TIDMICV
Indochina Capital Vietnam Holdings Limited
For immediate release
16 April 2010
Not for distribution, directly or indirectly, in or into the United States or
any jurisdiction in which such distribution would be unlawful.
Indochina Capital Vietnam Holdings Limited (the "Company")
Annual results for the year ended 31 December 2009
The Company is today releasing its audited results for the year ended 31
December 2009
COMPANY SUMMARY
The Company
The Company is a closed-end investment fund formed for the purpose of investing
primarily in Vietnamese securities. The Company was formed as an international
business company limited by shares established under the International Business
Companies Act 1984 (Cap. 291) of the British Virgin Islands ("BVI") on 16
February 2006. The Company was admitted to the Official List of the London Stock
Exchange on 7 March 2007 and was listed under Chapter 14 of the Listing Rules
made by the UK Listing Authority under section 73A of the United Kingdom
Financial Services and Markets Act 2000.
Objective
Before 3 September 2009
The investment objective of the Company was to achieve medium and long-term
capital appreciation by adhering to the following investment guidelines:
* The Company invests primarily in Vietnamese securities
* The Company may invest in a wide range of instruments, including equity
securities, debt securities, convertible instruments and derivative
instruments
* The Company may invest in companies in any industry sector, but will not
make any direct investments in real-estate
* No more than 10% of Net Asset Value may be invested in any single company,
at the time of investment, without the approval of the Manager's Advisory
Committee and, in any event, no more than 15% of Net Asset Value may be
invested in any single investment at the time of investment
* No more than 30% of Net Asset Value may be invested in any single industry
sector at the time of investment
* The Company does not and will not manage, operate or control any company or
enterprise it invests in
After 3 September 2009
As the result of the EGM on 3 September 2009 the Board decided to put the
Company on a liquidation footing and to begin the orderly realisation of all of
its portfolio. Indochina Capital Advisors Limited (the "Manager'") has been
entrusted with the orderly realisation of the Company's portfolio.
Management
The Company has as at 31 December 2009 five board members consisting of five
independent non-executive directors (including an independent non-executive
Chairman). The board members are Gordon Lawson (Chairman), Francis Finlay,
Hugues Lamotte, Eric Brock and Eitan Milgram. Detailed biographies can be found
on page 40 to page 41
The Board has also appointed other third party providers to undertake
operational and recording functions. Under the terms of a management agreement
(the "Management Agreement") dated 2 March 2007 which has been entered into
between the Company and Indochina Capital Advisors Limited (the "Manager"), the
Manager has the responsibility, subject to the overall control of the Board, for
the day-to-day management of the Company's investment portfolio in accordance
with the Company's investment objective, policy and guidelines. The Management
Agreement is terminable by the Company on a minimum of 6 months' notice expiring
at any time after the second anniversary of the admission of the Company to the
Official List of the London Stock Exchange.
Capital Structure
Ordinary Shares
Placing (7 March 2007):
45,000,000
Over-allotment (1 April 2007):
2,066,671
Share repurchases (during the period commencing on
7 March 2007 and ending
on 31 December 2009 (both inclusive) :
1,435,442
Compulsory repurchases of shares:
40,052,124
Outstanding
shares: 5,579,105
Financial Highlights
NAV/share increased during 2009 from $ 4.66 to $ 4.71 (+1.07%)
Net profit after tax of $ 38,476,824
Equity investments valued at $ 25,296,617
Cash and bank balances of $ 1,165,238
Financial Data
As
at As at % change
31 Dec
2008 31 Dec 2009
Net asset value $
212,818,422 $ 26,275,647 - 87.7%
Outstanding shares
45,631,229 5,579,105
Net asset value per share $ 4.66
$ 4.71 +1.07%
Ordinary share price ` $ 2.48
$3.68 +48.4%
Discount of share price to NAV (46.8%)
(22.0%)
CHAIRMAN'S STATEMENT
2009 was an eventful year in financial markets and especially for shareholders
in Indochina Capital Vietnam Ltd (ICV). I suspect you had more communications
to consider than most investors receive in a decade!
Early in the year a proposal was put forward that the investment management of
ICV be transferred to a new joint venture set up between ICA and Dragon
Capital. After this failed to receive shareholder approval, it became
increasingly clear that there were two quite distinct groups of shareholders
with very different objectives. First, there were those who wished to realise
the value of the underlying assets as soon as possible and second, those who
wished to continue to be invested in Vietnam for the long term. Numerous
discussions were held with both groups to try to find a mutually acceptable
solution.
A proposal was finally submitted to create two classes of share in an attempt to
satisfy each group: a realisation class and a continuation class with
shareholders being given the opportunity to choose which class they wished to be
invested in. In light of the fixed costs required to maintain the continuation
class, the proposal provided that where more than 65% of the shareholders opted
to realize their investment, then the Fund would instead move to realize the
entire portfolio. At the EGM, 67.7% of the shareholders elected for the
realisation class and accordingly, the Fund began an orderly realisation of all
of its portfolio.
At the end of June 2009, the net assets of the Fund were $243.3m. Since then the
Fund has returned a total of $ 222.8m to shareholders by way of two capital
distributions. As of end of 2009, the remainder of the portfolio consists of 6
private equity and one OTC investment, whose sale is ongoing through the public
auction with KPMG acting as exclusive financial advisor and one listed
investment which the Fund is restricted from selling until August 2010.
Dependent on the progress with the sale of the remaining portfolio investments,
the Board intends to make further distributions through compulsory repurchases
of shares during 2010.
The performance of the Vietnamese stock market during the year was extremely
volatile, with the VNIndex hitting a low of 236 in February and a high of 624 in
October.
I would like to thank the Board, and in particular Francis Finlay who has
decided not to stand for re-election, the fund manager and the Fund's advisors
for the enormous amount of work they all put in last year, including the various
constructive proposals and the development of the complex process for the return
of net realisation proceeds through compulsory repurchases of shares.
Gordon Lawson
Chairman
16 April 2010
MANAGER'S REVIEW
The Market Review
Vietnam's stock markets experienced unprecedented volatility during 2009 as a
result of the fall-out from the global financial crisis. At the beginning of the
year the VNIndex fell to 2005 levels, reaching as low as 236 in February.
Liquidity and daily trading values dropped to as low as US$ 10mm on a few
trading days during the first quarter.
In a reversal of fortunes and aided by proactive fiscal measures and resilient
domestic demand, Vietnam's stock market has embarked on an impressive rally
since the beginning of the second quarter, turning Vietnam into one of the best
performing stock markets in Asia. The VNIndex climbed to a 52 week high of 624
on 22 October and enjoyed increasing liquidity from the beginning of the third
quarter reaching an all-time high of US$ 494mm daily trading value on both
exchanges combined on 23 October.
The VNIndex has since then corrected as domestic investors have started taking
profits and unwinding their leveraged positions in anticipation of the
Government stimulus program being wound down and as other asset classes such as
gold and real estate started providing better prospects for upside. Towards the
year end, the credit tightening policy and the unexpected devaluation of the
local currency have had an impact on the VNIndex. As of 31 December 2009, the
VNIndex closed at 495, an increase of 57% year-on-year with average daily
trading volume of US$127 mm on both exchanges combined.
There are a number of reasons for the extraordinary reversal of fortune for
Vietnam's stock markets. The government's swift and strong policy responses to
the crisis allowed Vietnam's economy to weather the global economic crisis
better than most other countries. The government was helped by sharply lower
commodity prices which reduced inflationary pressures. This gave the government
more leeway to implement expansionary fiscal and monetary measures sooner. From
today's standpoint it is clear that the stimulus program has been highly
effective with Personal Income Tax exemptions allowing domestic consumption to
remain resilient and with interest rate subsidies breathing much needed
liquidity into the operations of companies. The stimulus program came with a
steep price tag to the government's budget and it appears that some of the
liquidity provided found its way to the stock market fuelling in part the rally.
Equally important, with investors' sentiment turning positive and markets
rallying Vietnam's stock market finally was able to welcome new companies to the
board again with the listing of blue chip companies such as Vietcombank,
Vietinbank, Bao Viet Holdings, Vietnam Import and Export Bank and others helping
to increase capitalization to US$ 33bn (compared to US$ 13bn at the end of
2008). As always, challenges remain and the pressure points for the Vietnamese
economy are a widening trade deficit and fiscal deficit as well as rising
inflation concerns.
In 2009, the State Bank of Vietnam devalued the official VND/USD exchange rate
on two separate occasions for a combined devaluation of 5.7%. However, at the
end of 2009, there was still a 5% gap between the market rate and the official
exchange rate. This put pressure on the State Bank to devalue the VND again in
Feb 2010, subsequent to which the off-market exchange rate has moved towards the
official exchange rate and stabilized.
Portfolio Activities
From the beginning of the financial year to September 3rd, the Manager was
restricted from changing asset allocations and making new investments because of
a realization proposal put forward at the EGM on 11 May 2009. This prevented the
Fund from participating in the listed market rally.
Given the above mentioned constraints the Manager focused on rebalancing the
portfolio with a view to optimizing performance. In view of the gradual
depreciation of the local currency during the first half of 2009 and the absence
of suitable hedging instruments in Vietnam, the Manager converted - to the
extent that foreign exchange liquidity permitted - its VND cash holdings to USD.
And when liquidity surged during the second quarter the Manager took advantage
of the rally to replace formerly illiquid corporate bonds with liquid shorter
term bonds and to selectively rebalance its listed portfolio. Over the course of
2009, the off-market VND/USD rate went up 11%. However, by converting cash into
USD throughout the year, the Manager was able to limit the Fund's exposure to
devaluation.
