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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vision OP China | LSE:VOC | London | Ordinary Share | GG00B28DJ748 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.115 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMVOC
RNS Number : 6276M
Vision Opportunity China Fund Ltd
27 May 2010
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART INTO THE UNITED
STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN
27 May 2010
Vision Opportunity China Fund Limited (the "Company" or "VOC")
Unaudited Interim Results for the six months ended 31 March 2010
Vision Opportunity China Fund Limited (AIM: VOC.L), the closed-ended fund traded
on AIM that seeks promising investments in small and medium enterprises in
Greater China, today reports its unaudited interim results for the six months
ended 31 March 2010.
Highlights
· NAV per share increase of 131% to US$2.75 (compared to 30 September 2009)
and 189% (compared to 31 March 2009)
· Share price increase of 64% to US$1.99 (since 30 September 2009) and 155%
(since 31 March 2009). The MSCI China index increased by 8% (since 30 September
2009)and 55% (since 31 March 2009)
· Net investment income increase of 343% to $65,634,476 (since 31 March
2009)
· Assets by industry: 35.1% consumer staples; 49.5% industrials; 13.9%
alternative energy; 1.3% healthcare and 0.2% in technology (as at 31 March 2010)
· Two of the Company's largest holdings, China Integrated Energy, Inc. and
QKL Stores, Inc, completed secondary public offerings in the fourth quarter of
2009
· During the period, positions sold for US$40.7 million, realising gains of
US$25.5 million
· Outlook for Chinese economic growth is stable with strong VOC deal flow
expected
Post period end, the Company has announced:
· Planned premium listing on the London Stock Exchange for the end of 2010
financial year
· Introduction of a new distribution policy designed to enhance shareholder
value
· New investments of US$2.0 million in Silver Pearl Enterprises, a
China-based manufacturer of petrochemical products
Adam Benowitz, Chief Investment Officer of Vision Capital Advisors, LLC,
commented:
"Despite continuing volatility in the global markets, the latest macro data on
China shows encouraging results from the stimulus driven recovery. We believe
the Chinese market is poised for further balanced growth during the remainder of
2010.and VOC continues to work tirelessly to generate positive shareholder
returns."
Chris Fish, Chairman of the Company, commented:
"VOC's investee companies have continued to show promising growth during this
period, permitting the Company to realise substantial returns within a
relatively short timeframe. Exciting investment opportunities combined with the
recently announced new distribution policy will provide VOC with a platform to
continue its efforts to enhance long-term shareholder value."
Financial Highlights
+---------------+--------------+--------------+--------------+
| | 31 March | 30 September | Growth |
| | 2010 | 2009 | |
+---------------+--------------+--------------+--------------+
| Net Asset | $182,127,289 | $138,649,851 | 31% |
| Value (NAV) | | | |
+---------------+--------------+--------------+--------------+
| Net Asset | $2.7516 | $2.0947 | 31% |
| Value (NAV) | | | |
| per Ordinary | | | |
| Share | | | |
+---------------+--------------+--------------+--------------+
For further information, please contact:
Vision Opportunity China Fund Limited
David Benway / Adam Benowitz
Tel: +1 (212) 849 8225
www.vocfund.com
Canaccord Genuity Limited
Tel: +44 (0)20 7050 6500
Sue Inglis / Guy Blakeney
Financial Dynamics
Tel: +44 (0)20 7269 7132
Ed Gascoigne-Pees / Ed Berry
NOTE TO EDITORS
Vision Opportunity China Fund Limited is a closed-ended listed fund traded on
AIM. VOC primarily invests directly in listed companies with operations
principally within Greater China.
Greater China is a collective term for the territories administered by the
People's Republic of China, those administered by the Republic of China and
Singapore.
VISION OPPORTUNITY CHINA FUND LIMITED
Chairman's Statement
Period ended 31 March 2010
The Company is pleased to report results for the period from 1 October 2009 to
31 March 2010. The NAV of the Company continued an upward trend during the
period rising from US$138.65 million to US$182.13 million. As at 31 March 2010
the Company's NAV per share was US$2.752, a 31.4% increase from the NAV per
share at 30 September 2009, and 191.4% increase since inception at 28 November
2007.
This period has witnessed some recovery in global economies and stock markets.
Despite the continuing volatility, VOC's investee companies have performed well
with several of them either closing additional financings or elevating their
shares to trade on major exchanges. This has permitted the Company to realise
substantial returns from certain investments within a relatively short
timeframe. During the period, VOC sold positions for a total of US$40.7 million
of sales proceeds, realising gains of US$25.4 million. We took this opportunity
to adopt a policy of returning a portion of net gains realised in each year to
shareholders, and are due to make our first remittance this month.
In addition, during this period, we have undertaken to pursue a premium listing
on the London Stock Exchange. Working closely with our advisers, we hope to
achieve this uplift by the end of the 2010 financial year.
From inception to date, the Company had invested approximately US$76.1 million
across 13 companies and, as at 31 March 2010, had cash balances of approximately
US$31.8 million. From inception, we have realised approximately US$82.7 million
of sales proceeds from assets purchased for approximately US$44.3 million,
representing a return of approximately 86.9%1.
The Board is pleased with the progress the Company has made to date and the
performance of Vision Capital Advisors as the Company's investment manager.
Going forward, we shall continue to focus on identifying the most promising
investments for the Company's investment portfolio in an effort to continue to
generate returns for our Shareholders.
Christopher Fish
Chairman
26 May 2010
1 Excluding "shell" companies purchased as investment vehicles and a short-term
loan to Vision Opportunity Master Fund. If including the shell companies and
the loan, VOC deployed approximately US$83.3 million in 16 companies and
realised approximately US$90.0 million in sale proceeds.
VISION OPPORTUNITY CHINA FUND LIMITED
Investment Manager's Report
Period ended 31 March 2010
We are pleased to report that during the period under review the Company saw a
number of important positive developments. Most notably, the growth in both the
Company's NAV and trading price of its Ordinary Shares. The Company's NAV at 31
March 2010 was US$182.13 million and the NAV per Ordinary Share was US$2.752,
which was an increase of approximately 31.4% from NAV of US$2.095 per Ordinary
Share at fiscal year ended 30 September 2009 and 189.2% from US$0.951 per
Ordinary Share at 31 March 2009. VOC's share price was US$1.99 at 31 March
2010, representing an increase of 63.1% from 30 September 2009, and 155.1% from
31 March 2009. During the same period, the MSCI China Index increased by 8.0%
and 54.6% respectively.
The upswing in liquidity and price appreciation in a number of portfolio
companies has provided an opportunity for VOC to realise profits as well as NAV
appreciation. China Integrated Energy, Inc. and QKL Stores, Inc. completed
public offerings in the fourth quarter of 2009, both of which enhanced stock
liquidity. VOC has also completely exited investments in Lihua International,
Inc. and China Information Security Technology, Inc. during the first quarter of
2010. In addition, the Company realised profits in a number of positions,
including in Shengkai Innovations, Inc., China Integrated Energy, Inc. and QKL
Stores, Inc. As of 31 March 2010, the portfolio held six positions, three of
which collectively accounted for 98.1% of the securities portfolio and 87.0% of
NAV. By industry, 35.1% of VOC's assets were in consumer staples, 49.5% in
industrials, 13.9% in alternative energy, 1.3% in healthcare and 0.2% in
technology.
