HQ annual report 2016

INCREASING VALUE ENHANCING POSITION

ANNUAL REPORT 2016

CONTENTS 1

CREATIVITY SOLID PIONEERING

2

TRANSPARENCY FOR TRUST IN COOPERATION

3 4

5

6

PERSEVERANCE CORE BUSINESS SUSTAINABLE DEVELOPMENT HARMONIZING IDENTITIES

INCREASING VALUE ENHANCING POSITION

KNOWLEDGE SOLIDIFYING PROSPERITY NURTURING

Overview Overview of Hoang Quan Group Corporate History and Development Corporate Highlights in 2016 Honors & Awards in 2016 Key Financial Ratios in 2016

04 08 10 12 16 18

Corporate governance Organizational Chart Board of Directors Board of Management Supervisory Board Macro Perspectives and Risk Management Model The Report of The Board of Directors The Report of The Board of Management The Report of Supervisory Board Shareholders’ Information

20 22 24 25 28 32 38 46 52 54

Core business Real Estate Education Financial

58 60 94 100

Sustainable development Message from Chairman of the Board of Directors Report Overview Sustainable Development Model Sustainable Development Management Sustainable Development Activities in 2016 Table of GRI - Gratifying Items Options - Core

104 106 108 110 114 122 126

Financial statements Statement of The Board of Directors Statement of The Board of Directors Balance Sheet Income Statement Cash Flow Statement Notes to The Financial Statements

130 132 135 136 140 141 144

172 System overview 174 System Operating Functions Shareholders Relations Department Contact Information 175

4 | OVERVIEW

With brand reputation establishment and investment experience, HQC will continue to maintain the leading position in social housing development in southern areas, promote the diversification of commercial real estate investment products, apply modern technology, advanced management models, etc. in order to bring the harmonized benefits to shareholders, customers, employees, partners; as well as fulfill obligations towards the State and social responsibilities.

Dr. TRUONG ANH TUAN Chairman of the Board of Directors

ANNUAL REPORT 2016 | 5

MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS

To: Our Valued Shareholders,

In 2016, Hoang Quan Consulting - Trading - Service Real Estate Corporation (HQC) has continues to maintain the leading position in social housing investment and development. Each social housing project being built, finished and handed over to clients is the demonstration of the Corporation’s spirit in accompanying with the Government to implement social housing development policies and housing for workers for social welfare purposes. So far, HQC has been investing in building a chain of 22 social housing projects and housing for workers with a total investment of more than VND 20,000 billion.

Following the success of social housing product line, HQC well maintains the leading position of social housing in Ho Chi Minh City and other southern provinces of Vietnam; and will continue to implement the registered social housing project chain, accompanying with national housing strategy, contributing to creating good living conditions for residents.

At the same time, with the foundation of prestige brand, investment experience, HQC will promote the diversification of commercial real estate investment products such as: Real Estate Resort (Sea Villas and Condo-tel), Real Estate for Accommodation and Business (Shop-house and Officetel), Apartments (Luxury, Medium, low-income), Industrial

Zones, Factories, Warehouses. In the development orientation of the period 2017-2020, commercial real estate products will contribute at least 50% of sales revenue.

In addition, convenient products and services such as supermarkets, clinics, education and training system from preschool to vocational school, academy, university are also emphasized and invested to create value resonance increase of real estate projects.

In 2017, based on the market experience, compared with modern standards, HQC will study and apply good practices, international standards of corporate governance; at the same time drastically step up capital divestments of member companies, minimizing cross-ownership in order to make information transparent and ensure the interests of shareholders.

Moreover, HQC will promote the research and application, operation of advanced technologies, equipment and techniques, advanced management models and usage of environmentalfriendly new materials to accelerate the construction speed, ensuring safety and improving project efficiency. On the other hand, the approach of selecting and conducting M&A of potential projects will help HQC reduce time, initial investment costs, speed up progress and improve investment efficiency.

Dear Valued Shareholders, The success of HQC today is firstly thanks to the support of the Government, Ministries, provinces and cities,departments, local authorities and the trust of Shareholders, investors, customers, partners and the contribution of all staff members. HQC will constantly strive towards achieving stable business performance, ensuring the benefits of shareholders, customers, employees and partners; well perform obligations towards the State and social responsibilities.

On behalf of the Board of Directors, I would like to express my sincerest thanks and hope the Government, Ministries, provinces, cities, departments and local authorities as well as shareholders, investors, HQC’s partners and staffs will successfully complete the tasks of 20172020, accelerate the growth momentum and ensure harmonized benefit between the business and other related parties.

Sincerely,

Dr. TRUONG ANH TUAN Chairman of the Board of Directors

CREATIVITY MAINTAINING PIONEERING

VISION

MISSION

Becoming a leading Vietnamese company operated in multi-sector, multi-field, where Real Estate, Education, Finance are considered as key sectors to generate strengths for sustainable development and enter international market.

Constantly innovating, striving to create high quality products and services at reasonable cost.

Pioneering in every products and services, bringing about differentiated values to customers and shareholders.

CORE VALUES Knowledge: Knowledge is considered as the foundation for sustainable development and creating Hoang Quan’s competitiveness.

of modern technology, aiming to create sustainable values for businesses, customers, partners and the community.

Innovation: Always renewing, being flexible in exploring, innovating products, services, applications

Pioneering: Pioneering in the mission of serving customers, shareholders and the society.

8 | OVERVIEW

OVERVIEW OF HOANG QUAN On the growth of 17 years of extensive operational experience, Hoang Quan Group - one of the leading Real estate, Education - Financial groups in Vietnam has increasingly affirmed its brand name and sustainable growth, ready to integrate into the world economy.

With the motto: “Knowledge - Innovation - Pioneer,” Hoang Quan is proud to be the first company in real estate sector to implement and apply ISO 9001:2008. Through profile appraisal and capability review, Hoang Quan has been officially recognized by the Ministry of Construction as managing civil works and technical infrastructure project capability as Group A in Vietnam.

Hoang Quan Group is the pioneer in the field of investment and development of social housing, housing for workers in Ho Chi Minh City and other southern provinces, contributing to accompany with the Government in social housing policy implementation and National Housing Strategy. Till now, Hoang Quan has invested and deployed a chain of 22 social housing projects, housing for workers with total investment of over VND 20,000 billion, supplying to the market more than 34,000 apartments.

The Company’s name in Vietnamese: CÔNG TY CỔ PHẦN TƯ VẤN - THƯƠNG MẠI - DỊCH VỤ ĐỊA ỐC HOÀNG QUÂN The Company’s name in Vietnamese: HOANG QUAN CONSULTING - TRADING - SERVICE REAL ESTATE CORPORATION Abbreviated name: HOANG QUAN CORP Business Registration Certificate No: 0302087938 Charter capital: 4,266,000,000 VND Head office: 286 - 288 Huynh Van Banh, Ward 11, Phu Nhuan District, Ho Chi Minh City, Vietnam Tel: +84 8 62928617 Fax: +84 8 62928486 Email: info@hoangquan.com.vn Website: www.hoangquan.com.vn

Besides, Hoang Quan Group has also stepped up its investment in other commercial real estate segments, generating stable revenue such as Thuong Thanh Housing in Commercial District (Can Tho), Mekong City Urban Area, Officetel Golden King Building (Ho Chi Minh City), Ham Kiem I Industrial Zone (Binh Thuan), Urban - Port - Industry Binh Minh (Vinh Long)…

In parallel with real estate investment and trading, Hoang Quan Group also expanded its investment in education and finance through the construction of the Mekong Delta University, putting Tay Nam A College of Economics and Technology into operation, Long An University of Economics and Technology, Mui Ne College of Tourism, etc; and promoted M&A opportunities, international cooperation to enhance competitive advantages, growing stronger in Vietnam and reaching out to the world.

With a network of more than 25 member companies, closed affiliate operation, forming a linkage chain from investment, legal, design, construction, pricing to marketing, distribution and management, Hoang Quan always strives every day to improve the product value, better service quality, and bring the highest benefits to customers, shareholders, investors, community and society.

BUSINESS LINES •• Investment in real estate, financial investment in associates and educational investment activities.

•• Trading of houses (except for receiving land use right to invest in infrastructure construction in accordance with housing construction planning to transfer land use right).

•• Investment in construction and trading of infrastructure of industrial zones.

•• Trading of real estate; Housing and land brokerage service, real estate transaction service, real estate advertising, and real estate management.

•• Real estate auction service, real estate valuation service; •• Civil engineering; Site leveling; Cadastral survey.

•• Investment project planning. Project management.

•• Architectural design of civil and industrial works.

Construction planning design; •• Vocational training (not operating in the head office).

Securities code: HQC Time of listing: 20 October 2010

ANNUAL REPORT 2016 | 9

EDUCATION Expecting to contribute to the development of Vietnamese next generations, Hoang Quan has brought lots of efforts to bring modern knowledge and educational environment by practical and useful activities.

FINANCIAL Hoang Quan aims to develop and growing stronger by expending financial investment and becoming an established and reliable financial organization in the market with diverse and professional operations.

REAL ESTATE The first company in real estate sector to implement and apply the quality management system ISO 9001:2008 Especially, Hoang Quan is a pioneer in construction investing and development of social housing in Ho Chi Minh City and other southern provinces.

The first company in Vietnam to build a closed real estate process from brokerage, design, construction, valuation, legal, bring high economic efficiency to customers.

25 17 22

Member companies, affiliates

Branches, transaction centers

Social Housing projects Housing for worker

4,266 1,500 20,000

Billion Total charter capital

Staff employees

Billion Total investment

10 | OVERVIEW

CORPORATE HISTORY AND DEVELOPMENT

2006-2010 2000-2005 22/08/2000: Hoang Quan Consulting – Trading – Service Real Estate Company Limited was established •• Operation expanded: Hoang Quan Appraisal Company Limited was established •• Hoang Quan Binh Thuan Consulting - Trading - Service Real Estate Corporation was established •• Hoang Quan MeKong Consulting - Trading - Service Real Estate Corporation was established

Charter capital was increased to VND 400 billion (Increasing 20 times higher than the period 2000-2005) •• Company was converted from a limited liability company to a joint stock company in the name of Hoang Quan Consulting Trading - Service Real Estate Corporation •• Operation expanded: Establishment of Viet Kien Truc JSC, Nam Quan Investment JSC, Hoa Chen Long Duc Ltd, Hoang Quan Can Tho Investment Real Estate Company, Hoang Quan Law Company Limited, Hoang Quan Education Investment Ltd •• Hoang Quan Study Encouragement Fund was established

2010: Joining the HoSE stock exchange, officially listing HQC stock

STEADY DEVELOPMENT BEGINNING

ANNUAL REPORT 2016 | 11

2016-2020

2011-2015 Charter capital was increased to VND 3,950 billion

(Nearly 10 times higher than period 2006-2010) •• A pioneer in investment and development of social housing in the South •• Operation expanded: Hoang Quan Nha Trang Consulting – Trading – Service Real Estate Co., Ltd. Was established

Hoang Quan Group was officially established with more than 25 member companies, affiliates, branches and transaction centers throughout the southern provinces.

Objectives: Maintaining a pioneering position in the development of social housing. By 2020, striving to complete 50,000 social houses, workers’ houses. Promoting investment and operation in the fields of commercial real estate, industry, tourism, etc, create stable revenue for the Group. Expand the market to regional and international countries.

•• Promoting investment in Education Finance, increasing domestic and foreign investors’ meeting, signing comprehensive cooperation strategy with big International brands •• The Ministry of Construction recognized the company management capacity as Group A and Company received many awards, certificates of merit, titles from the Ministries, Departments,associations and organizations

MATURITY, SUCCESS

GROWTH

12 | OVERVIEW

CORPORATE HIGHLIGHTS IN 2016 On 15 January 2016, the online conference on the implementation of objectives and plans for construction sector in 2016 in Hanoi was organized by the Ministry of Construction under the chairmanship of Minister of Construction Trinh Dinh Dung and the direction of Deputy Prime Minister Vu Van Ninh.

Attending the conference, Dr. Truong Anh Tuan - Chairman of the BOD - General Director of Hoang Quan Company, the pioneer of social housing development in the South in accordance with the policy of the Government, delivered a speech on the achievements, advantages and disadvantages of the company in the investment and construction of social housing.

Dr. Truong Anh Tuan participated in Conference of implementation of objectives and plans for construction sector in 2016

Honored the achievements in construction sector, including Hoang Quan Company, and appreciated the speech of Dr. Truong Anh Tuan, Deputy Prime Minister Vu Van Ninh and Minister of Construction Trinh Dinh Dung emphasized the continuous development of social housing as one of the important activities in the sector and required the construction industry to continue to development houses for policy beneficiaries, professional army men, low income people...

Successfully organized the 2016 Annual General Meeting of Shareholders On March 26, 2016, Hoang Quan Real Estate Company successfully organized the 2016 Annual General Meeting of Shareholders with the participation of more than 400 shareholders, investors, domestic and foreign partners with correspondent of the press, news agency.

100% of voting shareholders approved the reports, the content of the Board of Directors' reports with voting rate of 99.8% or more, including the most important contents are Results of business activities in 2015; Plan of revenue, profit in 2016; Plan to increase charter capital to 6,000 billion; Issuance of HQC Bonds; Increase foreign ownership limit to 60%.

Officially groundbreaking social housing projects HQC Tan Huong and HQC Tay Ninh Continuing with the development of social housing in the Southern provinces, Hoang Quan Real Estate Company officially kicked off the social housing projects of Tan Huong HQC (Chau Thanh, Tien Giang)

on April 22, 2017 and HQC Tay Ninh on April 29, 2017, realizing the dream of living for people and accompanying social housing policy of the State and Government.

ANNUAL REPORT 2016 | 13

Received Certificate of Merit awarded by the Minister of Construction and the President of the Vietnam Real Estate Association

On March 26, 2015, Hoang Quan Real Estate Corporation was honored to be awarded the Certificate of Merit by the Minister of Construction for outstanding business performance in 2015, contributing to the development of Vietnam's construction industry.

At the same time, the company was also awarded the Certificate of Merit by the President of the Vietnam Real Estate Association (VNREA) for our contribution in activities and actively contributed to the development of the Vietnam Real Estate Association in 2015.

Successfully organized the idea of planning contest of Ham Tien – Mui Ne Travel Service Center

On May 30 and 31, 2016, under the direction of the People's Committee of Binh Thuan province, Hoang Quan Real Estate Corporation organized a successful idea of planning contest of Ham Tien – Mui Ne Travel Service Center in Ham Tien Ward, Phan Thiet city, Binh Thuan province

with a total planning area of 198 ha.

