Annual Financial Report

RNS Number : 8510C

Vietnam Enterprise Investments Ltd

20 April 2017

Vietnam Enterprise Investments Limited

Annual Report and Financial Statements for the year ended 31 December 2016

INVESTMENT MANAGER'S REPORT

FUND PERFORMANCE

VEIL, rising 22.98% in 2016, outperformed the VN Index by 5.7%, despite a flurry of market-boosting new listings and the outlier performance of index heavyweights Faros ("ROS", +791.7%, 3.3% of VN Index) and Sabeco (+51.5%, 8.5% of VN Index). This was VEIL's best relative performance against the VN Index in the last five years and was mainly attributable to the outsized gains by its materials sector holdings (+70.1%). The transportation and food & beverage sectors were also significant contributors, as discussed in detail later in this report.

Market performance and development

The market as a whole also had a remarkable year, with historic highs and no less dramatic lows. The VN Index rose 17.1%, thanks in part to the new Government's two-pronged approach to developing the capital market by: (1) pushing big-ticket IPOs/privatisations to increase the market size, and (2) lifting FOL to increase market accessibility.

The new Government signalled that the next five-year term would be action oriented, with capital market development at the top of its agenda. Progress with this is already visible. As an example, Vissan, a top player in meat processing, had a very successful IPO that was won by Masan, a strategic investor that was willing to pay a price that implied a 2016 PER of 76. The listing of other names like Novaland, Sabeco, Habeco and ACV catapulted the market capitalisation of all three exchanges from US$60.6bn to US$86bn in just one year, a rise of 42%.

The effectiveness of the Government's FOL-raising decree was initially doubted - until Vinamilk completely removed its limit. The highly sought-after Military Bank then lifted its FOL from 10% to 20%. And Everpia, a bedding products manufacturer, became the first non-brokerage company to lift its FOL to 100%. We expect many more companies to follow suit in 2017.

There were a couple of events during the course of the year that caused the market to stumble. But the negative effects of Brexit and the US presidential election proved to be short-lived. The market also experienced its first year of net foreign selling since records began in 2006. This is a bad headline for sure, but not a signal of capital flight from Vietnam's equity market, as: (1) 92% of the outflow was concentrated in a single stock (Vingroup) as a result of dumping from a CB conversion; and (2) a significant portion of capital inflow (approximately US$950m) went into IPOs/Privatisations but was not counted as part of foreign flow calculations even if the companies were listed soon thereafter.

In addition, the VN Index performance was skewed by one company, Faros, a wildly overvalued contractor that rose 792% in four months to hit a 3.3% index weight, accounting for 20% of the VN Index's entire annual 2016 gain (3.5% of the 17.1% gain). This caused complications for investors who compare their returns to the VN Index.

Attribution analysis

The investments in the Portfolio are spread over more than 10 industries, all in Vietnam. As such, the Portfolio faces single-country risk. Security allocations are over- or underweighted vs. the benchmark based on a bottom-up process, which generally results in the selection of industry/sector leaders that have good corporate governance and trade at compelling discounts to intrinsic value. VEIL also had sizeable exposure (19.95% of NAV) to non-benchmark holdings including pre-listings and OTC-traded companies, as well as companies traded on other exchanges such as HNX and UPCoM. A complete listing of sector contributions to VEIL's performance can be seen below.

The materials sector was the top contributor (6.4%) to the VEIL's performance in 2016, with the Fund's holdings in sector leaders Hoa Sen Group (+155.9%) and Hoa Phat Group (+72.8%) rising on very good earnings resulting from strong sales volume growth and increased market shares. Hoa Sen Group had sales of VND17,894bn (+2.6%) and net earnings of VND1,504bn (+130.4%), while Hoa Phat Group achieved sales of VND33,283bn (+21.2%) and net earnings of VND6,606bn (+88.5%). Sales volumes grew on high market demand, which registered its fastest growth since 2007 thanks to the positive performance of the property market and exports. Profitability benefited from increased margins resulting from rising prices as a result of the imposition of import duties on Chinese steel.

The food and beverage sector was the second-biggest contributor (5.7%) to the Fund's performance. The key representative in this sector was also the Fund's biggest holding, Vinamilk, which raised its foreign ownership limit to 100% during the year. The State Capital Investment Corporation ("SCIC") sold 60% of its 9% of the company that it had targeted to sell. Although the SCIC did not succeed in selling its entire stake, it was nonetheless encouraging to see the State reducing its ownership in the company. Fundamentally, Vinamilk maintained its strong business performance with net sales of VND46,794bn, (+16.8%) and net earnings of VND9,350bn (+20.3%). We are, however, concerned about its 2017 earnings growth as the gross margin will be hit by the recent significant increase in the raw material price. This is the main reason why VEIL has been reducing its position in Vinamilk and re-investing the proceeds into more compelling opportunities.

Beverage company Sabeco is a recent acquisition of the Fund in the food and beverage sector. Given its leading position in the beer industry, solid business results, and mega-weight in VN Index, Sabeco is an alternative Vinamilk in order to diversify the portfolio. The stock did well (+33.9%) after listing on the HSX on 6 December 2016, however, the underweight position in Sabeco had a negative impact the Fund's performance.

The third-largest contributor to VEIL's return (4.4%) was the transportation sector. VEIL's holdings here increased by 178.6% while the VN Index's transport components actually decreased by 0.1%. VEIL's gain was mainly due to ACV, which rose 86.4% since it started trading on the UPCoM on 21 November 2016. Since the Fund bought ACV in December 2014 at an average price of VND13,350, the stock has gained 264%. ACV'S 2016 operating results were also strong, with an estimated net revenue of VND16,595bn (+26%) and net earnings of VND3,384bn (+56%). The company was also estimated to have served 80.9 million passengers during the year (+28%), of which 23.8 million were international passengers (+25%) and 57.1 million domestic passengers (+30%).

Still in the transport sector, in December 2016, VEIL participated in the pre-IPO and IPO of Vietjet Air, the leading low-cost-carrier and the second-largest airline in Vietnam with a 41.4% market share. The IPO was oversubscribed, attracting interest from many big institutional players such as the Government of Singapore Investment Corporation (GIC) and Morgan Stanley, as well as from retail investors. Vietjet Air was recently approved to list 300m shares on the HSX with the ticker VJC. The company also announced strong 2016 operating results, with total revenue of VND27,532bn (+39%) and profit before tax of VND2,395bn (+105%). ACV and Vietjet Air are two typical examples of undervalued IPO stocks that VEIL was able to acquire due to its local presence and expertise. The Fund will continue to pursue this strategy and hopes to achieve similar results from upcoming IPO listings.

On the negative side, the banking sector, which fell by 6.5%, dragged down VEIL's performance by 1.3%. We attribute the poor performance of the sector to the following reasons: Firstly, as the sector is undergoing restructuring, 2016 was the year that many banks had to book very high provisions for NPLs. Secondly, the banks were facing pressure from Basel II to recapitalise. When banks apply Basel II, the CARs of the system will be lowered. Thus, the outlook for credit growth is restrained by the banks' ability to raise capital to meet Basel II standards. In addition, the search for strategic partners by various banks in 2016 was not successful. And thirdly, expectations of a lifting of bank FOLs went unfulfilled, with FOLs for the sector remaining unchanged at 30%. Nevertheless, the Fund's banking stocks outperformed the market by 3.5% thanks to the selection of top names in the sector, i.e. Vietcombank, ACB and Military Bank.

Sector return and contribution
Sector	Portfolio return	VN Index return	Portfolio contribution
	%	%	%
Materials & Resources	70.07	37.01	6.43
F & B	25.98	27.34	5.71
Transportation	178.57	-0.07	4.42
Real Estate	14.74	10.22	2.39
Pharmaceuticals	123.51	63.90	1.96
Energy	39.34	64.37	1.94
Retail	83.21	55.86	1.41
Capital Goods	16.80	125.86	0.89
Software & Services	7.51	8.15	0.42
Banks	-6.52	-10.03	-1.32

Outlook

Vietnam's 2017 market outlook looks bright, thanks to: (a) accelerated SOE reform via IPOs and State divestment of companies such as Satra Group, Petrolimex, Ben Thanh Group, Sawaco, etc. The Government also remains determined to shorten the time between listings and IPOs via a circular that went into effect from 1 November 2016 requiring SOEs to start trading on UPCoM within 20 working days of the investor deadline for submission of payment; (b) strong earnings growth, especially from some domestic-focused large-cap companies with good fundamentals; (c) the continued relaxation of foreign ownership limits, supported by a new proposal to revise the current Law on Securities to limit the reference to international commitments to WTO only. This would take away the company's right to decide its FOL. In other words, if the company works in a sector in which 100% foreign ownership is allowed, then the FOL for that company is 100%, and the company cannot set it lower. Even some sectors which are restricted by WTO commitments about FOLs, especially banks (FOL of 30%), the Government is considering raising the FOL.