Despite continuing volatility in the global markets, the latest macro data on
China supports our previous optimism and shows encouraging results from the
stimulus driven recovery. It also signals potential for a continued balanced
growth for the first half of 2010. Chinese economic growth accelerated to the
fastest pace in almost three years in the first quarter of 2010aided by the
government's stimulus measures, tax cuts and consumer subsidies. GDP expanded
11.9% year-on-year in the first quarter of 2010, partially due to last year's
low comparison base. The GDP growth in the first quarter was mainly driven by
surging domestic demand, as retail sales increased 17.9% year-on-year in the
first quarter and fixed-asset investment rose 25.6% year-on-year. Industrial
output grew 19.6% year-on-year in the same period, of which central and western
regions grew 23.1% and 20.2% respectively. Foreign trade demonstrated further
recovery in the first quarter of 2010 with exports up by 28.7% and imports up by
64.6% year-on-year. Going forward, we expect that the Chinese government will
adjust its fiscal and monetary policy to steer a more sustainable economic
growth, and the central government will further increase transfer payments to
the local government to achieve a more balanced development among the country's
different regions.
In choosing companies for the Company we continue to focus on companies which
serve the domestic market and have strong balance sheet and competitive
advantages. We believe that VOC is well positioned to continue to deliver
growth. With VOC's recent exits, it is again actively looking to deploy
capital. Recently, the Company invested approximately US$2 million in Silver
Pearl Enterprises (OTCBB:SVPE), which conducts its business through its wholly
owned subsidiary, Keyuan Plastics Co. Ltd, an independent, China-based
manufacturer of a wide range of petrochemical products. VOC's deal flow
continues to be strong and we are diligencing several high quality, fast growing
companies which appear priced attractively for investment.
Adam Benowitz
Managing Member
Vision Capital Advisors, LLC
Date: 26 May 2010
VISION OPPORTUNITY CHINA FUND LIMITED
Consolidated Statement of Financial Position
As at 31 March 2010
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | Unaudited | | Audited | | Unaudited |
| | | 31 March | | 30 | | 31 March |
| |Notes | 2010 | | September | | 2009 |
| | | | | 2009 | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | US$ | | US$ | | US$ |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Non-current assets: | 6 | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Investment designated | | | | | | |
| as: | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Fair value through | | 101,701,551 | | 97,385,577 | | 55,733,746 |
| profit or loss | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Held for trading | | 59,760,699 | | 35,987,698 | | 7,670,479 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Total investments | | 161,462,250 | | 133,373,275 | | 63,404,225 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Current assets: | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Cash and cash | 7 | 31,798,337 | | 23,088,891 | | 6,125,920 |
| equivalents | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Other receivables | 8 | 230,174 | | 581,155 | | 122,911 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | 32,028,511 | | 23,670,046 | | 6,248,831 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Total assets | | 193,490,761 | | 157,043,321 | | 69,653,056 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Current liabilities: | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Bank overdraft | 7 | 8,317 | | 180 | | - |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Other payables | 9 | 11,255,155 | | 18,293,290 | | 4,961,848 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | 11,263,472 | | 18,293,470 | | 4,961,848 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Non-current | | | | | | |
| liabilities: | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| B Redeemable | | | | | | |
| Participating Shares | 10 | 100,000 | | 100,000 | | 100,000 |
| of GPCo | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Total liabilities | | 11,363,472 | | 18,393,470 | | 5,061,848 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Total net assets | | 182,127,289 | | 138,649,851 | | 64,591,208 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Represented by | | | | | | |
| Shareholders' equity: | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Revenue reserves | | 118,217,859 | | 74,080,421 | | 21,778 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Share capital | 10 | 63,909,430 | | 64,569,430 | | 71,064,098 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Treasury shares | 10 | - | | - | | (6,494,668) |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
| Total net assets | | 182,127,289 | | 138,649,851 | | 64,591,208 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
| Net Asset Value per | | | | | | |
| Ordinary Share | 11 | 2.7516 | | 2.0947 | | 0.9759 |
+-----------------------+-------+-------------+----------+-------------+----------+-------------+
The accompanying notes on pages 10 to 20 form an integral part of these
financial statements.
VISION OPPORTUNITY CHINA FUND LIMITED
Consolidated Statement of Comprehensive Income
For the period 1 October 2009 to 31 March 2010
+-------------------------------+-------+-------------+-+--------------+
| | | Unaudited | | Unaudited |
| | | 1 October | | 1 October |
| | | 2009 | | 2008 |
| |Notes | to | | to |
| | | 31 March | | 31 March |
| | | 2010 | | 2009 |
+-------------------------------+-------+-------------+-+--------------+
| | | US$ | | US$ |
+-------------------------------+-------+-------------+-+--------------+
| Income | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Bank interest | | 13 | | 6,915 |
+-------------------------------+-------+-------------+-+--------------+
| Dividend income | | 8,793 | | 88,621 |
+-------------------------------+-------+-------------+-+--------------+
| Movement in net unrealised | | | | |
| gain/(loss) on investments at | 6 | 40,202,582 | | (26,268,831) |
| fair value through profit or | | | | |
| loss | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Net realised gain/(loss) on | | | | |
| investments at fair value | 6 | 25,428,875 | | (828,829) |
| through profit or loss | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Net foreign exchange losses | | (5,787) | | (8,818) |
+-------------------------------+-------+-------------+-+--------------+
| | | | | |
| Net investment income | | 65,634,476 | | (27,010,942) |
+-------------------------------+-------+-------------+-+--------------+
| | | | | |
+-------------------------------+-------+-------------+-+--------------+
| | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Expenses | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Investment Manager's fees | 3 | 1,441,611 | | 952,130 |
+-------------------------------+-------+-------------+-+--------------+
| Performance allocation | 3 | 10,869,360 | | - |
+-------------------------------+-------+-------------+-+--------------+
| Realised movement in PPUs | 3 | 6,666,830 | | - |
+-------------------------------+-------+-------------+-+--------------+
| Unrealised movement in PPUs | 3 | - | | (1,386,947) |
+-------------------------------+-------+-------------+-+--------------+
| Income allocation on B | | | | |
| Redeemable Preference Shares | | 201,300 | | (26,643) |
| of GPCo | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Administrator's fees | 3 | 118,671 | | 60,336 |
+-------------------------------+-------+-------------+-+--------------+
| Directors' fees and expenses | 4 | 95,947 | | 85,000 |
+-------------------------------+-------+-------------+-+--------------+
| Auditor's remuneration | | 40,574 | | 37,005 |
+-------------------------------+-------+-------------+-+--------------+
| Custodian's fees | 3 | 45,679 | | 15,228 |
+-------------------------------+-------+-------------+-+--------------+
| Registrar's fees | 3 | 6,365 | | 7,518 |
+-------------------------------+-------+-------------+-+--------------+
| NOMAD & Broker's fees | 3 | 59,173 | | 36,934 |
+-------------------------------+-------+-------------+-+--------------+
| Commissions | 3 | 1,555,974 | | 209,002 |
+-------------------------------+-------+-------------+-+--------------+
| D&O insurance | | 59,167 | | 51,490 |
+-------------------------------+-------+-------------+-+--------------+
| Annual listing fees | | 5,689 | | 6,127 |
+-------------------------------+-------+-------------+-+--------------+
| Legal and professional fees | | 95,691 | | 151,490 |
+-------------------------------+-------+-------------+-+--------------+
| Expenses in relation to the | | - | | 142,000 |
| Tender Offer | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Transaction fees | | 149,906 | | 55,288 |
+-------------------------------+-------+-------------+-+--------------+
| Marketing fees | | 38,725 | | 41,375 |
+-------------------------------+-------+-------------+-+--------------+
| Other expenses | | 46,376 | | 29,674 |
+-------------------------------+-------+-------------+-+--------------+
| | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Total expenses | | 21,497,038 | | 467,007 |
+-------------------------------+-------+-------------+-+--------------+
| | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Total comprehensive | | | | |
| income/(deficit) for the | | 44,137,438 | | (27,477,949) |
| period attributable to | | | | |
| Shareholders | | | | |
+-------------------------------+-------+-------------+-+--------------+
| | | | | |
+-------------------------------+-------+-------------+-+--------------+
| Earnings/(loss) per Ordinary | | | | |
| Share (basic and diluted) | 5 | 0.6668 | | (0.3533) |
+-------------------------------+-------+-------------+-+--------------+
The results from the current and prior periods are derived from continuing
operations.