The project "Flower from the land" from the Planning Faculty (HCMC University of Architecture) won the first prize with friendly environment and humanity in modern urban.

Attended the Nationwide Online Conference on Social Housing, Housing for Workers

On December 7, 2016, the National Online Conference on Social Housing, Housing for Workers took place under the chairmanship of Prime Minister Nguyen Xuan Phuc and had participation of Deputy Prime Minister Vu Duc Dam, Deputy Prime Minister Trinh Dinh Dung, leaders of ministries, sectors and localities at the videoconferencing online.

At the meeting, Prime Minister Nguyen Xuan Phuc directed: Development of social housing, housing for workers is not only tasks of the State, the Government but also the responsibility of community and enterprises. The Prime Minister praised the corporations and enterprises to participate in investing in the social housing and housing for workers segments, actively contributing to the government's national housing strategy. Being selected as the pioneer in social housing development in the South, Hoang Quan Real Estate Corporation has reported to the Prime Minister and the whole Conference on the implementation of projects as well as presentation of the advantages, disadvantages and recommendations in the investment process.

14 | OVERVIEW

CORPORATE HIGHLIGHTS IN 2016

Welcome foreign organizations and investment funds With strategic investment and business activities towards the goal of sustainable development, Hoang Quan Group has been attracting foreign investors and organizations such as USA, Thailand and Japan... to explore opportunities to invest in the Company.

In 2016, the company has welcomed many organizations, investment funds and investors to visit and work with our leaders in the spirit of promoting long-term, sustainable cooperation. The content of these meetings are about investment projects, company’s size and the system of affiliated companies, member companies, business operations, financial situation, sustainable development strategies; Financial indicators, stock index HQC ... as well as our development potentials in the next 3 to 5 years.

Handover of HQC Plaza, HQC Hoc Mon In 2016, Hoang Quan Company handed and put into use two social housing projects HQC Plaza (1,735 units) and HQC Hoc Mon (562 units) in Ho Chi Minh City. With modern design, excellent facilities, complete and consistent infrastructure system, HQC Plaza and HQC Hoc Mon is considered as key social housing projects in Ho Chi Minh City and a model of social housing investment and development throughout the South. Moreover, HQC Plaza has the honor to welcome many Government delegations, localities, investors, international real estate organizations to visit and refer to experience in project design and construction.

On July 29, 2016, in Ho Chi Minh City Stock Exchange (HoSE), the Best Annual Report Award in 2016 was held by HoSE, Investment Securities News and Dragon Capital fund management company with the participation of leaders of stock exchanges, organizers and more than 200 leaders representing for their enterprises participating in the vote.

Honored to receive the Top 50 Best Annual Report in 2016

Hoang Quan Consulting – Trading – Services Real Estate Corporation (HoSE: HQC) was honored to receive the Top 50 Best Annual Report in 2016.

Since joined the stock market in 2010, Hoang Quan always strives to complete the Annual Report over the years, improve content quality following the criteria of information transparency, effective management and sustainable development.

ANNUAL REPORT 2016 | 15

Delegation of Tacoma Council (Washington, United States) visited and worked in Vietnam

During 4 days from March 31, 2016 to April 3, 2016, the delegation of Tacoma Council (Washington, United States) led

by Mayor Marilyn Strickland visited and worked with the Ministry of Construction, Ministry of Planning and Investment, State Securities Commission, Vietnam Real Estate Association (VNREA) in Vietnam.

Hoang Quan Company is honored to

be the bridge for the visit and attend the meetings of Tacoma delegation in Vietnam.

In Ho Chi Minh City, Tacoma delegation also had a session of working, exchanging information on cooperation and investment with Hoang Quan Group and had a field trip to HQC Plaza And the Golden King building.

Announced interest rate policy supporting customers for buying social houses

Since November 01, 2016, Hoang Quan Company has applied the supportive interest rate policy to create favorable conditions for customers to buy social houses in projects invested or jointly invested by the Company. In particular, the company will support customers with interest rates exceeding 6% per year that banks apply for commercial loans, with a maximum duration of no more than 15 years.

The policy of interest rate that supports for Hoang Quan's customers is extended until the competent state agencies issue and implement the policy of supporting the purchase of social houses in accordance with Decree 100/2015/ND-CP.

Association Of Realtors (NAR) delegation to visit Vietnam

Welcomed the United States National Association Of Realtors (NAR) delegation to visit Vietnam On March 19, Dr. Truong Anh Tuan - Vice President of Vietnam Real Estate Association (VNREA) - Chairman of BOM - General Director of Hoang Quan Real Estate Company and VNREA delegates, representatives of member associations in the South were honored to welcome the delegation of United States National Association Of Realtors (NAR) to visit and work in Ho Chi Minh City, Vietnam.

The NAR delegation also visited HQC Plaza - a model social housing project in the South and the Golden King office building co-invested by Hoang Quan Real Estate Company with Indochina Real Estate Company.

16 | OVERVIEW

HONORS & AWARDS IN 2016

26/03 Certificate of Merit awarded by the Minister of Construction and Certificate of Merit awarded by the President of Vietnam Real Estate Association (VNREA) Certificate of Merit by the Minister of Construction for outstanding business achievements in 2015, contributing to the development of Vietnam's construction industry.

Certificate of Merit by the President of the Vietnam Real Estate Association (VNREA) for contribution in activities and actively contributing to the development of the Vietnam Real Estate Association by 2015.

ANNUAL REPORT 2016 | 17

29/07

12/01

Top 50 Best Annual Report in 2016

Certificate of Merit from HCMC Department of Construction

Top 50 Best Annual Report in 2016 jointly voted by Ho Chi Minh Stock Exchange (HOSE), Securities Investment News and Dragon Capital Fund Management Company.

Certificate of Merit of HCM City Department of Construction for active participation in investment and construction of social housing in Ho Chi Minh City in 2016.

18 | OVERVIEW

KEY FINANCIAL RATIOS IN 2016

6,860.2

Billion Total assets

1,019.2

Billion Total Revenue

ANNUAL REPORT 2016 | 19

Calculating unit: Billion VND FINANCIAL SITUATION

2014

2015

2016

1

Total assets

4,033.1

6,379.5

6,860.2

2

Net revenue

328.4

1,389.6

1,019.5

3

Profits from business actvites

39.9

419.8

26.1

4

Profits from other sources

(1.9)

300.2

6.1

5

Pre-tax profits

37.9

720.1

32.2

6

Afer-tax profits

30.1

641.3

20.0

KEY FINANCIAL INDICATORS 1

Liquidity indicators

a

Short-term liquidity ratio (Current assets/ short-term debts)

1.95

2.34

2.4

b

Quick liquidity ratio ([Current assets - Inventories]/ Short-term debts)

1.40

1.84

2.0

2

Capital structure indicators

a

Debt/Total asset

0.56

0.37

0.4

b

Debt/Owner’s equity

1.29

0.59

0.7

3

Performance indicators

a

Inventory turnover (Product price/Average inventories)

0.37

1.20

0.2

b

Net revenue/Total assets

0.08

0.22

0.1

4

Proftability indicators

a

Afer-tax profit/Net revenue

9%

46%

2%

b

Afer-tax profit/Owner’s equity

2%

16%

0.5%

c

Afer-tax profit/Total assets

0.70%

10%

0.3%

d

Profit from business actvites/Net revenue

12.10

30.20

3%

5

Share profitability indicators

a

Number of outstanding stocks

170,000,000

395,000,000

426,600,000

b

Earning per share (EPS)

177

1,623

47

c

Book value

10,371

10,102

9,487

d

Market value per share at the end of the period

7,300

5,300

2,280

e

Price-Earnings Ratio (P/E)

41.24

3.27

49

CORPORATE MANAGEMENT Management Structure Board of Management Board of Directors Board of Supervisors

Macro Perspectives & the Risk Management Model Report of the Board of Management Report of the Board of Directors Report of the Board of Supervisors Shareholder profile

TRANSPARENT SOUL FOR COOPERATION FAITH

22 | BUSINESS MANAGEMENT

THE SYSTEM OF KINDERGARTENS, VOCATIONAL SCHOOLS THE SYSTEM OF TRAINING INSTITUTES THE SYSTEM OF UNIVERSITIES

REAL ESTATE TRANSACTION CENTER DISTRICT 7

REAL ESTATE TRANSACTION CENTERS IN HCMC

INVESTOR RELATION DEPARTMENT

REAL ESTATE TRANSACTION CENTERS IN TIEN GIANG

LEGAL DEPARTMENT

CUSTOMER SERVICE DEPARTMENT

ACCOUNTING DEPARTMENT

FINANCE DEPARTMENT

BOARD OF SUPERVISORS

MANAGEMENT STRUCTURE

ANNUAL REPORT 2016 | 23

MEMBER COMPANIES

SUBSIDIARY COMPANIES

JOINT VENTURE COMPANIES

REAL ESTATE TRANSACTION CENTERS IN CAN THO

REAL ESTATE TRANSACTION CENTERS IN TAY NINH

REAL ESATE TRANSACTION CENTERS IN BA RIA – VUNG TAU

BUSINESS DEPARTMENT

INVESTMENT PROMOTION DEPARTMENT

PROJECT MANAGEMENT DEPARTMENT

BOARD OF DIRECTORS DEPARTMENT OF INTERNAL CONTROL AUDIT

BOARD OF MANAGEMENT

GENERAL MEETING OF SHAREHOLDER

REAL ESTATE TRANSACTION CENTERS IN MEKONG

COMMUNICATION DEPARTMENT

REAL ESTATE TRANSACTION CENTERS IN NHA TRANG

REAL ESTATE TRANSACTION CENTERS IN BINH THUAN

MARKETING DEPARTMENT HUMAN RESOURCES DEPARTMENT

ADMINISTRATIVE MANAGEMENT DEPARTMENT

24 | BUSINESS MANAGEMENT

BOARD OF MANAGEMENT

1. Mr. TRUONG ANH TUAN Chairman of BOM

4. Mr. LE DINH VIEN Member of BOM

2. Mrs. NGUYEN THI DIEU PHUONG Vice Chairwoman of BOM

5. Mr. LE THANH NAM Member of BOM

3. Mr. TRUONG DUC HIEU Member of BOM

6. Mr. TRUONG THAI SON Member of BOM

4

3 2

5 1

6

ANNUAL REPORT 2016 | 25

BOARD OF SUPERVISORS

1. Mr. NGUYEN THANH VAN Head of the BOS 2. Mrs. LE PHUNG NHA PHUONG Member of the BOS Deputy Head of Internal Control 3. Mrs. MAI HOANG YEN Member of the BOS

2

1

3

26 | BUSINESS MANAGEMENT

BOARD OF MANAGEMENT Mr. TRUONG ANH TUAN Chairman of the Board of Management cum General Director Member of the executive BOM First date of promotion: 23 March 2007 Date of repeated promotion: 28 March 2015

Year of birth: 1964 Qualification:

Native place: Ninh Thuan Doctor of Business Administration

WORKING BACKGROUND: Dr. Truong Anh Tuan is the founder of Hoang Quan Group. He has more than 20 years of experiences in real estate and held many key positions in the boards of real estate, education companies and become a lecturer in National Economics University.

HELD POSITIONS: • Manager of Sales Department – Assistant to General Director of Nghi Gia Company - Singapore • Manager of Sales Department – Assistant to General Director of Vinh Phuoc Company – Indonesia • Manager of Sales Department – Assistant to General Director of Thanh Danh Company CURRENT POSITIONS: • At listed companies: Chairman cum General Director of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Joint Stock Company • At other companies: Chairman of Hoang Quan Mekong Consulting – Trading – Service Real Estate Company

Chairman of Hoang Quan Can Tho Investment – Real Estate Company

Chairman of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Chairman of Hoang Quan Mekong Consulting – Trading – Service Real Estate Company • Chairman of Hoang Quan Can Tho Investment – Real Estate Company • Chairman of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Company • Chairman of Binh Minh Port Company

Mrs. NGUYEN THI DIEU PHUONG Vice Chairwoman of BOM cum Deputy General Director of Accountng and Finance Member of the executive BOM First date of promotion: 23 March 2007 Date of repeated promotion: 28 March 2015

Year of birth: 1965 Qualification:

Native place: Thua Thien Hue Doctor of Business Administration

WORKING BACKGROUND: Dr. Nguyen Thi Dieu Phuong has many years of experiences in management and administration of accounting and finance. She is the founding shareholder and has made many contributions to the success of Hoang Quan Group.

HELD POSITIONS: No CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Vice Chairwoman of Hoang Quan Mekong Consulting – Trading – Service Real Estate Company • Vice Chairwoman of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Company • Vice Chairwoman of Chairman of Hoang Quan Can Tho Investment – Real Estate Company • Chairman of Tay Nam A College of Economics and Technology • Chairman of Mui Ne College of Tourism • Director of Hoang Quan Investment Education Company

Mr. TRUONG THAI SON Member of BOM cum Deputy General Director of Marketng and Foreign Affairs Member of executve BOM First date of promotion: 23 March 2007 Date of repeated promotion: 28 March 2015

Year of birth: 1967 Qualification:

Native place: Ninh Thuan Doctor of Business Administration

WORKING BACKGROUND: Dr. Truong Thai Son is the founding shareholder of Hoang Quan Group. He has many years of experiences in marketing. He currently manages and operates Hoang Quan Appraisal Company, one of the leading appraisers in Vietnam.

HELD POSITIONS: • General Director of Hoang Quan Mekong Consulting – Trading – Service Real Estate Company • Assistant to Director cum Director of Sales at Vietnam Packaging Ink Company • Director of Sales at Long Su Company • Director of Sales at DX Trading Company • Director of Marketng at Ben Nghe Statonary Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Director of Hoang Quan Appraisal Company

Mr. TRUONG DUC HIEU Member of BOM cum Deputy General Director of Sales Member of executve BOM First date of promotion: 23 March 2007 Date of repeated promotion: 28 March 2015

Year of birth: 1972 Qualification:

Native place: Ninh Thuan Master of Business Administration

WORKING BACKGROUND: Master Truong Đuc Hieu is the founding shareholder of Hoang Quan Group. He has many years of experiences in the field of real estate and market development. He is currently the General Director of Hoang Quan Group Company – one of the key distributors of Hoang Quan.

