Interim results

27 March 2019

VinaLand Limited

Interim results for the six months ended 31 December 2018

VinaLand Limited ("the Company" or "VNL"), the AIM-quoted investment vehicle established to target strategic segments within Vietnam's emerging real estate market, today announces its interim results for the six months ended 31 December 2018 ("the Period").

Financial highlights:

· Net Asset Value ("NAV") of USD0.5 million (30 June 2018: USD46.9 million); and,

· NAV per share of USD0.0036 (30 June 2018: USD0.286).

Operational highlights:

During the Period, VNL completed its last four divestments as below:

· 196 HVT project in July 2018, resulting in net proceeds of USD2.8 million.

· SGPY project in July 2018, resulting in net proceeds of USD0.3 million.

· Green Park Estate project in November 2018, resulting in net proceeds of USD35.3 million.

· Garland project in November 2018, with final return from development of USD0.9 million.

About VinaCapital

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of USD1.8 billion in assets under management. The firm has two closed-ended funds that trade on the London Stock Exchange: the VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, and VinaLand Limited which trades on AIM. VinaCapital also manages the Forum One - VCG Partners Vietnam Fund, one of Vietnam's largest open-ended UCITS-compliant funds, the Vietnam Equity Special Access Fund, numerous segregated accounts, and two domestic funds. VinaCapital also has joint ventures with Draper Fisher Jurvetson in venture capital, and Warburg Pincus in hospitality and lodging. VinaCapital's expertise spans a full range of asset classes including capital markets, private equity, real estate, venture capital, and fixed income.

For more information about VinaCapital, please visit www.vinacapital.com

The financial statements will be posted to shareholders and are available on the Company's website at https://vnl.vinacapital.com/ .

Enquiries:

Michael Truong / Joel WeidenVinaCapital Investment Management LimitedInvestor Relations / Communications+84 28 3821 9930[email protected] / [email protected]

Philip SecrettGrant Thornton UK LLP, Nominated Adviser+44 (0)20 7383 5100[email protected]

David Benda / Hugh JonathanNumis Securities Limited, Broker+44 (0)20 7260 1000[email protected]

Chairman's Statement

Dear Shareholders,

I am pleased to report that VinaLand Limited (the "Company", "VNL") has completely divested all of its assets and distributed most of the divestment proceeds to shareholders during the interim period from 1 July 2018 to 31 December 2018.

Project divestments

During the period the Company completed the last four disposals as follows:

· 196 HVT project (July 2018): the Company disposed of its entire stake in the 196 HVT project at a total valuation of 22.1%, above the 31 March 2018 unaudited net asset value and 28.0% below the net asset value at the time of the 2016 EGM, including adjustments for additional investments over this period. This transaction resulted in net cash proceeds of USD2.8 million to VNL.

· SGPY project (July 2018): the Company divested its entire stake in this project which resulted in net cash proceeds of USD0.3 million to VNL, equal to both the 31 March 2018 unaudited net asset value and the net asset value at the time of the 2016 EGM (including adjustments for additional investments over this period).

· Green Park Estate project (November 2018): the Company disposed of its entire stake in this project for net cash proceeds of approximately USD35.3 million, which includes the repayment of shareholder loans, resulting in an IRR of 0.9% to the Company. The total valuation is recorded at 22.5% above the 30 September 2018 unaudited net asset value and 14.8% above the unaudited net asset value at the time of VNL's extraordinary meeting in November 2016. Both figures include adjustments for additional investments up to the date of exit.

· Garland project (November 2018): the Company received the final return from the development of Garland project (located in Ho Chi Minh City) with net proceeds of USD0.9 million to VNL, which is equal to the 30 September 2018 unaudited net asset value and 37.8% below the net asset value at the time of the 2016 EGM including adjustments for additional investments over this period. 

Following the completion of the disposal of 196 HVT and SGPY projects in July 2018 and in accordance with paragraph 5.6 of the AIM Note for Investing Companies (which forms part of the AIM Rules), the Company announced that it had disposed of substantially all of its assets and entered a period of 12 months to begin an orderly wind up of the fund and cancellation of the Company's shares from trading on AIM. If the wind up is not fulfilled in the 12 month period the Company's shares will be suspended from trading on AIM in July 2019.

AGM

The Company held its Annual General Meeting ("AGM") on 14 December 2018, which included a resolution for the cancellation of the quotation of VNL shares from trading on AIM (the "Delisting Resolution"). However, the Delisting Resolution was not passed. Consequently, trading in VNL shares on AIM was not cancelled and the Company will continue to remain listed on AIM.

Shareholder distributions and share repurchases

Following the disposal of all projects in the portfolio, the Company distributed most of its distributable funds to shareholders in December 2018 via a return of capital of approximately USD45.45 million, representing USD0.31 per ordinary share. In addition to the return of capital, the Company also repurchased (via ongoing share buybacks) a further 16.8 million ordinary shares, which have been cancelled.

