Interim results for the six months ended 31 Dec

27 March 2018

VinaLand Limited

Interim results for the six months ended 31 December 2017

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 2017 ("the Period").

Financial highlights:

· Net Asset Value ("NAV") of USD119.3 million (30 June 2017: USD 241.5 million) due to the USD43.0 million tender offer, USD60.4 million capital distribution and ongoing buyback resulting in total distributions for the 6 month period of USD123.1 million; and,

· NAV per share of USD0.66 (30 June 2017: USD0.94).

Operational highlights:

During the Period, VNL completed the divestment of four projects and made considerable progress on other pending disposals. The four projects sold were:

· My Gia township development project in August 2017, resulting in net proceeds of USD5.9 million.

· Vina Square project in September 2017, resulting in net proceeds of USD41.2 million.

· Project Phu Hoi City in November 2017, resulting in net proceeds of USD15.8 million.

· Trinity Garden Project in December 2017, resulting in net proceeds of USD23.1 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 the 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 www.vnl-fund.com .

Enquiries:

Jonathan Viet Luu

VinaCapital Investment Management Limited

Investor Relations

+84 28 3821 9930

[email protected]

Joel Weiden

VinaCapital Investment Management Limited

Communications

+84 28 3821 9930

[email protected]

Philip Secrett

Grant Thornton UK LLP, Nominated Adviser

+44 (0)20 7383 5100

[email protected]

David Benda / Hugh Jonathan

Numis 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") continued to make good progress in divesting assets and making distributions to shareholders during the interim period from 1 July 2017 to 31 December 2017.

AGM

The Company held its Annual General Meeting ("AGM") in November, where all four resolutions were approved. The Company will continue to divest all of its remaining assets in an orderly manner to achieve the highest possible sales values and continue to return available proceeds to shareholders.

Project divestments

During the period the Company completed four disposals as follows:

· My Gia township development project (August 2017): the Company disposed of its remaining stake, receiving net proceeds of USD5.9 million. The valuation was 0.7% above the 30 June 2017 unaudited net asset value ("NAV") and 25.1% below the unaudited NAV at the time of the Company's Extraordinary General Meeting in November 2016 ("2016 EGM").

· Vina Square project (September 2017): the Company divested its entire stake in this project in HCMC, with net proceeds of USD41.2 million, including the repayment of loans from shareholders. The total valuation was recorded at 0.3% above the 30 June 2017 unaudited NAV and 13.5% above the unaudited NAV at the time of the 2016 EGM.

· Project Phu Hoi City (November 2017): the Company disposed of its entire stake in this project at a valuation 2.0% above the 30 September 2017 unaudited NAV and 3.3% above the unaudited NAV at the time of the 2016 EGM. Net proceeds received by the Company were USD15.8 million.

· Trinity Garden Project (December 2017): the Company divested its entire stake at a valuation of 2.6% above the 30 September 2017 unaudited NAV and 3.5% above the unaudited NAV at the time of the 2016 EGM. This transaction resulted in net proceeds of USD23.1 million to the Company.

Shareholder distributions and share repurchases

During the interim period, the Company continued to make distributions to shareholders. In October 2017, the Company distributed USD43.0 million via a tender offer resulting in the cancellation of 51.8 million shares. In addition to the tender offer, the Company also repurchased, via ongoing share buybacks, a further 25.4 million ordinary shares, which have subsequently been cancelled. Then in December 2017, the Company made a capital distribution (capital reduction) of USD60.4 million, or USD0.33 per share, to all shareholders.

Subsequently, during this 6 month period, USD123.1m in total was distributed using these three methods.

Since the commencement of the share buyback program, the Company has cancelled 63.8% of the Company's total issued shares.

Fund performance

The NAV per share (reviewed by the auditors) was USD0.66 at 31 December 2017, an improvement of 8.3% from the adjusted audited NAV per share on Capital Return of USD0.61 at 30 June 2017. During this period, the Company's share price increased 21.2% to USD0.60, resulting in a share price discount to NAV of 9.9%.

* * * * *

Vietnam's real estate market continues to exhibit an upbeat environment leading into 2018 which will provide positive conditions that will support the Company's divestment strategy enabling further distributions to shareholders. On behalf of the Board, I appreciate your continued support.

Michel Casselman

Chairman

VinaLand Limited

27 March 2018

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 USD10.1 million (six months ended 31 December 2017: USD0.8 million) realised on the disposals of investments. The tax amounts due were withheld from disposal proceeds by the acquirors of investments and remitted to the tax authorities. As a result, these amounts are excluded from proceeds from disposal of subsidiaries included in the 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 23).

The condensed interim consolidated financial statements for the six months ended 31 December 2017 were approved for issue by the Company's Board of Directors on 27 March 2018.

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 2017. 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 2017, which have been prepared in accordance with IFRSs.

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 2017.

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.

Information about significant judgements, estimates and assumptions that have the most effect on recognition and measurement of assets, liabilities, income and expenses were the same as those that applied to the last annual consolidated financial statements for the year ended 30 June 2017.