HELD POSITIONS: • Head of market development, South Thai Son Exports & Imports Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: Vice Chairman of Binh Thuan House Construction and Trading Joint Stock Company • General Director of Hoang Quan Group Company • BOM’s member of Hoang Quan Can Tho Investment – Real Estate Company • BOM’s member of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Company

Mr. LE HUNG Member of executive BOM (*) First date of promotion: 28 March 2015

Year of birth: 1952 Qualification:

Native place: Thanh Hoa Senior Lecturer, Doctor of Economics

WORKING BACKGROUND: Dr. – Senior Lecturer Le Hung has more than 30 years of experiences in teaching financial and accounting subjects at College of Finance - Customs and Banking University.

HELD POSITIONS: • Lecturer, Deputy Head of Department of Personnel Organization of College Finance-Accounting IV, now is the College of Finance - Customs - Ministry of Finance • Excellent Teacher - Senior Lecturer, Doctor, Dean of Graduate School of Banking University of HCMC CURRENT POSITIONS AT OTHER COMPANIES: No (*) Mr. Le Hung resigned as Deputy General Director from 10 September 2016

ANNUAL REPORT 2016 | 27

Mr. LE DINH VIEN Independent member of BOM No participation in execution First date of promotion: 23 March 2007 Date of repeated promotion: 28 March 2015

Year of birth: 1951 Qualification:

Native place: Binh Dinh Doctor of Science

WORKING BACKGROUND: Dr. Le Dinh Vien has held managerial positions in executive boards at state-owned companies such as Sai Gon 3 Textile Company, Mien Nam Constructon – Transport – Service – Trading JSC,... He also has nearly 10 years of holding Manager cum President of Long An Industrial Economics University.

HELD POSITIONS: • Offcial of HCMC Industry Department • Director of Saigon 3 Textles Company, HCMC Industry Department • Chairman of Truong Thinh Company under HCMC Labor Federaton • Chairman of Mien Nam Constructon – Transport – Service – Trading JSC • Chairman of Nam Quan Investment Joint Stock Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Chairman cum President of Long An Industrial Economics University

Mr. LE THANH NAM Independent member of BOM No participation in execution First date of promotion: 29 April 2011 Date of repeated promotion: 28 March 2015

Year of birth: 1978 Qualification:

Native place: Hanoi Technological Engineer, Bachelor of Business Administration, CFO, Fund Management Certificate

WORKING BACKGROUND: Mr. Le Thanh Nam has held positions from specialist to managerial level in construction and consulting companies. He is currently the Deputy General Director of MB Securities Joint Stock Company - one of the first securities companies that has many contributions to the development of Vietnam's stock market.

HELD POSITIONS: • Project management expert in Tan Mai Group • Deputy General Director of Sales of Viet Paper Trading Service JSC • General Director of Viet Paper Trading Service JSC • Director of the Southern Area – MB Securites JSC CURRENT POSITIONS AT OTHER LISTED COMPANIES: • Deputy General Director of MB Securites JSC • BOM member of DIC No. 4 JSC • BOM member of Cai Lay Veterinary Pharmaceutcal JSC CURRENT POSITIONS AT OTHER COMPANIES: • Vice Chairman of BOM of Viet Paper Trading Service JSC

BOARD OF SUPERVISORS Mr. NGUYEN THANH VAN Head of the BOS No participation in execution First date of promotion: 01 November 2011 Date of repeated promotion: 28 March 2015

Year of birth: 1964 Qualification:

Native place: Ho Chi Minh City Bachelor of Economics

WORKING BACKGROUND: Mr. Nguyen Thanh Van has extensive experiences in the field of economics, finance and accounting. He has held Chief Accountant at some big companies such as Ba Ria Vung Tau Seafood Logistics Service Company - Ho Chi Minh City, Hoang Quan Mekong Consulting – Trading – Service Real Estate Company.

HELD POSITIONS: •Executve of Planning Department – Long An Department of Transportaton •Deputy Manager of Finance Accountng Department cum Chief Accountatn of HCMC Branch – Baseaserco Company •Head of the Supervisory Board - Hoang Quan Consultng – Trading – Service Real Estate Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: No

Ms. LE PHUNG NHA PHUONG Member of the BOS Deputy Head of Internal Control Hoang Quan Consulting – Trading – Service Real Estate Joint Stock Company First date of promotion: 28 March 2015

Year of birth: 1980 Qualification:

Native place: Can Tho Bachelor of Finance and Audit

WORKING BACKGROUND: Ms. Le Phung Nha Phuong has the bachelor degree of finance and audit with many experiences in these fields. She has worked for various companies such as Military Bank - MB, South East Asia Bank – Seabank …

HELD POSITIONS: • Credit ofcer at Social Policy Bank, Chau Thanh A District, Hau Giang Province • Senior internal auditor, MB Bank • Team Leader of Southern Region Internal Control, SEABANK • Deputy Director cum Head of Internal Control CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: No

Ms. MAI HOANG YEN Member of the BOS First date of promotion: 26 April 2012 Date of repeated promotion: 28 March 2015

Year of birth: 1986 Qualification:

Native place: Kien Giang Master of Real Estate Market Management

WORKING BACKGROUND: Ms. Mai Hoang Yen is a Master in Real Estate Market Management. She has extensive experiences in real estate market research and management. She has been working for Hoang Quan Group for seven years.

HELD POSITIONS: • Executive, Hoang Quan Consulting – Trading – Service Real Estate Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: No

28 | BUSINESS MANAGEMENT

BOARD OF DIRECTORS

1. Mr. TRUONG ANH TUAN General Director 2. Mrs. NGUYEN THI DIEU PHUONG Deputy General Director of Accounting and Finance 3. Mr. NGUYEN TON Deputy General Director of Materials

4. Mr. VU TRONG DAC Deputy General Director of Administration and Human Resources

7. Mr. TRUONG THAI SON Deputy General Director of Marketing and Foreign Affairs

5. Mr. TRAN ANH TUAN Deputy General Director of Project Management in Binh Thuan

8. Mr. TRAN THAI SON Deputy General Director of Project Investment

6. Mr. TRUONG DUC HIEU Deputy General Director of Sales

9. Mr. DANG THANH THAO Deputy General Director of Legalities

ANNUAL REPORT 2016 | 29

10. Mr. NGUYEN VAN TOAN Deputy General Director of Education 11. Mr. NGUYEN THANH PHONG Deputy General Director of Project Management 12. Ms. NGUYEN HONG PHUONG Chief Accountant

6

8

7 3

2

10

9 1

4

11

12 5

30 | BUSINESS MANAGEMENT

BOARD OF DIRECTORS Mr. TRUONG ANH TUAN General Director

Profile is presented in the Board of Management

Date of promotion: 24 March 2007

Mrs. NGUYEN THI DIEU PHUONG Deputy General Director of Accountng and Finance

Profile is presented in the Board of Management

Date of promotion: 24 March 2007

Mr. TRUONG THAI SON Deputy General Director of Marketng and Foreign Affairs

Profile is presented in the Board of Management

Date of promotion: 09 Octorber 2014

Mr. TRUONG DUC HIEU Deputy General Director of Sales Member of executve BOM

Profile is presented in the Board of Management

Date of promotion: 01 September 2011

Mr. NGUYEN THANH PHONG Deputy General Director of Project Management Date of promotion: 01 November 2016

Year of birth: 1964 Qualification:

Native place: An Giang Construction Engineer

WORKING BACKGROUND: Mr. Nguyen Thanh Phong is a construction engineer with more than 30 years of experiences of working in big construction companies such as Eastern Construction Company, Construction No. 8.1 Company … He started working for Hoang Quan Group from 2014 to now.

HELD POSITIONS: • Team Leader of Construction No.3 of Enterprise of precast elements • Main Coordinator of Eastern Construction Company • Director of Eastern Construction No.4 Enterprise – Eastern Construction Company • Deputy General Director of Construction No. 8.1 Company • Deputy General Director of Binh Thuan House Construction and Trading Joint Stock Company

Mr. TRAN THAI SON Deputy General Director of Project Investment Date of promotion: 18 March 2015

Year of birth: 1977 Qualification:

Native place: Da Nang Bachelor of Architecture

WORKING BACKGROUND: Mr. Tran Thai Son has many years of experiences as architects. He started working for the Hoang Quan Group since 2002 with his professional work in design – assisting the Board of Directors in raising ideas and design of the company's projects.

HELD POSITIONS: • Architect, Mien Nam Construction and Architecture Company • Assistant to General Director of Hoang Quan Consulting – Trading – Service Real Estate Company • Director of Industrial Design cum Assistant to General Director, Hoang Quan Consulting – Trading – Service Real Estate Company • Director, Viet Kien Truc JSC • Head of Project Management, Hoang Quan Consulting – Trading – Service Real Estate Company • General Director, Chau A Construction and Architecture Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Chairman Tay Ninh Infrastructure & Urban Development JSC • Chairman Bao Linh Housing Development Investment - Construction JSC • Vice Chairman Viet Kien Truc JSC

Mr. DANG THANH THAO Deputy General Director of Legality

Year of birth: 1975 Qualification:

Date of promotion: 02 January 2016

WORKING BACKGROUND: Laywer Dang Thanh Thao has extensive experience in legal consultancy and litigation.

Mr. Dang Thanh Thao is also the Chairman of Hoang Quan Law Firm Ltd - one of the leading legal service providers in Ho Chi Minh City.

Native place: Ninh Thuan Lawyer

HELD POSITIONS: • Consultant, Gia Luat Company • Manager of Legality, Hoang Quan Consulting – Trading – Service Real Estate Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Chairman of Hoang Quan Law Firm Ltd

ANNUAL REPORT 2016 | 31

Mr. TRAN ANH TUAN Deputy General Director of Project Management in Binh Thuan Date of promotion: 15 March 2016

Year of birth: 1955 Qualification:

Native place: Binh Thuan Hydraulic Construction Engineer

WORKING BACKGROUND: Mr. Tran Anh Tuan is a construction engineer with more than 40 years of experiences in construction and has held important positions in Binh Thuan’s Construction Department. He started working for Hoang Quan Group from 2016.

HELD POSITIONS: • Director of Thuy Nong enterprise, Ham Thuan Bac District.

• Deputy Director of Binh Thuan’s Water Resources Department • Deputy Director of Binh Thuan’s Construction Department • Drector of Binh Thuan House Construction and Trading Joint Stock Company • Director of Binh Thuan’s Construction Department CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Vice Chairman of Binh Thuan House Construction and Trading Joint Stock Company • Vice Chairman of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Joint Stock Company

Mr. NGUYEN VAN TOAN Deputy General Director of Education Date of promotion: 21 September 2016

Year of birth: 1971 Qualification:

Native place: Long An Doctor of Business Administration

WORKING BACKGROUND: Dr. Nguyen Van Toan has extensive experience in business administration and education.

He has many years of holding management positions in big corporations such as Ajinomoto, Gillette, ... He is currently the President of Tay Nam A College of Economics and Technology and the Director of Institute for Development of Talents and Human Resources.

HELD POSITIONS: • Sales Supervisor of Ajinomoto Viet Nam • Sales Manager of Gillette Viet Nam • Deputy Director to Sales of Saigon Ve Wong Company • Director of Sales and Marketing of Kellogg Vietnam • Lecturer, visiting lecturer at universities CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • President of Tay Nam A College of Economics and Technology • Director of Institute for Development of Talents and Human Resources

Mr. NGUYEN TON Deputy General Director of Materials

Year of birth: 1960 Qualification:

Date of promotion: 01 Novemeber 2016

WORKING BACKGROUND: Mr. Nguyen Ton is an experienced engineer in the field of construction. He has held management positions at construction companies such as Bao Linh Housing Development Investment – Construction JSC, Binh Thuan House Construction and Trading JSC.

Native place: Ninh Thuan Bachelor of Chemicals

HELD POSITIONS: • Deputy Technical Manager of Thuan Hai Textile Union Enterprise • Branch Director of Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate JSC • Director of Bao Linh Housing Development Investment – Construction JSC • General Director of Binh Thuan House Construction and Trading JSC CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: • Vice Chairman of Binh Thuan House Construction and Trading JSC

Mr. VU TRONG DAC Deputy General Director

Year of birth: 1950 Qualification:

Date of promotion: 01 September 2011

WORKING BACKGROUND: Mr. Vu Trong Dac has extensive experiences in the field of economics. He was a lecturer at Economic School No. I and Manager School of General Department of Logistics. In addition, he has held management positions at the schools and at the Saigon Real Estate Corporation…

Native place: Lang Son Bachelor of Economics

HELD POSITIONS: • Lecturer – Economics School No. 1, Officer and Manager School, General Department of Logistics, Vietnamese People’s Army • Managing Officer – Ministry of Metallurgical Engineering and Cao Thang Technical School • Deputy General Director – Housing Development and Trading Company Limited Saigon Real Estate Corporation CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: No

Ms. NGUYEN HONG PHUONG Chief Accountant

Year of birth: 1981 Qualification:

Date of promotion: 22 October 2015

WORKING BACKGROUND: Ms. Nguyen Hong Phuong has expertise in accounting. She has worked and joined Hoang Quan Group for almost 7 years.

Native place: Tay Ninh Bachelor of Economics

HELD POSITIONS: • Deputy Head of Accounting Department, Hoang Quan Consulting – Trading – Service Real Estate Company CURRENT POSITIONS AT OTHER LISTED COMPANIES: No CURRENT POSITIONS AT OTHER COMPANIES: No

32 | BUSINESS MANAGEMENT

MACRO PROSPECT I. MACRO PROSPECT 1. Assess the macroeconomic situation in 2016 of the property market 1.1. Growth and inflation

Source: Consolidated GDP annual growth rates

6.21%

6.68%

5.98%

5.42%

5.25%

5.89%

5.32%

6.78%

0.830%

0.570%

0.540%

0.540%

0.460%

0.420% 0.330%

0.130%

0%

2009

2010

2011

2012

2013

2014

2015

2016

1

1.2. Credit and interest In 2016, the mortgage credit rose by 12.5% from the end of 2015, which was significantly lower than that of 2015 (28.3%). Investment and real estate investment credit mainly focused on home building, repairing and buying residential properties, including residential and rental housing (34.3%), urban construction (19%) and investment in other types of real estate (restaurants, hotels for sale and for rent) (21.8%).

The credit sources from the banking system for the market were shrinking. Commercial banks were virtually out of short-term capital in accordance with the regulations of the State Bank of Vietnam effective from January 2017.