As a result of the Extraordinary General Meeting on September 3rd, the Manager
was mandated to realize the entire portfolio. Taking the advantage of the stock
market rally and high liquidity, during September the Manager sold into the
rising market an amount of US$67 mm of listed equities that represented 66% of
the listed portfolio or 25% of the Net Asset Value as at September 1. By the
middle of December, the Manager had completed liquidating all listed positions
except 373,338 shares of Dien Quang Corporation, which are locked up until
August 20, 2010. On December 8, the Manager successfully divested My Xuyen Bank,
a private equity holding, and collected US$2.9 mm from the sale.
Given pressure on the exchange rate, the Manager quickly converted the proceeds
in VND generated from the divestments into USD to minimize foreign exchange
loss. By the end of November, the Manager had successfully converted more than
US$90 million.
The Company distributed US$ 205.3 million on 22 October and US$ 17.5 million on
15 December to ICV shareholders. Further distributions will be made as and when
progress is made with the divestment of the remaining holdings of ICV.
Outlook
The Manager will do its best to exit the remaining six private equity holdings
and one OTC holding at the market value. The process is estimated to take 6-12
months. The remaining listed equity position will be divested when the lock-up
expires in August 2010.
Any proceeds raised will be distributed to shareholders as per the realisation
document of 2009.
Indochina Capital Advisors Limited
Richmond Mayo-Smith III, CEO
16 April 2010
DIRECTOR'S REPORT
The Directors present their report together with the audited financial
statements of the Company for the year ended 31 December 2009
Business Review
This section of the Directors' Report provides a fair review and description of
the Company's business and describes the principal risks and uncertainties it
faces.
Business of the Company
The Company is a closed-end investment fund which was formed as an international
business company limited by shares established under the International Business
Companies Act 1984 (Cap. 291) of the British Virgin Islands on 16 February 2006
for the purpose of investing primarily in securities issued by companies that
(i) are organized, or for which the principal securities trading market is, in
Vietnam or (ii) derive or are expected to derive a significant portion of
revenue or turnover from goods produced in, sales made into, services performed
in or other activities related to
Vietnam, and may also acquire participations and other interests in syndicated
loans and other debt related assets where the borrower is a company that falls
in (i) or (ii) (collectively, "Vietnamese Securities").
Investment Objective
Prior to 3 September 2009 the investment objective of the Company was to achieve
medium and long-term capital appreciation through investing primarily in
Vietnamese securities. At the EGM held on 3 September 2009, shareholders voted
to change the Company's investment policy and commence the orderly realization
of its entire portfolio.
Principal Risks and Uncertainties
The Board confirms that there is an ongoing process for identifying, evaluating
and managing the principal risks which fall under the general headings of
strategic, business and operational risks. This process is regularly reviewed by
the Board.
An internal control report and the assessment of risks applicable to the Company
is prepared by the Manager and considered by the Governance & Compliance
Committee. Risks are identified and graded and this process, together with the
policies and procedures for the mitigation of risks, is updated and regularly
reviewed.
1. Market risks
The inevitable uncertainty about prices and the Manager's success or failure to
protect and increase the Company's assets against this background is core to the
Company's continued justification. Other factors affected by market forces, such
as exchange and bond rates or interest rates, contribute to risks which have to
be taken as part of the Company's normal business.
2. Performance risk
The achievement of the Company's performance objective relative to the market
requires the acceptance of risk. Strategy, asset allocation and stock selection
might lead to under performance of the market. Management of the risks set out
above is carried out by the Manager which, at each Board meeting, presents the
asset allocation of the portfolio and the risks associated with particular
investments and industry sectors within the parameters of the investment
objective. The Manager is responsible for actively monitoring the portfolio
selected in accordance with the asset allocation parameters and seeks to ensure
that individual stocks meet an acceptable risk-reward profile. The Net Asset
Value is published on a monthly basis.
3. Income risk
The Company's objective of long term capital growth relies on generating income
to meet expenses and provide adequate reserves which are subject to the risk
that income generation from its investments fails to meet the level required.
The Board monitors this risk through the receipt of detailed income reports and
forecasts which are provided by the Manager on a monthly basis.
4. Share price risk
The price of the Company's shares and its discount to NAV are not factors that
the Company is able to control. Some short term influence over the discount may
be exercised by the use of share repurchases at acceptable prices. The Company's
share price is monitored daily by the Manager and considered by the Board at
each of its meetings.
5. Gearing risk
The Company has the option to borrow up to 25% of the Net Asset Value. In a
rising market the Company would benefit but in a falling market the impact would
be detrimental. In order to manage the level of gearing, any borrowing by the
Company must be approved by the Board.
6. Control systems risk
The Company is dependent on the Manager's control systems and those of its
Custodian and Registrars, both of which are monitored and managed by the Manager
in the context of the Company's assets and interests on behalf of the Board. The
security of the Company's assets, dealing procedures and risk management
procedures rely on effective operations of such systems. These are regularly
tested and a programe of internal audits is carried out by the Manager to
maintain standards.
Other risks
Other risks to which the Company is exposed and which form part of the Market
risks referred to above are included in Note 14 to the financial statements
together with the summaries of the policies for managing these risks. These
comprise: credit risk, liquidity risk, interest risk, foreign currency risk and
price risk.
Net Asset Value
The Company's Net Asset Value amounted to $26,275,647 as at 31 December 2009
resulting in a NAV per ordinary share of $4.71
Result
The Income Statement for 2009 shows a net profit after tax of $38,476,824.
Share Capital
At launch, the Company issued 47,066,671 shares of par value of $ 0.01 each at $
10 per share. The excess of funds received over the par value of the shares
issued, less underwriting and over-allotment fees paid to the Company's global
coordinator and book runner, was recorded as a share premium.
Compulsory of Repurchases
As the result of Extraordinary General Meeting on 3 September 2009, the
Company's shareholders resolved to arrange an orderly realisation of the its
investment portfolio, and the distribution of the related proceeds through
compulsory repurchase and cancellation of the Company's ordinary shares, in
accordance with Article 3A (2) of the Company.
On 22 October 2009, the Company acquired 36,596,245 shares, at the price of
$5.61 per share, for cancellation by way of compulsory repurchase of 80.2
percent of each shareholder's holding of shares. On 15 December 2009 the Company
acquired a further 3,455,879 shares, at the price of $5.06 per share, for
cancellation by way of a compulsory repurchase of 38.3% of each shareholder' s
holding of shares. Following these compulsory repurchases and cancellations of
the Company's issued share capital comprised 5,579,105 ordinary shares
(excluding 1,435,442 ordinary shares are held in treasury by the Company).
Gearing
The Company has no borrowings as at 31 December 2009.
Payment of Creditors
The Company's principal service provider is the Manager which is paid monthly in
arrears within 15 days of each Valuation Day in accordance with the terms of the
Management Agreement (see "The Manager" immediately below).
The Manager
Before September 3(rd), 2009, under the terms of the Management Agreement dated
2 March 2007, the Manager had been given responsibility, subject to the overall
control of the Board, for the day-to-day management of the Company's investment
portfolio in accordance with the Company's investment objective, policy and
guidelines.
The Management Agreement provides for the Manager to receive a management fee at
a rate of 1.5% per annum of Net Asset Value, payable monthly in arrears. The fee
is based on the Net Asset Value as at each monthly Valuation Day and is due
within 15 days of each Valuation Day. The Manager is also entitled to an annual
incentive fee equal to
15% of the increase in Net Asset Value, subject to a high water mark, in each
financial year.
The Company may terminate the Management Agreement on a minimum of six months'
notice and may terminate without notice in the event that the Manager commits a
material breach or if the Manager ceases to hold, or fails to obtain, any
authorisation necessary or, in the reasonable opinion of the Board, appropriate,
to perform its obligations under the Management Agreement, or a regulatory
authority directs the Company to terminate the Management Agreement.
The Management Agreement also contains an indemnity in favour of the Manager and
its employees against losses and claims other than as a result of the claimant's
gross negligence, bad faith or wilful misconduct.
The Company has also undertaken to cease using the "Indochina Capital" name
entirely, including changing its name to remove any reference to "Indochina
Capital", within 90 calendar days of the effective date of termination of the
Management Agreement for any reason, unless otherwise approved by the Manager.
The Manager may delegate any of its duties under the Management Agreement to any
other member of the Indochina Capital Group with the consent of the Company, but
any such delegation will not affect the liability of the Manager under the
Management Agreement.
After the EGM on 3 September 2009, the Manager has been entrusted with the
orderly realisation of the Company's portfolio. The management fees were reduced
from 3 September 2009 to a fee of 0.75 per cent of Net Asset Value for the first
year reducing to 0.50 per cent for the second year and 0.25 per cent Thereafter,
plus a fee of 1 per cent of each distribution to Shareholders (both before and
after any liquidation commences) in the first year, 0.75 per cent in the second
year and 0.5 per cent. Thereafter, together with an incentive fee equal to 10
per cent of any sum that a Shareholders receives by way of liquidation dividend
in excess of the Net Asset Value per Share on the last business day before the
change in investment policy became effective.
Directors
The Directors who served during the year to 31 December 2009 are listed in the
Corporate Information section together with a brief description of their careers
which indicates their qualifications for Board membership.
Directors' Fees
Prior to 11 May 2009, the Independent Directors received an annual fee of not
more than $60,000, plus $10,000 for membership of each Committee, payable in
equal quarterly installments, in arrears, the exact sum to be decided by the
Nominating and Remuneration Committee. The Chairman received a further annual
fee of $15,000, while the Chairman of the Compliance and Governance Committee
received a further annual fee of $15,000.
