VIETNAM LOTUS FUND LIMITED - RNS Submit · A full description of the risks ... VIETNAM LOTUS FUND...
Transcript of VIETNAM LOTUS FUND LIMITED - RNS Submit · A full description of the risks ... VIETNAM LOTUS FUND...
VIETNAM LOTUS FUND LIMITED
VIETNAM LOTUS FUND LIMITED
Interim report for the six months ended 30 June 2009
VIETNAM LOTUS FUND ANNUAL REPORT 2008 2
VIETNAM LOTUS FUND LIMITED
LOTUS FUND ANUAL REPORT 2
ContentsSpecial considerations and risk factors 1
Responsibility statement of the Board of Directors 2
Interim management report 3 - 4
Condensed balance sheet 5
Condensed statement of comprehensive income 6
Condensed statement of changes in equity 7
Condensed statement of cash flows 8
Notes to the condensed interim financial information 9 - 17
Directory 18 - 19
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 1
VIETNAM LOTUS FUND LIMITED
THE INVESTMENT OBJECTIVE OF VIETNAM LOTUS FUND LIMITED (“the Fund”) is to
seek long-term capital appreciation of its assets by investing in a portfolio of equity
securities of listed or prelisting Vietnamese companies, whether established with domestic
or foreign ownership.
SHAREHOLDERS SHOULD BE AWARE THAT THE RISKS inherent in the investments of the
Fund in Vietnam are of a nature and degree not typically encountered when investing in
securities of companies listed on the major securities markets. Such risks include, but are
not limited to, political and economic risks in addition to the normal risks inherent in any
equity investment. A full description of the risks involved in investment in the Fund can be
found in the Prospectus.
INVESTMENT IN THE FUND SHOULD BE REGARDED AS LONG-TERM IN NATURE. There
can be no guarantee that the Fund’s investment objectives will be achieved.
SHAREHOLDERS SHOULD BE AWARE THAT THE VALUE OF THE FUND’S SHARES and the
income from them may fluctuate. In addition, there is no guarantee that the market prices
of shares in closed-end funds will fully reflect their underlying Net Asset Value.
SPECIAL CONSIDERATIONS AND RISK FACTORS
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 1
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 2
VIETNAM LOTUS FUND LIMITED
As required under the Transparency Directive, to the best of our knowledge:
The condensed financial statements have been prepared in accordance with IAS 34 Interim Financial
Reporting and give a true and fair view of the assets, liabilities, financial position and performance of
Vietnam Lotus Fund Limited.
The interim management report includes a fair review of:
Important events that have occurred during the first six months of the year;•
The impact of those events on the condensed financial statements;•
A description of the principal risks and uncertainties for the remaining six months of the financial •
year; and
Details of any material related party transactions.•
On behalf of the Board of Directors
Philip Smiley Chairman
27 August 2009
RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 3
VIETNAM LOTUS FUND LIMITED
REVIEW OF THE INTERIM PERIOD
During the period under review the Fund’s Net Asset Value (“NAV”) per share increased by 28.49%, from
US$1.699 to US$2.183. This compares with a rise in the Viet Nam Index (“VNI”) of 39.25% in US$ terms over
the same period. The Vietnamese Dong (“VND”) depreciated by 2.09% over the period under review.
STOCK MARKET
The first half of the Fund’s Financial Year saw a remarkable turnaround in the fortunes of the Vietnam stock
exchange after local, followed by global economic problems had precipitated a 68.73% collapse in the VNI
in 2008. The rally which started toward the end of February 2009 has resumed into August to the time of
writing after a period of consolidation in June and July, with the index having gained 123% from its 235.50
closing low on 24 February 2009. Much improved sentiment has underpinned the rally with local investors
reflecting that the fall in 2008 was somewhat excessive and now adopting a more optimistic outlook for the
economy. We have seen a resumption of listing activity in the second quarter of 2009 with Vietcombank,
Bao Viet Holdings and Vietinbank all joining the Ho Chi Minh City bourse recently and making a solid
contribution to the increase of total market capitalisation to above US$ 24 billion including the Hanoi
market. Daily turnover is regularly above US$ 100 million and it certainly appears that the development of
Vietnam’s capital markets is back on track after a major stumble in 2008.