The accompanying notes on pages 10 to 20 form an integral part of these
financial statements.
VISION OPPORTUNITY CHINA FUND LIMITED
Consolidated Statement of Changes in Equity
For the period 1 October 2009 to 31 March 2010
+-----------------------+-------+-------------+------------+----------+-------------+
| | | Unaudited |
| | | 1 October 2009 to 31 March 2010 |
| | | |
+-----------------------+-------+---------------------------------------------------+
| | | Revenue | Share |Treasury | Total |
| |Notes | Reserve | Capital | Shares | |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | US$ | US$ | US$ | US$ |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | | | | |
| Balance brought | | 74,080,421 | 64,569,430 | - | 138,649,851 |
| forward | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
| Purchase and | | | | | |
| cancellation of | 10 | - | (660,000) | - | (660,000) |
| Fairfax Option | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
| Total comprehensive | | | | | |
| income for the period | | 44,137,438 | - | - | 44,137,438 |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | | | | |
| Balance carried | | 118,217,859 | 63,909,430 | - | 182,127,289 |
| forward | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
| | | | | | |
+-----------------------+-------+-------------+------------+----------+-------------+
For the period 1 October 2008 to 31 March 2009
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | Unaudited |
| | | 1 October 2008 to 31 March 2009 |
| | | |
+-----------------------+-------+----------------------------------------------------------+
| | | Revenue | Share | Treasury | Total |
| |Notes | Reserve | Capital | Shares | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | US$ | US$ | US$ | US$ |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
| Balance brought | | 27,499,727 | 94,427,417 | - | 121,927,144 |
| forward | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| Tender offer | 10 | - | (23,363,319) | - | (23,363,319) |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| Repurchase of | | | | | |
| Ordinary Shares | 10 | - | - | (6,494,668) | (6,494,668) |
| held as Treasury | | | | | |
| Shares | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| Total comprehensive | | | | | |
| deficit for the | | (27,477,949) | - | - | (27,477,949) |
| period | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
| Balance carried | | 21,778 | 71,064,098 | (6,494,668) | 64,591,208 |
| forward | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
| | | | | | |
+-----------------------+-------+--------------+--------------+-------------+--------------+
The accompanying notes on pages 10 to 20 form an integral part of these
financial statements.
VISION OPPORTUNITY CHINA FUND LIMITED
Consolidated Statement of Cash Flows
For the period 1 October 2009 to 31 March 2010
+------------------------------+-------+--------------+-+---------------+
| | | Unaudited | | Unaudited |
| | | 1 October | | 1 October |
| | | 2009 | | 2008 |
| |Notes | to | | to |
| | | 31 March | |31 March 2009 |
| | | 2010 | | |
+------------------------------+-------+--------------+-+---------------+
| | | US$ | | US$ |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
+------------------------------+-------+--------------+-+---------------+
| Cash flows from/(used in) | | | | |
| operating activities: | | | | |
+------------------------------+-------+--------------+-+---------------+
| Bank interest received | | 13 | | 15,975 |
+------------------------------+-------+--------------+-+---------------+
| Dividends received | | 8,793 | | 88,621 |
+------------------------------+-------+--------------+-+---------------+
| Operating expenses paid | | (28,578,957) | | (2,577,369) |
+------------------------------+-------+--------------+-+---------------+
| Amounts paid on purchases of | | (2,738,224) | | (27,011,430) |
| investments | | | | |
+------------------------------+-------+--------------+-+---------------+
| Sales proceeds received from | | | | |
| disposal of investments | | 40,675,471 | | 8,626,879 |
+------------------------------+-------+--------------+-+---------------+
| Net cash from/(used in) in | | | | |
| operating activities | | 9,367,096 | | (20,857,324) |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
+------------------------------+-------+--------------+-+---------------+
| Cash flows used in financing | | | | |
| activities: | | | | |
+------------------------------+-------+--------------+-+---------------+
| Amounts paid on purchase and | | | | |
| cancellation of Fairfax | | (660,000) | | - |
| Option | | | | |
+------------------------------+-------+--------------+-+---------------+
| Amounts paid in relation to | | - | | (23,363,319) |
| the Tender Offer | | | | |
+------------------------------+-------+--------------+-+---------------+
| Amounts paid on repurchase | | | | |
| of Ordinary Shares held as | | - | | (6,494,668) |
| Treasury Shares | | | | |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
| Net cash used in financing | | (660,000) | | (29,857,987) |
| activities | | | | |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
+------------------------------+-------+--------------+-+---------------+
| Net increase/(decrease) in | | | | |
| cash and cash equivalents | | 8,707,096 | | (50,715,311) |
| during the period | | | | |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
+------------------------------+-------+--------------+-+---------------+
| Cash and cash equivalents, | | 23,088,711 | | 56,850,049 |
| start of period | | | | |
+------------------------------+-------+--------------+-+---------------+
| | | | | |
+------------------------------+-------+--------------+-+---------------+
| Effect of exchange rate | | | | |
| changes during the period | | (5,787) | | (8,818) |
+------------------------------+-------+--------------+-+---------------+
| | 7 | | | |
| Cash and cash equivalents, | | 31,790,020 | | 6,125,920 |
| end of period | | | | |
+------------------------------+-------+--------------+-+---------------+
+------------------------------+------+--------------+-+---------------+
| Cash and cash equivalents | | | | |
| comprise the following | | | | |
| amounts: | | | | |
+------------------------------+------+--------------+-+---------------+
| Bank deposits | | 31,798,337 | | 6,125,920 |
+------------------------------+------+--------------+-+---------------+
| Bank overdrafts | | (8,317) | | - |
+------------------------------+------+--------------+-+---------------+
| | | 31,790,020 | | 6,125,920 |
+------------------------------+------+--------------+-+---------------+
The accompanying notes on pages 10 to 20 form an integral part of these
financial statements.