From 11 May 2009, the Independent Directors received an annual fee of not more
than $30,000, plus $5,000 for membership of each Committee, payable in equal
quarterly installments, in arrears, the exact sum to be decided by the
Nominating and Remuneration Committee. The Chairman receives a further annual
fee of $7,500, while the Chairman of the Compliance and Governance Committee
receives a further annual fee of $7,500.
The Company also reimburses the Directors for all reasonable and authorized
business expenses. The Company does not provide Directors with pension,
retirement or similar benefits. It is intended that this policy will continue
for the year ending 31 December 2010.
Committees
Compliance and Governance Committee
The Compliance and Governance Committee is responsible for, among other things:
· Reviewing matters involving conflict of interests, including but not
limited to the entering of proposed transactions by the Company in which any
Director, the Manager or Indochina Capital and/or any of their affiliates have a
direct or indirect interest.
· Reviewing related party transactions including, but not limited to,
the payment terms, payment period(s) and settlement of related party
transactions.
· Appointing a third party, with the necessary experience and expertise,
to conduct a review to determine if the Manager has performed its duties in
accordance with the Management Agreement.
· Reviewing the trade allocations carried out by the Manager.
Each member of the Compliance and Governance Committee is to abstain from voting
on any resolution in respect of matters in which he is interested.
Gordon William Lawson is the Chairman of the Compliance and Governance Committee
from 1 December 2008.
The other members of the Compliance and Governance Committee are Francis Finlay
and Hugues Lamotte who have served in this role since the admission of the
Company to the Official List of the London Stock Exchange.
Nominating and Remuneration Committee
The Nominating and Remuneration Committee is responsible for, among other
things:
<li> Reviewing and approving the remuneration for non-executive directors.
<li> Reviewing and assessing candidates for directorships.
Each member of the Nominating and Remuneration Committee is to abstain from
voting in the review and approval process relating to any matter in which he has
an interest.
After Peter Ryder stepped down as Chairman no replacement Chairman was appointed
in view of the Company's efforts to restructure the Company.
Directors and Officers' Liability Insurance
The Company maintained, in addition to the Manager's combined Directors and
Officers' Liability and Personal Indemnity Insurance, insurance cover for its
Directors under its own Directors and Officers' Liability Insurance.
AGM NOTICE
On page 36 of this document you will find the notice convening the Company's
2010 Annual General Meeting (the "AGM").
Resolutions 2 to 4 (inclusive) propose the re-election of certain directors of
the Company. Under Article 85 of the Company's articles of association (the
"Articles") any director appointed by shareholders during the year must retire
at the next annual general meeting and shall then be eligible for re-election at
that meeting. Accordingly, Mr. Eitan Milgram and Mr. Eric Brock retire at the
AGM and seek re-election. Additionally, under Article 86, a proportion of the
directors are required to retire by rotation at the AGM. There are two directors
who are retiring by rotation this year, namely Mr. Francis Finlay and Mr. Hugues
Lamotte. Mr. Francis Finlay decided not to stand for re-election.
Resolution 5 proposes the re-appointment of KPMG Limited as the Company's
auditors, who have expressed their willingness to continue. This resolution also
gives the directors the power to determine the auditors' remuneration, which
will be disclosed in the next accounts of the Company.
For and on behalf of the Board
Gordon Lawson
Chairman
16 April 2010
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the consolidated financial
statements of Indochina Capital Vietnam Holdings Limited and Subsidiaries ("the
Group") for each financial period. To the best of the Directors' knowledge the
consolidated financial statements give a true and fair view of assets,
liabilities, financial position and profit or loss of the Group for the period
then ended. In preparing those consolidated financial statements, the Directors
are required to:
· select suitable accounting policies and then apply them consistently;
· make judgments and estimates that are reasonable and prudent; and
· state whether applicable International Financial Reporting Standards
have been followed, subject to any material departures disclosed and explained
in the consolidated financial statements.
The Directors are also responsible for:
· ensuring that proper accounting records are kept which disclose, with
reasonable accuracy at any time, the financial position of the Group; and
· safeguarding the assets of the Group and for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Board of Directors confirms that they have complied with the above
requirements in preparing the consolidated financial statements.
On behalf of the Board of Directors
Mr. Gordon William Lawson
Director
12 February 2010
Brief Description of the Remaining Portfolio
Mai Linh Group ("MLG")
Industry: Transportation
Mai Linh is the leading passenger transportation service company in Vietnam. The
Company owns over 6,000 vehicles and operates the largest nation-wide taxi fleet
and medium distance bus service. The Company has operations in 60 out of 64
provinces in Vietnam.
International Transportation and Trading Joint Stock Company ("ITC")
Industry: Transportation
Established in 2001, ITC is one of the leading private shipping companies.
Primarily services the construction materials industry. The Company has seven
dry bulk ships having a total capacity of 280,000 DWT. Management is growing the
business through the expansion into port services with new port projects near Ho
Chi Minh City.
AA Corporation ("AA")
Industry: Furniture and home furnishing
AA Corporation is a joint stock company founded in 1990. AA has three main
business units: (1) interior design and fit?out to residential, office buildings
and retail outlets; (2) contract manufacturing of furniture principally for
export; and, (3) furniture retailing for its own brands. AA's products and
services target the high-end market sector. Its key export markets are the US,
Middle East and Europe.
Mobile Solution Services Joint Stock Company ("MSS")
Industry: Telecommunications
Established in 2006, Mobile Solution Services Joint Stock Company provides
mobile value added services ("VAS") in Vietnam. The Company's key services
involve (1) mobile content distribution; (2) SMS entertainment services; and,
(3) mobile marketing solutions. MSS won the Red Herring 100 Asia award in 2007
for excellence in management quality, financial performance, strategy execution,
ecosystem integration and technology innovation for the Asia Pacific region.
Navigos Group Ltd
Industry: Consumer Services
Navigos is the leading human resources services company in Vietnam. It owns and
operates four main businesses: (1) VietnamWorks.com, an online recruitment
website (2) Executive Search and Selection, placement services for middle and
upper management positions (3) Outsourcing and payroll services (4) Caravat.com,
a networking website for management-level professionals.
Viet Fashion JSC ("Viet Fashion")
Industry: Apparel
Viet Fashion is one of the leading fashion retailer in Vietnam with a nationwide
presence.Viet Fashion has a vertically integrated business which includes a
design house, a manufacturing plant and a nation-wide store network and is
therefore able to effectively control quality and costs. Established in 1998,
Viet Fashion has successfully developed a number of strong fashion brands in the
casual wear segment, including MaxxStyle, Ninomaxx, and N&M. Conceptualized as
casual products for active young people, Viet Fashion's products are very
popular with young Vietnamese consumers from 16 to 35 years old. Viet Fashion
currently has 120 stores mainly located in big cities.
BIM Seafood JSC ("BIM")
Industry: Aquaculture
Established as a private company in 1999, BIM is the first domestic seafood
company to have a vertically integrated business model which includes
hatcheries, farming, processing and distribution. BIM operates approximately
1,500 hectares of farmland and a processing facility with a maximum capacity of
9,000 tons a year.
Dien Quang Lamp Joint Stock Company ("DQC")
DQC is Vietnam's leading domestic household light-bulb brand name and
manufacturer. The Company is currently the market-leading light bulb
manufacturer for the domestic household segment where it claims to control more
than 30% of the market with concentration in the southern areas of Vietnam.
CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2009
Corporate Information
Certificate of incorporation The Company was incorporated on 16 February
2006 in the British Virgin Islands ("BVI").
Board of Directors Gordon William Lawson
Chairman/Independent Director
(from 11 May 2009)
Miles Q. Morland
Chairman/Independent Director
(until 11
May 2009)
Gordon William Lawson
Independent Director
(until 11 May 2009)
Peter R.
Ryder Independent Director
(until 11 May 2009)
David Francis Kerr Finlay
Independent Director
Hugues Lamotte
Independent Director
Eitan
Milgram Independent Director
(from 27 May 2009)
Eric
Brock Independent Director
(from 27 May 2009)
Registered Office c/o Tricor Services (BVI) Ltd.
Palm Grove House
PO Box 3340
Road Town
Tortola
British Virgin Islands
Auditors KPMG Limited
Vietnam
APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
We hereby approve the accompanying consolidated financial statements which give
a true and fair view of the consolidated financial position of the Group as of
31 December 2009 and of its consolidated results, consolidated changes in equity
and consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards.
On behalf of the Board of Directors
Mr. Gordon William Lawson
Director
12 February 2010
REPORT OF the INDEPENDENT AUDITORS
To the Shareholders
Indochina Capital Vietnam Holdings Limited and Subsidiaries
Scope
We have audited the accompanying consolidated financial statements of Indochina
Capital Vietnam Holdings Limited and Subsidiaries ("the Group") as of 31
December 2009 which comprise the consolidated statement of financial position as
at 31 December 2009 and the related consolidated statement of comprehensive
income, changes in equity and cash flows for the year then ended, and a summary
of significant accounting policies and other explanatory notes.
Management's responsibility for the consolidated financial 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 misstatements,
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 relevant ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the consolidated financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the consolidated financial statements. The
procedures selected depend on our 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, we consider internal
control relevant to the entity's preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are
appropriate in the 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 principles 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 opinion.
Audit opinion
In our opinion, the consolidated financial statements give a true and fair view
of the consolidated financial position of the Group as at 31 December 2009, and
of its consolidated financial performance and its consolidated cash flows for
the year then ended in accordance with International Financial Reporting
Standards.