ECONOMY
Vietnam has been spared the worst ravages of the global economy to date, albeit having suffered a fairly
dramatic slowdown in the first quarter of 2009 when Gross Domestic Product (“GDP”) growth declined to
3.1%. Second quarter growth picked up to 4.6% for a first half total of 3.85% and continued improvement
in the latter part of 2009 will provide a reasonable chance for the economy to meet the government’s 4.5
to 5% full year target, which would represent an impressive showing under the circumstances after 6.23%
growth in 2008. Much of the credit for Vietnam’s relatively strong economic performance during the crisis
has been attributed to what has come to be known as the “Wal-Mart Effect” whereby the low-end make-
up of Vietnam’s export range has provided a cushioning effect. The narrowing of the trade deficit to US$
2.1 billion for the first six months of 2009 compared to US$ 14.77 billion at the same stage of 2008 has been
more notably impacted by a 34% decline in imports than the 10% decline in exports.
Consumer Price Inflation (“CPI”) has slowed dramatically from a year ago, when negative macro-economic
comment was at its most hysterical (and not in a funny way) as the two main contributors to a near 30%
annual rate in the third quarter of 2008, namely food and petroleum prices, have seen sharp retracements.
Year-on-year CPI was up 3.94% to the end of June 2009. Whilst we do not expect full year inflation to come
in much under 10%, that in itself would be a decent achievement particularly if price pressure continues
to fall into 2010.
All things considered, not a bad performance overall for the Vietnam economy during the first six months
of 2009 and one that is likely to improve going forward assuming that the current level of global “green
shoot” optimism does not turn out to have been misplaced in the fullness of time.
INTERIM MANAGEMENT REPORT
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 4
VIETNAM LOTUS FUND LIMITED
INTERIM MANAGEMENT REPORT
STRATEGY
With the VNI having risen back above 525 points in August 2009, the rally from the 24 February 2009 low
of 235.5 has taken the index more than 120% above that level. We expect the rally to continue in the
short-term but will take advantage of further strength toward 600 points to complete rebalancing of the
portfolio whilst protecting gains made year-to-date as best we are able.
OUTLOOK
During the life of the index we have seen a fairly typical early-stage emerging market pattern, with the
VNI having risen from 100 at inception in July 2000 to 1,170 points in March 2007 and subsequently falling
back to 235 in February 2009. Whilst we are confident that we have seen the lows of this (almost) global
recession we do not discount future periods of extreme volatility as the market develops, particularly as
turnover remains dominated by domestic investors with foreigners contributing less than 10% of activity
on an average day. Our 2009 year-end target has been raised to 475; we would expect, on balance, that
the index is more likely to finish the Fund’s financial year above rather than below that level with further
gains currently regarded as likely in 2010. We intend to continue to manage the portfolio more actively
in future and we remain confident of our stock selection methodology in building a portfolio capable of
delivering superior long-term returns.
As outlined in an announcement released by the Irish Stock Exchange on 14 August 2009 we feel that
Shareholders are likely to benefit from the Fund being absorbed into an open-ended structure and will
work toward completion of the necessary steps by the end of the Financial Year. We sincerely thank
Shareholders for their continuing loyalty and support.
RELATED PARTY TRANSACTIONS
See Note 7 to the condensed interim financial statements for details of related party transactions during
the period.
On behalf of the Investment Manager
Kevin Snowball27 August 2009
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VIETNAM LOTUS FUND LIMITED
CONDENSED BALANCE SHEET(UNAUDITED)
As at
Note 30 June 2009 31 December 2008
US$ US$
Assets
Cash and cash equivalents 2,175,904 256,513
Financial assets at fair value through profit or loss 4 20,981,128 16,597,905
Other receivables and prepayments 12,093 55,896
Total assets 23,169,125 16,910,314
Liabilities
Payable to brokers (1,461,794) -
Accounts payable and accruals (52,059) (62,178)
Total liabilities (1,513,853) (62,178)
Net assets 21,655,272 16,848,136
Equity
Issued capital 5 495,893 495,893
Share premium 5 48,577,489 48,577,489
Accumulated profits/(losses) (25,092,611) (30,249,737)
Cumulative translation reserve (2,325,499) (1,975,509)
Total shareholders’ equity 21,655,272 16,848,136
Net asset value per share (US$ per share) 6 2.183 1.699
The attached Notes 1 to 8 form an integral part of this condensed interim financial information.
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 6
VIETNAM LOTUS FUND LIMITED
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
The attached Notes 1 to 8 form an integral part of this condensed interim financial information.