Thus, VEIL's main strategy for 2017 is to participate in new IPOs, private placements, pre-listings and State divestments. The majority of VEIL's portfolio is still in listed Top-70 "blue chip" companies, with market caps generally down to a cut-off of US$200m. But we are also expanding our coverage into "medium-cap" names in the US$50-200m zone, where liquidity requirements are less emphasised, in favour of significant upside prospects based on deep research. Finally, we hope to create more value for our investees by advising them on actions they can take to enhance their company value, including: strategy building, capital structure, corporate governance, investor relations, etc.

Vu Huu Dien

Investment Manager

Vietnam Enterprise Investments Limited

20 April 2017

REPORT OF THE BOARD OF DIRECTORS

The Directors of Vietnam Enterprise Investments Limited (the "Company") present their report and the audited financial statements of the Company for the year ended 31 December 2016.

PRINCIPAL ACTIVITY

The Company is an investment holding company incorporated as an exempted company with limited liability in the Cayman Islands on 20 April 1995. The shares of the Company have been listed on the Main market of the London Stock Exchange since 5 July 2016 (until 4 July 2016: listed on the Irish Stock Exchange). The principal activity of the Company is investing directly or indirectly in a diversified portfolio of listed and unlisted securities in Vietnam.

RESULTS AND DIVIDENDS

The Company's profit for the year ended 31 December 2016 and its financial position at that date are set out in the attached financial statements. The Directors have taken the decision not to pay a dividend in respect of the year ended 31 December 2016 (2015: Nil).

SHARE CAPITAL

In accordance with the Company's Restated and Amended Memorandum and Articles of Association (the "Articles") dated 21 June 2016, all issued Redeemable Shares of the Company have become Ordinary Shares. There were no movements in the Company's share capital during the year (Note 7). As at 31 December 2016, the Company had 220,920,746 Ordinary Shares and 1,000 Management Shares outstanding (31 December 2015: 220,920,746 Redeemable Shares and 1,000 Management Shares).

DIRECTORS

The Directors of the Company during the year were:

· Wolfgang Bertelsmeier Chairman

· Stanley Chou Senior Independent Non-Executive Director

· Marc Faber Independent Non-Executive Director

· Derek Loh Independent Non-Executive Director

· Gordon Lawson Independent Non-Executive Director

· Dominic Scriven Non-Executive Director

In accordance with Article 91 of the Articles, the Independent and Non-independent Non-executive Directors are required to submit themselves for re-election at the next occurring Annual General Meeting ("AGM"). All the Independent Non-executive Directors were duly re-appointed at the AGM held on 7 December 2016 following the expiry of their respective term. Dominic Scriven also submitted himself for re-election, even though the Articles does not explicitly require him to stand for election, and was duly re-appointed. Susie Rippingall and Farida Khambata resigned on 26 January 2016. Marc Faber and Stanley Chou were newly appointed as the Independent Non-executive Directors on 26 January 2016.

DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES

At no time during the year was the Company a party to any arrangement to enable the Company's Directors or their respective spouses or minor children to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS' INTERESTS IN SHARES

Dominic Scriven has indirect interests in the share capital of the Company as he is a shareholder of Dragon Capital Group Limited, the parent company of Dragon Capital Limited which holds the Management Shares of the Company. Dragon Capital Group Limited is also the ultimate parent company of Enterprise Investment Management Limited, the Investment Manager of the Company and Dragon Capital Markets Limited. As at 31 December 2016, Dragon Capital Markets Limited beneficially held 3,700,359 Ordinary Shares of the Company for investment and proprietary trading purposes (31 December 2015: 7,177,433 Redeemable Shares). Gordon Lawson, a Director of the Company, is a beneficial shareholder of the Company, holding 25,000 Ordinary Shares of the Company as at 31 December 2016 (31 December 2015: Nil).

Apart from the above, no other Director had a direct or indirect interest in the share capital of the Company, or its underlying investments at the end of the year, or at any time during the year.

DIRECTORS' INTERESTS IN CONTRACTS

Dominic Scriven has indirect interests in the investment management agreement between the Company and Enterprise Investment Management Limited where he is a Director. There were no further contracts of significance in relation to the Company's business in which a Director of the Company had a material interest, whether directly or indirectly, at the end of the year or at any time during the year.

SUBSTANTIAL SHAREHOLDERS

As at 31 December 2016, the Company's register of shareholders showed that the following shareholders held more than a 10% interest in the issued Ordinary Share capital of the Company.

Registered shareholders	Number of Ordinary Shares held	% of total Ordinary Shares in issue
Computershare Investor Services PLC (*)	220,920,746	100%
In which:
• Bill & Melinda Gates Foundation Trust	25,049,173	11.34%

(*) On 17 June 2016, the Company appointed Computershare Investor Services PLC to act as depositary in respect of a facility for the issue of depositary interest representing the Company's Ordinary Shares.

SUBSEQUENT EVENTS

Details of the significant subsequent events of the Company are set out in Note 13 to the financial statements.

AUDITORS

KPMG Limited, Vietnam

DIRECTORS' RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS

The Board of Directors is responsible for ensuring that the financial statements of the Company are properly drawn up so as to give a true and fair view of the financial position of the Company as at 31 December 2016 and of its financial performance and its cash flows for the year then ended. When preparing these financial statements, the Board of Directors is required to:

· adopt appropriate accounting policies which are supported by reasonable and prudent judgments and estimates and then apply them consistently;

· comply with the requirements of International Financial Reporting Standards ("IFRSs") or, if there have been any departures in the interest of true and fair presentation, ensure that these have been appropriately disclosed, explained and quantified in the financial statements;

· maintain adequate accounting records and an effective system of internal controls;

· prepare the financial statements on a going concern basis unless it is inappropriate to assume that the Company will continue its operations in the foreseeable future; and

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

The Board of Directors is also responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the financial position of the Company. It is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors confirm to the best of their knowledge that:

· the financial statements have been prepared in conformity with IFRS and give a true and fair view of the assets, liabilities, financial position and profit of the Company, and the undertakings included in the financial statements taken as a whole as required by the United Kingdom Listing Authority Disclosure and Transparency Rules ("DTR") 4.1.12R and are in compliance with the requirements set out in the Companies Law;

· the financial statements include a fair review of the information required by DTR 4.1.8R and DTR 4.1.11R, which provide an indication of important events and a description of principal risks and uncertainties during the year;

· the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

The Board of Directors confirms that they have complied with the above requirements in preparing the financial statements.

APPROVAL OF THE FINANCIAL STATEMENTS

The Board of Directors hereby approves the accompanying financial statements which give a true and fair view of the financial position of the Company as of 31 December 2016, and of its financial performance and its cash flows for the year then ended in accordance with IFRSs.

By Order of the Board

Dominic Scriven, OBE

Director

Vietnam Enterprise Investments Limited

20 April 2017

CONDENSED FINANCIAL STATEMENTS

Audited statement of financial position as at 31 December 2016

	Note	31 December 2016	31 December 2015	Change
		US$	US$	in %

CURRENT ASSETS
Financial assets at fair value through profit or loss	5	995,759,344	804,732,800
Other receivables		436,608	346,223
Balance due from brokers		720,731	-
Cash and cash equivalents		19,837,882	15,174,526

		1,016,754,565	820,253,549	23.96

CURRENT LIABILITIES
Borrowings	6	40,000,000	20,000,000
Accounts payable and accruals		1,951,794	1,536,018
Balances due to brokers		-	6,064,653

		41,951,794	27,600,671	52.00
NET ASSETS		974,802,771	792,652,878	22.98

EQUITY
Issued share capital	7	2,209,217	2,209,217
Share premium	7	563,283,425	563,283,425
Retained earnings		409,310,129	227,160,236

TOTAL EQUITY		974,802,771	792,652,878	22.98

NUMBER OF ORDINARY/REDEEMABLE SHARES IN ISSUE	8	220,920,746	220,920,746	0.00

NET ASSET VALUE PER ORDINARY/REDEEMABLE SHARE	8	4.41	3.59	22.84

Audited statement of profit or loss and other comprehensive income for the year ended 31 December 2016

	Note	2016	2015
		US$	US$

INCOME
Bank interest income		47,210	101,805
Dividend income		7,582,111	6,925,393
Net changes in fair value of financial assets at fair value through profit or loss	5	162,976,600	(5,794,940)
Gains on disposals of investments		33,038,858	33,581,701
Other income		736,650	9,444

TOTAL INCOME		204,381,429	34,823,403

EXPENSES
Administration fees	9	(967,680)	(460,545)
Custodian fees	9	(590,575)	(347,585)
Directors' fees	9	(176,712)	(155,000)
Management fees	9	(17,759,320)	(10,319,816)
Withholding taxes		(24,144)	(5,838)
Legal and professional fees	9	(1,610,626)	(296,649)
Other operating expenses		(983,281)	(650,184)

TOTAL EXPENSES		(22,112,338)	(12,235,617)
NET PROFIT BEFORE EXCHANGE LOSSES		182,269,091	22,587,786
EXCHANGE LOSSES
Net foreign exchange losses		(119,198)	(333,596)
PROFIT BEFORE TAX		182,149,893	22,254,190
Income tax	10	-	-

NET PROFIT AFTER TAX FOR THE YEAR		182,149,893	22,254,190
OTHER COMPREHENSIVE INCOME FOR THE YEAR		-	-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR		182,149,893	22,254,190

TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO ORDINARY/REDEEMABLE SHAREHOLDERS		182,149,893	22,254,190

BASIC EARNINGS PER ORDINARY/REDEEMABLE SHARE	11	0.82	0.15

Audited statement of changes in net assets attributable to holders of Ordinary/Redeemable Shares for the year ended 31 December 2016


	Issued share capital	Share premium	Retained earnings	Total
	US$	US$	US$	US$
Balance at 1 January 2015	1,509,110	306,547,207	204,906,046	512,962,363
Total comprehensive income for the year:
Net profit for the year	-	-	22,254,190	22,254,190
Transactions with shareholders, recognised directly in equity:
Issuance of Redeemable Shares as a result of the Merger (Note 7)	775,981	277,950,958	-	278,726,939
Repurchase of Redeemable Shares	(75,874)	(21,214,740)	-	(21,290,614)

Balance at 1 January 2016	2,209,217	563,283,425	227,160,236	792,652,878

Total comprehensive income for the year:
Net profit for the year	-	-	182,149,893	182,149,893

Balance at 31 December 2016	2,209,217	563,283,425	409,310,129	974,802,771

Audited statement of cash flow for the year ended 31 December 2016

	Note	2016	2015
		US$	US$

CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year		182,149,893	22,254,190
Adjustments for:
Bank interest income		(47,210)	(101,805)
Dividend income		(7,582,111)	(6,925,393)
Net changes in fair value of financial assets at fair value through profit or loss		(162,976,600)	5,794,940
Gains on disposals of investments		(33,038,858)	(33,581,701)

		(21,494,886)	(12,559,769)

Net cash flow from/(to) subsidiaries carried at fair value		50,962,362	(14,302,551)
Changes in other receivables		(1,431,346)	-
Changes in balances due to brokers and accounts payable and accruals		(5,648,877)	4,677,529

		22,387,253	(22,184,791)
Proceeds from disposals of investments		80,210,782	122,985,058
Purchases of investments		(126,184,230)	(93,642,076)
Bank interest income received		8,202,341	101,805
Dividends received		47,210	6,715,619

Net cash generated from/(used in) operating activities		(15,336,644)	13,975,615

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		20,000,000	20,000,000
Repurchase of Redeemable Shares		-	(21,579,454)

Net cash used in financing activities		20,000,000	(1,579,454)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		4,663,356	12,396,161
Cash and cash equivalents at the beginning of the year		15,174,526	2,778,365

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		19,837,882	15,174,526

Notes to the financial statements for the year ended 31 December 2016

1. THE COMPANY

Vietnam Enterprise Investments Limited (the "Company") is a closed-end investment fund incorporated as an exempted company with limited liability in the Cayman Islands on 20 April 1995. It commenced operations on 11 August 1995, the date on which the initial subscription proceeds were received.

The investment objective of the Company is to invest directly or indirectly in publicly or privately issued securities of companies, projects and enterprises issued by Vietnamese entities, whether inside or outside Vietnam.

The Company's Ordinary shares have been listed on the Main Market of the London Stock Exchange since 5 July 2016 (until 4 Jul 2016: Redeemable shares were listed on the Irish Stock Exchange). The Company is established for an unlimited duration. Refer to Note 13 for subsequent events.

The Company had the following investments in subsidiaries and joint operation as at 31 December 2016, for the purpose of investment holding:

Subsidiaries and joint operation	Country of incorporation	Principal activities	% Ownership

Grinling International Limited	British Virgin Islands	Investment holding	100%
Wareham Group Limited	British Virgin Islands	Investment holding	100%
Goldchurch Limited	British Virgin Islands	Investment holding	100%
VEIL Holdings Limited	British Virgin Islands	Investment holding	100%
Venner Group Limited	British Virgin Islands	Investment holding	100%
Dragon Financial Holdings Limited	British Virgin Islands	Investment holding	90%
Rickmansworth Limited	British Virgin Islands	Investment holding	100%
Geffen Limited	British Virgin Islands	Investment holding	100%
VEIL Cement Limited	British Virgin Islands	Investment holding	100%
VEIL Estates Limited	British Virgin Islands	Investment holding	100%
VEIL Industries Limited	British Virgin Islands	Investment holding	100%
VEIL Infrastructure Limited	British Virgin Islands	Investment holding	100%
VEIL Paper Limited	British Virgin Islands	Investment holding	100%
Amersham Industries Limited	British Virgin Islands	Investment holding	100%
Balestrand Limited	British Virgin Islands	Investment holding	100%

As at 31 December 2016 and 31 December 2015, the Company had no employees.

2. BASIS OF PREPARATION

(a) Statement of compliance

The Company's financial statements as at and for the year ended 31 December 2016 have been prepared in accordance with International Financial Reporting Standards ("IFRSs").

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis, except for financial instruments classified as financial assets at fair value through profit or loss which are measured at fair value.

The financial statements are presented in United States Dollar ("US$"), which is the Company's functional currency.

(d) Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have significant effect on the amounts recognised in the financial statements are discussed as follows:

Assessment as investment entity

Entities that meet the definition of an investment entity within IFRS 10 - Consolidated Financial Statements are required to account for investments in controlled entities, as well as investments in associates and joint ventures, at fair value through profit and loss. Subsidiaries that provide investment related services or engage in permitted investment related activities with investees continue to be consolidated unless they are also investment entities.

The criteria which define an investment entity are currently as follows:

- An entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

- An entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

- An entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Board of Directors has made an assessment and concluded that the Company meets the above listed criteria of an investment entity. The investment objective of the Company is to provide shareholders with attractive capital returns by investing directly or indirectly through its subsidiaries in a diversified portfolio of listed and unlisted securities in Vietnam. The Company has always measured its investment portfolio at fair value. The exit strategy for all investments held by the Company and its subsidiaries is assessed regularly, documented and submitted to the Investment Committee for approval.

The Company also meets the additional characteristics of an investment entity, in that it has more than one investment; the investments are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties. The Board has concluded that the Company therefore meets the definition of an investment entity. These conclusions will be reassessed on an annual basis for changes in any of these criteria or characteristics.

Fair value of financial instruments

The most significant estimates relate to the fair valuation of each subsidiary and the fair valuation of financial instruments with significant unobservable inputs in their underlying investment portfolio.

The Board has assessed the fair valuation of each subsidiary to be equal to its net asset value at the reporting date, and the primary constituent of net asset value across subsidiaries is their underlying investment portfolio.

Within the underlying investment portfolio, the fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Board uses its judgments to select a variety of valuation methods and make assumptions that are mainly based on market conditions existing at each reporting date.

Impairment of receivables

The Directors determine the allowance for impairment of receivables on a regular basis. This estimate is based on the Directors' review of each individual account balance taking into account the credit history of the debtors and prevailing market conditions.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates are revised and in any future period affected.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies have been applied consistently to all periods presented in these financial statements.

(a) Financial assets and financial liabilities

(i) Classification

The Company classifies financial assets and financial liabilities into the following categories:

Financial assets at fair value through profit or loss

- Designated at fair value through profit or loss - equity and debt investments.

Financial assets at amortised cost

- Loans and receivables - cash and cash equivalents, balance due from brokers and other receivables.

Financial liabilities at amortised cost

- Other liabilities - borrowings, accounts payables and accruals, and balances due to brokers.

(ii) Recognition

The Company initially recognises financial assets and financial liabilities measured at amortised cost on the date at which they are originated. All other financial assets and liabilities are initially recognised on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities at fair value through profit or loss are recognised initially at fair value, with transaction costs recognised in profit or loss as incurred. All other financial assets or financial liabilities are recognised initially at fair value plus transaction costs that are directly attributable to their acquisition or issue.

(iii) Measurement

Non-derivative financial assets

- Financial assets at fair value through profit or loss

A financial asset is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein, including any interest or dividend income, are recognised in profit or loss.

- Loans and receivables

These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method.

Non-derivative financial liability

Non-derivative financial liabilities are initially measured at fair value less any directly attribute transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

(iv) Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control of the financial asset. Any interest in such transferred financial assets that is created or retained by the Company is recognised as a separate asset.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised), and the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

(v) Offsetting

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis for gains and losses from financial instruments at fair value through profit or loss and foreign exchange gains and losses.

(vi) Amortised cost measurement

The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment.

(vii) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date.

When available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as 'active' if transactions for the assets or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company measures instruments quoted in an active market at the current bid price.

If there is no quoted price in an active market, then the Company uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The fair value of listed investments is determined based on quoted market prices on a recognised exchange or sourced from a reputable broker or counterparty in the case of non-exchange traded instruments at the reporting date without any deduction from estimated selling costs. Unlisted investments for which an active over-the-counter ("OTC") market exists are stated at fair value based upon the average price quotations received from two independent brokers. Where no quotes or insufficient quotes are available, the Board of Directors will decide the appropriate method(s) for the estimation of fair value of the relevant asset(s). The Board of Directors will take into account all factors they consider relevant, which may include valuation methodologies where appropriate.

(viii) Impairment

At each reporting date, the Company assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. A financial asset or a group of financial asset(s) is (are) impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset(s), and that the loss event has an impact on the future cash flows of the asset(s) that can be estimated reliably.