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
1. The Company:
The Company is a Guernsey registered, closed-ended investment company. The
Company commenced business on 28 November 2007 when its Ordinary Shares were
admitted to trading on AIM. The registered office of the Company is Suites 13
and 15, Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 4NA.
The Company is a Guernsey registered closed-ended investment scheme and is
subject to the Registered Collective Investment Scheme Rules 2008 of the
Guernsey Financial Services Commission.
The Company's objective is to achieve long-term capital growth by investment in
companies whose operations at the time of the initial investment are principally
in Greater China ("Investee Companies") or investment vehicles to be used to
acquire the foregoing. The Company intends to provide shareholders with returns
on their investment predominantly through capital appreciation.
The underlying investments of the Group are held by the Limited Partnership
which was registered as a limited partnership in Guernsey under the Limited
Partnership (Guernsey) Law, 1995. The Company is the limited partner of the
Limited Partnership and the Company's subsidiary, GPCo, is the general partner
of the Limited Partnership.
GPCo was incorporated in Guernsey and is licensed under The Protection of
Investors (Bailiwick of Guernsey) Law 1987, as amended. GPCo's principal
activity is to manage the Limited Partnership which it does by employing the
services of Vision Capital Advisors under the Investment Management Agreement.
GPCo is responsible for the continuing fees of the Investment Manager.
The Company owns all of the issued A Ordinary Share capital of GPCo. The A
Ordinary Shares give the Company the sole control rights over GPCo.
Vision Capital Advisors owns all of the issued B Redeemable Preference Share
capital of GPCo. The B Redeemable Preference Shares give the Investment Manager
the sole economic rights to the performance allocation to which GPCo is entitled
under the terms of the Limited Partnership and the return on the US$100,000
capital invested by Vision Capital Advisors for the B Redeemable Preference
Shares.
Through its interest as a limited partner in the Limited Partnership, the
Company is entitled to a return on the amount invested in the Limited
Partnership.
The Company, the GPCo and the Limited Partnership together form an integrated
fund structure and consequently the Company has consolidated its interests in
GPCo and the Limited Partnership. The Investment Manager's holding in the GPCo
is the interest in B Redeemable Preference Shares issued by the GPCo.
2. Principal Accounting Policies:
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the Group's financial
statements:
(a) Basis of Preparation:
The condensed interim financial statements have been prepared in accordance with
International Accounting Standard ("IAS") 34 "Interim Financial Reporting", as
adopted by the European Union, which comprise standards and interpretations
approved by the International Accounting Standards Board ("IASB"), and
International Accounting Standards and Standing Interpretations Committee
interpretations approved by the International Accounting Standards Committee
("IASC") that remain in effect.
(b) Significant Accounting Policies:
The same accounting policies, presentation and methods of computation are
followed in the condensed interim financial statements as those followed in the
preparation of the Group's annual audited financial statements for the year
ended 30 September 2009.
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
3. Related Parties & Material Contracts:
The Company is responsible for the continuing fees of GPCo, the Administrator,
the Custodian, the Prime Broker, the NOMAD & Broker and the Registrar in
accordance with the Limited Partnership, Administration, Custodian, the Prime
Broker, NOMAD & Broker and Registrar agreements, respectively.
The Investment Manager is a related party of the Group as a result of a number
of connections. Dr Randolph Cohen is a Director of the Company and is co-founder
and Senior Managing Director of the Investment Manager. Mr David Benway is a
Director of the Company and is also Director of Research and Investments for the
Investment Manager.
Limited Partnership Agreement
Pursuant to the provisions of the Limited Partnership Agreement dated 22
November 2007, GPCo's compensation consists of all expenses incurred in relation
to the constitution, administration and business of the Limited Partnership,
without limitation or exception.
The GPCo is responsible for the continuing fees of the Investment Manager in
accordance with the Investment Management Agreement.
Investment Management Agreement
Pursuant to the Investment Management Agreement, GPCo pays a management fee to
the Investment Manager of 0.5% of the final month-end NAV of the previous
quarter, paid quarterly in advance. [For the first quarter following Admission,
the management fee was 0.5% of the net proceeds pro-rated on a time basis.]
As at 30 September 2009 the management fee creditor was US$Nil (30 September
2009 & 31 March 2009: US$Nil).
The Investment Manager is also entitled to a performance allocation, through its
interest in GPCo, in respect of a performance period if two conditions are met,
namely (i) the performance hurdle test is met; and (ii) the High Watermark is
exceeded.
The performance hurdle test will be met in a performance period if the Adjusted
Closing NAV per Ordinary Share exceeds the Hurdle NAV at the end of such period.
The Hurdle NAV is the greater of (a) the Opening NAV per Ordinary Share and (b)
the High Watermark, increased over the relevant performance period by a rate
equal to 10% per annum.
The High Watermark will be exceeded if the Adjusted Closing NAV per Ordinary
Share at the end of the relevant performance period is higher than the High
Watermark.
The performance allocation is based on "NAV Increase per Ordinary Share" which
is the amount by which the Adjusted Closing NAV per Ordinary Share exceeds
either (i) the Opening NAV per Ordinary Share, or (ii) in the case where the
High Watermark exceeds the Hurdle NAV, the High Watermark.
The performance allocation is an amount equal to 20% of the NAV increase per
Ordinary Share multiplied by the time weighted average of the total number of
Ordinary Shares in issue for the relevant period. Vision Capital Advisors will
not be entitled to any such part of the performance allocation to which it would
otherwise be entitled if allocating such part of the performance allocation
would have caused the performance hurdle test or High Watermark test to not be
met.
The first performance period began on Admission and ended on 30 September 2008.
Each subsequent performance period is a period of one financial year commencing
on 1 October.
The Investment Manager has agreed to treat a portion of its performance
allocation as invested each year. The portion of the performance allocation
which is represented by realised gains, less expenses, from investments will be
distributable in cash by the Limited Partnership to GPCo in arrears at the end
of each performance period (the "Cash Performance Allocation"). Any amount of
the performance allocation which is not represented by realised gains (or which
the Investment Manager via GPCo otherwise elects not to receive in cash as part
of the Cash Performance Allocation) will be treated as invested by GPCo at the
end of each performance period in Performance Partnership Units ("PPUs") in the
Limited Partnership. PPUs will accrue a preferred share of the profits and
losses of the Limited Partnership on the basis of fluctuations in the market
price of Ordinary Shares from the date of their allocation to GPCo until the
date PPUs are redeemed, such that GPCo's return on its PPUs will track the
return of an investor in Ordinary Shares over the same period (ignoring dealing
costs).