Six months ended
Note 30 June 2009 30 June 2008
US$ US$
Interest income - 1,225
Dividend income 210,626 577,118
Net gain/(loss) on financial assets at fair value 4 5,192,743 (25,274,379)
Net investment gain/(loss) 5,403,369 (24,696,036)
Management fee 7 (169,845) (396,425)
Custodian, secretarial and administration fees (13,506) (38,198)
Brokerage commissions (10,321) (3,788)
Directors’ fees 7 (26,492) (20,444)
Foreign exchange loss - net (3,306) (23,897)
Other operating expenses (22,773) (110,484)
Total operating expenses (246,243) (593,236)
Net profit/(loss) before tax 5,157,126 (25,289,272)
Income tax expense - -
Net profit/(loss) for the period 5,157,126 (25,289,272)
Other comprehensive income/(loss)
Currency translation differences (349,990) (1,473,948)
Total comprehensive income/(loss) for the period 4,807,136 (26,763,220)
Earnings/(losses) per share – basic and diluted (US$ per share) 6 0.520 (2.754)
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VIETNAM LOTUS FUND LIMITED
CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
The attached Notes 1 to 8 form an integral part of this condensed interim financial information.
Issued
capital
Share
premium
Accumulated
profits/
(losses)
Cumulative
translation
reserve Total
US$ US$ US$ US$ US$
At 1 January 2008 458,275 46,435,130 5,967,736 - 52,861,141
Issued capital 15,150 839,310 - - 854,460
Net loss for the six month period - - (25,289,272) - (25,289,272)
Other comprehensive income/(loss):
Currency translation differences - - - (1,473,948) (1,473,948)
Total comprehensive income/(loss) for the period ended 30 June 2008 - - (25,289,272) (1,473,948) (26,763,220)
Balance at 30 June 2008 473,425 47,274,440 (19,321,536) (1,473,948) 26,952,381
Issued capital 22,468 1,303,049 - - 1,325,517
Net loss for the six month period - - (10,928,201) - (10,928,201)
Other comprehensive income/(loss):
Currency translation differences - - - (501,561) (501,561)
Total comprehensive income/(loss) for the period ended 31 December 2008 - - (10,928,201) (501,561) (11,429,762)
Balance at 31 December 2008 495,893 48,577,489 (30,249,737) (1,975,509) 16,848,136
Net profit for the six month period - - 5,157,126 - 5,157,126
Other comprehensive income/(loss):
Currency translation differences - - - (349,990) (349,990)
Total comprehensive income/(loss) for the period ended 30 June 2009 - - 5,157,126 (349,990) 4,807,136
Balance at 30 June 2009 495,893 48,577,489 (25,092,611) (2,325,499) 21,655,272
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 8
VIETNAM LOTUS FUND LIMITED
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
The attached Notes 1 to 8 form an integral part of this condensed interim financial information.
Six months ended
30 June 2009 30 June 2008
US$ US$
Cash flows from operating activities
Proceeds from sales of financial assets at fair value 2,810,804 1,550,184
Dividends received 258,541 573,770
Interest received - 1,157
Purchases of financial assets at fair value (889,479) (1,732,300)
Payments to investment manager, administrator
and suppliers (260,475) (496,635)
Net cash flows generated from/(used in) operating activities 1,919,391 (103,824)
Cash flows from financing activities
Proceeds from share issues - 854,460
Placing fee paid to placing agent - (20,370)
Net cash flows generated from financing activities - 834,090
Net increase in cash and cash equivalents 1,919,391 730,266
Cash and cash equivalents at beginning of the period 256,513 250,786
Cash and cash equivalents at end of the period 2,175,904 981,052
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 9
VIETNAM LOTUS FUND LIMITED
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
1. CORPORATE INFORMATION
Vietnam Lotus Fund Limited (“the Fund”) was incorporated in the Cayman Islands on 27 August 2009 as an
exempted company with limited liability.
The primary investment objective of the Fund is to seek long-term capital appreciation of its assets by
investing in a portfolio of equity securities of listed or prelisting Vietnamese companies, whether established
with domestic or foreign ownership. The Fund may also invest up to 30 percent of its assets at the time of
investment in the shares of overseas-listed Vietnamese companies.
The Fund’s shares are listed on the Irish Stock Exchange.
The address of the Fund’s registered office is as follows:
CARD Corporate Services Ltd.