Objective evidence that financial assets are impaired includes significant financial difficulty of the borrower or issuer, default or delinquency by a borrower, restructuring of amount due on terms that the Company would not consider otherwise, indications that a borrower or issuer will enter bankruptcy, adverse changes in the payments status of the borrowers or issuers, or observable data indicating that there is a measurable decrease in the expected cash flows from a company of financial assets.

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 asset's original effective interest rate. Impairment losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on impaired assets continues to be recognised. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

The Company writes off financial assets carried at amortised cost when they are determined to be uncollectible.

(b) Share capital

Issuance of share capital

Management Shares and Ordinary/Redeemable Shares are classified as equity. The difference between the issued price and the par value of the shares less any incremental costs directly attributable to the issuance of shares is credited to share premium.

Repurchase of Ordinary/Redeemable Shares

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Par value of repurchased shares is presented as deductions from share capital and the excess over par value of repurchased shares is presented as deductions from share premium. When repurchased shares are sold or reissued subsequently, the amount received is recognised as an increase in share capital and share premium similar with issuance of share capital.

Net changes in fair value of financial assets at fair value through profit or loss include all realised and unrealised fair value changes.

Net realised gain/loss from financial assets at fair value through profit or loss is calculated using the weighted average cost of the investments.

(d) Basic earnings per share and Net Asset Value per share

The Company presents basic earnings per share ("EPS") for its Ordinary/Redeemable Shares. Basic EPS is calculated by dividing net profit attributable to the Ordinary/ Redeemable Shareholders by the weighted average number of Ordinary/Redeemable Shares outstanding during the year. The Company did not have potentially dilutive shares as of 31 December 2016 and 31 December 2015.

NAV per share is calculated by dividing the NAV attributable to the Ordinary/Redeemable Shareholders by the number of outstanding Ordinary/Redeemable Shares as at the reporting date. NAV is determined as total assets less total liabilities. Where Ordinary/Redeemable Shares have been repurchased, NAV per share is calculated based on the assumption that those repurchased Ordinary/Redeemable Shares have been cancelled.

(e) Related parties

A party is considered to be related to the Company if:

a) The party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is under common control with, the Company; (ii) has an interest in the Company that gives it significant influence over the Company, or (iii) has joint control over the Company;

b) The party is an associate;

c) The party is a jointly controlled entity;

d) The party is a member of the key management personnel of the Company;

e) The party is a close member of the family of any individual referred to in (a) or (d);

f) The party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or

g) The party is a post-employment benefit plan for the benefit of the employees of the Company, or of any entity that is related party of the Company.

Other investment companies/funds under the management of Dragon Capital Management Limited, the parent company of the Investment Manager, or entities of Dragon Capital Group Limited (including Ho Chi Minh City Securities Cooperation ("HSC") and VietFund Management ("VFM") and its funds under management) are also considered related parties to the Company.

4. TRANSACTIONS WITH RELATED PARTIES

Dominic Scriven has indirect interests in the share capital of the Company as he is a shareholder of Dragon Capital Group Limited, which is the parent company of Dragon Capital Limited which holds the Management Shares of the Company. Dragon Capital Group Limited is also the ultimate parent company of Enterprise Investment Management Limited, the Investment Manager of the Company and Dragon Capital Markets Limited. As at 31 December 2016, Dragon Capital Markets Limited beneficially held 3,700,359 Ordinary Shares of the Company for investment and proprietary trading purposes (31 December 2015: 7,177,433 Redeemable Shares). Gordon Lawson, a Director of the Company, is a beneficial shareholder of the Company, holding 25,000 Ordinary Shares of the Company as at 31 December 2016 (31 December 2015: Nil).

During the year, the Directors, with exception of Dominic Scriven, earned US$176,712 (2015: US$155,000) for their participation on the Board of Directors of the Company.

During the year, total broker fees paid to HSC - an associate of Dragon Capital Group Limited and one of the securities brokers of the Company and its subsidiaries - amounted to US$184,154 (2015: US$131,211). As at 31 December 2016, there was no broker fee payable to this broker (31 December 2015: US$2,573).

During the year, total trading amount dealt on the Company's behalf by VFM - a subsidiary of Dragon Capital Group Limited and its subsidiaries - amounted to US$17,369,503 (2015: Nil). As at 31 December 2016, there was no payable amount to this party (31 December 2015: Nil).

5. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

	31 December 2016	31 December 2015
	US$	US$

Directly held investments (a)	329,143,330	227,918,319
Investments in subsidiaries (b)	666,616,014	576,814,481

	995,759,344	804,732,800

(a) The cost and carrying value of directly held listed and unlisted investments of the Company were as follows:

	31 December 2016	31 December 2015
	US$	US$
Listed investments
Investments, at cost	222,858,809	150,403,297
Unrealised gains	96,205,034	75,180,132

At carrying value	319,063,843	225,583,429

Unlisted investments
Investments, at cost	12,392,183	5,835,389
Unrealised losses	(2,312,696)	(3,500,499)

At carrying value	10,079,487	2,334,890
	329,143,330	227,918,319

Movements of investments directly held by the Company during the year were as follows:

	31 December 2016	31 December 2015
	US$	US$

Opening balance	227,918,319	249,399,837
Purchases	126,184,230	93,642,076
Sales	(47,171,924)	(89,403,357)
Unrealised gains/(losses)	22,212,705	(25,720,237)

Closing balance	329,143,330	227,918,319

(b) Investments in subsidiaries are fair valued at the subsidiary's net asset value with the significant part being attributable to the underlying investment portfolio. The underlying investment portfolio is valued under the same methodology as directly held investments of the Company, with any other assets or liabilities within subsidiaries fair valued in accordance with the Company's accounting policies. All cash flows to/from subsidiaries are treated as a reduction/increase in the fair value of the subsidiary.

The net asset of the Company's subsidiaries comprised:

	31 December 2016	31 December 2015
	US$	US$

Cash and cash equivalents	31,817,639	11,110,242
Financial assets at fair value through profit or loss (c)	662,690,197	567,536,076
Other receivables	4,243,009	778,313
Balances due from brokers	-	1,437,052

Total assets	698,750,845	580,861,683

Balance due to brokers	(32,134,831)	(4,047,202)

Total liabilities	(32,134,831)	(4,047,202)
Net asset	666,616,014	576,814,481

Movements in the carrying value of investments in subsidiaries during the year were as follows:

	31 December 2016	31 December 2015
	US$	US$

Opening balance	576,814,481	263,937,734
Net cash flows (from)/to subsidiaries	(50,962,362)	14,302,551
Transfer from VGF as a result of the Merger (see Note 7)	-	278,648,899
Fair value movements on investment entity subsidiaries	140,763,895	19,925,297

Closing balance	666,616,014	576,814,481

(c) The cost and carrying value of underlying financial assets at FVTPL held by the Company's subsidiaries were as follows:

	31 December 2016	31 December 2015
	US$	US$
Listed investments
Investments, at cost	410,126,668	367,776,535
Unrealised gains	191,760,310	150,042,801

At carrying value	601,886,978	517,819,336

Unlisted investments
Investments, at cost	55,984,424	46,479,933
Unrealised gains	4,818,795	3,236,807

At carrying value	60,803,219	49,716,740
	662,690,197	567,536,076

(d) As at 31 December 2016 and 2015, the Company held the following listed and unlisted investments directly and/or indirectly through its subsidiaries:

	The Company
	31 December 2016		31 December 2015
	Cost	Carrying value	Cost	Carrying value
	US$	US$	US$	US$
Listed investments

Vietnam listed equities
VNM	3,093,510	60,148,087	4,304,172	71,976,088
MWG	23,076,410	37,684,636	10,760,103	12,100,971
MBB	26,485,492	22,865,541	6,823,499	6,630,799
HPG	9,276,518	22,450,806	10,718,675	15,459,003
NVL	17,711,599	20,877,036	-	-
FPT	18,206,053	20,420,695	13,430,252	15,623,541
PC1	16,988,261	18,150,536	-	-
VCB	13,898,264	17,608,500	12,571,955	15,507,337
NKG	12,989,631	15,370,427	-	-
HSG	5,766,633	11,654,144	6,502,161	5,490,433
KBC	12,177,117	11,055,867	15,024,253	13,066,280
GAS	11,583,984	10,859,991	9,390,226	4,747,215
KDH	5,282,379	7,736,691	4,603,063	6,265,464
CTG	8,368,314	6,412,677	8,540,812	8,191,553
DIG	7,766,220	6,338,806	7,596,374	6,896,686
VHC	4,549,925	5,584,296	-	-
DXG	5,178,331	5,343,181	-	-
VGC	3,848,569	4,031,444	-	-
PVD	3,497,695	2,745,879	1,891,541	1,149,512
DCM	3,506,299	2,695,244	3,506,299	3,469,053
PVS	2,958,348	2,210,338	3,516,663	2,202,157
IMP	2,420,353	2,454,877	-	-
SAM	1,654,221	1,648,900	1,654,221	1,559,772
SJS	1,246,919	1,394,458	957,488	1,108,602
SSI	1,327,764	1,320,786	4,091,864	4,619,289
ACV (*)	-	-	-	-
ACB	-	-	-	-
CTD	-	-	-	-
CII	-	-	-	-
SAB	-	-	-	-
REE	-	-	1,464,632	3,227,752
DQC	-	-	-	-
HDG	-	-	-	-
VSC	-	-	-	-
DHG	-	-	6,131,634	6,505,531
MSN	-	-	3,442,142	6,293,107
BID	-	-	5,008,633	5,281,036
PDR	-	-	4,736,211	4,966,316
DPM	-	-	3,507,168	2,957,665
GMD	-	-	229,256	288,267
VIC	-	-	-	-
NT2	-	-	-	-
DRC	-	-	-	-
NCT	-	-	-	-
STK	-	-	-	-
CSM	-	-	-	-
NBB	-	-	-	-