4.1 Fair value of investment properties

The investment properties of the Group are stated at fair value in accordance with accounting policy 2.5 of the annual consolidated financial statements for the year ended 30 June 2017. The fair values of investment properties are based on valuations by independent professional valuers. For the purpose of these interim consolidated financial statements, the Group engaged Cushman & Wakefield to perform independent valuations of its investment properties. These valuations are based on certain assumptions which are subject to uncertainty and might materially differ from the actual results. The estimated fair values provided by the independent professional valuers are used by the Valuation Committee as the primary basis for estimating each property's fair value for recommendation to the Board. 

In making its judgement, the Valuation Committee considers information from a variety of sources including:

(i) current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;

(ii) recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the dates of those transactions;

(iii) recent developments and changes in laws and regulations that might affect zoning and/or the Group's ability to exercise its rights in respect to properties and therefore fully realise the estimated values of such properties;

(iv) discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of external evidence such as current market rents and sales prices for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows;

(v) recent compensation prices made public by the local authority at the province where the property is located; and

(vi) prices contained in recent term sheets entered into by the Company with prospective buyers.

Sensitivity analyses are provided in Note 6.

4.2 Disposal fee and alignment fee

The liabilities of the Group are stated at fair value in accordance with accounting policy 2.28 of the annual consolidated financial statements for the year ended 30 June 2017. Their fair value is estimated at each annual balance sheet date by an independent valuation company. For interim reporting purposes, management estimated the fair value of the fees by updating the independent valuation company's model with the latest projected disposal proceeds and distributions. The valuation is based on certain assumptions which are subject to uncertainty and might materially differ from the actual results, including:

(i) the timing and amount of disposals;

(ii) development expenditure and operating expenses of the Group;

(iii) the timing and amount of distributions to shareholders using a variety of methods;

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 2017.

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 INVESTMENT PROPERTIES

The Group's investment properties were revalued during the period by independent professionally qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and categories of the investment properties valued.

As at 31 December 2017 and 30 June 2017, there were no bank borrowings secured by investment properties. During the period, there were no borrowing costs capitalised (year ended 30 June 2017: USD4.9 million) in investment properties.

At 31 December 2017, land use right certificates have not been fully issued for certain portions of the Group's investment properties as final issuance is subject to the completion of a number of administrative steps required by local authorities and/or the settlement of any outstanding land taxes.

The Group's policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. All of the Group's investment properties are in Level 3 of the fair value hierarchy. There were no transfers between levels during the period (year ended 30 June 2017: none).

Information about fair value measurements using unobservable inputs (Level 3) is set out below:

As at 31 December 2017

For the comparative balance sheet date:

7 SUBSIDIARIES AND ASSOCIATES

(a) Investments in associates

Particulars of material operating associates and their summarised financial information, extracted from their financial statements as at 31 December 2017 and 30 June 2017, are as follows:

As at 31 December 2017

As at 30 June 2017

As at the reporting date, the Group has a 65% equity interest in Thang Loi Textile Garment Joint Stock Company. Management considers the interest an investment in an associate as the Group does not have control over the investee. The Group and a co-investor have significant influence over this investee.

(b) Principal subsidiaries

The Group had the following principal subsidiaries which are held through special purpose vehicles established outside of Vietnam at 31 December 2017 and 30 June 2017:

(*) At the reporting date, the Group has a 38.2% equity interest in VinaCapital Commercial Center Limited (Vietnam). Management considers this company as a subsidiary as the Group has de facto control through the majority voting rights in the company.

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 Vinh Thai Urban Development Corporation Limited

During the period the Group sold its 53.3% equity interest in Vinh Thai Urban Development Corporation Limited for a total consideration of USD5.9 million. The book value of the net assets at the sale date was USD5.8 million and the reclassification of translation reserve on disposal was USD7.2 million, resulting in a loss of USD7.1 million.

Sale of Vina Alliance Company Limited

During the period the Group sold its 46.5% equity interest in Vina Alliance Company Limited for a total consideration of USD61.8 million. The book value of the net assets at the sale date was USD61.8 million and the reclassification of translation reserve on disposal was USD9.3 million, resulting in a loss of USD9.3 million.

Sale of Phu Hoi City Company Limited

During the period the Group sold its 52.5% equity interest in Phu Hoi City Company Limited for a total consideration of USD21.2 million. The book value of the net assets at the sale date was USD20.8 million and the reclassification of translation reserve on disposal was USD5.3 million, resulting in a loss of USD4.9 million.

Sale of VinaCapital Phuoc Dien Co., Ltd.

During the period the Group sold its 100% equity interest in VinaCapital Phuoc Dien Co., Ltd. for a total consideration of USD26.5 million. The book value of the net assets at the sale date was USD23.9 million and the reclassification of translation reserve on disposal was USD1.5 million, resulting in a gain of USD1.1 million.

Summarised financial information of subsidiaries with material non-controlling interests

The total non-controlling interests as at 31 December 2017 was USD9.9 million (30 June 2017: USD74.9 million), allocated as below:

(*) The Group disposed of these subsidiaries during the period.

Set out below is summarised financial information for each of the subsidiaries with non-controlling interests that are material to the Group.

Summarised balance sheets

Summarised income statements

Summarised statements of cash flow