4th Floor, Zephyr House, 122 Mary Street
PO Box 709 GT, George Town
Grand Cayman, Cayman Islands
British West Indies
This condensed interim financial information was approved for issue on 27 August 2009
This condensed interim financial information has neither been audited nor reviewed by the auditors.
2. BASIS OF PREPARATION
This condensed interim financial information for the six months ended 30 June 2009 has been prepared in
accordance with IAS 34 Interim Financial Reporting. The interim financial information should be read in
conjunction with the annual financial statements for the year ended 31 December 2008, which have been
prepared in accordance with International Financial Reporting Standards (“IFRS”).
3. ACCOUNTING POLICIES
Except as described below, the accounting policies applied are consistent with those of the annual financial
statements for the year ended 31 December 2008, as described in those annual financial statements.
The following new standards and amendments to standards are mandatory for the first time for the
financial year beginning 1 January 2009.
IAS 1 (revised) • Presentation of Financial Statements. The revised standard prohibits the presentation
of items of income and expenses (that is “non-owner changes in equity”) in the statement of changes
in equity, requiring “non-owner changes in equity” to be presented separately from owner changes in
equity. All “non-owner changes in equity” are required to be shown in a performance statement.
Entities can choose whether to present one performance statement (the statement of comprehensive
income) or two statements (the income statement and statement of comprehensive income).
The Fund has elected to present a single statement of comprehensive income. The interim financial
statements have been prepared under the revised disclosure requirements. The presentation of
comparative information in the statement of comprehensive income has been amended for consistency
with the presentation of the current period.
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VIETNAM LOTUS FUND LIMITED
IFRS 8 • Operating Segments replaces IAS 14 Segment Reporting. It requires a “management approach”
under which segment information is presented on the same basis as that used for internal reporting
purposes. The Fund currently operates as one segment and therefore this standard does not result
in significant changes to the financial statements. The required disclosures in IFRS 8 for entities
operating as one segment were already included in the financial statements of the Fund for the year
ended 31 December 2008.
IFRS 7 (amendment) • Financial Instruments: Disclosures. The amendments introduce a three-level
hierarchy for fair value measurement disclosures and require entities to provide additional disclosures
about the relative reliability of fair value measurements. In addition, the amendments clarify and
enhance the existing requirements for the disclosure of liquidity risk. The main impact on the annual
financial statements of the Fund will be additional disclosures required on the fair value measurements
for any investments in prelisting companies that the Fund is holding as at 31 December 2009 and
onwards. The additional disclosures are not required to be included in interim financial statements.
The following new amendments to standards and interpretations are mandatory for the first time for the
financial year beginning 1 January 2009, but are not currently relevant for the Fund:
IFRS 1 (amendment) • First Time Adoption of IFRS; and IAS 27 (amendment) Consolidated and Separate
Financial Statements.
IFRS 2 (amendment) • Share-based Payments - Vesting Conditions and Cancellations.
IAS 1 (amendment) • Presentation of Financial Statements.
IAS 23 (amendment) • Borrowing Costs.
IAS 32 (amendment) • Financial Instruments: Presentation; and IAS 1 (amendment) Presentation of
Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation.
IAS 39 (amendment) • Financial Instruments: Recognition and Measurement.
IFRIC 13 • Customer Loyalty Programmes.
IFRIC 15 • Agreements for Construction of Real Estates.
IFRIC 16 • Hedges of a Net Investment in a Foreign Operation.
There were other amendments to standards as part of the IASB’s annual improvements project published
in May 2008 that are not noted above. These amendments to standards were all effective from 1 January
2009 and do not have an impact on the Fund’s financial statements.
3. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
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VIETNAM LOTUS FUND LIMITED
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
The following new standards, amendments to standards and interpretations have been issued but are not
mandatory or not effective for the financial year beginning 1 January 2009 and have not been early adopted:
IFRS for SMEs is effective from its release date of 1 January 2010. This is a self-contained standard •
tailored for the needs and capabilities of small and medium-sized entities. This standard is not relevant
to the Fund as it cannot be adopted by listed entities.
IFRS 1 (amendment) • First Time Adoption of IFRS – Additional Exemptions for First-time Adopters is
effective from 1 January 2010. The Fund is not a first time adopter, so this amendment is not relevant
to the Fund.
IFRS 3 (revised) • Business Combinations and consequential amendments to IAS 27 Consolidated and
Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures,
effective prospectively to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after 1 July 2009. To date, the Fund
has not been involved in any business combinations. The impact of the revised standard will be
assessed if the Fund is involved in any business combinations from 1 January 2010 onwards.