Total listed investments	222,858,809	319,063,843	150,403,297	225,583,429

	Subsidiaries
	31 December 2016		31 December 2015
	Cost	Carrying value	Cost	Carrying value
	US$	US$	US$	US$
Listed investments

Vietnam listed equities
VNM	4,477,335	87,054,214	5,753,920	96,219,339
MWG	31,063,926	29,046,452	-	-
MBB	32,761,408	30,224,185	22,131,553	21,506,544
HPG	9,334,605	22,591,387	19,683,944	28,389,158
NVL	15,409,310	23,648,325	-	-
FPT	31,727,360	37,992,351	31,032,175	36,100,028
PC1	-	-	-	-
VCB	11,197,466	13,845,092	18,479,575	22,794,305
NKG	1,038,147	999,078	-	-
HSG	3,758,836	7,596,464	10,290,104	8,688,976
KBC	12,784,474	12,055,023	10,664,682	9,274,853
GAS	33,694,719	35,140,282	15,197,443	7,683,046
KDH	13,576,874	21,476,780	15,237,784	20,740,927
CTG	10,303,635	7,895,722	12,684,101	12,165,409
DIG	1,544,824	1,411,191	-	-
VHC	2,768,623	3,477,993	-	-
DXG	14,504,733	14,450,910	-	-
VGC	5,907,096	6,377,743	-	-
PVD	8,441,708	5,470,903	9,929,401	6,034,215
DCM	5,363,420	4,122,787	5,363,420	5,306,447
PVS	17,472,958	13,339,917	11,281,610	7,064,616
IMP	8,087,781	9,776,338	3,281,425	3,170,362
SAM	3,611,243	3,599,629	4,413,609	4,161,612
SJS	3,855,567	4,391,066	3,695,091	4,278,265
SSI	13,905,492	13,684,474	23,139,781	26,122,411
ACV (*)	13,737,092	49,363,944	-	-
ACB	28,165,214	48,894,956	28,165,214	50,642,263
CTD	19,589,523	22,841,553	3,620,886	7,480,907
CII	13,762,177	20,782,970	13,762,177	16,149,987
SAB	13,347,912	16,608,849	-	-
REE	4,855,613	11,886,140	14,718,626	32,436,875
DQC	8,442,534	10,223,373	8,442,534	8,653,145
HDG	6,752,782	7,758,295	6,752,782	8,505,362
VSC	4,882,281	3,858,592	-	-
DHG	-	-	5,434,237	5,765,607
MSN	-	-	2,485,141	4,543,468
BID	-	-	12,900,819	13,602,451
PDR	-	-	1,981,371	2,077,633
DPM	-	-	11,438,700	9,646,485
GMD	-	-	2,351,036	2,956,196
VIC	-	-	17,066,898	17,676,142
NT2	-	-	5,608,649	7,230,551
DRC	-	-	4,438,203	4,347,646
NCT	-	-	1,749,683	2,502,886
STK	-	-	1,206,066	1,503,847
CSM	-	-	2,229,301	1,392,482
NBB	-	-	1,164,594	1,004,890

Total listed investments	410,126,668	601,886,978	367,776,535	517,819,336

(*) ACV is listed on Unlisted Public Company Market ("UPCoM").

	The Company
	31 December 2016		31 December 2015
	Cost	Carrying value	Cost	Carrying value
	US$	US$	US$	US$

Unlisted investments

Vietnam OTC equities
VEAM	3,843,120	4,281,762	-	-
Vinatex	2,073,027	2,415,353	2,073,027	2,334,890
Tin Nghia	2,713,674	3,238,769	-	-
ACV	-	-	-	-
VJA	-	-	-	-

Private Equities
Besra Gold	3,762,362	-	3,762,362	-
VFMVF2	-	-	-	-
NVL	-	-	-	-

Vietnam Corporate bonds
NBB - Convertible bonds	-	-	-	-

Rights
IMP - rights	-	143,603	-	-

Total unlisted investments	12,392,183	10,079,487	5,835,389	2,334,890
Total	235,250,992	329,143,330	156,238,686	227,918,319

	Subsidiaries
	31 December 2016		31 December 2015
	Cost	Carrying value	Cost	Carrying value
	US$	US$	US$	US$

Unlisted investments

Vietnam OTC equities
VEAM	15,372,478	17,127,047	-	-
Vinatex	10,883,392	12,680,602	10,883,392	12,258,172
Tin Nghia	3,922,088	4,786,900	-	-
ACV	-	-	15,518,899	16,643,035
VJA	21,138,134	21,485,301	-	-

Private Equities
Besra Gold	-	-	-	-
VFMVF2	1,331,290	354,872	1,331,290	714,860
NVL	-	-	15,409,310	16,268,517

Vietnam Corporate bonds
NBB - Convertible bonds	3,337,042	3,796,607	3,337,042	3,832,156

Rights
IMP - rights	-	571,890	-	-

Total unlisted investments	55,984,424	60,803,219	46,479,933	49,716,740
Total	466,111,092	662,690,197	414,256,468	567,536,076

Investment portfolio by sector was as follows:

	31 December 2016		31 December 2015
	US$	%	US$	%

Food & beverage	172,873,439	17	168,195,427	21
Real Estate	172,601,458	17	123,443,000	15
Banks	147,746,673	15	156,321,697	19
Material & Resources	97,889,524	10	86,651,195	11
Transportation	74,707,837	8	22,390,384	3
Energy	69,767,310	7	28,880,761	4
Retail	66,731,088	7	12,100,971	2
Software & Services	58,413,046	6	51,723,569	6
Others	55,726,174	5	52,888,443	6
Diversified Financials	41,036,759	4	63,449,646	8
Consumer Durables	25,319,328	3	23,246,207	3
Pharmaceuticals	12,946,708	1	15,441,500	2

	995,759,344	100	795,454,395	100

6. BORROWINGS

	31 December 2016	31 December 2015
	US$	US$
Standard Chartered Bank - Singapore Branch
- Secured Bank Loan 1	20,000,000	10,000,000
- Secured Bank Loan 2	20,000,000	10,000,000

	40,000,000	20,000,000

Term and conditions of outstanding short-term borrowings are as follows:

			31 December 2016
	Interest rate per annum (%)	Date of Maturity	Nominal value US$	Carry amount US$

Secured Bank Loan 1	2.8869	9 February 2017	20,000,000	20,000,000
Secured Bank Loan 2	2.9962	22 March 2017	20,000,000	20,000,000

			40,000,000	40,000,000

As at 31 December 2016, the bank loans were secured over the Company's investments with total carrying value of US$74,643,186 (31 December 2015: US$86,055,756).

These loans have been rolled over subsequent to the date of maturity.

7. ISSUED SHARE CAPITAL AND SHARE PREMIUM

	31 December 2016	31 December 2015
	US$	US$
Authorised:
500,000,000 Ordinary/Redeemable Shares at par value of US$0.01 each	5,000,000	5,000,000
300,000,000 Conversion Shares at par value of US$0.01 each	3,000,000	3,000,000
1,000 Management Shares at par value of US$0.01 each	10	10

	8,000,010	8,000,010

Issued and fully paid:
220,920,745 Ordinary Shares at par value of US$0.01 each (31 December 2015: 251,421,114 Redeemable Shares at par value of US$0.01 each)	2,209,207	2,514,211
1,000 Management Shares at par value of US$0.01 each	10	10

	2,209,217	2,514,221

Treasury Shares:
Redeemable Shares	-	(305,004)

Shares in circulation:
Ordinary/Redeemable Shares	2,209,207	2,209,207
Management Shares	10	10

Outstanding issued share capital in circulation	2,209,217	2,209,217

In accordance with the Company's Restated and Amended Memorandum and Articles of Association dated 21 June 2016, all issued Redeemable Shares of the Company have become Ordinary Shares.

Holders of Ordinary Shares present in person or by proxy or by authorised representative shall have one vote and, on a poll, every holder of Ordinary Shares present in person or by proxy or by authorised representative shall have one vote for every Ordinary Share of which he is the registered holder. The Ordinary Shares carry rights to dividends as set out in Articles 106 to 114 of the Articles. In a winding up, the Ordinary Shares carry a right to a return of the nominal capital paid up in respect of such Ordinary Shares, and the right to share in the manner set out in the Articles in surplus assets remaining after the return of the nominal capital paid up on the Ordinary Shares and Management Shares, provided that in a winding up the assets available for distribution among the members are more than sufficient to repay the whole of the nominal capital paid up at the commencement of the winding up. No holder of Ordinary Shares has the right to request the redemption of any of his Ordinary Shares at his option.