Without qualifying our opinion, we draw attention to Note 1 to the financial
statements. The Company's shareholders resolved at an Extraordinary General
Meeting on 3 September 2009 to arrange an orderly realisation of its investment
portfolio, and the distribution of the related proceeds through compulsory
repurchase and cancellation of the Company's ordinary shares, to enable
liquidation of the Company as soon as practically possible.
____________________________
KPMG Limited
Vietnam
Ho Chi Minh City
12 February 2010
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2009
Note 2009 2008
USD USD
Assets
Cash and bank balances 4 1,165,238 64,277,390
Debt investments held-for-trading 5 - 34,320,925
Equity investments held-for-trading 5 25,296,617 109,588,544
Interest, dividends and other receivables 19,436 5,352,499
----------------------------
Total Assets 26,481,291 213,539,358
----------------------------
Liabilities
Accrued expenses 6 (205,644) (720,936)
----------------------------
Total Liabilities (205,644) (720,936)
----------------------------
Net assets attributable to ordinary shareholders 26,275,647 212,818,422
Represented by:
Issued capital 7 70,145 470,667
Share premium 7 226,494,085 451,113,162
Treasury shares 7 (10,262,576) (10,262,576)
Accumulated losses (190,026,007) (228,502,831)
----------------------------
26,275,647 212,818,422
----------------------------
Net asset value per share (based on shares 4.71 4.66
outstanding, excluding treasury shares)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER
2009
Note 2009 2008
USD USD
Interest income 9 2,244,848 11,284,391
Dividend income 1,852,621 3,568,488
Gains/(losses) on investments 10 46,585,479 (243,864,270)
Net foreign exchange losses (6,225,415) (3,326,555)
------------------------------
Net investment income/(loss) 44,457,533 (232,337,946)
------------------------------
Investment management fees 11 (2,597,104) (4,622,124)
Custodian fees (69,293) (108,082)
Administration fees (135,748) (206,140)
Transaction costs (313,234) (339,665)
Professional fees (219,425) (333,587)
Directors' fees 11 (235,611) (337,354)
Withholding tax (257,776) (516,026)
Capital reorganisation fees 12 (1,742,122) -
Other operating expenses (410,396) (596,223)
------------------------------
Operating expenses (5,980,709) (7,059,201)
------------------------------
Profit/(loss) before tax 38,476,824 (239,397,147)
Corporate income tax - -
------------------------------
Net profit/(loss) after tax 38,476,824 (239,397,147)
Other comprehensive income - -
------------------------------
Total comprehensive income/(loss) 38,476,824 (239,397,147)
Earnings/(loss) per share 8 1.06 (5.22)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2009
------------------------------------------------------------------
Issued Share premium Treasury Accumulated Total
capital USD shares losses USD
USD USD USD
Balance at 1 470,667 451,113,162 (1,811,046) 10,894,316 460,667,099
January 2008
Transactions
with
shareholders,
recorded
directly in
equity:
Buy back of
shares (Note - - (8,451,530) - (8,451,530)
7)
Total
comprehensive
income for the
year
Net loss for - - - (239,397,147) (239,397,147)
the year
Balance at 1 470,667 451,113,162 (10,262,576) (228,502,831) 212,818,422
January 2009
Transactions
with
shareholders,
recorded
directly in
equity:
Share
repurchase and
cancellation (400,522) (224,619,077) - - (225,019,599)
(Notes 1 and
7)
Total
comprehensive
income for the
year
Net profit for - - - 38,476,824 38,476,824
the year
Balance at 31 70,145 226,494,085 (10,262,576) 26,275,647
December 2009 (190,026,007)
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2009
Note 2009 2008
USD USD
operating activities
Net profit/(loss) for the year 38,476,824 (239,397,147)
Adjustments for
Dividend income (1,852,621) (3,568,488)
Interest income (2,244,848) (11,284,391)
Realised gain on debt and equity investments
trading (56,223,911) 29,905,223
Unrealised losses on debt and equity
investments 9,638,432 213,959,047
----------------------------
(12,206,124) (10,385,756)
Change in receivables from investment
activities 5,333,063 39,903,239
Change in current liabilities (515,292) (7,387,559)
Interest received 2,244,848 19,730,653
Dividends received 1,852,621 4,020,276
Change in deposits in escrow account for
purchases of equity investments - 2,995,056
----------------------------
Net cash (used in) generated from operating (3,290,884) 48,875,909
activities
----------------------------
investing activities
Proceeds from sale of debt and equity
investments 183,024,635 117,500,299
Payments for purchase of debt and equity
investments (17,826,304) (189,102,677)
----------------------------
Cash flows generated from (used in) investing 165,198,331 (71,602,378)
activities
----------------------------
financing activities
Payments for treasury shares - (8,451,530)
Payments for share repurchase and cancellation 7 (222,791,683) -
Distribution fees for share repurchase 11 (2,227,916) -
----------------------------
Cash flows used in financing activities (225,019,599) (8,451,530)
----------------------------
Net decrease in cash and bank balances (63,112,152) (31,177,999)
Cash and bank balances at the beginning of the 64,277,390 95,455,389
year
----------------------------
Cash and bank balances at the end of the year 1,165,238 64,277,390
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2009
These notes form an integral part of and should be read in conjunction with the
accompanying consolidated financial statements.
Reporting entity
Indochina Capital Vietnam Holdings Limited ("the Company") is a closed-ended
investment fund incorporated as a limited liability company under the
International Business Companies Act 1984 (Cap.291) of the British Virgin
Islands ("BVI") on 16 February 2006. The Company's shares are listed on the
London Stock Exchange.
The purpose of the Company and its subsidiaries ("the Group") is to invest
primarily in securities issued by companies that (i) are organised or for which
the principal securities trading market is in Vietnam; or (ii) derive or are
expected to derive a significant portion of revenue or turnover from goods
produced in, sales made into, services performed in or other activities related
to Vietnam. It may also acquire participations and other interests in
syndicated loans and other debt related assets where the borrower is a company
that falls within in (i) or (ii). In doing so, it applies techniques more fully
defined in the prospectus of the Company dated 2 March 2007.
The investment activities of the Company are managed by Indochina Capital
Advisors Limited (the "Manager") and the administration of the Company is
delegated to HSBC Institutional Trust Services (Asia) Limited. The registered
office of the Company is Palm Grove House, PO Box 3340, Road Town, Tortola, BVI.
At an Extraordinary General Meeting on 3 September 2009, the Company's
shareholders resolved to arrange an orderly realisation of the its investment
portfolio, and the distribution of the related proceeds through compulsory
repurchase and cancellation of the Company's ordinary shares, in accordance with
Article 3A (2) of the Company, to enable liquidation of the Company as soon as
practically possible.
As at 31 December 2009, the Company has cumulatively repurchased 40,052,124
shares and distributed USD222,791,683 (net of distribution fees of USD2,227,916
- see note 11) to the shareholders.
The Group includes the following subsidiaries:
Company Date of incorporation Country of incorporation Equity
%
=---------------------------------------------------------------------------
Ta Keo Limited 27 Sep 2007 British Virgin Islands 100%
Bayon Holdings Limited 27 Sep 2007 British Virgin Islands 100%
Baphuon Limited 27 Sep 2007 British Virgin Islands 100%
Bakong Limited 27 Sep 2007 British Virgin Islands 100%
Basis of preparation
(a)Statement of Compliance
The consolidated financial statements have been prepared in compliance with
International Financial Reporting Standards ("IFRSs").
The consolidated financial statements were authorised for issue by the Board of
Directors on 12 February 2010.
(b)Basis for preparation
The Company is conducting an orderly realisation of its investments, and
distributing the related proceeds through compulsory repurchase and cancellation
of the Company's ordinary shares, to enable liquidation of the Company as
practical as possible. No adjustments relating to the recoverability and
classification of recorded assets amounts, or to amounts and classification of
liabilities were required to reflect the fact that the Company is no longer a
going concern at 31 December 2009.
(c)Basis of measurement
The consolidated financial statements are prepared on a fair value basis for
financial assets and financial liabilities at fair value through profit or loss
and derivative financial instruments, except for investments in equity
instruments that do not have a quoted market price in an active market and whose
fair value cannot be reliably measured and derivatives linked to and which must
be settled by delivery of such unquoted investments, which shall be measured at
cost. Other financial assets and financial liabilities are stated at amortised
cost.
The methods used to measure fair values are discussed further in Note 3(c)(iv).
(d)Functional and presentation currency
The consolidated financial statements are presented in United States Dollars
("USD" or "$"), the functional currency of the Company. References to "VND" are
to the lawful currency of Vietnam.
(e)Use of estimates and judgments
The preparation of consolidated financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the year in which the
estimate is revised if the revision affects only that year, or in the year of
the revision and future years if the revision affects both current and future
years.
Judgements made by management in the application of IFRSs that have a
significant effect on the consolidated financial statements and estimates with a
significant risk of material adjustment in the next year relate to fair value
measurement of financial instruments. Further descriptions of fair value
measurement methods are described in Note 3(c)(iv).
(f)Segment reporting
The Group is organised and operates as one segment (both in terms of business
and geography). Consequently, no segment reporting is provided in the Group's
consolidated financial statements.
(g)Change in accounting policies
The Group applies revised IAS 1 Presentation of Financial Statements (2007),
which became effective 1 January 2009. As a result, the Group presents in the
consolidated statement of changes in equity all changes in equity, whereas all
non-owner changes in equity are presented in the consolidated statement of
comprehensive income.