IAS 39 (amendment) • Financial Instruments: Recognition and Measurement on Eligible Hedged Items,
effective for financial years beginning on or after 1 July 2009. This amendment is currently not
relevant to the Fund, as the Fund does not apply hedge accounting as described in IAS 39.
IFRIC 17 • Distributions of Non-cash Assets to Owners, effective for financial years beginning on or after
1 July 2009. This interpretation is not relevant to the Fund.
IFRIC 18 • Transfers of Assets from Customers, effective for transfers of assets from customers received
on or after 1 July 2009. This interpretation is not relevant to the Fund.
There are other amendments to standards as part of the IASB’s annual improvements project published in
April 2009 that are not noted above. These amendments to standards are all effective from 1 January 2010
and are unlikely to have an impact on the Fund’s financial statements.
3. ACCOUNTING POLICIES (CONTINUED)
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 12
VIETNAM LOTUS FUND LIMITED
4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Movements in financial assets at fair value through profit or loss in the periods:
All the Fund’s financial assets at fair value through profit and loss at the balance sheet dates were in
equity securities of investee companies that are incorporated in Vietnam. All of these equity securities were
denominated in Vietnamese Dong.
Opening carrying value/cost of sales as included in the above table represents, for those investment *
securities sold in the period: the fair values of the investment securities held at the start of the period
and the costs of the investment securities purchased during the period.
Six months ended
30 June 2009 30 June 2008
US$ US$
Opening balance 16,597,905 54,865,024
Purchases 2,351,273 200,747
Opening carrying value/cost of sales* (2,070,742) (1,724,787)
Net unrealised gains/(losses) arising from changes in the fair values
_ of financial assets 4,452,682 (25,106,815)
Difference arising on translation to presentation currency (349,990) (1,473,948)
Closing balance 20,981,128 26,760,221
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 13
VIETNAM LOTUS FUND LIMITED
4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
Analysis of equity securities between industry groups at the balance sheet dates:
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
As at
30 June 2009 31 December 2008
US$ % US$ %
Agriculture 2,172,863 10.35 1,898,489 11.44
Construction and materials 658,182 3.14 482,781 2.91
Consumer Staples 1,358,749 6.48 927,278 5.58
Energy 1,198,849 5.71 1,123,188 6.77
Financials 4,636,590 22.10 1,532,884 9.23
Food and Beverages 2,153,415 10.26 2,302,710 13.87
Logistics 1,072,020 5.11 664,961 4.01
Mining - - 98,848 0.60
Packaging 806,731 3.85 372,033 2.24
Pharmaceutical 2,049,632 9.77 2,683,765 16.17
Plastics 905,886 4.32 513,991 3.10
Property 2,136,533 10.18 2,190,174 13.19
Steel 86,814 0.41 - -
Telecoms 1,744,864 8.32 1,806,803 10.89
20,981,128 100.00 16,597,905 100.00
Analysis of equity securities between listed and prelisting status at the balance sheet dates:
As at
30 June 2009 31 December 2008
US$ US$
Listed securities
At cost 31,428,311 35,787,632
Net unrealised losses arising from changes in the fair
values of financial assets (13,752,746) (23,131,599)
17,675,565 12,656,033
Prelisting securities *
At cost 8,649,151 10,245,606
Net unrealised losses arising from changes in the fair
values of financial assets (5,343,588) (6,303,734)
3,305,563 3,941,872
Total 20,981,128 16,597,905
As quoted prices for these unlisted securities were not available in an active market on the balance sheet *
dates, the Fund has determined the fair value of these unlisted securities using valuation techniques.
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 14
VIETNAM LOTUS FUND LIMITED
4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
Included within the telecoms and the prelisting securities categories presented above is an investment
in Saigon Postel Corporation with carrying value at 30 June 2009 of US$1,744,864 (31 December 2008:
US$1,735,040). The holding comprises 700,000 shares that are restricted from trading until 28 December
2009 and 215,385 shares which are unrestricted.
Net gains/(losses) arising from changes in the fair values of financial assets in the periods:
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
Six months ended
30 June 2009 30 June 2008
US$ US$
Realised gains/(losses) on sales of investments 740,061 (167,564)
Unrealised gains/(losses) 4,452,682 (25,106,815)
5,192,743 (25,274,379)
Six months ended
30 June 2009 30 June 2008
US$ US$
Realised (losses)/gains on sales of investments (4,597,076) 413,734
Net losses arising from changes in the fair values of financial assets as presented above is calculated with
reference to the fair values of investment securities held at the start of the period and the costs of investment
securities purchased during the period.