During this 6-month period, USD50.2 million in total was distributed using these two methods.

Since the commencement of the share buyback programme, the Company has cancelled 353.3 million shares, representing 70.7% of the Company's total issued shares.

Fund performance

The NAV per share (reviewed by the auditors) was USD0.0036 at 31 December 2018, after taking into account the provision made for the Company's final commitments, including the operating and liquidation costs until the winding up of the Company.

On behalf of the Board, I appreciate your continued support.

Michel Casselman

Chairman

VinaLand Limited

27 March 2019 

CONDENSED INTERIM CONSOLIDATED BALANCE SHEET

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED INTERIM CONSOLIDATED INCOME STATEMENT

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

During the period, major non-cash transactions included capital gains tax of USD2.0 million (six months ended 31 December 2017: USD10.1 million) realised on the disposals of investments. The tax amounts due were withheld from disposal proceeds by the acquirers of investments and remitted to the tax authorities. As a result, these amounts are excluded from proceeds from disposal of subsidiaries included in the condensed interim consolidated statement of cash flows.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

VinaLand Limited ("the Company") is a limited liability company incorporated in the Cayman Islands. The registered office of the Company is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The original objective of the Company was to focus on key growth segments within Vietnam's emerging real estate market, namely residential, office, retail, industrial and leisure projects in Vietnam and the surrounding countries in Asia. The Company is listed on the AIM Market of the London Stock Exchange under the ticker symbol VNL.

At the Extraordinary General Meeting ("EGM") held on 21 November 2012 the shareholders approved a proposal that the Company make no new investments and dispose of a portion of its investments in a controlled and orderly manner so as to maximise returns to shareholders. At the subsequent EGM held on 18 November 2016 this strategy was expanded to include the disposal of all remaining investments. The key changes impacting these financial statements are summarised as follows:

· The new strategy involves the orderly sell down of investments in conjunction with ongoing development of selected projects to maximise returns to shareholders. All projects will be realised over a period of approximately three years and the proceeds collected, less operating costs, disposal and alignment fees, will be returned to shareholders.

· The Third Amended and Restated Investment Management Agreement ("the Third Amended Management Agreement") introduces a new fee structure composed of disposal and alignment fees, prepayment advances and a retention account to ensure that the Investment Manager is incentivised to meet the investing policy (Note 19).

On 23 July 2018, the Company announced that it had disposed of substantially all of its assets. In accordance with paragraph 5.6 of the AIM Note for Investing Companies, which forms part of the AIM Rules, the Company has 12 months to begin an orderly wind up of the Company and cancellation of its shares from trading on AIM, ultimately resulting in a voluntary liquidation. If this is not fulfilled, the Company's shares will be suspended from trading on AIM in July 2019.

The condensed interim consolidated financial statements for the six months ended 31 December 2018 were approved for issue by the Company's Board of Directors on 26 March 2019.

These condensed interim consolidated financial statements have been reviewed, not audited.

2 BASIS OF PREPARATION

The Company and its subsidiaries herein are referred to as the Group.

These condensed interim consolidated financial statements are for the six months ended 31 December 2018. They have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). They do not include all of the information required in the annual consolidated financial statements which are prepared in accordance with International Financial Reporting Standards ("IFRSs"). Accordingly, these financial statements are to be read in conjunction with the annual consolidated financial statements of the Group for the year ended 30 June 2018, which have been prepared in accordance with IFRSs.

Going concern

On 23 July 2018, the Company announced that it had disposed of substantially all of its assets. In accordance with paragraph 5.6 of the AIM Note for Investing Companies, which forms part of the AIM Rules, the Company has 12 months to begin an orderly wind up of the Company and cancellation of its shares from trading on AIM, ultimately resulting in a voluntary liquidation. If this is not fulfilled, the Company's shares will be suspended from trading on AIM in July 2019. As a consequence, these condensed interim consolidated financial statements have been prepared using the liquidation basis, as the going concern basis is no longer considered appropriate.

3 ACCOUNTING POLICIES

These condensed interim consolidated financial statements (the "interim financial statements") have been prepared in accordance with the accounting policies, methods of computation and presentation adopted in the last annual consolidated financial statements for the year ended 30 June 2018.

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

When preparing the condensed interim consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and may not equal the estimated results.

There are no significant accounting estimates in the condensed interim consolidated financial statements for the six months ended 31 December 2018.

5 SEGMENT ANALYSIS

In identifying its operating segments, management generally follows the Group's sectors of investment which are based on internal management reporting information for the Investment Manager's management, monitoring of investments and decision making. The operating segments by investment portfolio include commercial, residential and office buildings, hospitality, mixed-use segments and cash and short-term investments.