Comparative information has been represented so that it is in conformity with
the revised standard. Since the change in accounting policy only impacts
presentation aspects, there is no impact on earnings per share.
Summary of significant accounting policies
The accounting policies set out below have been applied consistently by the
Group to all periods presented in the consolidated financial statements.
a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group
has the power to govern the financial and operating policies of an entity so as
to obtain benefits from its activities. In assessing control, potential voting
rights that presently are exercisable are taken into account. The financial
statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. The
accounting policies of subsidiaries have been changed when necessary to align
them with the policies adopted by the Group.
(ii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised differences arising
from intra-group transactions, are eliminated in preparing the consolidated
financial statements. Unrealised gains arising from transactions with equity
accounted investees are eliminated to the extent of the Group's interest in the
investee. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.
b) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the
reporting date are retranslated to the functional currency at the exchange rate
at that date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in the functional currency at the beginning of
the period, adjusted for effective interest and payments during the period, and
the amortised cost in foreign currency translated at the exchange rate at the
end of the period. Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit
or loss.
c) Financial instruments
(i) Classification
Financial assets designated as at fair value through profit or loss comprises:
· Financial instruments held-for-trading: these include debt investments
and equity investments.
· Financial instruments designated at fair value through profit or loss
upon initial recognition: these include financial assets that are not held for
trading purposes and which may be sold. These are investments in tradable
promissory notes, listed equity instruments, and unlisted equity instruments.
Financial assets that are classified as loans and receivables include balances
due from brokers, receivables from reverse repurchase agreements and interest,
dividends and other receivables.
Financial liabilities that are not measured at fair value subsequent to initial
recognition include balances due to brokers, payables under repurchase
agreements, accounts payable and accrued expenses.
(ii) Recognition
A financial instrument is recognised if the Group becomes a party to the
contractual provisions of the instrument. Financial assets are derecognised if
the Group's contractual rights to the cash flows from the financial assets
expire or if the Group transfers the financial asset to another party without
retaining control of substantially all risks and rewards of the asset. Regular
way purchases and sales of financial assets are accounted for at trade date,
i.e., the date that the Group commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Group obligations specified in the
contract expire or are discharged or cancelled.
A regular way purchase of financial assets is recognised using trade date
accounting.
(iii) Measurement
Financial instruments are measured initially at fair value (transaction price)
plus, in case of a financial asset or financial liability not at fair value
through profit or loss, transaction costs that are directly attributable to the
acquisition or issue of the financial asset or financial liability. Transaction
costs on financial assets and financial liabilities at fair value through profit
or loss are expensed immediately, while on other financial instruments they are
amortised. Subsequent to initial recognition, financial instruments are
measured as described below.
Debt and equity investments
Subsequent to initial recognition, all debt and equity investments, which are
classified at fair value through profit or loss, are measured at fair value with
changes in their fair value recognised in the profit or loss, except for
investments in equity instruments that do not have a quoted market price in an
active market and whose fair value cannot be reliably measured and derivatives
linked to and which must be settled by delivery of such unquoted equity
instruments, which shall be measured at cost.
Cash and cash equivalents
Cash comprises current deposits with banks. Cash equivalents are short-term
highly liquid investments that are readily convertible to known amounts of cash,
are subject to an insignificant risk of changes in value, and are held for the
purpose of meeting short-term cash commitments rather than for investment or
other purposes. They are stated at amortised cost using the effective interest
rate method, less impairment losses, if any.
Trade and other receivables and payables
Trade and other receivables and payables are measured at amortised cost after
initial recognition using the effective interest method, less any impairment
losses.
(iv) Fair value measurement principles
The following principles will be applied in determining the fair value of
financial instruments:
Listed securities will be valued at their last traded prices as of the last
official close of the applicable exchange on the reporting date.
Investments in unlisted securities for which an active over-the-counter market
exists will be stated at fair value based upon price quotations received from
independent brokers.
Where no quotes or insufficient quotes are available, the Board will decide,
following consultation with the Administrator, the appropriate method(s) for the
estimation of fair value of the relevant asset(s). The Board will take into
account all factors they consider relevant, which may include valuation
methodologies or guidelines, such as the European Venture Capital Association
guidelines for the valuation of private equity and venture capital investments,
where appropriate.
The fair value of financial instruments stated at amortised cost is estimated as
the present value of future cash flows, discounted at the market rate of
interest at the reporting date. The fair value is determined for disclosure
purposes only.
The value of assets or liabilities in currencies other than USD will be
converted into USD at the prevailing market rate for such currencies on the
reporting date.
(v) Impairment
Financial assets
A financial asset is considered to be impaired if objective evidence indicates
that one or more events have had a negative effect on the estimated future cash
flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is
calculated as the difference between its carrying amount, and the present value
of the estimated future cash flows discounted at the original effective interest
rate.
Individually significant financial assets are tested for impairment on an
individual basis. The remaining financial assets are assessed collectively in
groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an
event occurring after the impairment loss was recognised. For financial assets
measured at amortised cost, the reversal is recognised in profit or loss.
(vi) Derecognition
The Group derecognises a financial asset when the contractual rights to the cash
flows from the financial asset expire or it transfers the financial asset and
the transfer qualifies for derecognition in accordance with IAS 39.
The Group uses the weighted average method and the specific identification
method to determine realised gains and losses on de-recognition of equity
investments and other investments respectively.
A financial liability is derecognised when the obligation specified in the
contract is discharged, cancelled or expired.
d) Interest income
Interest income is recognised in the income statement as it accrues, using the
original effective interest rate of the instrument calculated at the acquisition
or origination date.
Interest income on debt instruments at fair value through profit or loss is
accrued using the original effective interest rate and classified to the
interest income line item within the income statement. Interest income is
recognised on a gross basis, including withholding tax, if any.
e) Dividend income
Dividend income relating to exchange-traded equity investments is recognised in
the income statement on the ex-dividend date.
In some cases, the Group may receive or choose to receive dividends in the form
of additional shares rather than cash. In such cases, the Group recognises the
divided income based on the amount of cash dividend alternative with the
corresponding debit treated as an additional investment.
Income distributions from private equity investments and other investment funds
are recognised in the income statement as dividend income when declared.
f) Expenses
All expenses, including management fees and custodian fees, are recognised in
the income statement on an accrual basis.
g) Foreign exchange gains and losses
Foreign exchange gains and losses on financial assets and financial liabilities
at fair value through profit or loss are recognised together with other changes
in the fair value. Included in the profit or loss line item Net foreign exchange
losses are net foreign exchange gains and losses on monetary financial assets
and financial liabilities other than those classified at fair value through
profit or loss.
h) Taxation
The Company and its subsidiaries were incorporated in the British Virgin
Islands. Under the current laws of the British Virgin Islands, there is no
income, estate, corporation, capital gains or other taxes payable by the Company
and its subsidiaries.
The Group currently incurs withholding taxes imposed by certain countries on
interest income and on sale proceeds of equity and debt investments. Such
interest income or sale proceeds are recorded gross of withholding taxes in the
income statement. Please refer to Note 15 for a discussion on contingent
liabilities on taxation.
i) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period. Diluted EPS is
determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects
of all dilutive potential ordinary shares.
j) Provisions
Provisions are recognised only when the Group has (a) a present obligation
(legal or constructive) as a result of past event; (b) it is probable (i.e.,
more likely than not) that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (c) a reliable estimate can be
made of the amount of the obligation. If the effect of the time value of money
is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessment of the time
value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of
time is recognised as interest expense. Where the Group expects a provision to
be reimbursed, the reimbursement is recognised as a separate asset but only when
the receipt of the reimbursement is virtually certain.
k) Contingencies
Contingent liabilities are not recognised in the consolidated financial
statements. They are disclosed unless the possibility of an outflow of
resources embodying economic benefits is remote. Contingent assets are not
recognised in the consolidated financial statements but are disclosed when an
inflow of economic benefits is probable.
l) Subsequent Events
Post year-end events that provide additional information about the Group's
position at reporting date (adjusting events) are reflected in the consolidated
financial statements. Post year-end events that are not adjusting events are
disclosed in the notes to the consolidated financial statements when material.
Cash and bank balances
Cash in bank earned interest from 0% to 6.3% per annum (2008: 0% to 7.3%).
Cash and bank balances at 31 December 2009 included amounts denominated in VND
amounting to USD357,272 (2008: USD24,933,577). The remaining balances were
denominated in USD. All bank balances as at 31 December 2009 were with The
Hongkong and Shanghai Banking Corporation Limited.