Net realised (losses)/gains on sales of investment securities with reference to the initial costs of the
investment securities is as follows:
5. ISSUED CAPITAL
As at
30 June 2009 31 December 2008
US$ US$
Authorised share capital
40,000,000 ordinary shares of US$0.05 each 2,000,000 2,000,000
Issued and fully paid capital
9,917,857 ordinary shares at par value 495,893 495,893
Share premium
Share premium on 9,917,857 ordinary shares 48,577,489 48,577,489
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 15
VIETNAM LOTUS FUND LIMITED
5. ISSUED CAPITAL (CONTINUED)
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
The shares constitute the only class of shares in the Fund. All shares have the same rights, whether in regard
to voting, dividend, return of share capital and otherwise.
Each issued and fully paid ordinary share is entitled to dividend when declared and carries one voting right.
In a winding up of the Fund, the shares carry a right to a return of the nominal capital paid-up in respect of
such shares, and the right to share in the surplus assets.
The following shareholders own more than 10 percent of the Fund’s issued capital:
Holding as at
30 June 2009 31 December 2008
Shareholder Shares % Shares %
Citivic Nominees Limited 5,964,898 60.14 5,964,898 60.14
Cogent Nominees 1,054,589 10.63 1,054,589 10.63
Movements in share capital during the periods:
Movements in share premium during the periods:
Six month period to
30 June 2009 31 December 2008 30 June 2008
US$ US$ US$
Balance at beginning of the period 495,893 473,425 458,275
Capital issued during the period - 22,468 15,150
Balance at end of the period 495,893 495,893 473,425
Six month period to
30 June 2009 31 December 2008 30 June 2008
US$ US$ US$
Balance at beginning of the period 48,577,489 47,274,440 46,435,130
Share premium from shares issued
during the period - 1,303,049 839,310
Balance at end of the period 48,577,489 48,577,489 47,274,440
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VIETNAM LOTUS FUND LIMITED
6. NET ASSET VALUE PER SHARE AND EARNINGS PER SHARE
Net asset value per share
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
As at
30 June 2009 31 December 2008
US$ US$
Net asset value 21,655,272 16,848,136
Net asset value per share 2.183 1.699
Earnings/(losses) per share
Six months ended
30 June 2009 30 June 2008
US$ US$
Net profit/(loss) for the period 5,157,126 (25,289,272)
Weighted average number of shares for
earnings per share 9,917,857 9,183,813
Earnings/(losses) per share 0.520 (2.754)
The net asset value per share is determined by dividing the net asset value by the number of shares issued
and outstanding at the time.
The basic earnings/(losses) per share is calculated by dividing net profit/(loss) for the period attributable
to the Fund’s shareholders by the weighted average number of ordinary shares in issue during the period.
During the period, the Fund did not have dilutive ordinary shares.
7. RELATED PARTIES
Investment Management Agreement
Under the Investment Management Agreement with PXP Vietnam Asset Management Limited (“the
Investment Manager“) dated 28 November 2006, the Fund pays the Investment Manager a monthly
management fee equal to one-twelfth of two percent of the Net Asset Value of the Fund, which fee shall
be payable monthly in advance and be calculated by reference to the valuation day at the end of the
preceding month.
During the six month period to 30 June 2009, PXP Vietnam Asset Management Limited was entitled to
receive a management fee of US$169,845 (six month period to 30 June 2008: US$396,425).
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 17
VIETNAM LOTUS FUND LIMITED
7. RELATED PARTIES (CONTINUED)
8. SUBSEQUENT EVENTS
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (CONTINUED)
Investment Management Agreement (continued)
In accordance with the Investment Management Agreement between the Fund and PXP Vietnam Asset
Management Limited, the Investment Manager is also entitled to receive a performance fee from the Fund
which is calculated at the end of each financial year. No accrual has been made for performance fee for the
six month period ended 30 June 2009 (six month period to 30 June 2008: US$ Nil).
Directors’ remuneration
The Board of Directors determines the fees payable to each director, subject to a maximum aggregate amount
of US$50,000 per annum being paid to the Board as a whole. The Fund will also pay reasonable expenses
incurred by the directors in the conduct of the Fund’s business including travel and other expenses.