Detail of activities undertaken by each segment and how each segment is managed and monitored, can be found in Note 4 to the annual consolidated financial statements of the Group for the year ended 30 June 2018.

There is no measure of segment liabilities regularly reported to the Investment Manager; therefore, liabilities are not disclosed in the sector analysis. Segment information can be analysed as follows for the reporting periods under review:

(a) Condensed Interim Consolidated Income Statement

(b) Condensed Interim Consolidated Balance Sheet

6 SUBSIDIARIES

The Group had the following principal subsidiaries which are held through special purpose vehicles established outside of Vietnam at 31 December 2018 and 30 June 2018:

All subsidiaries are included in the consolidated financial statements. The proportion of the voting rights in the subsidiary undertakings held directly by the Group does not differ from the proportion of ordinary shares held. The Group further does not have any shareholding in the preference shares of subsidiary undertakings included in the Group.

During the period, the Group sold several subsidiaries, details of which are provided on the following pages. The assets and liabilities held by the subsidiaries sold were as follows:

Details of the losses from sales of subsidiaries are as follows:

Sale of VinaCapital Commercial Center Limited

During the period the Group sold its 38.2% equity interest in VinaCapital Commercial Center Limited for a total consideration of USD0.6 million. The book value of the net assets at the sale date was USD0.2 million and the reclassification of translation reserve on disposal was USD0.8 million, resulting in a loss of USD0.4 million.

Sale of SIH Real Estate Limited Company

During the period the Group sold its 75% equity interest in SIH Real Estate Limited Company for a total consideration of USD1.0. The book value of the net liabilities at the sale date was USD0.2 million and the reclassification of translation reserve on disposal was USD0.5 million, resulting in a loss of USD0.3 million.

7 TRADE AND OTHER RECEIVABLES

(*) Receivables from disposals of subsidiaries represent the final settlements upon completion of the transfer of ownership of subsidiaries to the buyers in accordance with the relevant sale and purchase agreements.

All current trade and other receivables are short-term in nature and their carrying values, after allowances for impairment, approximate their fair values at the date of the condensed interim consolidated balance sheet.

8 CASH AND CASH EQUIVALENTS

Cash equivalents include short-term highly liquid investments with original maturities of three months or less.

As at 31 December 2018, cash and cash equivalents held at the Company level amounted to USD4.8 million (as at 30 June 2018: USD27.8 million). The remaining balance of cash and cash equivalents is held by subsidiaries in Vietnam. Cash held in Vietnam is subject to restrictions imposed by co-investors and the Vietnamese government and it cannot be transferred out of Vietnam unless those restrictions are satisfied.

In accordance with the Third Amended Management Agreement, 20% of any disposal fee payable to the Investment Manager is to be deposited into a separate bank account under the Company's name ("the Retention Account"). These funds will be distributed upon the performance of certain milestones by the Manager. The Company has no specific rights to these funds. Included in cash and cash equivalents as at 31 December 2018 was USD3.6 million transferred into the Retention Account (as at 30 June 2018: USD1.2 million).

9 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

As at 31 December 2018, the Group had no assets and liabilities classified as held for sales.

For the comparative balance sheet date:

It is the Group's view that all of its assets and liabilities classified as held for sales are in Level 3 of the fair value hierarchy. The major classes of assets and liabilities and their movements during the period/year are as follows:

For the comparative year:

10 SHARE CAPITAL

The Company considers investors holding more than a 10% beneficial interest in the ordinary shares of the Company as major shareholders. As at 31 December 2018, there were three investors that held more than 10% of the ordinary shares of the Company (30 June 2018: four).

During the period, the Company purchased and cancelled 16,780,000 of its ordinary shares (year ended 30 June 2018: 94,587,732 shares) for a total cash consideration of USD4.7 million (year ended 30 June 2018: USD73.0 million) at an average cost USD0.28 per share (year ended 30 June 2018: USD0.772 per share). The difference between the cost of the shares repurchased and their net asset value has been recorded in an equity reserve.

11 ADDITIONAL PAID-IN CAPITAL

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

On 16 November 2018, the Company announced that it would make a distribution of capital from its additional paid-in capital of USD45.5 million or 31 cents per ordinary share. As at 31 December 2018, this amount had been fully distributed.

12 CURRENT TRADE AND OTHER PAYABLES

All trade and other payables are short-term in nature. Their carrying values approximate their fair values as at the date of the condensed interim consolidated balance sheet.

13 SELLING AND ADMINISTRATION EXPENSES

(*) These expenses primarily relate to the operating activities of the Company such as legal and professional fees, audit fees, valuation fees, fund administrative and custodian fees, directors fees.

(**) These expenses primarily relate to the operating activities of the Group's subsidiaries.

14 NET GAINS/(LOSSES) ON DISPOSALS OF INVESTMENTS

15 INCOME TAX

VinaLand Limited is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there are no income, corporation, capital gains or other taxes payable by the Company.