Financial instruments at fair value through profit and loss
2009 2008
USD USD
Equity investments held-for-trading
Ho Chi Minh Stock Exchange and Hanoi Securities Trading Center
equity investments
Natural resources
Common shares of PetroVietnam Fertilizer and Chemical JSC - 4,878,797
Common shares of PetroVietnam Drilling and Well Services JSC - 4,601,130
Common shares of Petroleum Technical Services Corp - 1,303,314
Common shares of Drilling Mud Corporation - 638,341
Common shares of Pha Lai Thermal Power JSC - 655,902
Common shares of Candon JSC - 70,227
Telecom/technology
Common shares of FPT Corporation - 3,989,763
Common shares of Viet-Han Corporation - 1,319,156
Common shares of Cables & Telecomunication Materials JSC - 116,138
Financial institutions
Common shares of Petrovietnam Insurance JSC - 1,854,713
Common shares of Sai Gon Securities Incorporation - 765,172
Healthcare
Common shares of DHG Pharmaceutical JSC - 2,772,358
Common shares of Imexpharm Pharmaceutical JSC - 433,706
Consumer products
Common shares of Vinamilk Corporation - 8,050,659
Common shares of North KinhDo Food JSC - 821,394
Common shares of Tuong An Vegetable Oil JSC - 539,599
Agricultural
Common shares of TANIRUCO JSC - 205,072
Common shares of Cuu Long Fish JSC - 183,550
Industrial
Common shares of Hoa Phat Urban Development and Construction
JSC - 3,189,335
Common shares of Refrigeration Electrical Engineering
Corporation - 2,785,870
Common shares of Dien Quang JSC 677,770 1,139,991
Common shares of Tien Phong Plastic JSC - 470,228
Common shares of Vinaconex Advanced Compound Stone JSC - 304,841
-
Common shares of Dry Cell and Storage Battery JSC 175,926
|2009 |2008
|USD |USD
=-------------------------------------------------------+----------+-----------
Transportation service provider | |
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Common shares of General Forwarding and Agency | |
Corporation |- |3,218,922
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Media | |
=-------------------------------------------------------+----------+-----------
Common shares of Phuong Nam Cultural Joint Stock Corp. |- |858,312
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Listed equity investments |677,770 |45,342,416
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Unlisted equity investments | |
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Transportation service provider | |
=-------------------------------------------------------+----------+-----------
Common shares of International Transportation and | |
Commercial JSC |6,473,715 |13,000,000
=-------------------------------------------------------+----------+-----------
Common shares of Mai Linh Corporation |2,070,301 |2,422,865
=-------------------------------------------------------+----------+-----------
Common shares of Mai Linh Dong Bac Bo Corporation |657,576 |1,629,228
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Financial institutions | |
=-------------------------------------------------------+----------+-----------
Common shares of Joint Stock Commercial Bank for | |
Foreign Trade of Vietnam ("Vietcombank") |- |11,001,196
=-------------------------------------------------------+----------+-----------
Common shares of Baoviet Insurance Corporation |- |9,567,255
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Agricultural | |
=-------------------------------------------------------+----------+-----------
Common shares of BIM Seafood JSC |- |6,500,000
=-------------------------------------------------------+----------+-----------
Common shares of Phuoc Hoa Rubber Corporation |- |5,594,119
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Consumer products | |
=-------------------------------------------------------+----------+-----------
Common shares of Viet Fashion JSC |6,668,092 |4,700,000
=-------------------------------------------------------+----------+-----------
Common shares of Management Consulting Group Limited |4,061,776 |2,830,465
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Industrial | |
=-------------------------------------------------------+----------+-----------
Common shares of AA Corporation |2,800,000 |1,200,000
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Telecom/technology | |
=-------------------------------------------------------+----------+-----------
Common shares of Mobile Solution Services Group |1,887,387 |1,512,500
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Unlisted equity investments |24,618,847|59,957,628
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Tradable promissory notes at fair value through profit and loss |
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Promissory notes issued by Deutsche Bank for Call | |
Warrant of FPT Corporation's shares |- |4,288,500
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Total equity investments |25,296,617|109,588,544
|2009 |2008
|USD |USD
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Debt investments held-for-trading | |
=-------------------------------------------------------+----------+-----------
Corporate bonds of Bank for Investment and Development | |
of Vietnam ("BIDV") 8.5% redeemable on 23 July 2012 |- |15,449,082
=-------------------------------------------------------+----------+-----------
Corporate bonds of Lilama Corporation 9.2% redeemable | |
on 6 June 2017 |- |2,868,406
=-------------------------------------------------------+----------+-----------
Government bonds 8.2% redeemable on 11 December 2011 |- |4,790,978
=-------------------------------------------------------+----------+-----------
Government bonds 8.75% redeemable on 24 May 2011 |- |8,166,960
=-------------------------------------------------------+----------+-----------
Zero coupon Corporate bonds of VPREIT |- |3,045,499
=-------------------------------------------------------+----------+-----------
| |
=-------------------------------------------------------+----------+-----------
Total debt investments |- |34,320,925
=-------------------------------------------------------+----------+-----------
Total debt and equity investments |25,296,617|143,909,469
With the exception of the common shares of BIM Seafood JSC, which were valued at
USD nil at 31 December 2009 (2008 - USD 6,500,000), all the Company's equity and
debt investments with nil valuation at the reporting date had been fully
disposed of as of that date.
Accrued expenses
2009 2008
USD USD
Management fees 22,729 289,028
Directors fees 47,500 80,000
Administration fees 2,524 26,727
Custody & portfolio administration fees 939 24,677
Withholding tax payable 21,584 178,247
Legal fees 3,500 36,600
Audit fees 35,500 44,472
Capital reorganisation 52,550 -
Others 18,818 41,185
--------------------
205,644 720,936
Capital
Authorised and issued share capital
The authorised and issued share capital of the Company was as follows:
2009 2008
No. of shares USD No. of shares USD
Authorised share capital with
par value of USD0.01 1,300,000,000 13,000,000 1,300,000,000 13,000,000
Issued and fully paid capital 7,014,547 70,145 47,066,671 470,667
At an Extraordinary General Meeting on 3 September 2009, the Company's
shareholders resolved to arrange an orderly realisation of the investment
portfolio, and the distribution of the related proceeds through the compulsory
repurchase and cancellation of the Company's ordinary shares, in accordance with
Article 3A (2) of the Company.
On 22 October 2009, the Company acquired 36,596,245 shares, at the price of
USD5.61 per share, for cancellation by way of compulsory repurchase of 80.2
percent of each shareholder's holding of shares. Following this compulsory
repurchase and cancellation of the Company's issued share capital comprised
10,470,426 ordinary shares.
On 15 December 2009 the Company acquired a further 3,455,879 shares, at the
price of USD5.06 per share, for cancellation by way of a compulsory repurchase
of 38.3 percent of each shareholder' s holding of shares. Following this
compulsory repurchase and cancellation of the Company's issued share capital
comprised 7,014,547 ordinary shares.
Share premium
The Company issued 47,066,671 shares of par value of USD0.01 at USD10 per share
in 2007. The excess of funds received over par value of the shares issued, less
underwriting fees and over-allotment fees paid, is recorded as share premium.
Treasury shares
Treasury shares held by the Company at 31 December 2009 are as follows:
2009 2008
No. of shares USD No. of shares USD
Opening balance 1,435,442 10,262,576 221,252 1,811,046
Purchases - - 1,214,190 8,451,530
----------------------------------------------------------
Closing balance 1,435,442 10,262,576 1,435,442 10,262,576
Earnings/(loss) per share
The Company's basic earnings per share for the year is:
| 2009 | 2008
=--------------------------------------------+------------+---------------
| |
=--------------------------------------------+------------+---------------
Profit/(loss) for the year in USD | 38,476,824 | (239,397,147)
=--------------------------------------------+------------+---------------
| |
=--------------------------------------------+------------+---------------
Weighted average number of ordinary shares | 36,194,178 | 45,904,826
=--------------------------------------------+------------+---------------
| |
=--------------------------------------------+------------+---------------
Earnings/(loss) per share in USD | 1.06 | (5.22)
| |
Diluted
As at 31 December 2009, the Company's capital structure consists solely of
ordinary shares. There are no share options or warrants or other convertible
instruments in issue. Accordingly, diluted earnings per share is equal to basic
earnings per share.
Interest income
2009 2008
USD USD
Interest income arising from:
Cash and cash equivalents 630,463 2,295,992
Investments in other debt securities 1,614,385 8,804,818
Receivables from reverse repurchase agreements - 183,581
-------------------------
2,244,848 11,284,391
Interest income on receivables from reverse repurchase agreements represents
interest earned on securities purchased under agreement to sell these securities
at a future date, at an agreed price.
Gains and losses on debt and equity investments
2009 2008
USD USD
Net gains and losses on debt investments 1,457,427 (33,839,599)
Net gains and losses on equity investments 45,128,052 (210,024,671)
-----------------------------
46,585,479 (243,864,270)
Fees
Investment Manager Fees
Prior to 3 September 2009
Under the terms of a management agreement dated 2 March 2007 between the Company
and Indochina Capital Advisors Limited (the "Manager") (the "Management
Agreement") the Company appointed the Manager, an investment management group
incorporated in the BVI, for the day-to-day management of the Company's
investment portfolio in accordance with the Company's investment objective,
policy and guidelines. Under the Management Agreement, the Manager receives a
monthly management fee in arrears, at an annual rate of 1.5% percent of the net
assets attributable to holders of ordinary shares on each valuation day (being
the last business day of each calendar month unless the Board determines
otherwise).
Following 3 September 2009
The terms of the Management Agreement were amended effective from 3 September
2009 to reduce management fees to 0.75 percent of the Company's Net Asset Value
for the first year subsequent to the decision to realise and distribute the
Company's investment portfolio, reducing to 0.50 percent for the second year and
0.25 percent thereafter.
The Company paid USD2,597,104 (2008 - USD4,622,124) investment manager fees in
2009.
Incentive Fees
The Manager is also entitled to an annual incentive fee (the "Incentive Fee")
equal to 15% of the increase in Net Asset Value, subject to a high water mark,
in each financial year.
The terms of the Management Agreement were amended effective from 3 September
2009 such that incentive fees equal to 10 percent of any sum that a shareholder
receives by way of distribution, in excess of the Net Asset Value per share on
1 September 2009.
No incentive fee was earned by the Manager in 2009 (2008 - nil).
Distribution Fees
In accordance with the Management Agreement the Manager is entitled to
distribution fees on amounts distributed to shareholders at 1 percent of each
distribution to shareholders in the first year of subsequent to the agreement
date, 0.75 percent in the second year and 0.5 percent in subsequent years.
