basis (or at such other times as the Manager may determine but in any event at least quarterly) in according with International Financial

VNI Annual Report 2010

Reporting Standards (IFRS). 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 Manager any of their discretions under the valuation guidelines. For a detailed description of valuation guidelines please refer to the VNI AIM Admission Document page 41. 4. Co-investments and third party investors In cases where investments are too large for the Company given its diversification requirements or where the Company has insufficient funds, the Company may co-invest in investment opportunities with third party investors, or invite third party investors to co-invest in investment opportunities led by the Company, including entities that are affiliated with or managed by the Investment Manager (such as VinaCapital Vietnam Opportunity Fund (“VOF”), VinaLand Limited (“VNL”) or DFJ VinaCapital) or its affiliates. The Company may also invest in partnership with SOEs or by way of joint venture partnerships with reputable developers. Such third party investors may have investment objectives and policies that differ from those of the Company. Although the Company may not have control over these investments and may therefore have a limited ability to protect its position therein, the Investment Manager expects appropriate rights will be negotiated to protect the Company’s interests. Shareholders or other affiliates of the Investment Manager may also be invited to co-invest in Investee Companies on terms no more favourable than the terms on which the Company invests. This invitation will only be made when the Investment Manager is satisfied that the interests of the Company and its Shareholders will not be prejudiced by such invitations.

The 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 Manager. Where a conflict arises in respect of an investment opportunity, the 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 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 Manager may make on behalf of the Company. The 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. Distribution policy and discount control Until further notice, the Board of Directors of the Company has resolved to distribute approximately five to ten percent of NAV yearly once the fund is fully invested, expected in 2011. In the event that the Ordinary Shares trade at a substantial discount to the then prevailing Net Asset Value per Share for an extended period of time, the Board will consider the most appropriate method of reducing the discount, which may include implementing a Buyback Programme. The making and timing of any buybacks will be at the absolute discretion of the Board and not at the option of Shareholders. 6. 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 to convene an extraordinary general meeting of the Company in 2017 where a special resolution will be proposed that the Company continue as presently constituted. Unless Shareholders vote against this resolution, Shareholders will only be able to realise their investment by selling their Ordinary Shares or accepting any Buyback Programme proposals that may or may not be made by the Company from time to time.

VNI Annual Report 2010

Vietnam Infrastructure Limited (â&#x20AC;&#x2DC;VNIâ&#x20AC;&#x2122;) is a closed-end fund trading on the AIM Market of the London Stock Exchange. Launched in 2007, VNI is the first fund to focus on infrastructure and infrastructure-related assets in Vietnam, namely energy, transportation, telecommunications and the environment.

VNI Annual Report 2010

VNI overview and details VNI Details Fund size

USD257 million (NAV as of 30 June 2010).

Fund launch

5 July 2007.

Term of fund

Ten 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

Standard Chartered (Singapore).

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 focus

Medium to long-term capital gains with some recurring income through investment in the following infrastructure and infrastructure-related sectors: energy; transportation; industrial parks; telecommunications; and the environment.

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.

VNI Annual Report 2010

VNI overview and details VNI Details Fund size

USD257 million (NAV as of 30 June 2010).

Fund launch

5 July 2007.

Term of fund

Ten 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

Standard Chartered (Singapore).

Broker

LCF Edmond de Rothschild (UK)

Lawyers

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

VinaCapital Investment Management Ltd.

Investment focus

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.

Ho Chi Minh City 17th Floor, Sun Wah Tower 115 Nguyen Hue Blvd., District 1 Ho Chi Minh City, Vietnam Phone: +84-8 3821 9930 Fax: +84-8 3821 9931

www.vinacapital.com

Hanoi 5th Floor, Sun City Building 13 Hai Ba Trung Street, Hoan Kiem Dist., Hanoi, Vietnam Phone: +84-4 3936 4630 Fax: +84-4 3936 4629

Cambodia Canadia Tower, 20th floor No. 315, Ang Duong Street Phnom-Penh, Cambodia Phone: +855 23 99 66 88 Fax: +855 23 99 60 50

Singapore 6 Temasek Boulevard #42-01 Suntec Tower 4 Singapore 038986 Phone: +65 6332 9081 Fax: +65 6333 9081