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
3. Related Parties & Material Contracts, continued:
Investment Management Agreement, continued
GPCo is entitled to receive a priority distribution from the Limited Partnership
equivalent to the Cash Performance Allocation and the return on the PPUs. GPCo's
entitlement to the Cash Performance Allocation and the return on the PPUs will
be payable to the Investment Manager as the owner of 100% of the B Redeemable
Preference Shares in GPCo.
At the end of each performance period, the Administrator will calculate the
proposed performance allocation and the split between the Cash Performance
Allocation payable and the amount which will be automatically treated as
invested in PPUs (to be reviewed and agreed by the Board) and, if cash is
available, GPCo will pay a dividend on the non-voting B Redeemable Preference
Shares or permit certain of them to be redeemed to pay the Cash Performance
Allocation to the Investment Manager. If cash is not available or, if Vision
Capital Advisors elects, the Cash Performance Allocation may be satisfied by the
issue of further PPUs to Vision Capital Advisors. For the financial year ended
30 September 2010, the performance allocation High Watermark is US$2.0947 per
Ordinary Share (30 September 2009: US$ 1.2193).
As at 31 March 2010 the accrued uncrystalised Cash Performance Allocation
creditor was US$2,955,422 (30 September 2009: US$1,977,610 & 31 March 2009:
US$Nil) and the amount which would be automatically treated as invested PPUs,
upon crystalisation, is US$7,913,938 (30 September 2009: US$15,997,882 & 31
March 2009: US$4,917,356).
Administration Agreement
Praxis Fund Services Limited has been appointed as Administrator to the Group
under an administration agreement dated 16 November 2007 (the "Administration
Agreement"). The Administrator provides day-to-day administration and
secretarial services to the Group.
The Administration Agreement may be terminated by either party on not less than
180 days' written notice, or earlier upon certain breaches of the Administration
Agreement or the insolvency or receivership of either party or if the
Administrator ceases to be qualified to act as such.
Pursuant to the provisions of the Administration Agreement, the Administrator is
entitled to receive the following administration fees from the Group:
· Accounting and NAV calculation- a fee based upon 0.10% of NAV subject to
a minimum of GBP4,500 per month;
· Company Secretarial & US Shareholder Reporting- time based fee; and
· GPCo - time based fee subject to a minimum of GBP10,000 per annum.
As at 31 March 2010 the administration fee creditor was US$24,517 (30 September
2009: US$18,849 & 31 March 2009: US$9,968).
Registrar Agreement
Pursuant to the provisions of the registrar agreement between the Registrar and
the Group, dated 16 November 2007, the Registrar is entitled to an annual
maintenance fee of GBP2 per shareholder account, subject to an annual minimum of
GBP5,000 per annum, together with a per deal fee per shareholder transaction. In
addition, the Registrar is also entitled to an investor relations fee of
GBP2,720 per annum and a compliance fee of GBP750 per annum.
As at 31 March 2010 the registrar fee creditor was US$4,000 (30 September 2009:
US$8,221 & 31 March 2009: US$1,772).
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
3. Related Parties & Material Contracts, continued:
Custodian Agreement
Jefferies & Company Inc. has been appointed as custodian to the Group and in
that capacity has custody of many of the Group's investments. In accordance with
US securities laws, the assets of the Custodian's customers are required to be
segregated from the Custodian's proprietary assets.
As at 31 March 2010 the custodian fee creditor was US$Nil (30 September 2009:
US$Nil & 31 March 2009: US$883).
Prime Broker Agreement
Jefferies & Company Inc. has been appointed as prime broker to the Limited
Partnership. The Limited Partnership pays the Prime Broker commissions and
other transaction fees (for the execution of purchases and sales of securities).
These fees are payable at the Prime Broker's prevailing rates.
As at 31 March 2010 the Limited Partnership had amounts due to the Prime Broker
of US$8,876 (30 September 2009: US$4,331 & 31 March 2009: US$Nil).
NOMAD & Broker Agreement
With effect from 1 October 2009 Canaccord replaced Fairfax as NOMAD & Broker to
the Company under a nominated adviser and Broker agreement dated 1 October 2009
between the Company and Canaccord (the "NOMAD & Broker Agreement"). The NOMAD &
Broker Agreement is on normal market terms, and under those terms the Company
has agreed, inter alia, to consult and discuss with Canaccord all of its
announcements and statements and to provide Canaccord with any information which
Canaccord reasonably requires to enable it to carry out its obligations as a
NOMAD and Broker. The NOMAD & Broker Agreement is terminable by either party on
2 months written notice and in certain other circumstances.
As at 31 March 2010 the fees paid in advance to Canaccord were US$125 (30
September 2009: US$23,354 creditor (Fairfax) & 31 March 2009: US$18,344 prepaid
(Fairfax)).
Transactions with the Master Fund
On 10 December 2008 the Limited Partnership sold all the shares of common stock
held by the Group in two shell companies listed on the Over-the-Counter Bulletin
Board, City Language Exchange Incorporated ("CLGX") and First Transaction
Management Incorporated ("FMNG") (together the "Shell Companies") to the Master
Fund. This transaction was carried out on an arm's length basis and the total
sale price paid by the Master Fund was US$814,363 which is equal to the price
paid by the Limited Partnership for the investments together with the expenses
incurred on making such investments, such as due diligence and legal fees.
Co-investments with the Master Fund
As at 31 March 2010 the Group held investments in the three underlying
investment companies noted below, which the Master Fund also held an interest
in:
* China Integrated Energy Inc
* Jingwei International Limited
* Wuhan General Group (China) Inc
The Limited Partnership, collectively with the Master Fund, does not hold an
aggregated controlling interest in any of the above co-investments.
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
3. Related Parties & Material Contracts, continued:
Directors' Interests
The interests in Ordinary Shares of the Directors and their families, who held
office during the period 1 October 2009 to 31 March 2010 are set out below:
+--------------------+------------+----------+----------------+----------+-----------+
| | 31 March | | 30 | | 31 March |
| | 2010 | |September 2009 | | 2009 |
+--------------------+------------+----------+----------------+----------+-----------+
| | No. of | | No. of | | No. of |
| | Ordinary | | Ordinary | | Ordinary |
| | Shares | | Shares | | Shares |
+--------------------+------------+----------+----------------+----------+-----------+
| Christopher Fish | - | | - | | - |
| (Chairman) | | | | | |
+--------------------+------------+----------+----------------+----------+-----------+
| Dr Randolph Cohen* | 7,537,845 | | 7,850,000 | | 7,800,000 |
+--------------------+------------+----------+----------------+----------+-----------+
| David Benway | - | | - | | - |
+--------------------+------------+----------+----------------+----------+-----------+
| Ruiping Wang | - | | - | | - |
+--------------------+------------+----------+----------------+----------+-----------+
| Dr Christopher | - | | - | | - |
| Polk | | | | | |
+--------------------+------------+----------+----------------+----------+-----------+
*Dr Cohen is interested in 7,537,845 or 11.39% (30 September 2009: 7,850,000 or
11.86% & 31 March 2009: 7,800,000 or 10.61%) Ordinary Shares due to his
ownership of a proportion of the economic rights of Vision Capital Advisors'
Ordinary Shares.