The Company paid USD2,227,916 (2008 - nil) distribution fees in 2009.
Directors' fees
The total directors' fees are disclosed in the income statement. A list of the
members of the board of directors is shown on page 1.
Capital reorganisation fees
Capital reorganisation fees represent third party legal and professionally
advisory fees incurred in relation to the Company's planned liquidation.
Related party transactions
During the year there were the following significant transactions with related
parties:
Related Party |Relationship|Nature of transaction| 2009 | 2008
| | | USD | USD
=-----------------------+------------+---------------------+---------+---------
| | | |
=-----------------------+------------+---------------------+---------+---------
Indochina Capital | | | |
Advisors Limited |Manager |Management fees |2,597,104|4,622,124
=-----------------------+------------+---------------------+---------+---------
| | | |
=-----------------------+------------+---------------------+---------+---------
Indochina Capital | | | |
Advisors Limited |Manager |Distribution fees |2,227,916|-
=-----------------------+------------+---------------------+---------+---------
| | | |
=-----------------------+------------+---------------------+---------+---------
Mekong Securities JSC |Broker |Brokerage fees | -| 220,594
=-----------------------+------------+---------------------+---------+---------
| | | |
Investments and associated risks
The Group maintains positions in a variety of non-derivative financial
instruments as dictated by its investment management strategy. The Group's
investment portfolio comprises quoted and non-quoted equity investments and debt
investments, that it intends to hold for a long-term period.
Overview
The Group has exposure to the following risks from its use of financial
instruments:
· credit risk
· liquidity risk
· market risk
This note presents information about the Group's exposure to each of the above
risks, the Group's objectives, policies and processes for measuring and managing
risk, and the Group's management of capital.
Management has overall responsibility for the establishment and oversight of the
Group's risk management framework. Management establishes policies to identify
and analyse the risks faced by the Group, to set up appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and
the Group's activities. Through training and management standards and
procedures, management aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
Asset allocation is determined by the Manager who manages the distribution of
the assets to achieve the investment objectives. Divergence from target asset
allocations and the composition of the portfolio is monitored by the Manager.
The nature and extent of the financial instruments outstanding at the reporting
date and the risk management policies employed by the Group are discussed below.
(a) Credit risks
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group's balances due from brokers,
deposits with banks.
The Manager does not expect significant losses to arise from non-performance of
these financial institutions and counterparties.
Deposits with banks
All the bank deposits are deposited with financial institutions and the Manager
does not expect significant credit losses to arise from non-performance of these
financial institutions.
The maximum exposure to credit risk is equal to the carrying amounts of these
financial assets in the balance sheet.
(b) Liquidity risks
Liquidity risk is the risk that the Group will not be able to meet its financial
obligations as and when they fall due. The Group's policy is to regularly
monitor current and expected liquidity requirements to ensure that the Group
maintains sufficient cash to meet its liquidity requirements in the short and
longer term.
The following are the maturities of the financial liabilities of the Group:
| | | | | |
| | | | | |
| | | | | |
| Carrying | Undiscounted| | | |
| amount | contractual| 6 months| 6-12 | 1-2 | > 2
| | cash flow| or less| months| years| years
2009 | USD | USD| USD| USD| USD| USD
=-----------+-----------+---------------+----------+---------+--------+--------
| | | | | |
=-----------+-----------+---------------+----------+---------+--------+--------
Accrued |205,644 |205,644 |205,644 |- |- |-
expenses | | | | | |
=-----------+-----------+---------------+----------+---------+--------+--------
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | Undiscounted| | | |
| Carrying| contractual| 6 months| 6-12 | 1-2 | > 2
| amount| cash flow| or less| months| years| years
2008 | USD| USD| USD| USD| USD| USD
=-----------+-----------+---------------+----------+---------+--------+--------
| | | | | |
=-----------+-----------+---------------+----------+---------+--------+--------
Accrued |720,936 | 720,936|720,936 | -|- |-
expenses | | | | | |
=-----------+-----------+---------------+----------+---------+--------+--------
| | | | | |
| | | | | |
(c) Market risk
Market risk is the risk that changes in market prices, such as interest rates
and foreign exchange rates will affect the Group's income or the value of its
holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while
optimising the return.
(i) Interest risks
The Group's exposure to interest rate risk relates to interest bearing financial
assets.
At the reporting date the interest rate profile of the Group's interest bearing
financial instruments was:
| 2009 | 2008
| USD | USD
=-------------------------------+---------+------------
Fixed rate instrument | |
=-------------------------------+---------+------------
Financial assets - fixed rate | |
=-------------------------------+---------+------------
Time deposit | 807,966 | 56,752,692
=-------------------------------+---------+------------
Debt investments | - | 34,320,925
=-------------------------------+---------+------------
| |
| |
Fair value sensitivity analysis for fixed rate instruments
Time deposit is stated at amortised cost and therefore changes in interest rates
will not significantly impact the reported results of the Group.
(ii) Foreign currency risks
The Group is exposed to foreign currency risk on investments that are
denominated in a currency other than the USD. The currency giving rise to this
risk is primarily VND.
The Group ensures that the net exposure to this risk is kept at an acceptable
level by buying or selling foreign currencies at spot rates where necessary to
address short-term imbalances. The Group does not enter into currency hedging
transactions because the Manager considers that the cost of such instruments
outweigh the potential risk of exchange rate fluctuations.
Exposure to currency risk
The Group's exposure to foreign currency risk was on VND. The USD equivalents
of the VND denominated assets and liabilities of the Group are as follows:
| 2009 | 2008
=-------------------------------------------+------------+-------------
| USD | USD
=-------------------------------------------+------------+-------------
| |
=-------------------------------------------+------------+-------------
Cash in bank | 357,272 | 24,933,577
=-------------------------------------------+------------+-------------
Debt investments | - | 34,320,925
=-------------------------------------------+------------+-------------
Equity investments | 25,296,617 | 102,469,579
=-------------------------------------------+------------+-------------
Interest, dividends and other receivables | - | 5,331,397
=-------------------------------------------+------------+-------------
Accrued expenses | - | (187,151)
=-------------------------------------------+------------+-------------
| |
=-------------------------------------------+------------+-------------
Net balance sheet exposure | 25,653,889 | 166,868,327
| |
Sensitivity analysis
The Manager estimates that a change in the exchange rate of the VND against the
USD of 3% to 5% (which has been the historical annual movement over the last two
years) would result in a change in the net assets of the Group of approximately
USD0.8 million to USD1.3 million.
(iii) Price risk
The Group invests and trades in unlisted equity securities (both OTC traded and
private equity) and is exposed to market price risk of these securities.
(d) Fair values of financial assets and liabilities
The carrying amounts of significant financial assets and liabilities approximate
their respective fair values as at year end. The following methods and
assumptions were used to estimate the fair value for each class of financial
instrument:
Cash and cash equivalents, interest, dividends and other receivables and accrued
expenses.
The carrying amounts approximate their respective fair values due to the
short-term maturity of these instruments.
Equity investments held for trading - Fair value hierarchy
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the assets or liabilities, either directly (i.e., as prices) or
indirectly (i.e., derived from prices)
Level 3: inputs for the assets or liability that are not based on observable
market data (unobservable inputs).
31 December 2009 |Level 1| Level 2| Level 3| Total
=----------------------------------+-------+---------+----------+----------
| USD| USD| USD| USD
=----------------------------------+-------+---------+----------+----------
| | | |
=----------------------------------+-------+---------+----------+----------
Equity investment held-for-trading|677,770|2,727,877|21,890,970|25,296,617
=----------------------------------+-------+---------+----------+----------
| | | |
=----------------------------------+-------+---------+----------+----------
|677,770|2,727,877|21,890,970|25,296,617
31 December 2008 | Level 1| Level 2| Level 3| Total
=---------------------------------+----------+----------+----------+-----------
| USD| USD| USD| USD
=---------------------------------+----------+----------+----------+-----------
| | | |
=---------------------------------+----------+----------+----------+-----------
Equity investment |49,630,916| | |
held-for-trading | |30,214,663|29,742,965|109,588,544
=---------------------------------+----------+----------+----------+-----------
Debt investment held-for-trading |12,957,938|18,317,488|3,045,499 |34,320,925
=---------------------------------+----------+----------+----------+-----------
| | | |
=---------------------------------+----------+----------+----------+-----------
|62,588,854|48,532,151|32,788,464|143,909,469
There have been no transfers of equity investments held at 31 December 2009 and
2008 from one level to another.
(e) Capital management
The Group is in the process of realising its investment portfolio to enable
liquidation of the Company as soon as practically possible, refer to note 1.
Contingent liabilities
Although the Company and its subsidiaries are incorporated in the BVI where tax
is exempt, the activities of the Group are primarily focused on Vietnam. In
accordance with the prevailing tax regulations in Vietnam, if an entity was
treated as having a permanent establishment, or as otherwise being engaged in a
trade or business in Vietnam, income attributable to or effectively connected
with such permanent establishment or trade or business may be subject to tax in
Vietnam. As at the date of this report the following information is uncertain:
· Whether any entity in the Group is considered as having a permanent
establishment in Vietnam;
· The amount of tax that may be payable, if the income is subject to
tax; and
· Whether tax liabilities (if any) will be applied retrospectively.