In recent years, mortgage interest rates in 2016, in fact, also fell sharply, not to say they hit the trough. The decline in interest rates theoretically had a positive impact on the real estate market.

1.3. Some policies that had great impacts on the real estate market in 2016 a. Limiting credit to real estate Circular 06/2016 /TT-NHNN (TT06) was issued and effective from 1 July 2016 to amend some articles of the Circular 36/2014/TT-NHNN (TT36) on the safety limitations and ratios in the operation of credit institutions, foreign bank branches with a number of important changes affecting the real estate market as follows:

0.220%

0.100%

2

3

4

GDP annual growth rates

The GDP growth in 2016 was 6.23%, a fall compared to the growth rate of 6.68% in 2015. It can be seen that the upward trend of the economy is showing signs of slowing down although positive.

0.500%

5

6

7

8

9

10

11

12

Inflation by month

18.12%

Source: General Statistics Office

11.75%

6.80%

6.05%

4.74% 1.84% 0.63%

2010

2011

2012

2013

2014

2015

2016

Vietnam’s inflation rate by year

•• The increase in the risk factor for the real estate business receivables from 150% up to 200%, which was effective from January 1st 2017 •• The ratio of short-term capital for medium and long-term loans was reduced from 60% to 40% for commercial banks and the reduction process is set for 2 years (2017: 50%, 2018: 40%).

•• This means that businesses need to prepare for the shortage of the medium and long-term credit sources in the real estate market. b. Announcement of the list of mortgaged projects In the mid-July 2016, the Department of Natural Resources and Environment of Ho Chi Minh City in cooperation with the Department of Justice and the Department of Construction announced the list of 77 real estate projects

ANNUAL REPORT 2016 | 33

across the country that having mortgages. This is the first time the administrative agencies publicized the status of the projects to its people to avoid being deceived when buying houses as happened before. This made it difficult for the real estate businesses to quickly withdraw security assets and reassure their customers. On the other hand, this also provided a favorable condition for the customers to ensure the safety of their personal capital flows. c. Studying the taxation on real estate The objective of this tax is to contribute to the sustainable development of the real estate market, the prevention of speculation and the increase in the revenues of the State budget. d. The termination of 30-trillion-dong preferential credit package In the near future, the termination of this preferential credit package makes it difficult for the low-income urban residents to access housing and also affects the affordable housing segment. Most of the social housing buyers now only have access to the credit package at a floating interest rate, similar to that of the regular commercial properties. e. The transition of the Trans-Pacific Partnership Agreement The United States’ withdrawal from the Transpacific Partnership Agreement (TPP) constituted one of the uncertainties that might have a profound impact on Vietnam's property market. Throughout 2016, the supplydemand shifts in the real estate market toward the segments of high-end properties in major cities across the country was considered as a consequence of the trend of taking opportunities from the TPP. The absence of the United States in this trade agreement will affect the capital inflows and the shift in production into Vietnam. It will then have a direct effect on the real estate market in the medium and long terms. In the near future, TPP can change the demand for high-end residential real estate, resorts, industrial parks, and offices in metropolitan regions.

2. Macro-prospect in 2017 2.1. Market opportunity •• A young population, a fast-growing middle class as well as foreign capital inflows strongly invested in real estate, deep economic integration, widely invested-in modern transport infrastructure and stable political system, etc. will help the real estate market to grow sustainably, especially with about 1 billion VND in the apartment segment.

•• In 2017, there are probably two preferential credit packages for the poor to get a loan to buy a home.

-- The first loan is allocated to Vietnam Bank for Social Policies to provide loans by using 50% of the budget and 50% of the mobilized capital to provide loans for subsidised housing at a maximum interest rate of 5%.

-- The second loan belongs to the State-owned commercial banks. Accordingly, these banks have to spend 3% of their debit balance providing loans for subsidised housing with some preferential conditions.

These policies and guidelines will make the market more energised. People who want to get subsidised housing can now feel reassured because of these 2 packages for low income people in 2017 with unlimited scale and low interest rate instead of the previous package of 30,000 billion.

With the participation of the leading real estate corporations from Japan, Korea, Singapore and many other countries, the operation of the market will be more efficient and effective. Regarding the capital for real estate development, it is projected that FDI capital will still account for a high proportion while domestic credit will be the main resource of capital and remittances will be mobilized more, especially in the investment in tourism and resorts.

2.2. Challenges •• Preferential policies for low-income home buyers are still on paper and the possibility of their enactment is still in waiting.

•• The promulgation of Circular 06/2016/TT-NHNN will be a big challenge for the housing market in particular and the real estate market in general as the source of credit plays a decisive role in the development of the market.

The estimated capital structure accounts for 70-80% of its value.

•• Though imposing a tax on a second home is only a disambiguation, in the future, tax policies are expected to become a barrier to the development of the residential property market.

•• Supply and demand being out of phase and high-end real estate dominating in 2016 also threatens the balance of the market in 2017. Some real estate companies receiving large amounts of credit and mobilizing a lot of social capitals (including many consumers and secondary investors) in 2016 are also potential risk factors in the next year.

•• TPP can change the demand in the following segments: high-end residential real estate, industrial parks, offices in big cities, etc.

34 | BUSINESS MANAGEMENT

RISK MANAGEMENT 1. Risk management mechanism The integrated risk management system is closely linked to the development and implementation of Hoang Quan Corporation's business strategy. The closed-risk management process is continually improved to adapt to changes in the risks and impacts of the risk.

Risk management model

Identify risk

Subsidiary Evaluate risk

Supervise, review Deparments

Handle risk Identify risk •• Develop a risk control process •• Continuously monitor, update and adjust •• Specifies the internal control responsibilities of divisions, personnel in Management mechanism: -- The Board is responsible for overseeing, improving the adequacy and effectiveness of the internal control system.

-- The BOM is responsible for building and maintaining effective internal control throughout the organization: establish organizational structure, reporting mechanism, delegation of authority and responsibility, the coordination between parts in the internal control system.

-- All staff are responsible for risk management and control of the work of their department...

Evaluate risk •• Establishing strategic objectives, business objectives and risk management objectives throughout the Corporation to member companies to ensure consistency in the identification, assessment and treatment of risks.

•• Issue Audit and Control regulation to identify, control and report on the risks. In particular, clearly define the organizational structure, authority and responsibilities of all levels in risk management, process control activities and procedures.

Handle risk The risks arising are dealt with on the basis of: 1. Determine the cause 2. Build a plan / option that is suitable with the resources 3. Select and apply the optimal plan 4. Learning from risk avoidance 5. Adjust and improve the risk management mechanism 6. Monitor the adjustments made Supervise and Review •• Regular monitoring: the management of the monitoring department performs risk management through day-today operations •• Periodic monitoring: Regular monitoring is carried out through the Board of Internal Audit and Control review report on the adequacy and effectiveness of the internal control system at the member companies and department. Solutions to improve the internal control system are consulted afterwards.

Risk management system BThe risk management system of the Company continues to improve and consolidate in order to identify and analyze the risks that the company is exposed to and ready to respond to those risks.

General Meeting of Shareholders Monitoring Board Board of Director Board of Internal Audit and Control CEO

Departments, divisions

The risk management system is directly monitored and supervised by the Board of Internal Audit and Control through regular and irregular inspections.

Board of Internal Audit and Control Board of Internal Audit and Control is established under The Board of Directors (BOD), which oversees and controls the operations of the Group and its Subsidiaries; check the compliance with laws and regulations of the Group, thereby detecting problems and proposing inconsistent improvement measures.

Activities of the Board of Internal Audit and Control aim to supervise and inspect compliance with the law; rules, regulations, procedures and policies of the Corporation, for the purpose of prevention, detection and handling of violations, reduce risks.

On that basis, perfecting the management mechanism, bringing into play positive factors, contributing to improvement of the controllability and efficiency of the operation, thus helping to achieve the objectives set by the Leaders.

ANNUAL REPORT 2016 | 35

The Board of Internal Audit and Control operates on the basis of 1. Comply with the laws, regulations and regulations and policies of the Group.

2. Objective, honest in the process of performing control tasks.

3. Independent in terms of organization from departments, units, functional units.

4. Independent in terms of operations from management operations and controlled operations.

5. Independent in terms of assessment, presentation in control reports, internal audit.

Risk mitigation measures: At signing project construction investment contract, the Hoang Quan Corporation selected general contractor signing form with fixed price during construction process.

Simultaneously build strategic partnerships with many material suppliers to maintain stable prices throughout the construction period. In addition, continually expand network of diverse and optimized material supplies. Therefore, the fluctuation on input material price had less implication on the enterprise’s expected profit.

In 2016, the Board of Internal Audit and Control carried out 19 audits and inspections in the system, and set up a satellitebased Internal Audit and Control system to enhance monitoring activities in key areas such as Western, Binh Thuan to report to the Corporation’s Board of Internal Audit and Control.

3.2. Credit risk Credit risk is a risk where the Corporation is financially damaged if a customer cannot perform his contractual obligations and such risk arises mainly from receivables from customer.

3. Main risks The Corporation identifies key risks and implements risk control measures to reflect changes in market conditions:

Risk mitigation measures: -- Receivables from customers and other receivables: Each customer holds specific characteristics which bring particular risk to the Corporation. In 2014, the Leadership of the Corporation implemented some policies to control as follows: making provision for doubtful receivables, selecting appropriate customers for each project, building payment condition for various customers to create the most optimal conditions to customers and enterprise.

3.1. Market risk Connecting with financial market and general economic situation, market fluctuation will greatly affect to the expected revenue and profit of the Corporation. Market risks are classified into 3 major types of risk, namely, currency risk, interest rate risk and market price risk. a) Currency risk The Corporation have been transacting in VND with fixed unit price, therefore fluctuations in currency value and rise in costs are controlled and minimized.

However, as a result of inflation, devaluation of the currency also affects medium and long-term projects. Thus, the Leadership has established a currency devaluation reserve norm to minimize the possibility of higher prices due to inflation. b) Interest rate risk This is the risk associated with interest expenses arising from rising market interest rates. Interest-bearing loans are mainly used to invest in real estate projects. However, for social housing investors entitled to interest incentives under the Housing Law, specifically implemented in Decision 2530a/QD-NHNN on the preferential interest rates of credit institutions, provisions of Circular No. 25/2015 / TT-NHNN applies to borrowers that invest in the construction of social houses.

Risk mitigation measures: -- Continuing to maintain the pioneering position of social housing investment, taking advantage of the State's incentives to reduce production costs.

-- Proactively paying off or restructuring of loans with floating interest rate to loans with preferred and fixed interest rate.

-- Proactively support homebuyers with stable payments with a flexible interest rate policy.

-- Strengthen capital mobilization from existing shareholders and strategic investors to maintain the financial structure with steady loan utilization. c) Market price risk Risk of fluctuation on input material price, rise in service price during commencement of projects.

-- Investments: In the last year, the Corporation has limited credit risk level by only investing in trusted partners of Hoang Quan system, limiting investments in its subsidiaries by means of withdrawing capitals from such subsidiaries to focus investment resources on some key projects being implemented by the Corporation.

3.3. Liquidity risk Liquidity risk management aims to ensure funds to meet current and future debt obligations of the enterprise.

Risk mitigation measures -- The Finance Director monitors receivables and payables as well as current requirements on liquidity daily to ensure satisfaction of immediate financial demand of the Corporation and stable budget.

-- Establish budget for each department/division and ensure compliance of budget. Budget variance must be approved by the Management Board.

-- The Corporation implemented measures to increase the turnover of receivables to meet cash needs for its other investment activities.

3.4. Project implementation progress risk The Corporation’s projects often have the implementation period of 3-4 years and face up many huge challenges from investment procedure application, site clearance, construction design, and construction commencement.

Risk mitigation measures The Leadership of the Corporation has prepared measures to speed up the project construction period to minimize progress delay risk against customers such as: -- Preparing clean soil for planned projects; -- Preparing partner and customer right from the beginning to ensure capital source invested in the project;

36 | BUSINESS MANAGEMENT

-- Early make closed activity chain available to assure project implementation work, including legitimacy - design - material supply - construction; -- For projects being implemented, the Leadership offers an exact house delivery and completion time. Pressure is created so that the Corporation uses its best attempt to complete criteria and commitments to customers for the purpose of establishing prestige and trust toward them; -- Search and M&A potential projects.

3.6. Compliance risks

3.5. Legal risk Legal and policy changes can have a positive impact on the business development or can cause short-term or long-term disadvantages. Legal risk is defined as policy changes that are detrimental to the business. In the year 2016 there are many new legal documents and guidelines to apply the law began to affect directly or indirectly on the field of operation of the Group such as the Land Law, Housing Law, Business Law Real estate,... and other guiding legal documents such as Decree 99/2015/NDCP, Decree 100/2015/ND-CP, Circular 25/2015/TTNHNN, Circular 20/2016/TT- BXD, Circular 139/2016 /TT-BTC,... These new policies coming into practice are helping businesses to enjoy many incentives such as: exemption from land use, land rent, receiving 20% of the total area of residential land allocated within the scope of social housing development projects for investment in the construction of commercial business, 5% VAT reduction, 10% corporate income tax... However in 2016, during the transition period of the credit support policy, the company has encountered difficulties due to preferential capital as guided in the Decree No.100/2015/ND-CP has not disbursed while the 30,000 billion preferential credit package has ended.

Risk mitigation measures: In order to minimize the risk of compliance, the Company applies these following preventive measures: -- Designing the operation with cross-checking procedure among components; -- Establishing the internal inspection and supervision system; -- Applying strict discipline to the violation of the regulations of the Company.

Risk mitigation measures: Hoang Quan Corporation has a separate legal department while Hoang Quan Law - member of Hoang Quan Corporation also has a separate department including lawyers with years of experience. This department regularly monitors and updates the legal changes to timely consult and advise the Leadership in order to take best advantages of favorable legal conditions and minimize the damages from disadvantageous policies on real estate market.

Specifically, in 2016, the legal department coordinated with the Finance Department to advise the Board of Director to implement the interest subsidy program and credit support program for home buyers. Specifically, the Company will support customers with interest rates in excess of 6% per annum applied by the Bank for commercial lending, with a maximum duration of no more than 15 years. (Example: If Bank A lends buyer with a commercial interest rate of 10%/ year, Hoang Quan customers pay only 6%/year, the remaining 4% will be supported by Hoang Quan Corporation).