During the six month period to 30 June 2009 the members of the Board of Directors were entitled to receive
total fees of US$24,795 (six month period to 30 June 2008: US$20,444).
Shares held by related parties
As at 30 June 2009, PXP Vietnam Asset Management Limited, the Investment Manager, held 807,000 (31
December 2008: 730,000) shares of the Fund representing 8.14% (31 December 2008: 7.36%) of the total
issued capital; and Kevin Snowball, a director, held 235,000 (31 December 2008: 235,000) shares of the Fund
jointly with his spouse representing 2.37% (31 December 2008: 2.37%) of the total issued capital.
Significant transactions with related parties
Six month period to
Related party Relationship Nature of transaction 30 June 2009 30 June 2008
US$ US$
PXP Vietnam Asset
Management Limited
Investment
Manager
Management fee payable
Subscription for shares in the Fund
169,845
-
396,425
521,700
PXP Capital Markets
Limited
Placing Agent Payment of placing fee collected
on behalf - 20,370
Kevin Snowball Director Subscription for shares in the Fund - 169,200
Subsequent to the period-end, the directors of the Fund have held preliminary discussions with the directors
of Vietnam Emerging Equity Fund Limited (“VEEF”), a company which also has an investment management
agreement with PXP Vietnam Asset Management Limited, regarding a possible business combination.
This would involve VEEF making an offer to acquire all of the outstanding shares in the Fund via a share
exchange at the Net Asset Values of the respective funds on the closing date of the offer. As at the date of
approval of this interim report, the discussions are at a preliminary stage.
VIETNAM LOTUS FUND LIMITED
DIRECTORY
DIRECTORS OF THE FUND
Philip Smiley
Christopher Vale
Antony Jordan
Stephen Diggle
Gregory Hazlett
Kevin Snowball
THE FUND
Vietnam Lotus Fund Limited
CARD Corporate Services Ltd.
4th Floor, Zephyr House, 122 Mary Street
PO Box 709 GT, George Town
Grand Cayman, Cayman Islands
British West Indies
ADMINISTRATOR AND REGISTRAR
HSBC Trustee (Cayman) Limited
P.O. Box 484
2nd Floor, Strathvale House,
North Church, George Town
Grand Cayman, KY1–1106, Cayman Islands
British West Indies
CUSTODIAN
HSBC Institutional Trust Services (Asia) Limited
39th Floor Dorset House
Taikoo Place
979 Kings Road
Hong Kong
VIETNAM SUB-CUSTODIAN
HSBC Bank (Vietnam) Ltd.
The Metropolitan
235 Dong Khoi Street
District 1, Ho Chi Minh City
Vietnam
INVESTMENT MANAGER
PXP Vietnam Asset Management Limited
PO Box 957
Offshore Incorporations Centre
Road Town
Tortola
British Virgin Islands
ADMINISTRATOR’S AND REGISTRAR’S SERVICE PROVIDER
HSBC Institutional Trust Services (Asia) Limited
39th Floor, Dorset House
Taikoo Place
979 Kings Road
Hong Kong
PLACING AGENT
PXP Capital Markets Limited
PO Box 957
Offshore Incorporations Centre
Road Town
Tortola
British Virgin Islands
AUDITORS
KPMG Limited
10th Floor, Sun Wah Tower
115 Nguyen Hue Street
District 1, Ho Chi Minh City
Vietnam
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 18
VIETNAM LOTUS FUND LIMITED INTERIM REPORT - JUNE 2009 19
VIETNAM LOTUS FUND LIMITED
DIRECTORY
LEGAL ADVISER TO THE FUND
Freshfields Bruckhaus Deringer
11th Floor, Saigon Tower
29 Le Duan Boulevard
District 1, Ho Chi Minh City
Vietnam
DEALING ENQUIRIES
PXP Capital Markets Limited
PO Box 957
Offshore Incorporations Centre
Road Town
Tortola
British Virgin Islands
LEGAL ADVISER TO THE FUND ON CAYMAN ISLANDS LAW
Charles Adams, Ritchie & Duckworth
Attorneys-at-Law
PO Box 709GT
Grand Cayman
Cayman Islands
British West Indies
LISTING SPONSOR AND PAYING AGENT IN IRELAND
NCB Stockbrokers Limited
3 George’s Dock
International Financial Services Centre
Dublin 1
Ireland