The implementation and enforcement of tax regulations in Vietnam can vary
depending on numerous factors, including the identity of the tax authority
involved. The administration of laws and regulations by government agencies may
be subject to considerable discretion, and in many areas, the legal framework is
vague, contradictory and subject to interpretation. The Directors believe that
it is unlikely that the Group will be exposed to tax liabilities in Vietnam, and
in the worse case, if tax is imposed on income arisen in Vietnam it will not be
applied retrospectively.
INDOCHINA CAPITAL VIETNAM HOLDINGS LIMITED
(Incorporated in the British Virgin Islands)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the annual general meeting of the Members of
Indochina Capital Vietnam Holdings Limited (the "Company") will be held at the
offices of Slaughter & May LLP, One Bunhill Row, London EC1Y 8YY on 12 May 2010
at 10:30am London time (the "Meeting") for the following purposes:
1. To receive and consider the audited financial statements, directors'
report and auditors' report of the Company for the year ended 31 December 2009
2. To re-elect Mr Hugues Lamotte as a director
3. To re-elect Mr Eitan Milgram as a director
4. To re-elect Mr Eric Brock as a director
5. To consider the re-appointment of KPMG Limited as auditors and to
authorise the board of directors to fix their remuneration
Yours faithfully
On Behalf of the Board
Indochina Capital Vietnam Holdings Limited
Gordon Lawson
Chairman
Ho Chi Minh City, Vietnam, 16 April 2010
Notes:
(a) In order to qualify for attending the above Meeting, all instruments
of transfers must be lodged with Capita Registrars, The Registry, 34 Beckenham
Road, Beckenham, Kent BR3 4TU, London not less than 48 hours before the time
appointed for holding the Meeting or the adjourned Meeting (as the case may be).
(b) Any member (including a body corporate) entitled to attend and vote
at the Meeting may appoint not more than two proxies to attend, speak and vote
instead of him. If more than one proxy is so appointed, the appointment shall
specify the number and class of shares in respect of which each such proxy is so
appointed. A proxy need not be a member of the Company.
(c) Any member who wish to attend the Meeting by telephone conference in
person or by proxy (or in case of a corporation, by authorized representative)
should register his/her attendance via sending the completed registration form
to quyen.d.nguyen@indochinacapital.com directly or by lodging the signed
registration form which is enclosed with this notice, with Indochina Capital
Vietnam Holdings Limited, c/o Indochina Capital Advisors Ltd, Representative
Office, Capital Place, Floor 10, 6 Thai Van Lung Street, District 1, Ho Chi Minh
City, Vietnam or by facsimile +84 8 520 2036 not less than 48 hours before the
time (Vietnam time) fixed for holding the Meeting or any adjourned meeting
thereof (as the case may be) whereupon the access code will be provided to the
member or his proxy accordingly.
(d) The instrument appointing a proxy which is enclosed with this notice
and the power of attorney or other authority, if any, under which it is signed
on behalf of the appointer, or a certified copy of such power or authority, must
be lodged with Capita Registrars, The Registry, 34 Beckenham Road, Beckenham,
Kent BR3 4TU, London not less than 48 hours before the time (Vietnam time) fixed
for holding the Meeting or any adjourned meeting thereof (as the case may be).
In case of queries please contact the helpline number 0871 664 0300 (UK) or +44
20 8639 33 99 (overseas). Calls cost 10p per minute plus network extras.
Directors' biographies
Gordon William Lawson (age 53, date of appointment 1 December 2008)
Mr. Lawson has a long record of achievement in the investment management
industry, in both developed and emerging markets. Mr. Lawson was the founder and
Chief Executive of Pendragon Capital LLP, a London based Global Event hedge
fund, from 1999 to 2006, when he retired from the company to follow personal
business and charitable interests. From 1986 to 1999 Mr. Lawson was with Salomon
Brothers / Citigroup during which time his responsibilities included the role of
Head of proprietary European equity trading for Citigroup. Mr. Lawson is
currently Chairman of The Ukraine Opportunity Trust plc. Mr. Lawson resides in
London.
Francis Finlay (age 65, date of appointment 6 February 2007)
Francis Finlay is a Director of a number of investment companies, including the
Scottish Investment Trust and SVG Capital, both listed on the London Stock
Exchange, as well as of several emerging market funds. He is also a member of
the investment committees of a number of major Endowments and serves on several
international advisory boards. Mr. Finlay co-founded the New York- based
international investment firm Clay Finlay in 1982 and led it until 2006, having
previously held senior international investment management positions with
Morgan Guaranty Trust in New York and Lazard Freres in New York and Paris.
Educated at Oxford University, where he is an Honorary Fellow of Merton College,
Mr. Finlay is a Chartered Financial Analyst and also served as an Adjunct
Professor at Columbia University Graduate School of Business 1981-1986. He is
currently a Trustee of the British Museum, a Governor of the London Business
School and Co-Chairman of the EastWest Institute in New York.
Hugues Lamotte (age 67, date of appointment 6 February 2007)
Hugues Lamotte is Chairman of Atlas Capital Ltd, an investment management firm
which is the holding company of the Atlas Group and currently manages
approximately $4 billion on behalf of large international institutions and
wealthy private individuals. Mr. Lamotte founded the Atlas Group in 1993. The
Atlas Group has its main office in London and also maintains offices in New
York, Nassau, Guernsey and Rome. Prior to founding the Atlas Group, from 1974 to
1993, Mr. Lamotte was a managing director of Schroder Wertheim & Co. Inc., in
which capacity he was in charge of the international department and advised
numerous European institutions on the management of their assets and their
global allocation.
Mr. Lamotte is a director of a number of investment companies, including many of
the Funds managed by the Atlas Group, as well as the Alexandra Fund, a
multi-strategy fund with approximately $1.5 billion of assets under management,
and the Recap International Fund, a distressed securities fund with
approximately $300 million of assets under management. Mr. Lamotte received a
MBA from the Ecole Supèrieure de Commerce de Paris in 1965. Mr. Lamotte resides
in Verbier, Switzerland.
Eric A. Brock (age 39, date of appointment 27 May 2009)
Eric A Brock is a partner and portfolio manager at Clough Capital Partners, LP,
a Boston based investment advisor he helped found in 2000. Prior to founding
Clough Capital Partners, Mr Brock spent more than 15 years in equity research,
investment banking and accounting in a broad array of industries. He began his
career as an accountant with Ernst & Young and also spent several years as a
leveraged finance investment banker with Bear Stearns & Co. Clough Capital
currently holds 183,394 ordinary shares in the Company, representing 2.6 per
cent. of the issued share capital. Mr. Brock resides in Boston.
Eitan Milgram (age 30, date of appointment 27 May 2009)
Eitan Milgram has worked at Weiss Capital LLC since April 2000 as Portfolio
Manager, Head of Trading and Head of Operations and is currently Executive Vice
President of Weiss Capital. He has served on the board of directors of seven
publicly traded corporations, including Investec European Growth and Income,
Morley Absolute Growth and Premier Asian Asset Trust and has advised numerous
corporations on reorganisations and restructurings. Funds managed by Weiss
Capital currently hold 11,034,687 ordinary shares in the Company, representing
24.2 per cent. of the issued share capital. Mr. Milgram resides in Boston.
Miles Q. Morland (age 65, date of resignation 27 May 2009)
Miles Q. Morland started a new company of which he is Chairman, Development
Partners International, to do private equity in Africa in 2007. Before that he
founded Blakeney Management, of which he remains non-executive Chairman, in
1990. Blakeney was one of the pioneers of investment in many of the stock
markets in Africa and the Middle East. Blakeney today manages over $2 billion on
behalf of a number of long-term oriented investment institutions. It is one of
the largest foreign portfolio investors in sub-Saharan Africa and a number of
markets in the Arab world. Before starting Blakeney, Mr. Morland spent 22 years
in money management and investment banking in London and on Wall Street. He is a
present or past director of SABMiller plc, the Dubai Group, and several emerging
market funds. Until recently he was Chair of the London Business School's Africa
Advisory Board, a position he held for five years. Mr. Morland attended Oxford
University in England from 1962 to 1965. Mr. Morland resides in London.
Peter R. Ryder (age 55, date of resignation 11 May 2009)
Peter R. Ryder was formerly co-Chief Investment Officer of the Manager. He
stepped down from this position during the first half in 2008 in order to devote
more time to his other responsibilities within Indochina Capital. Mr. Ryder
founded Indochina Capital in 1999 with Richmond Mayo-Smith III. Mr. Ryder
presently serves as Chief Executive Officer of Indochina Capital Indochina Land.
He is also Co-Chairman of Indochina Capital's board of directors. For nearly
nine years, Mr. Ryder has played an active management role in nearly all aspects
of Indochina Capital's business.
Prior to forming Indochina Capital, from 1992 to 1995 and 1995 to 1998, Mr.
Ryder was a partner in, and managed the Vietnamese investment activities of, two
US-incorporated companies, Manolis & Company Asia Ltd and Lukemax Company
Limited. From 1983 to 1991, Mr. Ryder worked in various capacities at Salomon
Brothers Inc. in Tokyo and New York, including as director and manager of the
Global Real Estate Sales Group. Mr. Ryder received a Masters of Arts degree in
Anthropology from the University of Pennsylvania in 1983 and a Bachelor of Arts
degree in Anthropology from Beloit College in 1977. Mr. Ryder resides in Hanoi,
Vietnam.
For further information, please contact:
Arbuthnot Securities Tel:
+44 20 7012 2000
Alastair Moreton / Hannah Pearce
Indochina Capital Advisors (Investment Manager) Tel: +84 8 3520 2002
Rick Mayo-Smith, CEO Equities
Ordinary Shares - Listing Category: Standard - Equity
End of Announcement
[HUG#1404388]
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