VinaLand : 2017 Annual Report

VinaLand Limited Annual Report 2017

VinaLand Limited

Annual Report 2017

VinaLand Limited Annual Report 2017

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CONTENTS

Section 1 - Introduction

Financial Highlights 3

Chairman's Statement 4

Section 2 - Investment Manager's Report

Investment Environment 6

Portfolio Performance 10

TopHoldings 14

VinaCapital Management Team 19

Section 3 - Reports and Financial Statements

Board of Directors 21

Report of the Directors 23

Corporate Governance Statement 33

Directors' Remuneration Report 39

Statement of Directors' Responsibilities 40

Independent Auditor's Report 41

Consolidated Financial Statements and Notes 46

Section 4 - Annual General Meeting

Notice of Annual General Meeting 131

Section 5 - Additional Information

Investing policy 133

Historical Financial Information 137

Overview and advisers 139 Front Cover - Ho Chi Minh City's District 1 from the Saigon River.

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VinaLand Limited Annual Report 2017

The continued improvement of Vietnam's real estate market through 2016 and the first half of 2017 allowed VinaLand Limited ("VNL" or the "Company") to make further progress in divesting assets and selling its residential properties. The Company recorded a net asset value ("NAV") of USD241.5 million, or USD0.94 per share as at 30 June 2017, an increase of 9.4 percent from a net asset value per share of USD0.86 a year before. VNL's share price at the end of the fiscal year was USD0.78, an appreciation of 34.8 percent from USD0.58 at the end of June 2016. The Fund's share price to NAV discount narrowed to 17.2 percent as at 30 June 2017.

Performance summary FY2017 % Change FY2016 % Change FY2015

VNL has completed twenty two full divestments and two partial divestments since the November 2012 Extraordinary General Meeting, with a gross total sales value of USD441 million and net proceeds of approximately USD352 million, which were a combined 7.3 percent above NAV at the time each of the exits were completed.

During the year ended 30 June 2017, VNL repurchased and cancelled 85.2 million ordinary shares via its ongoing share buyback program and 50.6 million ordinary shares via a tender offer announced in May 2017. Since the share buyback program commenced in October 2011, and to 30 June 2017, the Company had cancelled a total of 242.0 million ordinary shares, representing 48.4 percent of the total shares in issue prior to the commencement of the share buyback program.

Increase

VinaLand Limited Annual Report 2017

Chairman's Statement 4

Dear Shareholders,

During the 2017 fiscal year VinaLand ("VNL" or "the Company") continued its focus on the realization of its portfolio and made a number of asset disposals in accordance with the strategy approved by shareholders at the EGM in November 2016. The country's macroeconomic environment continues to be one of the strongest in the region, with solid GDP growth, manageable inflation, and robust foreign direct investment all supporting the real estate sector that continues to be one of the most attractive sectors within Vietnam. The past year has seen both new and existing foreign developers significantly increase their investments in the residential, commercial and infrastructure segments of the market, and merger & acquisition activity has increased. This foreign intervention has underpinned the momentum in the market and maintained pressure on the local Vietnamese developers to close acquisition of new development projects notwithstanding the tightening of bank lending into this sector.

During the financial year, VNL completed five full divestments and one partial divestment, with a gross total sales value of USD129.7 million and net proceeds of approximately USD120.8 million. These divestments enabled the Company to proceed with further distributions to shareholders, via both the ongoing share buyback programme and a USD40 million tender offer to purchase ordinary shares announced on 17 May 2017 and paid out on 30 June 2017.

Subsequent to the close of the fiscal year, the Company announced another tender offer to purchase shares at USD0.83 per ordinary share on 7 September 2017 and USD42.95m was paid out on 13 October 2017.

The positive dynamics in the real estate market over the past 12 months have continued into the new fiscal year, creating an environment which supports the Company's objective to negotiate the sale of the Company's remaining assets in a controlled and orderly manner. While there can be no guarantees, the confidence in the market should allow the realisation process to proceed in a way that will allow for further distributions to shareholders during the current fiscal year.

Financial results summary

VNL's financial results for the fiscal year ended 30 June 2017 show VNL's audited NAV per share enhanced from USD0.86 as at 30 June 2016 to USD0.94 as at 30 June 2017. The Company's share price closed FY 2017 at USD0.78 per share, a 34.8 percent increase year on year. VNL's share price to NAV discount has narrowed considerably to 17.2 percent from 32.2 percent at the end of FY 2016.

During the financial year, VNL repurchased and cancelled 135.8 million ordinary shares, an increase of almost four times when compared to the 36.3 million shares repurchased and cancelled in the previous fiscal year. VNL did so via ongoing share buybacks and the USD40 million tender offer announced in May 2017. As at 30 June 2017 the Company has cancelled 242.0 million ordinary shares, representing 48.4% of the total shares in issue prior to the commencement of the share buyback programme and has 258.0 million ordinary shares still outstanding.

In December 2016, the VinaLand Zero Dividend Preference (ZDP) shares were redeemed, and the ZDP's listing was cancelled by the London Stock Exchange on 19 December 2016. This reduced the debt at the Company (Fund) level to zero, while debt at the portfolio project level remained at 25.1% of NAV as at 30 June 2017. As further projects are divested, the level of debt at the project level will continue to diminish.

Michel Casselman

Chairman

"The positive dynamics in the real estate market over the past 12 months have continued into the new fiscal year, creating an environment which supports VinaLand's realisation process that will allow for further distributions to shareholders during the current fiscal year."