A number of subsidiaries are established in Vietnam and Singapore and are subject to corporate income tax in those countries. Deferred tax assets/liabilities of these subsidiaries are estimated based on the tax legislation of each jurisdiction and included in the deferred income tax assets/liabilities on the balance sheet.

As is the case with many other developing countries, Vietnam is in the process of implementing comprehensive tax regulations. As a result, the administration of tax regulations by government agencies may be subject to considerable discretion, and in many areas, the legal framework is uncertain and subject to interpretation. The Group has provided for all taxes expected to be payable by it under the current tax regulations in Vietnam. There is, however, an ongoing risk that government agencies might seek to impose additional taxes on the Group based on different interpretations of the regulations or through the retrospective application of new regulations.

On 19 June 2014, the Vietnamese National Assembly approved a new corporate income tax law. Under the new law, the standard corporate income tax was reduced from 25% to 22% effective 1 January 2015. A further reduction in tax rate to 20% became effective on 1 January 2016. No provision has been made for corporate income tax payable by the Vietnamese subsidiaries for the period because these subsidiaries do not have taxable income in Vietnam (period from 1 July 2017 to 31 December 2017: nil).

The relationship between the expected tax expense based on the applicable tax rate of 0% and the tax expense actually recognised in the condensed interim consolidated income statement can be reconciled as follows:

16 DEFERRED INCOME TAX

Deferred income tax assets relating to the accumulated tax losses of the Group's subsidiaries subject to corporate income tax in Vietnam have not been recognised due to uncertainties as to the timing of their recoverability. Estimated tax losses available for offset against future taxable income are as follows:

Years of expiration

17 LOSS AND NET ASSET VALUE PER SHARE

(a) Basic

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group has no category of potential dilutive ordinary shares. Therefore, diluted earnings per share is equal to basic earnings per share.

(c) Net asset value per share

18 COMMITMENTS

As at 31 December 2018, the Group was not committed to any lease agreements (as at 30 June 2018: USD5,742).

19 RELATED PARTY TRANSACTIONS AND BALANCES

Management, disposal and alignment fees

The Group is managed by VinaCapital Investment Management Limited (the "Investment Manager"), an investment management company incorporated in the Cayman Islands.

Under the Third Amended and Restated Investment Management Agreement effective from 14 December 2016, no further management fees shall be charged by the Investment Manager to the Company (30 June 2017: nil). The Investment Manager receives a disposal fee and an alignment fee. The disposal fee is calculated at the rate of 3.00% of distributable funds realised in the year starting 22 November 2016, 2.75% in the second year and 2.25% in the third year. The alignment fee is calculated on distributions to shareholders over USD265.0 million during the 3-year period starting 22 November 2016. The Investment Manager will receive 10% of distributions over USD265.0 million and up to USD279.0 million, 15% of distributions over USD279.0 million, and up to USD313.0 million, and 20% of distributions over USD313.0 million. A non-refundable monthly advance of USD200,000 in the year starting 22 November 2016, USD150,000 in the second year, and USD100,000 in the third year, will be paid to the Investment Manager. These advances will be offset against disposal fees and alignment fees. During the period advances of USD0.8 million (30 June 2018: USD2.0 million) were paid and net off with disposal and alignment fees payable to the Investment Manager.

Details of disposal fees and alignment fees accrued at the balance date were as follows:

(*) Movement in accrual/payable disposal and alignment fees during the period/year were as follows:

Details of payables to related parties at the date of the condensed interim consolidated balance sheet are as below:

Advances to related parties as at 31 December 2018 were the non-refundable advances described under the section "Disposal fee and alignment fee" above.

The interests of the related parties in the shares, underlying shares and debentures of the Company are as follows:

 (*) In accordance with the Second Amended and Restated Investment Management Agreement, the Investment Manager was required to use 50% of the realisation fee arising from the contracted divestment proceeds collected to make market purchases of the Company's ordinary shares within three months of the receipt of the realisation fee. The shares acquired are subject to lockups of between one and two year from the date of acquisition. As at 31 December 2018, there were no ordinary shares under lockup (as at 30 June 2018: 7,039,279 ordinary shares).

20 FINANCIAL RISK MANAGEMENT

(a) Financial risk factors

The Group holds a diversified property portfolio in Vietnam. As a result the Group is exposed to a variety of financial risks: market risk (including price risk, currency risk and interest rate risk); credit risk; and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group's risk management is coordinated by its Investment Manager who manages the distribution of the assets to achieve the investment objectives.

The condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 30 June 2018. There have been no major changes in the risk management department of the Investment Manager and risk management policies since the most recent year end.

(b) Fair value estimation

The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows:

· Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

· Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2); and

· Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2018:

There were no significant transfers between levels during the period (year ended 30 June 2018: none).