The Conversion Shares carry the exclusive right to dividends in respect of assets attributable to the Conversion Shares, in accordance with the provisions of Articles 106 to 114. No dividend or other distribution shall be declared, made or paid by the Company on any of its shares by reference to a record date falling between the Calculation Date and the Conversion Date as set out in the Articles. The new Ordinary Shares to be issued on conversion shall rank in full pari passu with the existing Ordinary Shares for all dividends and other distributions with a record date falling after the conversion date. In order for the holder of the Conversion Shares to participate in the winding up of the Company, the Conversion Shares, if any, which are in existence at the date of the winding up of the Company will for all purposes be deemed to have been automatically converted into Ordinary Shares and Deferred Shares immediately prior to the winding up, on the same basis as if conversion had occurred 28 business days after the calculation date arising as a result of the resolution or the court to wind up the Company.

Until conversion, the consent of the holders of the Conversion Shares voting as a separate class and the holders of the Ordinary Shares voting as a separate class shall be required in accordance with the provisions of Article 14 to effect any variation or abrogation in their respective class rights.

During the year, no Conversion Shares were in issue, and no Conversion Shares were in issue as at 31 December 2016 and 31 December 2015.

The Management Shares shall not be redeemed by the Company, and do not carry any right to dividends. In a winding up, Management Shares are entitled to a return of paid up nominal capital out of the assets of the Company, but only after the return of nominal capital paid up on Ordinary Shares. The Management Shares each carry one vote on a poll. The holders of the Management Shares have the exclusive right to appoint two individuals to the Board.

As at 31 December 2016, the following shareholders each owned more than 10 percent of the Company's issued Ordinary shares capital.

Registered shareholders	Number of Ordinary Shares held	% of total Ordinary Shares in issue

Computershare Investor Services PLC (*)	220,902,746	100%
In which:
Bill & Melinda Gates Foundation Trust	25,049,173	11.34%

As at 31 December 2015, the following shareholders each owned more than 10 percent of the Company's issued Redeemable shares capital.

Registered shareholders	Number of Redeemable Shares held	% of total Redeemable Shares in issue

Citivic Nominees Limited	186,795,757	84.55%
Clearstream Banking SA	34,114,988	15.44%

Movements in Ordinary/Redeemable Share capital during the year were as follows:

	Shares	Year ended 31 December 2016 US$	Shares	Year ended 31 December 2015 US$

Balance at the beginning of the year	220,920,746	2,209,207	150,910,053	1,509,100
Issuance of Redeemable Shares as a result of the Merger (*)	-	-	77,598,114	775,981
Repurchase of Redeemable Shares during the year	-	-	(7,587,421)	(75,874)

Balance at the end of the year	220,920,746	2,209,207	220,920,746	2,209,207

Movements in share premium during the year were as follows:

	Year ended 31 December 2016 US$	Year ended 31 December 2015 US$

Balance at the beginning of the year	563,283,425	306,547,207
Issuance of Redeemable Shares as a result of the Merger (*)	-	277,950,958
Repurchase of Redeemable Shares during the year	-	(21,214,740)

Balance at the end of the year	563,283,425	563,283,425

(*) The Company entered into a transaction with the shareholders of Vietnam Growth Fund Limited ("VGF") to acquire the entire share capital of VGF for a purchase consideration of US$278,726,939 as at 17 December 2015. The purchase consideration was settled by the issue of a number of redeemable shares in the Company to the shareholders of VGF. As a result of the Merger, 77,598,114 Redeemable Shares in the Company have been issued and allocated to holders of VGF's Ordinary Shares with the Exchange Ratio of 1:6.4762320. Upon the Merger taking effect, the total number of the Company's Redeemable Shares issued and outstanding as at 31 December 2015 was 220,920,746.

8. NET ASSET VALUE PER ORDINARY SHARE

The calculation of the NAV per Ordinary/Redeemable Share was based on the net assets attributable to the Ordinary/Redeemable Shareholders of the Company as at 31 December 2016 of US$974,802,771 (31 December 2015: US$792,652,878) and the number of outstanding Ordinary/ Redeemable Shares in issue as at that date of 220,920,746 shares (31 December 2015: 220,920,746 Redeemable shares).

9. FEES

The management, administration and custodian fees are calculated based on the NAV of the Company.

Management fees

The Investment Manager is entitled to receive a management fee at 2% per annum of the NAV, payable monthly in arrears on the first business day of such month and calculated by reference to the NAV at the end of the preceding month. During the year, total management fees amounted to US$17,759,320 (2015: US$10,319,816). As at 31 December 2016, a management fee of US$1,638,148 (31 December 2015: US$1,316,158) remained payable to the Investment Manager.

Directors' fees

During the year, total directors' fees amounted to US$176,712 (2015: US$155,000). There were no directors' fees payable as at 31 December 2016 and 2015. Dominic Scriven has permanently waived his rights to receive directors' fees for his services as Director of the Company.

Administration fees

Standard Chartered Bank (the "Administrator") is entitled to receive a fee of 0.06% (2015: 0.06%) of the gross assets per annum, payable monthly in arrears and subject to a minimum monthly fee of US$4,000 per fund. During the year, total administration fees amounted to US$967,680 (2015: US$460,545). As at 31 December 2016, an administration fee of US$109,576 (31 December 2015: US$58,223) was payable to the Administrator.

Custodian fees

Standard Chartered Bank (the "Custodian") is entitled to receive a fee of 0.05% (2015: 0.05%) of the assets under custody per annum, payable monthly in arrears and subject to a minimum monthly fee of US$500 per custody account. In addition, the Custodian is entitled to US$20 per listed transaction and US$10 per script less securities. During the year, total custodian fees amounted to US$590,575 (2015: US$347,585). There were no custodian fees payable as at 31 December 2016 and 2015.

Audit and related fees

During the year, included in the legal and professional fees of the Company was audit fees amounted to US$69,000 (2015: US$48,000) paid to the auditor, KPMG Limited. In addition, an advisory fee for the purpose of listing the Company on London Stock Exchange paid to KPMG UK was US$149,450 (2015: nil), in which US$44,000 was paid to KPMG Limited by KPMG UK for the sub-contracting work.

10. INCOME TAX

Under the current law of the Cayman Islands and the British Virgin Islands, the Company and its subsidiaries are not required to pay any taxes in the Cayman Islands or the British Virgin Islands on either income or capital gains and no withholding taxes will be imposed on distributions by the Company to its shareholders or on the winding-up of the Company.

The Company is subject to 5% withholding tax on the interest received from any Vietnamese company. Dividends remitted by Vietnamese investee companies to foreign corporate investors are not subject to withholding taxes.

11. BASIC EARNINGS PER ORDINARY/REDEEMABLE SHARE

The calculation of basic earnings per Ordinary/Redeemable Share for the year was based on the net profit for the year attributable to the holders of Ordinary/Redeemable Shares of US$182,149,893 (2015: US$22,254,190) and the weighted average number of Ordinary Shares outstanding of 220,920,746 shares (2015: 146,799,779 Redeemable shares) in issue during the year.

(a) Net profit attributable to the Ordinary/Redeemable Shareholders

Year ended

31 December 2016

US$

Year ended

31 December 2015

US$

Net profit attributable to the Ordinary/Redeemable Shareholders

182,149,893

22,254,190

(b) Weighted average number of Ordinary/Redeemable Shares

	Year ended 31 December 2016 US$	Year ended 31 December 2015 US$

Issued Ordinary/Redeemable Shares at the beginning of the year	220,920,746	150,910,053
Effect of Redeemable Shares issued during the year	-	212,597
Effect of Redeemable Shares repurchased during the year	-	(4,322,871)

Weighted average number of Ordinary/Redeemable Shares	220,920,746	146,799,779

Year ended

31 December 2016

US$

Year ended

31 December 2015

US$

Basic earnings per Ordinary/Redeemable Share

0.82

0.15

12. FINANCIAL RISK MANAGEMENT AND UNCERTAINTY

A. Financial risk management

The Company and its subsidiaries mainly invested in listed and unlisted investments in Vietnam, are exposed to credit risk, liquidity risk and market risks arising from the financial instruments they hold. The Company has formulated risk management policies and guidelines which govern its overall business strategies, its balance for risk and its general risk management philosophy, and has established processes to monitor and control transactions in a timely and accurate manner. In essence, the Company and its Investment Manager practise portfolio diversification and have adopted a range of appropriate restrictions and policies, including limiting the Company's cash investment in each investment to not more than 20% of the Company's capital at the time of investment. Nevertheless, the markets in which the Company operates and the investments that the Company makes can provide no assurance that the Company will not suffer a loss as a result of one or more of the risks described above, or as a result of other risks not currently identified by the Investment Manager.

The nature and extent of the financial instruments outstanding at the reporting date and the risk management policies employed by the Company are discussed in the following notes.

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet a commitment that it has entered into with the Company.

