Message from the CEO

Dear stockholders:

I am pleased to present our 2017 Annual Sustainable Report, making it the fist public report where we voluntarily address the economic, environmental and social impacts of Vinte’s day-to-day operation, as well as our most signifiant contributions to achieving sustainable and inclusive development in our country.

Likewise, we are proud to be part of the Mexican companies that pioneered the adoption of the latest version of the Global Reporting Initiative Standards, the fist and most widely recognized standards for sustainability reporting in the world. This year, we began with a selective adoption of the Standards as the basis for a higher quality and exhaustive preparation of the Sustainable Annual Report for upcoming exercises.

In Vinte, through this process, we hope to lay down the foundations for a long-lasting and distinguished tradition of sustainability reporting in Mexico, allowing our shareholders to have a broad, in-depth and meaningful understanding of our sustainable model focused on creating shared value, as well as the evolution of our annual and historical performance in key economic, environmental and social aspects.

In this sense, the transition to this annual reporting framework reflcts our fundamental commitment to work continuously in the development of sustainable integral communities with a strong orientation towards the quality of life of Mexican families, through technological inclusion and constant innovation in environmental and community-friendly housing solutions.

Since its earliest days, our Company has distinguished itself as one of the fist housing companies in Mexico to introduce post-sale services and neighborhood organization in all its developments, as well as incorporating information technologies and services in pursuit of reducing the country’s digital gap. In this way, all integral communities developed by Vinte have consistently increased their value over time and have contributed to a higher quality of life for Mexican families.

Sergio

Moreover, we have ventured unceasingly into the implementation of initiatives towards the offering of a new generation of green homes and a higher quality of life. In this regard, Vinte has designed and executed a wide range of environmental solutions based on an Integral Urban Design, including recharging wells and lagoons that recover 80% of rainwater in the aquifer, the use of sustainable construction materials, alternative transportation methods, adequate solid waste management, as well as the rescue and conservation of wildlife.

On the front of the house as an individual part of the community, Vinte has developed a Near Zero-Energy home through a pilot program, which signifiantly reduces the environmental impact by producing almost as much renewable energy as that consumed in utilities, presented at the 2010 UN Climate Conference. Today, the vast majority of our housing models incorporate the technologies and equipment used in said program, including an innovative bioclimatic design, effiient house orientation, solar panels and thermodynamic elements, such as ecological windows with polarized fims and structural components that effiiently absorb solar radiation, which have led to a reduction of approximately 30% in energy consumption, as measured by the Company’s internal tests.

Vinte’s sustainable housing construction model also includes the responsible consumption of electricity, fuel gas and water, by incorporating advanced telemetry systems that monitors the consumption of such services in real time, with the capacity to alert users when utilities consumption has reached or exceed certain levels, as well as calculate the corresponding bills with the information of consumption and fees available online.

Parque

I would also like to highlight that Vinte has a nanotechnology laboratory dedicated to the research and development of new building materials, in order to provide better products with lower input requirements, resulting in more effiient and sustainable materials for the development of homes with a greater positive environmental impact.

Delving deeper into the social component of our integral communities, we have demonstrated our superior capacity, in comparison with the sector, to create an adequate environment of coexistence and human integration that positively impacts the development of its inhabitants, with greater access and proximity to education, health and transport services, as well as green areas and law enforcement authorities, as a result of the implementation of a consistent and disciplined methodology for the acquisition of land.

On the other hand, in our pursuit for the sustainable development of the communities where we operate, we have also been very respectful of its links with the past and its cultural traditions and, acknowledging the importance of these roots for its inhabitants, we assumed the responsibility of locating, designing and building our real estate developments seeking the conservation, management and rescue of cultural heritage through the formulation and implementation of procedures in cases of fortuitous fidings, as well as monitoring its compliance.

To conclude my comments on the social aspect, and last but not least, in Vinte we greatly appreciate the work and incessant dedication of all the collaborators who are part of our family. For this reason, we have a comprehensive wellness program oriented to generate job satisfaction and a positive work environment, which includes the delivery of updating and induction courses and workshops, health campaigns, promotion of sports activities and courses on techniques to manage stress, as well as a scheme of employee benefis exceeding those established by Mexican labor legislation.

The effectiveness of our innovative human resources policy has been reflcted in a signifiant improvement in the performance and productivity of our employees, the decrease in absenteeism, the attraction and retention of talent and a greater sense of commitment from our collaborators. Also, thanks to this policy, Vinte was recognized as one of the Super Empresas 2018, a certifiation granted by Top Companies and published by the Expansión website only to 213 Mexican companies with the best labor practices.

I take this opportunity to emphasize that Vinte has obtained important fiancing lines with institutions of wide recognition at a global level, such as the World Bank, the Inter-American Development Bank and DEG / KFW, who conduct rigorous due diligence in the granting of fiancial support to selected benefiiaries, for their vision and commitment to social integration and community development, as well as the incorporation of sustainable technologies. In the coming years, we expect to keep taking important steps to further strengthen the access and diversifiation of funding sources linked to the sustainable community development purposes in Mexico.

Regarding our economic performance, we closed the year achieving double-digit growth rates in the key indicators, despite the challenges posed by the effects of the growing infltionary pressure, mainly fueled by the persistent depreciation of the national currency against the US dollar, and the interest rate hikes that followed it, as well as modifiations in the government housing policy, such as the 27% decrease in the subsidies granted by CONAVI.

As in previous years, our shared value creation model focused on the offering of middle-income and residential homes, segments with the highest profi margins in the sector, greatly boosted our results and, coupled with our broad and diversifid customer base, allowed us to minimize the impact of potential changes in the national housing policy. Furthermore, we successfully capitalized on the new business opportunities generated by the strength of the labor market, the positive evolution of mortgage fiancing and the implementation of certain governmental measures, such as the increase in the INFONAVIT’s credit cap; factors that we believe will support a solid effective demand for housing in Mexico this 2018.

For 2018, we plan to sustain our positive results through the star-up of our new housing developments, Real Catania in Cancun and Real Vizcaya in Tecamac, with average sale prices above 1.2 million pesos per home, and maturity of the middle-income and residential segment developments that initiated operations in the second semester 2017, Real Carrara in Tecamac, Real Amalf and Mayakoba in Playa del Carmen.

To conclude, following our 2020 Innovation Plan, Vinte will continue to implement state-of-the-art technologies to transcend in the sector by providing high-quality sustainable housing aimed at the low and middle-income segments of the population. Meanwhile, we will keep our operations in strict compliance with current environmental, labor and social regulation of each level of government, as well as our robust, comprehensive and transparent framework of policies and internal procedures in this regard, for the benefi of our stakeholders.