There were no other changes in the interests of the Directors prior to the date
of publishing this report.
Dr Cohen has an indirect interest through Vision Capital Advisors' holdings of
Class B shares in the GPCo.
Other than Dr Cohen, no Director and no connected person of any Director has an
interest in Ordinary Shares which, is known to (or could with reasonable
diligence be ascertained by) the Directors, whether held directly or through a
third party.
Additionally, as at 31 March 2010 Jonathan Shane and Carl Kleidman, employees of
Vision Capital Advisors, held a collective 535,000 (30 September 2009: 535,000 &
31 March 2009: 535,000) Ordinary Shares, that carry certain restrictions.
4. Directors' Fees and Expenses:
Each of the Directors has entered into an agreement with the Company providing
for them to act as a non-executive Directors. Their annual fees, excluding all
reasonable expenses incurred in the course of their duties which will be
reimbursed by the Company, are as follows:
+--------------------+------------+----------+----------------+----------+------------+
| | 31 March | | 30 | | 31 March |
| | 2010 | |September 2009 | | 2009 |
+--------------------+------------+----------+----------------+----------+------------+
| |Annual Fee | | Annual Fee | |Annual Fee |
+--------------------+------------+----------+----------------+----------+------------+
| | US$ | | US$ | | US$ |
+--------------------+------------+----------+----------------+----------+------------+
| Christopher Fish | 70,000 | | 70,000 | | 70,000 |
| (Chairman) | | | | | |
+--------------------+------------+----------+----------------+----------+------------+
| Dr Randolph Cohen | - | | - | | - |
+--------------------+------------+----------+----------------+----------+------------+
| David Benway | - | | - | | - |
+--------------------+------------+----------+----------------+----------+------------+
| Ruiping Wang | 50,000 | | 50,000 | | 50,000 |
+--------------------+------------+----------+----------------+----------+------------+
| Dr Christopher | 50,000 | | 50,000 | | 50,000 |
| Polk | | | | | |
+--------------------+------------+----------+----------------+----------+------------+
Dr Cohen and Mr Benway are not entitled to any to Directors' fees for the
period. As at 31 March 2010, the Directors' fees creditor was US$Nil (30
September 2009: US$12,500 & 31 March 2009: US$Nil).
5. Earnings/(Loss) per Ordinary Share:
Earnings per Ordinary Share of US$0.6668 (period ended 31 March 2009: US$0.3533
loss) is based on the return for the period of US$44,137,438 (period ended 31
March 2009: US$27,477,949 deficit) and on a weighted average of 66,189,574
(period ended 31 March 2009: 77,771,046) Ordinary Shares in issue.
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+---------+
| | | | |
+------------------------------------+----------+------------+---------+
| | | | |
+------------------------------------+----------+------------+---------+
6. Investments:
+-----------------------+--------------+----------+--------------+----------+--------------+
| | 1 October | | 1 October | | 1 October |
| Fair Value Through | 2009 | | 2008 | | 2008 |
| Profit or Loss | to | | to | | to |
| Investments: | 31 March | |30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | US$ | | US$ | | US$ |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Listed equity | | | | | |
| securities (freely | 101,701,551 | | 80,184,124 | | 19,666,055 |
| tradeable) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Listed equity | | | | | |
| securities | - | | 17,201,453 | | 29,067,691 |
| (restricted) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Unlisted | - | | - | | 7,000,000 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | 101,701,551 | | 97,385,577 | | 55,733,746 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Opening fair value | 97,385,577 | | 56,794,508 | | 56,794,508 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Purchases | 2,738,224 | | 30,144,363 | | 27,011,430 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Sales - proceeds | (40,280,706) | | (35,141,651) | | (8,640,862) |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Sales - realised | | | | | |
| gains/(losses) on | 25,428,875 | | 8,783,085 | | (828,829) |
| disposals | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Movement in net | | | | | |
| unrealised | 16,429,581 | | 36,805,272 | | (18,602,501) |
| gains/(losses) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing fair value | 101,701,551 | | 97,385,577 | | 55,733,746 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing book cost | 32,234,815 | | 44,348,422 | | 58,104,364 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing net | | | | | |
| unrealised | 69,466,736 | | 53,037,155 | | (2,370,618) |
| gains/(losses) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing fair value | 101,701,551 | | 97,385,577 | | 55,733,746 |
+-----------------------+--------------+----------+--------------+----------+--------------+
+-----------------------+------------+----------+--------------+----------+-------------+
| | 1 October | | 1 October | | 1 October |
| Held for Trading | 2009 | | 2008 | | 2008 |
| Investments: | to | | to | | to |
| | 31 March | |30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | US$ | | US$ | | US$ |
+-----------------------+------------+----------+--------------+----------+-------------+
| Unlisted investments | | | | | |
| - warrants | 59,760,699 | | 35,987,698 | | 7,670,479 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
| Opening fair value | 35,987,698 | | 15,336,809 | | 15,336,809 |
+-----------------------+------------+----------+--------------+----------+-------------+
| Purchases | - | | - | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Sales - proceeds | - | | (168,000) | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Sales - realised | | | | | |
| gains on disposals | - | | 168,000 | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Movement in net | | | | | |
| unrealised | 23,773,001 | | 20,650,889 | | (7,666,330) |
| gains/(losses) | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
| Closing fair value | 59,760,699 | | 35,987,698 | | 7,670,479 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
| Closing book cost | 7,178 | | 7,178 | | 7,178 |
+-----------------------+------------+----------+--------------+----------+-------------+
| Closing net | 59,753,521 | | 35,980,520 | | 7,663,301 |
| unrealised gains | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
| Closing fair value | 59,760,699 | | 35,987,698 | | 7,670,479 |
+-----------------------+------------+----------+--------------+----------+-------------+
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+----------+
| | | | |
+------------------------------------+----------+------------+----------+
| | | | |
+------------------------------------+----------+------------+----------+
6. Investments, continued:
+-----------------------+--------------+----------+--------------+----------+--------------+
| | 1 October | | 1 October | | 1 October |
| | 2009 | | 2008 | | 2008 |
| Total Investments: | to | | to | | to |
| | 31 March | |30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | US$ | | US$ | | US$ |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Listed equity | | | | | |
| securities (freely | 101,701,551 | | 80,184,124 | | 19,666,055 |
| tradeable) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Listed equity | | | | | |
| securities | - | | 17,201,453 | | 29,067,691 |
| (restricted) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Unlisted equity | - | | - | | 7,000,000 |
| securities | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Warrants | 59,760,699 | | 35,987,698 | | 7,670,479 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | 161,462,250 | | 133,373,275 | | 63,404,225 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Opening fair value | 133,373,275 | | 72,131,317 | | 72,131,317 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Purchases | 2,738,224 | | 30,144,363 | | 27,011,430 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Sales - proceeds | (40,280,706) | | (35,309,651) | | (8,640,862) |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Sales - realised | | | | | |
| gains/(losses) on | 25,428,875 | | 8,951,085 | | (828,829) |