The proposed solution has contributed to limit the effect in the disbursement waiting period under Decree 100, contributed to the stability of corporate finance, while enabling customers to own their own apartments, expressing the humanity of the Corporation’s policy.

The Company shall face the compliance risk in the event that the Company or the Company's employees violate or fail to comply with the provisions of the Laws as provided in the Charter of the Company or violate the Internal Regulations.

Compliance risks are likely to cause confusion in the implementation of the Company's development strategies.

Consequently, Compliance control are considered as the effective measure to prevent and mitigate business risks.

3.7. Human resources management risks In today's labor market, despite the high unemployment rate for new graduates, the high quality human resources in almost all fields are still in short supply. Therefore, the competition in the labor market is quite large, creating potential risks in human resources management such as: excessive salary budget, wrong subject recruitment, labor safety, productivity, quality work, property loss.

Risk mitigation measures: -- The salary budget is too large: · Developing a process, determine the authority and approval limits · Implementing budget control and warnings -- Wrong subject recruitment: · Applying probationary time and post-test evaluation · Applying the internal transfer - Occupational safety: · Ensuring a safe and professional working environment and conditions · Organizing periodic medical examinations to keep track of the health of the employees, and make plans for personnel recruitment when necessary.

- Job performance: · Developing and applying the quarterly performance appraisal process · Organizing professional training for staffs not meeting the requirements · Applying the internal transfer - Employees leave: · Developing a clear job description for timely replacement · Training inheritance team for key positions · Developing and applying competitive salary and benefit policies - Loss of property, reputation influence: · Monitoring the asset handover and work handover to avoid the risk of asset loss · Interviewing the reasons for leave and the aspirations of employees.

38 | BUSINESS MANAGEMENT

REPORT OF THE BOARD OF MANAGEMENT ON THE ACTIVITIES IN 2016 WITH THE ORIENTATION IN 2017 A. EVALUATION OF THE BOARD OF MANAGEMENT ABOUT THE ACTIVITIES OF THE COMPANY I. EVALUATION OF THE BOARD OF MANAGEMENT ON THE ACTIVITIES OF THE COMPANY 1. Macroeconomic context for 2016 In the context of 2016, Vietnam's economy continues to have stable development. Legal frameworks have gradually improved. Especially, the policies on social housing development (NOXH) have created favorable conditions for enterprises to invest and develop. However, in the past year, difficulties caused by the stop of the investment of 30,000 billion VND have impacted significantly on the business plan of the Company.

Under that condition, with the collective efforts of the company, the whole year 2016 resulted in consolidated sales of 1,114 billion VND and the after-tax profit of 20.1 billion VND, equivalent to 15% of the revenue and 4% % of the profit as planned.

Although the business result in 2016 has not reached its target, the Board of Management (BOM) still appreciates the determination and sensitivity of the Board of General Directors and the spirit of solidarity and cooperation of the collective of staff members and member units.

Through reviewing and evaluating, the BOM has made changes in the business strategy of the Company and its member units, focusing on specialization to improve production and business efficiency and complete the strategic objectives from 2016 to 2020.

Along with the efforts to achieve positive business results and increase profitability to benefit shareholders, the Company also focuses on improving corporate governance in accordance with international practices. Specifically, the Company is measuring the quality of corporate governance and improving efforts under the ASEAN Corporate Governance Scorecard. Business information is provided fully and transparently. At the same time, the Company is strengthening communication channels in order to provide the timely and continuous information for stakeholders. The Company makes efforts to improve corporate governance not only from the leaders, but also from the managers and employees of the Company and affiliates.

In addition, the Company continues to maintain social responsibility for community and society, develop future generations, actively implement the initiatives of saving energy and materials, and comply with the regulations on environmental protection.

II. EVALUATION OF THE BOARD OF MANAGEMENT ON THE ACTIVITIES OF THE BOARD OF GENERAL DIRECTORS OF THE COMPANY 1. Monitoring and supervising activities The Board of Management has cooperated with the Board of Controllers ("BOC") to closely follow the activities of the Board of General Directors ("BOGD") and give timely guidance in the implementation of production and business strategies and plans. At the same time, The Board of Management approves the supervisory mechanism through the Board of Internal Controllers and Auditors under the Board of Management in order to review, identify, prevent and manage risks.

2. Monitoring results Production and business activities No. Item 01 Revenue 02 Profit from business activities

Unit: billion VND Business results 2016 1,114.0 319.3

03 Profit before tax

32.2

04 Profit after tax

20.1

In 2016, the Board of Management has promptly directed the Board of General Directors to develop and implement arrangements for arranging funds to prepare for the accelerated progress of the projects when the new policy to support the capital for the social housing projects has not disbursed. However, the plan to accelerate development has been greatly affected by the policy risk factor. While the credit support policy under Decree 100/2015/ND-CP on development and management of social housing has not disbursed, the package of 30,000 billion VND to provide credit for social housing customers and investors only disbursed the remaining capital for the contracts signed before March 31, 2016 and officially ended on 31/12/2016.

With this situation, the disbursement progress of the ongoing projects has been affected. However, the Board of General Directors has proposed a plan to reduce the impact of policy risk by deploying customer support schemes through the interest rate subsidy program for the borrowers at the commercial interest rate in order to purchase the social housing from 01/11/2016, and by applying the high discount for customers to pay earlier than payment plan.

These schemes are assessed to be the right decision, in line with practical requirements in the period when enterprises face policy risks. The Board of General Directors has implemented the guidelines of the General Assembly of

ANNUAL REPORT 2016 | 39

Shareholders and the Board of Management on the strategy of social housing development that not only helps the lowincome people realize the dream of having a house but also contributes to stabilize capital for businesses.

In 2016, the Board of General Directors had the following positive activities: -- Regularly organizing meetings to assess the macroeconomic situation, changes in policies that may affect the production and business activities, and propose appropriate solutions. Especially, the interest rate subsidy policy for customers to buy the social housing as well as the payment discount have timely stabilized capital source and financial situation of the company.

-- Continuing to affirm its leading position in social housing in the South, focusing on investment in social housing projects in provinces and cities such as Khanh Hoa, Binh Thuan, Ho Chi Minh City, Tay Ninh, Tien Giang, Vinh Long, Can Tho, Dong Nai, Tra Vinh, etc.

-- Continuing to strengthen investment promotion activities and effectively exploit Ham Kiem I Industrial Park, Binh Minh Industrial Park; -- Cooperating with investors to speed up the project of Golden King building for putting into operation of offices, commercial center, and mixed residential and commercial apartments (officetel).

-- Diversifying investment products to increase profitability; -- Speeding up the execution of projects for handing over to customers; -- Continuing to expand the land fund through the purchase of land, M&A, and the land funds allocated by the localities without land use fees to invest in social housing ... so as to prepare for the 2017-2020 business plan; -- Speeding up the construction progress, personnel recruitment and preparation for the first phase of the University of the Mekong Delta; -- Putting the pre-school system, supermarkets and clinics in Hoang Quan Company's housing projects into operation, which help to increase the utility of the projects to meet the practical needs of residents; -- Continuing to search for and select companies that already have good and effective projects to carry out M&A to earn better financial returns.

Corporate governance -- Completing the selection of A & C Auditing and Consulting Company Limited as independent auditing company.

-- Continuously improving corporate governance, especially risk control. In 2016, under the direction of the Board of General Directors and the supervision of the Board of Management and the Board of Controllers, the Department of Internal Control and Audit has supervised and controlled the process and regulation to control risks and cost.

-- Developing a dynamic and effective working environment to create the conditions for the staff to develop their capacity and creativeness.

-- Developing a project to restructure the governance model, focusing on reviewing and withdrawing capital

of member companies, continuing to consolidate the management and operation of Hoang Quan’s system; Conclusion -- Through the mechanism of inspection and supervision by direct reports from the Board of General Directors on the company's regular/unscheduled activities, reports of the Board of Internal Controllers and Auditors, and expanded meetings of the Board of Management, the Board of Directors assesses that the Board of General Directors has exercised the rights and duties assigned in accordance with the current law, the Charter of the Company, resolutions of the General Assembly of Shareholders and the Board of Management. At the same time, the Board of General Directors has exercised the rights and duties assigned in an honest and careful manner, ensuring the legitimate interests of the Company and its shareholders.

-- The Board of General Directors has made efforts to carry out the tasks entrusted by the General Assembly of Shareholders and the Board of Management, implement well sustainable development activities in association with community responsibility, continually review and propose the plans on improvement of the quality of corporate governance, especially risk management. However, in the past year, the mechanism of risk management has not responded in time, causing long-lasting effects. Although there are solutions to limit the effect, but the mechanism of risk management was implemented in the 4th Quarter of 2016; thus, the deployment is not so effective as expected.

The Board of General Directors should continue to review and develop effective risk management mechanisms to further improve business performance. At the same time, the Board of General Directors always attach the development goals of the business to the interests of employees, shareholders, partners, communities and maintain the compliance with environmental standards and regulations.

III. GENERAL ASSESSMENT ON THE ACTIVITIES OF THE BOM •• In the year 2016, the Board of Management actively operated, promoted the role of directing and closely supervising the activities of the Board of General Directors, ensuring that significant risks are identified, controlled and solved to limit the impact.

•• The independent members of the Board of Management have exercised a supervisory role, ensuring a balance of interests, contributing to protecting the legitimate interests of shareholders, especially small shareholders, contributing to independent opinion, and contributing to the strategy and operation of the Company.

•• The strategy for the 2016-2020 period is evaluated and consistent with the macroeconomic outlook and will continue to be implemented in 2017.

•• The plan to change the corporate governance model set by the Board of Management in the set out plan is determined to be necessary in the preparation phase for stronger and more stable growth of the Company in its development strategy with the vision to 2020.

40 | BUSINESS MANAGEMENT

B. CORPORATE GOVERNANCE

2. Activities of the Board of Management

I. PRINCIPLES OF CORPORATE GOVERNANCE

-- Following the functions and powers prescribed by relevant laws and the Charter, the Board of Management has seriously supervised and directed the business activities, the management and operation of the Board of General Directors.

•• Ensure an effective governance structure; •• Ensure the interests of shareholders; •• Ensure the equitable treatment of shareholders; •• Ensure the role of stakeholders in the Company; •• Ensure the transparency in the Company's operations; •• The Board of Management and the Board of Controllers lead and control the Company effectively.

II. BOARD OF MANAGEMENT The Board of Management is the governing body of the Company, which has full power to act on behalf of the Company to decide and exercise the rights and obligations of the Company without the authority of the General Assembly of Shareholders.

The Board of Management is responsible for developing the company's strategies and orient the company's development.

At the same time, it oversees the management of the Board of General Directors.

1. Composition and structure of the Board of Management -- The Board of Management of the Company has 7 members, including 02 independent and non-executive members (Mr. Le Thanh Nam and Mr. Le Dinh Vien).

-- Every year, Mr. Truong Anh Tuan, Chairman of the Board of Management cum General Director must be submitted the reports for the approval of the General Assembly of Shareholders.

-- In 2016, the Board of Management held 18 meetings to discuss and agree on issues under the authority of the Board of Management. From then on, timely guidance will be given to the Board of General Directors in production and business activities.

-- All BOM meetings have the participation of the Head of the Board of Controllers and/or members of the Board of Controllers as observers who perform the function of monitoring, supervising and commenting to the Board of Management. In principle, all resolutions and decisions of the Board of Management will only be passed with the approval of two thirds of the members of the Board of Management present and the member(s) absent but submitting the valid vote(s) at the meeting. Where the number of approval and disapproval votes are equal, the vote of the Chairman of the Board of Management is the decisive one, the opposing members have the right to reserve their opinions.

-- A member of the Board of Management is not allowed to vote on the contracts, transactions or proposals that such member or his affiliated person has interests that are or may be inconsistent, contradictory to the benefit of the Company. A member of the Board of Management will not be counted in the minimum number of attender required to be present in order to hold a BOM meeting on decisions that such member has no voting right.

Specifically, the BOM meetings are as follows: No.

Member of Board of Management

Position

Start day/ No longer a BOM member

Number of BOM meetings attended

Meeting attendance rate

01

Mr. Truong Anh Tuan

Chairman

23/03/2007

16

100%

02

Ms. Nguyen Thi Dieu Phuong

Vice Chairman

23/03/2007

16

100%

03

Mr. Truong Thai Son

Member

23/03/2007

16

100%

04

Mr. Le Dinh Vien

Member

13/07/2007

16

100%

05

Mr. Truong Duc Hieu

Member

23/03/2007

16

100%

06

Mr. Le Thanh Nam

Member

29/04/2011

16

100%

07

Mr. Le Hung

Member

28/03/2015

16

100%

Reason for not attending the meeting

Contents of BOM meetings: No.

Resolution

Date

Content

01

01/2016/NQ-HĐQT

17/03/2016

Approving the content of the annual shareholders meeting in 2016

02

02/2016/NQ-HĐQT

31/03/2016

Approving the issuance of shares to pay dividends

03

04/2016/NQ-HĐQT

28/04/2016

Issuing separate convertible bonds for strategic investors

04

05/2016/NQ-HĐQT

28/04/2016

Changing the capital use purpose of the share issue to existing shareholders and issuing individual shares to strategic investors in 2016

05

06/2016/NQ-HĐQT

12/05/2016

Adding information of individual convertible bond issuance options for strategic investors

06

07/2016/NQ-HĐQT

21/05/2016

Approving the results of share issuance to pay dividends to shareholders; Amending and supplementing the charter of the company; additionally registering the number of shares issued to pay dividends to shareholders at the Vietnam Securities Depository Center; additionally listing the number of shares issued to pay dividends to shareholders at the Ho Chi Minh Stock Exchange

ANNUAL REPORT 2016 | 41

07

08/2016/NQ-HĐQT

26/05/2016

Rounding out retail shares in the share issue to increase the charter capital to 2016

08

09/2016/NQ-HĐQT

28/05/2016

Rounding out the odd shares in the dividend share issue in 2016

09

10/2016/NQ-HĐQT

28/06/2016

Approving selection of an auditing company for the 2016 annual reports

10

11/2016/NQ-HĐQT

21/07/2016

Adopting the results of the issuance of individual convertible bonds to strategic investors

11

12/2016/NQ-HĐQT

27/07/2016

Approving the stop of issuing shares to increase charter capital of the Company in 2016

12

12B/2016/NQ-HĐQT

30/09/2016

Approving the policy of divesting member companies

13

15/2016/NQ-HĐQT

14/11/2016

Approving the stop of issuing individual shares in 2016

14

16/2016/NQ-HĐQT

12/12/2016

Approving the policy of divestment in the subsidiary

15

17/2016/NQ-HĐQT

29/12/2016

Approving the policy of divestment in the subsidiaries

16

18/2016/NQ-HĐQT

29/12/2016

Approving the closing of the list and holding the 2017 Annual General Assembly of Shareholders

3. Activities of independent and non-executive members of the Board of Management -- At present, the composition of the Board of Management ensures the balance between the executive and nonexecutive members, of which one third (1/3) of the BOM members are independent members.