The Company's listed and unlisted investments will only be traded on or subject to the rules of recognised stock exchanges or with counterparties which have, or whose parent company has been approved based on a set of defined criteria by the Investment Manager. All transactions in listed and unlisted securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal since the delivery of securities sold is made only once the broker has received payment. A purchase payment is only made once the securities have been received by the broker. If either party fails to meet their obligations, the trade will fail.

As at 31 December 2016 and 31 December 2015, the Company's credit risk arose principally from its other receivables, investments in debt securities, and cash and cash equivalents.

The maximum exposure to credit risk faced by the Company is equal to the carrying amounts of these balances as shown on the statement of financial position. The maximum exposure to credit risk at the reporting date was as follows:

	31 December 2016 US$	31 December 2015 US$

Other receivables (ii)	436,608	346,223
Balances due from brokers (ii)	720,731	-
Cash and cash equivalents (iii)	19,837,882	15,174,526

	20,995,221	15,520,749

The Company invests substantially all of its assets in its subsidiaries together with which it is managed as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments: Disclosures are met by providing disclosures on the credit risk of the underlying financial assets held by the subsidiaries.

As at 31 December 2016 and 2015, the subsidiaries' credit risk arose principally from the subsidiaries' other receivables, balances due from brokers, cash and cash equivalents, and investments in debt securities.

The maximum exposure to credit risk faced by the subsidiaries is equal to the carrying amounts of investments in debt securities, other receivables, balance due from brokers and cash and cash equivalents, which were as follows at the reporting date:

	31 December 2016 US$	31 December 2015 US$

Investments in debt securities (i)	3,796,607	20,100,673
Other receivables (ii)	4,243,009	778,313
Balances due from brokers (ii)	-	1,437,052
Cash and cash equivalents (iii)	31,817,639	11,110,242

	39,857,255	33,426,280

(i) Investment in debt securities

Investments in debt securities represented convertible bonds of Vietnamese companies. The Directors do not foresee any significant credit risks from these convertible bonds because they will be converted into listed shares.

(ii) Other receivables and balances due from brokers

Other receivables represented dividends receivable and bond interest receivable from investee companies. Balances due from brokers represented receivables from sales of securities. Credit risk relating to these amounts was considered as minimal due to the short-term settlement period involved.

No receivables as at 31 December 2016 and 2015 were past due.

(iii) Cash and cash equivalents

Cash and cash equivalents of the Company and its subsidiaries were held mainly with well-known financial institutions. The Directors do not foresee any significant credit risks from these deposits and do not expect that these financial institutions may default and cause losses to the Company.

(b) Liquidity risk

Liquidity risk is defined as the risk that the Company may not be able to settle or meet its obligations on time or at a reasonable price. The Company manages its liquidity risk by investing primarily in marketable securities. The Company also regularly monitors current and expected liquidity requirements to ensure that it maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term.

As at 31 December 2016 and 31 December 2015, all the contractual maturities of non-derivative financial liabilities of the Company and its subsidiaries were payable within a year.

Market risk is the risk that changes in market prices, such as equity prices, interest rates and foreign exchange rates will affect the income of the Company and the value of its holdings of financial instruments. The objectives of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Equity price risk

Equity price risk is the risk that the fair values of equities decrease as a result of changes in the levels of the equity indices and the values of individual securities. The trading equity price risk exposure arises from the Company's investment portfolio. The Company is exposed to equity price risk on all of its directly held and underlying listed and unlisted equity investments for which an active over-the-counter market exists. The Company's equity price risk is managed by the Investment Manager who seeks to monitor the risk through a careful selection of securities within specified limits.

Equity price risk for the Company's underlying listed investments principally relates to investments listed on the Ho Chi Minh City Stock Exchange and the Hanoi Stock Exchange in Vietnam. Investment Manager's best estimate of the effect on net assets and losses due to a reasonably possible change in equity indices, with all other variables held constant was as follows:

	Change in index level	Effects on net assets	Change in index level	Effects on net assets
	2016	2016	2015	2015
Market Indices	%	US$m	%	US$m

VN Index	15	117.24	30	203.69
VN Index	(15)	(117.24)	(30)	(203.69)

Equity price risk for the Company's underlying unlisted investments principally related to investments in private equities in Vietnam. Valuation of these investments is made using appropriate valuation methodologies.

Interest rate risk

The Company and its subsidiaries are exposed to risks associated with the effect of fluctuations in the prevailing levels of floating market interest rates on its financial position and cash flows. The Company and its subsidiaries have the ability to borrow funds from banks and other financial institutions in order to increase the amount of capital available for investments. Consequently, the level of interest rates at which the Company and its subsidiaries can borrow will affect the operating results of the Company and its subsidiaries. The Investment Manager monitors overall interest sensitivity of the Company and its subsidiaries on a monthly basis.

The table below summarises the Company's exposure to interest rate risk. Included in the table are the Company's assets and liabilities at carrying value, categorised by maturity date. The net interest sensitivity gap represents the contractual amounts of all interest sensitive financial instruments.

	Up to 1 year	1 - 5 years	Non-interest bearing	Total
	US$	US$	US$	US$
31 December 2016
ASSETS
Other receivables	-	-	436,608	436,608
Balance due from brokers	-	-	720,731	720,731
Cash and cash equivalents	19,837,882	-	-	19,837,882

TOTAL ASSETS	19,837,882	-	1,157,339	20,995,221

LIABILITIES
Borrowings	(40,000,000)	-	-	(40,000,000)
Accounts payable and accruals	-	-	(1,951,794)	(1,951,794)

TOTAL LIABILITIES	(40,000,000)	-	(1,951,794)	(41,951,794)
NET INTEREST SENSITIVITY GAP	(20,162,118)	-	N/A	N/A

	Up to 1 year	1 - 5 years	Non-interest bearing	Total
	US$	US$	US$	US$
31 December 2015
ASSETS
Other receivables	-	-	346,223	346,223
Cash and cash equivalents	15,174,526	-	-	15,174,526

TOTAL ASSETS	15,174,526	-	346,223	15,520,749

LIABILITIES
Borrowings	(20,000,000)	-	-	(20,000,000)
Accounts payable and accruals	-	-	(1,536,018)	(1,536,018)
Balances due to brokers	-	-	(6,064,653)	(6,064,653)

TOTAL LIABILITIES	(20,000,000)	-	(7,600,671)	(27,600,671)
NET INTEREST SENSITIVITY GAP	(4,825,474)	-	N/A	N/A

A change of 100 basis points in interest rates would have increased or decreased the net assets attributable to the Ordinary/Redeemable Shareholders by US$201,621 (31 December 2015: US$48,255). This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

The Company invests substantially all of its assets in its subsidiaries together with which it is managed as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments: Disclosures are met by providing disclosures on the interest risk of the underlying investments held by the subsidiaries.

The table below summarises the subsidiaries' exposure to interest rate risk. Included in the table are the subsidiaries' assets and liabilities categorised by maturity date. The net interest sensitivity gap represents the net carrying amounts of all interest sensitive financial instruments.

	Up to 1 year	1 - 5 years	Non-interest bearing	Total
	US$	US$	US$	US$
31 December 2016
ASSETS
Investment in debt securities	-	3,796,607	-	3,796,607
Other receivables	-	-	4,243,009	4,243,009
Cash and cash equivalents	31,817,639	-	-	31,817,639

TOTAL ASSETS	31,817,639	3,796,607	4,243,009	39,857,255

LIABILITIES
Balances due to brokers	-	-	(32,134,831)	(32,134,831)

TOTAL LIABILITIES	-	-	(32,134,831)	(32,134,831)
NET INTEREST SENSITIVITY GAP	31,817,639	3,796,607	N/A	N/A

	Up to 1 year	1 - 5 years	Non-interest bearing	Total
	US$	US$	US$	US$
31 December 2015
ASSETS
Investment in debt securities	-	3,832,156	-	3,832,156
Other receivables	-	-	778,313	778,313
Balances due from brokers	-	-	1,437,052	1,437,052
Cash and cash equivalents	11,110,242	-	-	11,110,242

TOTAL ASSETS	11,110,242	3,832,156	2,215,365	17,157,763

LIABILITIES
Balances due to brokers	-	-	(4,047,202)	(4,047,202)

TOTAL LIABILITIES	-	-	(4,047,202)	(4,047,202)
NET INTEREST SENSITIVITY GAP	11,110,242	3,832,156	N/A	N/A

A change of 100 basis points in interest rates would have increased or decreased the net assets attributable to the Ordinary/Redeemable Shareholders by US$356,142 (31 December 2015: US$149,424). This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Foreign currency risk

Foreign currency risk is the risk that changes in foreign exchange rates will affect the Company and its subsidiaries' income or the value of its holding of financial instruments. The Company and its subsidiaries ensure that the net exposure to this risk is kept to an acceptable level by buying or selling foreign currencies at spot rates to address short-term imbalances where necessary.

The table below summarises the Company's exposure to various currencies. All amounts were stated in US$.