| disposals | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Movement in net | | | | | |
| unrealised | 40,202,582 | | 57,456,161 | | (26,268,831) |
| gains/(losses) | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing fair value | 161,462,250 | | 133,373,275 | | 63,404,225 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing book cost | 32,241,993 | | 44,355,600 | | 58,111,542 |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing net | 129,220,257 | | 89,017,675 | | 5,292,683 |
| unrealised gains | | | | | |
+-----------------------+--------------+----------+--------------+----------+--------------+
| Closing fair value | 161,462,250 | | 133,373,275 | | 63,404,225 |
+-----------------------+--------------+----------+--------------+----------+--------------+
7. Cash and Cash Equivalents:
+-----------------------+------------+----------+--------------+----------+-------------+
| | 31 March | |30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | US$ | | US$ | | US$ |
+-----------------------+------------+----------+--------------+----------+-------------+
| Cash at bank | 31,798,337 | | 23,088,891 | | 6,125,920 |
+-----------------------+------------+----------+--------------+----------+-------------+
| Bank overdraft | (8,317) | | (180) | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| | 31,790,020 | | 23,088,711 | | 6,125,920 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
8. Other Receivables:
+-----------------------+-----------+----------+--------------+----------+-------------+
| | 31 March | |30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+-----------------------+-----------+----------+--------------+----------+-------------+
| | US$ | | US$ | | US$ |
+-----------------------+-----------+----------+--------------+----------+-------------+
| Unsettled investment | 142,030 | | 536,796 | | 13,982 |
| sales | | | | | |
+-----------------------+-----------+----------+--------------+----------+-------------+
| Prepayments | 88,144 | | 44,359 | | 108,929 |
+-----------------------+-----------+----------+--------------+----------+-------------+
| | 230,174 | | 581,155 | | 122,911 |
+-----------------------+-----------+----------+--------------+----------+-------------+
The Directors consider that the carrying amount of other receivables
approximates fair value.
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+----------+
| | | | |
+------------------------------------+----------+------------+----------+
| | | | |
+------------------------------------+----------+------------+----------+
9. Other Payables:
+-----------------------+------------+----------+--------------+----------+-------------+
| | 31 March | |30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | US$ | | US$ | | US$ |
+-----------------------+------------+----------+--------------+----------+-------------+
| Performance | 10,869,360 | | 17,975,492 | | 4,917,356 |
| allocation | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
| Income allocation on | | | | | |
| B Redeemable | | | | | |
| Preference Shares | 201,464 | | 142,189 | | (26,643) |
+-----------------------+------------+----------+--------------+----------+-------------+
| Administrator's fee | 24,517 | | 18,849 | | 9,968 |
+-----------------------+------------+----------+--------------+----------+-------------+
| Custodian's fee | - | | - | | 883 |
+-----------------------+------------+----------+--------------+----------+-------------+
| Registrar's fee | 4,000 | | 8,221 | | 1,772 |
+-----------------------+------------+----------+--------------+----------+-------------+
| NOMAD & Broker's fee | - | | 23,354 | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Prime Broker fees | 8,876 | | 4,331 | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Legal & professional | 78,784 | | 15,868 | | 3,420 |
| fees | | | | | |
+-----------------------+------------+----------+--------------+----------+-------------+
| Directors fees | - | | 12,500 | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Audit fee | 44,080 | | 73,573 | | 26,431 |
+-----------------------+------------+----------+--------------+----------+-------------+
| Marketing | 6,091 | | 8,491 | | - |
+-----------------------+------------+----------+--------------+----------+-------------+
| Sundry payables | 17,983 | | 10,422 | | 28,661 |
+-----------------------+------------+----------+--------------+----------+-------------+
| | 11,255,155 | | 18,293,290 | | 4,961,848 |
+-----------------------+------------+----------+--------------+----------+-------------+
The Directors consider that the carrying amount of other payables approximates
fair value.
10. Share Capital:
+------------------------+------------+-+---------------+-+--------------+
| | 31 March | | 30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+------------------------+------------+-+---------------+-+--------------+
| Authorised Share | US$ | | US$ | | US$ |
| Capital: | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Unlimited shares of | | | | | |
| no par value that may | | | | | |
| be | - | | - | | - |
| issued as Ordinary | | | | | |
| Shares | | | | | |
+------------------------+------------+-+---------------+-+--------------+
+------------------------+------------+-+---------------+-+--------------+
| | 1 October | | 1 October | | 1 October |
| | 2009 | | 2008 | | 2008 |
| | to | | to | | to |
| | 31 March | | 30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+------------------------+------------+-+---------------+-+--------------+
| | No. | | No. | | No. |
+------------------------+------------+-+---------------+-+--------------+
| Allotted, Issued and | | | | | |
| Fully Paid: | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Brought forward | 66,189,574 | | 100,000,000 | | 100,000,000 |
+------------------------+------------+-+---------------+-+--------------+
| Tender Offer | - | | (33,810,426) | | (33,810,426) |
+------------------------+------------+-+---------------+-+--------------+
| Repurchased Treasury | - | | 7,354,397 | | 7,354,397 |
| Shares | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Repurchased Ordinary | | | | | |
| Shares held in | - | | - | | (7,354,397) |
| treasury | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Treasury Shares | - | | (7,354,397) | | - |
| cancelled | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| | 66,189,574 | | 66,189,574 | | 66,189,574 |
+------------------------+------------+-+---------------+-+--------------+
| | | | | | |
+------------------------+------------+-+---------------+-+--------------+
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+----------+
| | | | |
+------------------------------------+----------+------------+----------+
| | | | |
+------------------------------------+----------+------------+----------+
10. Share Capital, continued:
+------------------------+------------+-+---------------+-+--------------+
| | 1 October | | 1 October | | 1 October |
| | 2009 | | 2008 | | 2008 |
| | to | | to | | to |
| | 31 March | | 30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+------------------------+------------+-+---------------+-+--------------+
| Share Capital | US$ | | US$ | | US$ |
+------------------------+------------+-+---------------+-+--------------+
| Share capital brought | 64,569,430 | | 94,427,417 | | 94,427,417 |
| forward | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Share capital on | - | | (29,857,987) | | (29,857,987) |
| Tender Offer | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Purchase and | | | | | |
| cancellation of | (660,000) | | - | | - |
| Fairfax Option | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Share capital on | | | | | |
| repurchase of Treasury | - | | 6,494,668 | | 6,494,668 |
| Shares | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Share capital on | | | | | |
| cancellation of | - | | (6,494,668) | | - |
| Treasury Shares | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| | | | | | |
| Share capital carried | 63,909,430 | | 64,569,430 | | 71,064,098 |
| forward | | | | | |
+------------------------+------------+-+---------------+-+--------------+
On 2 December 2008, the Shareholders approved the Tender Offer pursuant to which
the Company, through Fairfax, acquired 33,810,426 Ordinary Shares from
Shareholders for an aggregate price (including costs) of US$30 million.