-- Independent members play the role of balancing interests and ensuring tha tBOM decisions are made on an objective and independent basis.

4. The activities of the subcommittees of the Board of Management The Company has not set up subcommittees that the Board of Management assigns to the BOM Office, the Shareholder Relations Department, the Internal Control Department to perform the specialized functions.

BOM Office: The BOM Office is in charge of monitoring, holding the BOM meetings, and providing necessary information and materials to members of the Board of Management and the Board of Controllers.

Board of Internal Controllers and Auditors: The Board of Internal Controllers and Auditors under the Board of Management performs the function of supervising and inspecting compliance with the provisions of law, the Company's regulations, rules, regulations, procedures and policies, for the purpose of preventing, detecting and handling violations, reducing risks, advising on solutions to prevent risks to the Board of Management. On that basis, The Board of Internal Controllers and Auditors will perfect the management mechanism, promote the positive factors, contributing to enhancing the control capability and raising the operational efficiency to help achieve the Company's objectives and orientations.

The Board of Internal Controllers and Auditors consists of 09 members directly under the Board of Management.

The duties of the Board of Internal Controllers and Auditors are detailed in the Internal Control and Audit Regulations, which includes the following basic duties: -- Establishing internal control system -- Establishing control mechanism and policy to:

++ Protect property; prevent loss, fraud, waste; minimize potential errors. ++ Ensure the reliability of financial accounting and operation information of the Company. ++ Ensure system compliance with the organization's rules, policies, regulations, operating procedures and laws. ++ Assess the effectiveness of the Company's activities. ++ Build an internal control system based on 5 factors: Control Environment, Risk Assessment, Controlling Activities, Information and Communication, Monitoring ++ Connect and cooperate with other units to develop the constituent elements of the internal control system -- Setting up, organizing the program of internal control and audit periodically and extraordinarily -- Controlling the operations and compliance III. BOARD OF CONTROLLERS The Board of Controllers plays the role on behalf of the General Assembly of Shareholders to supervise and evaluate the management and administration of the Board of Management and the Board of General Directors in accordance with the relevant laws and regulations, the Charter of the Company, and Resolutions of the General Assembly of Shareholders.

The Board of Controllers consists of 03 members: No.

Full name

Position

01

Mr. Nguyen Thanh Van

02

Ms. Le Phung Nha Phuong

Member

03

Ms. Mai Hoang Yen

Member

Head

The Board of Controllers has the authority to inspect any matter within the scope of its responsibilities, to have full access to and work with the managers and leaders of the Company to carry out the responsibility of monitoring and evaluating the execution of the regulations by the Board of Management and the Board of General Directors.

The members of the Board of Controllers have professional knowledge of real estate, finance, accounting to ensure the supervision of the activities of the Board of Management and the Board of General Directors, thereby minimizing the risks in investment, production and business.

42 | BUSINESS MANAGEMENT

IV. BOARD OF GENERAL DIRECTORS The Board of General Directors is appointed by the Board of Management with the primary responsibility for organizing the implementation of the resolutions of the General Assembly of Shareholders and the Board of Management, deciding all issues that do not require resolutions of the Board of Management, including acting on behalf of the Company to sign the financial and commercial contracts, and organize and run daily business activities of the Company in accordance with the best management practices.

The Board of General Directors is currently working with 12 members.

In 2016, the Board of General Directors has some changes as shown in the table below: No.

Full name

Position

Remark

01

Mr. Truong Anh Tuan

General Director

02

Ms. Nguyen Thi Dieu Phuong

Deputy General Director in charge of Finance Accounting

03

Mr. Truong Duc Hieu

Deputy General Director in charge of Business

04

Mr. Vu Trong Dac

Deputy General Director in charge of Administration Human Resources

05

Mr. Truong Thai Son

Deputy General Director in charge of Marketing & PR

06

Mr. Tran Thai Son

Deputy General Director in charge of Project Investment

07

Mr. Le Trong Ngoc

Deputy General Director

08

Mr. Dang Thanh Thao

Deputy General Director in charge of Legal Affairs

Appointed on 02/01/2016

09

Mr. Tran Anh Tuan

Deputy General Director in charge of Binh Thuan region

Appointed on 15/03/2016

10

Mr. Nguyen Van Toan

Deputy General Director in charge of Education

Appointed on 21/09/2016

11

Mr. Nguyen Thanh Phong

Deputy General Director in charge of Project Management

Appointed on 01/11/2016

12

Mr. Nguyen Ton

Standing Deputy General Director

Appointed on 01/11/2016

13

Mr. Le Hung

Deputy General Director in charge of Education

Resigned on 10/09/2016

14

Mr. Pham Minh

Deputy General Director in charge of Project Management

Resigned on 31/10/2016

V. TRAINING ON CORPORATE GOVERNANCE In 2015, the Company created the conditions for the members of the Board of Management, the Board of Controllers, and the officers in charge of internal control and shareholder relations to participate in the course of training on corporate governance organized by Securities Research and Training Centre (SRTC). However, in 2016, due to fluctuations, great impact on business activities, members of the Board of Management, the Board of General Director did not have favorable conditions to participate in the training. It is expected that in 2017, the Company will arrange for at least one third of the management team to participate in the training program.

Up to now, the list of members of Board of Management, the Board of General Directors, the Board of Controllers, and other operational divisions with the same function of subcommittees under the Board of Management participating in the training course is as follows: No.

Full name

Position

01

Ms. Nguyen Thi Dieu Phuong

Vice Chairman of the BOM, Deputy General Director in charge of Finance - Accounting

02

Mr. Vu Trong Dac

Deputy General Director in charge of Human Resources - Administration

03

Ms. Mai Hoang Yen

Member of the Board of Controllers

04

Mr. Nguyen Ha Long

Head of the Board of Internal Controllers and Auditors

05

Mr. Nguyen Thanh Hoai

Head of Shareholder Relations Department

06

Ms. Doan Thi Thuy Trang

Deputy Head of Shareholder Relations Department

ANNUAL REPORT 2016 | 43

VI. LIST OF RELATED PERSONS OF LISTED COMPANY ACCORDING TO CLAUSE 34, ARTICLE 6 OF THE LAW OF SECURITIES 1.b List of related persons of the Company No.

Name of organization/ individual

Company position (if any)

Time of starting Time of being to be a related no longer a person related person

01

Truong Anh Tuan

Chairman cum General Director

23/03/2007

02

Nguyen Thi Dieu Phuong

Vice Chairman cum Deputy General Director 23/03/2007

03

Truong Thai Son

Member of the BOM cum Deputy General Director

23/03/2007

04

Truong Duc Hieu

Member of the BOM cum Deputy General Director

23/03/2007

05

Le Hung

Member of the BOM cum Deputy General Director

28/03/2015

06

Le Dinh Vien

Non-executive member of the BOM

13/07/2007

07

Le Thanh Nam

Non-executive member of the BOM

29/04/2011

08

Le Trong Ngoc

Deputy General Director

23/03/2007

09

Vu Trong Dac

Deputy General Director

01/09/2011

10

Tran Thai Son

Deputy General Director

18/03/2015

11

Dang Thanh Thao

Deputy General Director cum the authorized person to disclose information

02/01/2016

12

Tran Anh Tuan

Deputy General Director

15/03/2016

13

Nguyen Van Toan

Deputy General Director

21/09/2016

14

Nguyen Ton

Standing Deputy General Director

01/11/2016

15

Nguyen Thanh Phong

Deputy General Director

01/11/2016

16

Pham Minh

Deputy General Director

18/03/2015

17

Nguyen Thanh Van

Head of the Board of Controllers

01/11/2011

18

Le Phung Nha Phuong

Member of the Board of Controllers

28/03/2016

19

Mai Hoang Yen

Member of the Board of Controllers

26/04/2012

20

Nguyen Hong Phuong

Chief Accountant

22/10/2015

21

Binh Minh Port Joint Stock Company

Subsidiary

01/10/2015

22

Hoang Quan Binh Thuan Real Estate Services-TradingConsultancy JSC

Subsidiary

01/10/2015

23

Hoang Quan Can Tho Real Estate Investment JSC

Subsidiary

01/10/2015

31/10/2016

Reason

Resigned from the position of Deputy General Director

VII. TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATED PARTIES

No.

The person performing the transaction

Relationship with internal people

Number of shares at the Number of shares at beginning of the period the end of the period Number of shares

Rate

Number of shares

Rate

Reasons for increase or decrease (purchase, sale, conversion, bonus...)

01

Truong Anh Tuan

23,585,420

5.53%

20,350,240 4.77%

Received dividends from 1,598,920 shares Sold 3,235,180 shares

02

Nguyen Thi Dieu Phuong

18,189,840

4.26%

18,189,840 4.26%

Received dividends from 1,051,098shares

3,743,660 0.88%

Received dividends from 316,660 shares Bought 1,023,550 shares Sold 2,054,800 shares

03

04

Truong Duc Hieu

Nguyen Thanh Van

4,774,910

5,599,444

1.12%

1.31%

1,774,444 0.42%

Received dividends from 280,000 shares Sold 3,825,000 shares

44 | BUSINESS MANAGEMENT

05

Hoang Quan Me Kong Real Estate Services-TradingConsultancy Joint Stock Company

Mr. Truong Anh Tuan is the Chairman & Ms. Nguyen Thi Dieu Phuong is the Vice Chairman

29,741,300

6.97%

24,341,300

5.71%

Received dividends from 768,000 shares Sold 5,400,000 shares

06

Bao Linh Housing Development Investment Joint Stock Company

Mr. Tran Thai Son is the Chairman

20,000,000

5.06%

0

0%

Received dividends from 1,600,000 shares Bought 21,000,000 shares

07

Hoang Quan Group Company Limited

Mr. Truong Anh Tuan, Ms. Nguyen Thi Dieu Phuong & Mr. Truong Duc Hieu contribute more than 10%

0

0

38,244,658

8.96%

Bought 38,244,658 shares

VIII. CHANGES IN OWNERSHIP OF INVESTMENT CAPITAL In 2016, the Company issued additional 31,600,000 shares to pay dividends and issue convertible bonds with the value of 500 billion VND. Issuance of shares to pay dividends The Company issued shares to pay dividends at the ratio of 25:2 as follows: •• Number of shares issued: 31,600,000 shares •• Date of entry into force: 10/06/2016 •• Official transaction date: 16/06/2016 Issuance of individual convertible bonds •• Number of bonds issued: 5,000,000 bonds •• Release date: 20/05/2016 •• Due date: 20/05/2017 •• Conversion period: 07 days from the due date IX. REMUNERATION AND BENEFITS OF THE BOARD OF MANAGEMENT AND THE BOARD OF CONTROLLERS 1. Remuneration and benefits of the Board of Management and the Board of Controllers Cum the executive position

Remuneration (Million VND/ year)

No.

Member of the BOM

Position

01

Mr. Truong Anh Tuan

Chairman of the BOM

X

105,9

02

Ms. Nguyen Thi Dieu Phuong

Vice Chairman of the BOM

X

84

03

Mr. Le Dinh Vien

Member of the BOM

04

Mr. Truong Thai Son

Member of the BOM

X

68

05

Mr. Truong Duc Hieu

Member of the BOM

X

68

06

Mr. Le Thanh Nam

Member of the BOM

07

Mr. Le Hung

Member of the BOM

08

Mr. Nguyen Thanh Van

Head of the Board of Controllers

09

Ms. Le Phung Nha Phuong

Member of the Board of Controllers

X

58

10

Ms. Mai Hoang Yen

Member of the Board of Controllers

X

58

68

68 X

68 90

2. Bonus regime of members of the Board of Management and the Board of Controllers In addition to the remuneration for members of the Board of Board of Management and the Board of Controllers as mentioned above, the independent and non-executive members of the Board of Board of Management and the Board of Controllers do not receive any bonus from the Company's Bonus Fund.

3. Other benefits for members of the Board of Management and the Board of Controllers At present, only the members of the Board of Management cum executives are entitled to allowances (use of the company's automobile, receipt of the allowances for the actual phone bill, social insurance, health insurance and other types of insurance, periodical health checks, etc.) and other benefits as stipulated in the Company's internal regulations.

C. DIRECTIONS OF THE BOARD OF MANAGEMENT Orientation in the 2016-2020 period •• So far, the development plan for the 2016-2020 period still shows strategic relevance. However, it is agreed with the Board of General Directors that it is necessary to restructure the investment ratio among different segments and product lines.

•• Although the policy risk has affected the business strategy of the company, the low-cost commercial social housing products continue to be a high demand segment and attract investors. This shows that this is still a potential segment.

Being a pioneer and experienced company combined with a closed investment system, Hoang Quan Company has the advantage of implementing the investment strategy in this segment.

•• In parallel, the Company considers and selects other types of real estate with higher profit margins such as resort real estate

ANNUAL REPORT 2016 | 45

(sea villas and Condo-tel), residential and commercial real estate (Shop house and Office-tel), apartments (high, medium, cheap), industrial parks, workshops, warehouse to maximize profitability on equity. •• Based on internal business factors combined with macroeconomic outlook forecasts, the Board of Management has set the development orientation for 2017 as follows: Production and business plans The Board of Management proposes some basic targets for 2017 as follows:

Unit: billion VND Plan

No.

Item

01

Revenue Of which

2,000

--

1,000

----02

Profit before tax

240

03

Profit after tax

200

04

Dividend

5%

Corporate governance -- Continue reviewing and finalizing the project of restructure the governance model and proceed with the divestment of member companies.

-- Improve corporate governance in line with international standards while enhancing the role of risk management and control in financial management, auditing accounting, risk management, cost control.

-- Continue improving transparency in the corporate operation, enhance the role of independent BOM members, the Board of Internal Controllers and Auditors; consider early establishment of the Subcommittee in charge of salary, bonus, personnel, investment strategies.

-- Enhance and facilitate corporate governance training for members of the Board of Management, the Board of General Directors, and the Board of Controllers.