	Denominated in
31 December 2016	VND
	US$
ASSETS
Financial assets at fair value through profit or loss	329,143,330
Other receivables	413,108
Balance due from brokers	720,731
Cash and cash equivalents	4,017,621

TOTAL ASSETS	334,294,790

LIABILITIES
Balances due to brokers	-

NET CURRENCY POSITION	334,294,790

	Denominated in
31 December 2015	VND
	US$
ASSETS
Financial assets at fair value through profit or loss	227,918,319
Other receivables	346,223
Cash and cash equivalents	12,518,119

TOTAL ASSETS	240,782,661

LIABILITIES
Balances due to brokers	(6,064,653)

NET CURRENCY POSITION	234,718,008

At 31 December 2016, had the US$ strengthened or weakened by 1% (31 December 2015: 5%) against the VND with all other variables held constant, the net assets attributable to the Ordinary Shareholders would have been decreased or increased by the amounts shown below. This analysis was performed on the same basis as in 2015.

	Denominated in
	VND
	US$
2016	3,309,849
2015	11,177,048

The Company invests substantially all of its assets in its subsidiaries together with which it is managed as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments: Disclosures are met by providing disclosures on the currency risk of the underlying investments held by the subsidiaries.

The table below summarises the exposure of the subsidiaries to currency risks as at 31 December 2016 and 2015. Included in the table are the assets and liabilities categorised by their base currency.

	Denominated in
31 December 2016	VND
	US$
ASSETS
Financial assets at fair value through profit or loss	662,690,197
Other receivables	4,243,009
Balances due from brokers	-
Cash and cash equivalents	26,817,456

TOTAL ASSETS	693,750,662

LIABILITIES
Balances due to brokers	(32,134,831)

NET CURRENCY POSITION	661,615,831

	Denominated in
31 December 2015	VND
	US$
ASSETS
Financial assets at fair value through profit or loss	567,536,076
Other receivables	778,313
Balances due from brokers	1,437,052
Cash and cash equivalents	9,778,283

TOTAL ASSETS	579,529,724

LIABILITIES
Balances due to brokers	(4,047,202)

NET CURRENCY POSITION	575,482,522

At 31 December 2016, had the US$ strengthened or weakened by 1% (31 December 2015: 5%) against VND with all other variables held constant, the net assets attributable to the Ordinary Shareholders would have been decreased or increased by the amounts shown below. This analysis was performed on the same basis as in 2015.

	Denominated in
	VND
	US$

2016	6,550,652
2015	27,403,930

(d) Fair values of financial assets and liabilities

(i) Valuation model

The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted prices or broker price quotations. For all other financial instruments, the Company determines fair values using other valuation techniques.

For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

- Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments.

- Level 2: Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.

- Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

The Company makes its investments through wholly owned subsidiaries, which in turn owns interests in various listed and unlisted equity and debt securities. The net asset value of the subsidiaries is used for the measurement of fair value. The fair value of the Company's underlying investments however is measured in accordance with the valuation methodology which is in consistent with that for directly held investments.

(ii) Fair value hierarchy - Financial instruments measured at fair value

The table below analyses financial instruments measured at fair value at the reporting date by the level in the fair value hierarchy into which the fair value measurement is categorised. The amounts are based on the values recognised in the statement of financial position. All fair value measurements below are recurring.

As at 31 December 2016	Level 1	Level 2	Level 3	Total
	US$	US$	US$	US$

Financial assets at fair value through profit or loss
- Listed investments	319,063,843	-	-	319,063,843
- Unlisted investments	-	10,079,487	-	10,079,487
- Investments in subsidiaries	-	-	666,616,014	666,616,014

	319,063,843	10,079,487	666,616,014	995,759,344

As at 31 December 2015	Level 1	Level 2	Level 3	Total
	US$	US$	US$	US$

Financial assets at fair value through profit or loss
- Listed investments	225,583,429	-	-	225,583,429
- Unlisted investments	-	2,334,890	-	2,334,890
- Investments in subsidiaries	-	-	576,814,481	576,814,481

	225,583,429	2,334,890	576,814,481	804,732,800

The following table shows a reconciliation from the opening balances to the closing balances for fair value measurements in three levels of the fair value hierarchy.

2016	Level 1	Level 2	Level 3
	US$	US$	US$

Opening balance	225,583,429	2,334,890	576,814,481
Purchases	119,627,436	6,556,794	-
Sales	(47,171,924)	-	-
Transfer from VGF as a result of the Merger (see Note 7)	-	-	-
Net cash outflows (from)/to subsidiaries	-	-	(50,962,362)
Unrealised gains/(losses) recognised in profit or loss	21,024,902	1,187,803	140,763,895

Closing balance	319,063,843	10,079,487	666,616,014
Total unrealised gains/(losses) for the year included in net changes in fair value of financial assets at fair value through profit or loss	21,024,902	1,187,803	140,763,895

2015	Level 1	Level 2	Level 3
	US$	US$	US$

Opening balance	240,404,037	6,354,179	263,937,734
Purchases	93,642,076	-	-
Sales	(86,761,463)	-	-
Transfer from VGF as a result of the Merger (see Note 7)	-	-	278,648,899
Net cash outflows (from)/to subsidiaries	-	-	14,302,551
Unrealised gains/(losses) recognised in profit or loss	(21,701,221)	(4,019,289)	19,925,297

Closing balance	225,583,429	2,334,890	576,814,481
Total unrealised gains/(losses) for the year included in net changes in fair value of financial assets at fair value through profit or loss	(21,701,221)	(4,019,289)	19,925,297

There were no transfers between the levels of hierarchy of financial assets recognised at fair value within the year ended 31 December 2016.

The Company invests substantially all of its assets in its subsidiaries together with which it is managed as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments: Disclosures are met by providing disclosures on the fair value hierarchy of the underlying investments held by the subsidiaries.

2016	Level 1	Level 2	Level 3
	US$	US$	US$

Opening balance	517,819,336	29,616,067	20,100,673
Transfer from level 2 to level 1	15,518,899	(15,518,899)	-
Transfer from level 3 to level 1	15,409,309	-	(15,409,309)
Purchases	159,807,441	40,432,700	-
Sales	(148,385,517)		-
Unrealised gains/(losses)	41,717,510	2,476,743	(894,756)

Closing balance	601,886,978	57,006,611	3,796,608
Total unrealised gains/(losses) included in net changes in fair value of financial assets at fair value through profit or loss	41,717,510	2,476,743	(894,756)

2015	Level 1	Level 2	Level 3
	US$	US$	US$

Opening balance	249,436,495	11,598,895	-
Transfer from level 2 to level 1	-	-	-
Transfer from level 3 to level 1	-	-	-
Purchases	243,245,727	20,701,466	18,746,352
Sales	(49,471,448)	-	-
Unrealised gains/(losses)	74,608,562	(2,684,294)	1,354,321

Closing balance	517,819,336	29,616,067	20,100,673
Total unrealised gains/(losses) included in net changes in fair value of financial assets at fair value through profit or loss	(7,775,875)	(3,575,281)	-

(e) Classification of financial assets and financial liabilities

	Loans and receivables	Designated at fair value	Other amortised cost	Total carrying amount
As at 31 December 2016	US$	US$	US$	US$

Assets
Financial assets at fair value through profit or loss	-	995,759,344	-	995,759,344
Other receivables	436,608	-	-	436,608
Balances due from brokers	720,731	-	-	720,731
Cash and cash equivalents	19,837,882	-	-	19,837,882

	20,995,221	995,759,344	-	1,016,754,565

Liabilities
Borrowings	-	-	40,000,000	40,000,000
Balances due to brokers	-	-	1,951,794	1,951,794

	-	-	41,951,794	41,951,794

	Loans and receivables	Designated at fair value	Other amortised cost	Total carrying amount
As at 31 December 2015	US$	US$	US$	US$

Assets
Financial assets at fair value through profit or loss	-	804,732,800	-	804,732,800
Other receivables	346,223	-	-	346,223
Cash and cash equivalents	15,174,526	-	-	15,174,526

	15,520,749	804,732,800	-	820,253,549

Liabilities
Borrowings			20,000,000	20,000,000
Accounts payable and accruals	-	-	1,536,018	1,536,018
Balances due to brokers	-	-	6,064,653	6,064,653

	-	-	27,600,671	27,600,671

B. Uncertainty

Although the Company and its subsidiaries are incorporated in the Cayman Islands and the British Virgin Islands, respectively, where tax is exempt, their activities 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 the Company and its subsidiaries are considered as having permanent establishments 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 different and inconsistent interpretation. The Directors believe that it is unlikely that the Company will be exposed to tax liabilities in Vietnam.

13. SUBSEQUENT EVENTS

From 20 to 23 February 2017, the Company repurchased 796,066 Ordinary Shares of the Company with total value of US$3,195,017.

For further information, please contact:

Dragon Capital

Rachel Hill

+44 (0) 20 7149 9969

rachelhill@dragoncapital.com

Jefferies International Limited

Stuart Klein

+44 (0) 20 7029 8703

stuart.klein@jefferies.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR SEWSASFWSEDL

Companies

Vietnam Enterprise Investments (DI) (VEIL)

Thursday, 23rd May 2024

COMPANIES COVERED:

HL. QQ. AJB

Another day and another round of takeover talk with Hargreaves Lansdown being eyed by private equity suitors. AJ Bell also advances on upbeat earnings news whilst QinetiQ upgrades its profit guidance, too.

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3 hours ago Marlowe
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4 hours ago Weir Group

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