Following the Tender Offer, 26,456,029 Ordinary Shares were cancelled and the
issued share capital of the Company then stood at 73,543,971 Ordinary Shares, of
which 7,354,397 were held in treasury. On 25 September 2009, the 7,354,397
Ordinary Shares previously held in treasury were cancelled. Following the
cancellation, the Company had 66,189,574 Ordinary Shares in issue.
The repurchase of Ordinary Shares by the Company was funded from the Company's
cash resources.
+------------------------+------------+-+---------------+-+--------------+
| | 1 October | | 1 October | | 1 October |
| | 2009 | | 2008 | | 2008 |
| | to | | to | | to |
| | 31 March | | 30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+------------------------+------------+-+---------------+-+--------------+
| Treasury Shares | US$ | | US$ | | US$ |
+------------------------+------------+-+---------------+-+--------------+
| Brought forward | - | | - | | - |
+------------------------+------------+-+---------------+-+--------------+
| Repurchase of | | | | | |
| 7,354,397 Treasury | - | | 6,494,668 | | 6,494,668 |
| Shares | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Cancellation of | | | | | |
| 7,354,397 Treasury | - | | (6,494,668) | | - |
| Shares | | | | | |
+------------------------+------------+-+---------------+-+--------------+
| Carried forward | - | | - | | 6,494,668 |
+------------------------+------------+-+---------------+-+--------------+
The Company's authorised share capital comprises an unlimited number of shares
of no par value.
11. Net Asset Value per Ordinary Share:
The NAV per Ordinary Share is based on net assets of US$182,127,289 (30
September 2009: US$138,649,851 & 31 March 2009: US$64,591,208) and the number of
Ordinary Shares in issue, less any shares held in treasury, at the period end
which was 66,189,574 (30 September 2009 & 31 March 2009: 66,189,574).
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
12. Reconciliation of NAV per Financial Statements to Announced NAV:
The NAV per Ordinary Share as disclosed in these financial statements may
different to the NAV per Ordinary Share as announced through a regulatory
information service. This difference is due to the different treatment of the
Company's own Ordinary Shares, which are held by the Company in treasury for
valuation and financial reporting purposes. For valuation purposes the fair
value of these shares is included in the Company's investment portfolio at bid
price and the published NAV per Ordinary Share is calculated based on the NAV of
the Company (including the fair value of the shares held in treasury) and on the
total number of Ordinary Shares in issue (including those shares held in
treasury). For financial reporting purposes the cost of the Treasury Shares are
included as a negative equity reserve in Company's financial statements in
accordance with IFRS (see note 2(d)) and the financial statements NAV per
Ordinary Share is calculated based on the NAV of the Company (including the cost
of the shares held in treasury as negative equity) and on the number of Ordinary
Shares in issue external to the Company (i.e. excluding those held in treasury).
The table below shows a reconciliation between the financial statements NAV per
Ordinary Share compared to the published NAV per Ordinary Share. As at 31 March
2010 the Company held none of its own Ordinary Shares in treasury, therefore
there is no difference between the NAV per these financial statements compared
to the NAV as announced through a regulatory information service:
+------------------------+----------------+-+----------------+-+---------------+
| | 31 March | | 30 September | | 31 March |
| | 2010 | | 2009 | | 2009 |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| Published NAV | US$182,127,289 | | US$138,649,851 | | US$69,959,918 |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| No. of shares in issue | 66,189,574 | | 66,189,574 | | 73,543,971 |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| Published NAV for | | | | | |
| Ordinary Share | US$2.7516 | | US$2.0947 | | US$0.9513 |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| Adjustment to NAV re | | | | | |
| shares held in | US$Nil | | US$Nil | | (5,368,710) |
| treasury | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| Adjustment to number | | | | | |
| of shares in issue for | | | | | |
| shares held in | - | | - | | (7,354,397) |
| treasury | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| Financial Statements | US$182,127,289 | | US$138,649,851 | | US$64,591,208 |
| NAV | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| | | | | | |
+------------------------+----------------+-+----------------+-+---------------+
| Financial Statements | | | | | |
| NAV per Ordinary Share | US$2.7516 | | US$2.0947 | | US$0.9759 |
+------------------------+----------------+-+----------------+-+---------------+
13. Dividend:
The Directors do not recommend the payment of a dividend for the period ended 31
March 2010 (period ended 31 March 2009: US$Nil).
14. Taxation:
The Company is exempt from Guernsey income tax under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance, 1989 and is charged an annual exemption fee of
GBP600.
15. Capital Management:
The Company has the ability to borrow up to 25% of net assets in order to meet
ongoing expenses and obligations. Any such borrowing requires Board approval.
The Company has been granted authority to make market purchases of up to 14.99%
of its own Ordinary Shares. Any such purchases require Shareholder approval.
The Company has the ability to apply to the Financial Services Authority for a
placing and offer to raise capital through further share issuance.
VISION OPPORTUNITY CHINA FUND LIMITED
Notes to the Consolidated Financial Statements, continued
For the period 1 October 2009 to 31 March 2010
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
| | | | |
+------------------------------------+----------+------------+--------+
16. Post Period End Events:
New Distribution Policy
On the 13 April 2010, the Company announced that the Board has decided to
introduce a distribution policy which will aim to return to Shareholders an
amount equivalent to up to 50%, and not less than 20%, of the Company's relevant
net realisation proceeds achieved in each financial year. For this purpose, the
"relevant net realisation proceeds" will be, in each financial year, 80% of the
net realisation proceeds, being the proceeds on realisation of investments
during that year less the original acquisition costs of the realised investments
and any other expenses directly attributable to the acquisition or realisation
of such investments. The remaining 20% of such net realisation proceeds takes
account of the potential performance allocation that the Investment Manager may
be entitled to.
The Directors will have discretion to determine the mechanics to be used on each
occasion an amount is to be returned to Shareholders in accordance with the
distribution policy.
Return of Capital
On 4 May 2010, the Company announced that the Shareholders had voted in favour
of a special resolution to reduce the Company's share capital and to authorise
the proposed return of capital of 5 cents per Ordinary Share, amounting to
US$3.31 million in aggregrate, which was announced on 13 April 2010. There were
no votes case against the resolution. The return of capital will be paid on 28
May 2010 to Shareholders on the register as at close of business on 7 May 2010.
There were no other significant post period end events that require disclosure
in these financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUPCAUPUUCM
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