Organization of personnel -- Supervise the deployment of a new management model at the Company and its member units.

-- Promote the implementation of the plan for development of successive human resources at the leadership level in the whole management apparatus at the BOM and the executive board of the enterprise.

Sustainable development -- Maximize the interests of shareholders while ensuring the sustainable development of the Company -- Ensure the balance of interests of other stakeholders: customers, staff, partners; well perform the obligations to the State; carry out the sustainable development in combination with environmental protection and social security.

-- Diversifying the form of investment on the basis of social housing is the key to maintaining a stable source of revenue for the development of projects with higher profitability; -- Expand the search and selection of highly effective projects in line with the Company's capability and experience in the domestic and regional markets.

-- Continue enhancing competitiveness for sustainable growth and make a positive contribution to the country's economic development.

Dividend plan With the orientation to ensure the stability of shareholders' benefits, the Company strives to achieve the dividend plan of 2017 not less than 5% of charter capital. And the dividend payment ratio in subsequent years is stable from 80% of the after-tax profit each year.

ON BEHALF OF THE BOARD OF MANAGEMENT CHAIRMAN

Dr. TRUONG ANH TUAN

46 | BUSINESS MANAGEMENT

THE 2016 REPORT OF THE BOARD OF GENERAL DIRECTORS WITH THE 2017 BUSINESS PLAN I. ASSESSMENT OF THE RESULTS OF THE YEAR 2016 1. Macroeconomic context in 2016 In 2016, the world economic situation had many complex fluctuations. The prices of energy and food were stable.

The world also witnessed the UK’s decision to leave the European Union's general economic community and the fact the United States raised interest rates when they had enough confidence to escape the economic downturn.

Meanwhile, general macroeconomic situation in Vietnam was relatively stable and inflation was controlled. Credit growth reached 18.71% of the target, interest rates were stable, and liquidity was abundant. In parallel, the exchange rate wass stable, foreign exchange reserves increased highly, and the stock market had a positive change.

Although the GDP growth rate of 6.23% of the whole 2016 did not meet expectations yet, it affirmed the stable growth trend of the Vietnamese economy.

The real estate market gradually warmed up in comparison with the first half of the year with real estate price indexes rising slightly, supply and transaction volume increased compared to previous quarters.

Advantages: In 2016, legal documents detailing and guiding the implementation of the Land Law, the Law on Real Estate Business, the Housing Law came into force and practice.

Accordingly, investors and buyers of social housing were entitled to many preferential policies such as: (i) being exempt from land use fee, land rent; (ii) reduction of Corporate Income Tax, Value Added Tax; (iii) being entitled to preferential loans from the Social Policy Bank, credit institutions operating in Vietnam; (iv) being supported all or part of the costs of constructing technical infrastructure within the social housing construction project. Preferential policies were implemented to improve the competitiveness of social security compared to cheap commercial housing products.

Of which, ·· Legal documents guiding the creation of a complete legal framework on social housing, worker housing, and assistance to investors during the implementation of the investment procedures for the construction of the project have been promulgated and effective; ·· The State Bank has fully implemented the tasks assigned in the Decree No. 100/2015/ND-CP dated October 20, 2015

by Government on the development and management of social houses, The State Bank has designated four commercial banks under Circular No. 25/2015/TT-NHNN dated December 09, 2015 by the State Bank of Vietnam

providing guidelines on providing preferential loans for the implementation of social housing policy for banks to deploy. ·· The State Bank has issued a circular to facilitate the procedures of approving the recognition of preferential capital as well as to create favorable conditions for the investors to borrow preferential capital in the package of 30,000 billion VND for the project implementation; ·· Many localities create favorable conditions for enterprises investing in social housing to be entitled to preferential policies such as clean land allocation, land use fee exemptions. These enterprises were also supported in terms of the cost of investment in construction of power infrastructure in some social housing projects as well as in terms of administrative procedures. Thus, the procedures for investment and construction licenses are carried out quickly. The investors are entitled to corporate income tax incentives at the rate of 10% of taxable income for social housing projects; ·· Customers are entitled to a 5% VAT rate and supported by the State through the incentive package of 30,000 billion VND (for cases disbursed before December 31, 2016). In the future, the investors will be supported by the preferential credit policy provided for in the Housing Act 2014 and Decree No. 100/2015/ND-CP dated October 20, 2015; Difficulties: In the field of real estate, the social housing product line, which is the strength of Hoang Quan Group, has contributed significantly to business results in recent years. However, in 2016, preferential credit sources for investors and customers were not stable. This is mainly due to the suspension of the credit package of 30,000 billion VND since March 31, 2016, which officially ceased to be disbursed on December 31, 2016, while the new preferential credit package under Decree 100/2015/ND-CP has not been implemented, causing difficulties for investors in mobilizing capital to continue investing in completing the projects. The effect of not being able to maintain a preferential credit package for social housing and worker housing has led to the difficulty for the investors to complete the plans.

The period that the social housing policy is completed and transferred from short-term to long-term policy has created favorable conditions for businesses to invest in the projects.

However, in the transition period, the enterprises have to face some difficulties, especially the issue of long-term funds to support customers and investors in the social housing.

However, Hoang Quan Real Estate Corporation has flexibly adjusted the strategy to maintain stable production, business and finance.

ANNUAL REPORT 2016 | 47

2. Assessment of operating results in 2016 According to the consolidated business results in 2016, the consolidated revenue reached 1,114 billion VND and the after-tax profit was 20.1 billion VND, fulfilled 15% of the revenue target and 4% of the profit target respectively. The main contribution was from real estate business, accounted for 88% of total revenue. Total assets reached 6,860 billion VND, up 7.5% against 2015.

Although compared with the plan, the result was quite modest. However, in the context of 2016 when the enterprises face capital difficulties due to the lack of support for social housing, this achievement demonstrated the efforts and flexibility of the Board of General Directors when offering timely solutions such as interest rate subsidy policy issued and applied from 01/11/2016 to help stabilize the financial of enterprise.

Business results in 2016

Unit: billion VND

No. Item

2015

2016

1,390

1,114

1

Revenue

2

Profit from business activities

420

319

3

Profit before tax

720

32

4

Profit after tax

641

20

5

Earnings per share (VND/share)

2.262

44

Financial situation Item

Unit: billion VND 2011

2012

2013

2014

2015

2016

Total assets

2,733.7

2,718.6

3,140.0

4,033.1

6,379.5

6,860.2

Current assets

1,680.7

1,660.6

2,116.1

2,694.0

4,315.3

4,774.3

Non-current assets

1,053.0

1,058.0

1,023.9

1,339.1

2,064.2

2,085.9

Total liabilities

1,959.9

1,965.7

2,184.2

2,270.0

2,378.3

2,812.7

Current liabilities

1,800.0

1,382.2

1,539.2

1,384.0

1,845.4

1,963.4

Non-current liabilities

159.9

583.5

645.0

886.0

532.9

849.3

Owner’s equity

712.6

752.9

955.9

1,763.0

4,001.1

4,047.3

Profit before tax

40.5

24.3

30.1

37.9

720.1

32.2

Profit after tax

16.5

19.0

23.0

30.1

641.4

20.1

As of 31/12/2016, total assets were recorded at 6,860.2 billion VND, up 7.5% y/y. Accounts receivable fell by nearly 185 billion VND, from 951 billion VND to 766 billion VND, revenue also decreased nearly 22 percent. Inventories fell by nearly 123 billion VND or 13.4% over the same period last year because the Company also stopped issuing additional capital and at the same time delayed some new projects.

Compared to 2015, interest-bearing loans increased by 7.6%, while long-term loans declined by 57%. In 2016, the Company issued 5 million convertible bonds which will become mature on May 20, 2017.

The Debt / Equity ratio (DER) was 0.69 times, although it was 0.59 times higher than the same period last year but still low, showing a high degree of financial security as well as the potential to raise capital to expand production and business in the future.

Key financial indicators No. Financial indicators

2014

2015

2016

Short-term payment ratio (Current assets/Current liabilities)

1.95

2.34

2.43

b

Quick ratio ([Current Assets - Inventory]/Current liabilities)

1.40

1.84

2.03

2

Capital structure indicators

a

Debt/Total Assets

0.56

0.37

0.41

b

Debt/Owner’s equity

1.29

0.59

0.69

3

Performance indicators

a

Inventory turnover (cost of goods sold/average inventory)

0.37

1.20

0.20

b

Net revenue/Total assets

0.08

0.22

0.15

1

Solvency indicators

a

48 | BUSINESS MANAGEMENT

No. Financial indicators

2014

2015

2016

4

Profitability indicators

a

Profit after tax/Net revenue

9%

46%

2%

b

Profit after tax/Owner’s equity

2%

16%

0,5%

c

Profit after tax/Total assets

0.7%

10%

0.3%

d

Profit from operating/Net Revenue

12.1

30.2

3%

5

Profitability index of the stock

a

Outstanding shares

170,000,000

395,000,000

426,600,000

b

Earnings per share (EPS-VND)

c

Book value per share (Book Value-VND)

d e

177

1,623

47

10,371

10,102

9,487

Market value per share (VND)

7,300

5,300

2,280

Price to Earnings (P/E)

41.24

3.27

49

Responsibility of the Board of General Directors in case of not completing the business plan:

to sell products faster, increase the return on capital as well as minimize capital costs and avoid liquidity risks.

Apart from the objective reasons, the Board of General Directors taking responsibility for the management also reveals the inadequacies, has not reached the plan approved by the General Assembly of Shareholders, the Board of Management.

Although the Board of General Directors still maintained a net profit of 20.1 billion VND, the failure to reach the planned targets affected the interests of shareholders, employees and other stakeholders who have been cooperating with the Company. Moreover, the failure to reach the planned targets also affected the perception of investors about HQC shares when they claimed that HQC shares were not suitable with the value of enterprises, thereby affecting the stock price on the market, making it difficult for the Company’s plan to increase capital to meet the development needs.

-- The Board of Controllers acknowledges the efforts in management to create added value for shareholders, employees and the community. However, the Board of General Directors was quite impatient to push up investment projects when not anticipating the impact of policy risks in 2016. Therefore, the Board of General Directors is proposed to reconsider investment projects and makes appropriate financial plans to ensure good implementation of annual production and business plans in 2017 and the completion of the strategic objectives to 2020.

The Board of General Directors has quickly reviewed the causes and proposed solutions to enhance the competitiveness of the Company.

Regarding objective reasons, the mechanism of capital policy for social housing investors and buyers has been delayed.

Thus, the source of capital from customers' payment schedule is very slow, compared to the project's progress, thus affecting the project cash flow.

On the other hand, the delayed implementation of capital support mechanism has affected the psychology of buyers, so the selling speed of social housing products has slowed down.

Apart from the issues mentioned above, the Board of General Directors recognizes several causes arising from the management and administration process as follows: -- Management systems and procedures in general and construction management in particular are not standardized.

For this reason, the Board of Management and the Board of General Directors should consider the review of the quality management system and adjust the processes in the direction of eliminating redundant processes.

-- The expansion of the portfolio while the financial resources have not met in time has created a large amount of unfinished products, affecting the liquidity, increasing the cost of capital. It is necessary to speed up the project

3. Operational highlights in 2016 Development, review, and preparation of the plan to divest the member companies With a view to building a sustainable and transparent governance model, the Board of Management sets out the policy of restructure Hoang Quan Company’s system and its member companies towards the divestment of member companies, minimizing the cross ownership, and improving investment efficiency.

Implementation of interest rate subsidy program for borrowers to buy social houses On 01/11/2016, Hoang Quan Corporation officially implemented interest rate subsidy program for customers to buy social houses belonging to projects invested by Hoang Quan Corporation. This policy is intended to contribute to sharing financial difficulties for customers, thereby creating conditions for customers to easily own social houses and access to the humane social housing policy of the Government and the State. At the same time, the policy also demonstrates the efforts and determination of Hoang Quan Real Estate Company for the pioneering strategy of social housing development in the South.

Product diversification Not only is the pioneer enterprise in social housing development, Hoang Quan Group and member units also invest and cooperate to invest in other types of commercial real estate such as resort real estate (sea villas, codo-tel); residential and commercial real estate (shop house, office-tel); apartments

ANNUAL REPORT 2016 | 49

with diverse customer segments from high-end, medium to low-cost apartments; industrial estates such as land, factory and port services, warehouses, entertainment services, etc.

Promotion of online sales channels through corporate website, project website, fanpage In 2016, the Corporation increased interaction and search for customers through online sales channels. Currently, in addition to the official website of the Company, all projects have their own website and fanpage to increase the efficiency of interaction to meet the needs of each customer.

Enhanced Investor Relations Investor Relations in 2016 were considered to have a quite effective interaction with investors, shareholders and experts on the stock market. The implementation of meeting quarterly investors through a frank and open dialogue with investors helps the Company to receive comments and give the feedback quickly and effectively.

Completion of the HQC Plaza project and some internal facilities of the project HQC Plaza is the first project to be converted from commercial housing to social housing which is subject to the package of 30,000 billion VND. The project includes 1,735 units at CC1 Plot, Nguyen Van Linh Boulevard, Saigon South New Urban, Binh Chanh District, Ho Chi Minh City which have been completed and put into operation with full legal documents. The facilities at the project such as HQC Market, Hoang Lam Kindergarten, Kien An Clinic, Cafe L'amour have been put into operation to serve the essential needs of residents in the project and the surrounding areas.

Completion and handover of HQC Hoc Mon project HQC Hoc Mon project is the first high-rise apartment building in Hoc Mon district. The project includes 562 apartments in Nguyen Thi Soc, Xuan Thoi Dong, Hoc Mon District (opposite Hoc Mon wholesale market of food and agricultural products). The project investor has handed over flats and commercial kiosks to customers. The interior areas of the project such as commercial centers, kindergartens, etc. are being completed to serve the residents.

4. Situation of investment and implementation of projects With the development of a multi-disciplinary group, in 2016, major investments and projects were mainly implemented in Real Estate, Education and Finance .

Real estate Social housing Hoang Quan Group and its affiliates have implemented 22 projects of social housing, worker housing throughout Ho Chi Minh City and southern provinces with a total investment of more than 20,000 billion VND, supplying more than 34,000 apartments to the market. By the end of 2016, Hoang Quan handled and completed roughly 4,000 apartments at HQC Plaza, HQC Hoc Mon (Ho Chi Minh City), Thuong Thanh Residential Area (Can Tho) and HQC Nha Trang (Khanh Hoa).

Hoang Quan Company and its affiliates will continue to hand over more than 8,000 social houses in 2017 and more than 14,000 social houses in 2018.

Commercial real estate Of all the social housing projects invested by the Corporation, 20% of the total number of apartments are commercialservice-trading houses in the form of commercial real estate.

These products are not limited in terms of profit margins and selling prices as social housing products.

In addition, the Corporation and member units also invest in the field of office leasing, officetel, and leasing of industrial land, warehouses, workshops, etc.

In 2016, the Golden King high-end complex project was commenced and will be put into use in Quarter 3/2017 that include an international standard trade center and an apartment complex combined with officetel offices invested

by Hoang Quan Corporation and Indochina Real Estate Investment Joint Stock Company. The project is strategically located in the International Commercial and Financial Center in Phu My Hung.

The urban area of Mekong City (Binh Minh, Vinh Long) on an area of more than 4 hectares was officially announced to open in June 2016. The urban area of Mekong City has townhouses and riverside villas with the area of 216m2 712m2 (townhouses: one ground floor and two floors; one ground floor and three floors) and 342m2 - 357m2 (riverside villas: one ground floor and one floor). The project has completed all the main frame. The customers purchase the products after paying a minimum of 50% of the value of the house. Once completed, the customers will receive their complete house to settle immediately.

In the past year, the Corporation has successfully held the Planning ideas competition for the Ham Tien - Mui Ne Tourist Service Center Project , Binh Thuan (198ha). The project is being reviewed and approved on the master plan, officially approved by the Prime Minister and granted the investment license on 19/04/2017.

Another project in Mui Ne, Phan Thiet City is the project of apartments, villas (3.5ha). The Company is also implementing legal procedures to start construction in 2017.

At the same time, Binh Minh - Vinh Long industrial park (60% occupied) and Ham Kiem I - Binh Thuan industrial park (40% occupied) continue to be promoted.

Binh Minh Port project (32ha) with total investment capital of nearly 2,300 billion VND belongs to the group of Seaport No.6, capable of receiving ships of 10,000 DWT to 20,000 DWT. This project is being deployed and will increase the investment attractiveness in Binh Minh Industrial Park.

Education Mekong Delta University in Thuong Thanh Ward, Cai Rang District, Can Tho City has completed construction of the managers and teachers’ office building. The university managers are implementing legal procedures to recruit about 3,000 students in the first phase and about 10,000 students in the second phase.

Hoang Lam Nursery School system is being implemented in commercial and social housing projects in Ho Chi Minh City, Binh Thuan, Khanh Hoa, Can Tho, Vinh Long, etc. that

50 | BUSINESS MANAGEMENT

is managed by Hoang Quan Education Investment Company Limited. By the end of Q1/2017, some kindergarten have been put into operation to serve the residents.

Vietnam is recognized as an attractive destination for international investors and will be a bright spot for economic growth in Southeast Asia in 2017.

Hoang Lam Kindergarten currently has four branches, of which Binh Chanh Branch is located at the 2nd floor, HQC Plaza, Nguyen Van Linh Boulevard, Saigon South New Urban, Binh Chanh District, Ho Chi Minh City. The school has 15 classrooms with the capacity up to 500 children aged 18 months to 6 years. The school has been put into operation since March 2017.

Deep international integration helps to remove barriers to trade and investment, providing a great opportunity for the Vietnamese economy in the medium and long term (attracting FDI/ODA capital, and boosting the import and export of goods). The context of integration helps businesses to be more favorable in attracting foreign investment. At the same time, businesses can learn experiences, apply new science and technology to production and business, improve labor productivity, and enhance investment efficiency. At the same time, businesses have the opportunity to access new markets, expand their activities not only in the country but also in the region and the world. This is an opportunity to develop products in the line of commercial real estate such as commercial centers, office apartments, industrial land lots, warehouses, workshops, tourism areas, etc.

A branch of Hoang Lam Nursery School in Can Tho City has a capacity of 04 classrooms to serve up to 100 children aged 18 months to 6 years, which have come into operation since Q1/2017.

A branch of Hoang Lam Nursery School in Vinh Long has a size of 09 classrooms with the capacity up to 300 children aged 18 months to 6 years, which have come into operation since Q1/2017.

Later, Hoang Lam Kindergarten - Hoc Mon Branch is currently completing legal procedures and expected to start operating from Q3/2017.

In 2017, Tay Nam A Economics and Technology plans to enroll 1,150 middle-level students, 1,800 short-term students, 270 college and university students.

Other educational investment projects, such as Long An University of Economics and Industry, Phan Thiet University, Institute of Talent and Human Resources Development (ITH), have been put into stable operation.

Finance As of 31/12/2016, Hoang Quan Company has 03 subsidiaries, 06 associates, and 06 financial investment companies.

In 2016, the Company has the policy of divesting some member companies to restructure the financial investment portfolio. This project is considered on the basis of restructuring the system of Hoang Quan and its affiliates towards more transparency in corporate governance.

5. Reports related to environmental and social responsibility As a leading unit in the social housing sector, with the desire to build a better life for the community, the Company is always aware of corporate responsibility for society and ensures the interests of related parties.

In the construction work, the Company and its member units are always in full compliance with current standards and regulations on environmental impact assessment. In parallel, the Company develops solutions to save money and reduce waste of energy, raw materials.

In 2016, the Group spent 7 billion VND on social activities demonstrating the social responsibility of a leading multidisciplinary enterprise in the field of sustainable social housing for sustainable values of the community.

Details are presented in the Sustainable Development Report.

II. OBJECTIVES AND BUSINESS PLAN IN 2017 1. Prospects for 2017 Opportunities

With respect to the social security segment, preferential policies for customers and social housing investors under the Housing Act 2014, Decree No. 100/2015/ND-CP continue to be an advantage for Hoang Quan Company when concentrating on this segment of the market, especially in terms of land fund creation, CIT reduction and interest rate support.

In 2016, the Ministry of Construction has proactively proposed and coordinated with relevant ministries and sectors, studied and proposed to the Government, the Prime Minister, the National Assembly Standing Committee on capital solutions for social security development in the 2016-2020 period in accordance with the law on social housing and capital for housing support programs under the decision of the Prime Minister. The Government’s efforts to achieve the target by 2020 and vision to 2030 is that the average housing area is about 22m 2 of floor per person under the National Housing Development Strategy approved by the Prime Minister.

The entry into the low-cost housing market by the previous enterprises specializing in high-end real estate investment has signaled that the trend of low-cost social housing is oriented in accordance with real needs. And obviously, this segment has a lot of potential.

Challenges Integration enhances competition and promotes a wave of entry into the Vietnamese market, putting enormous pressure on businesses to innovate and improve their governance and management capacity, especially the need to build and complete a comprehensive risk management system to actively respond to the changing business environment.

Although the Government and the State Bank of Vietnam have set a preferential interest rate of 4.8% for social housing, but by April 2017, both residents and investors have not been disbursed.

On the other hand, the investment shift of high-end housing units that increase the supply of cheap housing will create more competition for Hoang Quan Corporation.

ANNUAL REPORT 2016 | 51

2. Goals and business orientation of the Group in 2017

The Corporation must focus on promoting financial restructuring by reducing inventory, reducing debt to equity, and increasing return on total assets.

Plan Sales and profit plan for the 2017-2020 period Unit: billion VND No. Indicators

2017

2018

2019

2020

2,000

3,000

5,000

6,000

1

Revenue

2

Profit before tax

240

360

590

710

3

Profit after tax

200

300

500

600

Based on the macroeconomic context and actual investment situation in the Corporation, the Board of General Directors set out the plan for 2017 with turnover of 2,000 billion VND and the after-tax profit of 200 billion VND. It is estimated that about 50% of revenue comes from social housing, 50% comes from commercial real estate such as commercial houses, commercial centers, offices for lease, industrial parks, condominiums and public parks, industrial parks, warehouses, workshops, etc.

The Corporation continues to focus on social housing and maintains the leading position on social housing in the South.

In addition, the Corporation promotes the diversification of products and services.

The Corporation must speed up the progress of projects under construction, ensuring the timely completion. The Corporation must invest in researching and developing products, selecting products suitable to the market, tastes of customers, deploying projects in accordance with plans, ensuring the efficient use of capital.

In addition, the Corporation needs to promote the application of information technology throughout the operation from the management and office areas to the project implementation in order to improve operational efficiency, save costs, limit environmental impacts, to increase the uniformity of the system, to create faster and more dynamic development platform, and to ensure more stable and sustainable development in the 2016-2020 strategy.

The Company must strengthen the training and improving of the quality of human resources, coupled with the management and use of human resources effectively.

The Company must promote sustainable business development that fosters stakeholder interests, social and environmental responsibility.

GENERAL DIRECTOR

The Corporation completes the restructuring plan and rapidly implements the divestments of member companies towards the development of professional management model in line with good governance practices of the region and the world.

Deployment In order to complete the proposed plans, Hoang Quan Corporation must further promote its role as a leading unit by providing orientations and directions to improve the management at the member units and controlling risks.

Dr. TRUONG ANH TUAN

52 | BUSINESS MANAGEMENT

REPORT OF THE BOARD OF CONTROLLERS To perform the function of the Board of Controllers under the Enterprise Law, the Charter of the Company on the organization and operation, the Regulation of Internal Management of Hoang Quan Real Estate Services Company, the Board of Controllers submits the following reports to the General Assembly of Shareholders about the operation of the Board of Controllers in 2016: •• Activities of the Board of Controllers in 2016; •• Results of supervision of all aspects by the Board of Controllers; •• Operational plan for 2017.

I. ACTIVITIES OF THE BOARD OF CONTROLLERS IN 2016 The Board of Controllers is responsible for overseeing the Company's financial and business plans, ensuring compliance with the Company's laws, regulations and internal governance regulations, coordination between the Board of Controllers and the Board of Management, the Board of General Directors

and shareholders, and other duties in accordance with the law and the Charter of the Company to protect the legal rights of the Company and shareholders.

1. The composition of the Board of Controllers (BOC) The Company's Board of Controllers for the 2015-2019 period consists of 03 members (Mr. Nguyen Thanh Van (Head of Board), Ms. Le Phung Nha Phuong (Member) and Ms. Mai Hoang Yen). Mr. Nguyen Thanh Van and Ms. Le Phung Nha Phuong have expertise in accounting and auditing while Ms. Mai Hoang Yen has expertise in the field of real estate management. There is no BOC member who is in the accounting and finance section of the Company. At the same time, all members of the Board of Controllers are not members or employees of an independent auditing company who is auditing the financial statements of the Company. All members of the Board of Controllers are also not related to the BOM, the Board of General Directors. This ensure the objectivity of the assessment and control.

Position

Date of appointment

Number of meetings attended

Meeting attendance rate

Head

01/11/2011

02

100%

Member

28/03/2015

02

100%

26/04/2012

02

100%

No.

Member of the BOC

01

Mr. Nguyen Thanh Van

02

Ms. Le Phung Nha Phuong

03

Ms. Mai Hoang Yen

Member

2. Supervision activities of Board of Controllers for the BOM, the Board of Executive Directors, and shareholders •• The Board of Controllers regularly supervises the Board of Management and the Board of Executive Directors in checking compliance with the provisions of the Law on Enterprises, the Charter of the Company on Organization and Operation, including the implementation of resolutions of the General Assembly of Shareholders, resolutions of the Board of Management.

•• The Board of Controllers attends the BOM meetings, recognizes the results of investment and business, consider the appropriateness of the decisions of the Board of Management, and contribute ideas in the management and operation of the Board of General Directors.

•• The Board of Controllers monitors the implementation of periodic and extraordinary reports in accordance with the Law on Securities and related legal documents.

• • The Board of Controllers maintains independence in the monitoring process according to the functions and duties specified.

Reason

a) Coordination between the Board of Controllers on the activities of the BOM, the Board of Executive Directors, and other managers: -- The Board of Controllers coordinates with the Board of Management and the Board of Executive Directors in the supervision and inspection of business investment activities, regularly exchanges information, evaluates performance data, recommends measures to improve results and limit risks.

-- The Board of Controllers works closely with the Board of Internal Controllers and Auditors to supervise internal control and audit in 2016.

-- In the supervisory activities, the Board of Controllers is facilitated by the Board of Management and the Board of Executive Directors to fulfill its duties. b) Other activities of the Executive Directors: -- Propose the selection of an independent auditing company to review financial statements in 2016.

-- Monitor the issuance of shares to pay dividends for shareholders in 2015, issuance and offering of convertible bonds separately for strategic investors.

ANNUAL REPORT 2016 | 53

II. RESULTS OF MONITORING 1. Monitoring the implementation of the resolutions of the 2016 General Assembly of Shareholders •• Business results in 2016 reached consolidated sales of 1,114 billion VND and the after-tax profit of 20.1 billion VND, equivalent to 15% of the sales target and 4% of the profit target approved by the 2016 General Assembly of Shareholders. Although the Company has not yet fulfilled its objectives, this is a good result in the context of the Company's difficulties.

•• Complete the appropriation of funds according to regulations and pay dividend in 2015 by 8% shares in accordance with the Resolution of the 2016 Annual General Assembly of Shareholders.

•• Carry out the compensation for members of the Board of Management and members of the Board of Controllers at the level approved by the General Assembly of Shareholders.

2. Supervision of the company's financial and operating situation •• The Board of Controllers agrees with the financial data presented in the separate financial statements, the consolidated financial statements of the Company, audited

by A&C Auditing and Consulting Company Limited.

•• We also reviewed the financial statements and agreed with the content of the financial statements. The financial statements are prepared on the basis of full compliance with accounting standards and accounting regulations in the organization of accounting and financial reporting in the accurate, honest, reasonable manner.

•• Balance Sheet 2016 has honestly and reasonably reflected the financial position as of 31/12/2016, business results and cash flow statement in 2016, in line with the standard. Vietnamese accounting standards and relevant regulations.

•• However, the Board of General Directors should further analyze the subjective causes, besides objective reasons, resulting in the failure to meet the basic financial criteria, especially profit targets as approved by the 2016 General Assembly of Shareholders. From there, the Company proposes appropriate solutions for each cause.

Some financial indicators Indicator Number of employees

2015

2016

578

543

2,404,152,249

1,877,532,228

0.15

0.22

2%

46%

EAT/Revenue

0.5%

16%

EAT/Owner's Equity

0.3%

10%

Average turnover per employee (VND/person/year) Net revenue/Total assets

EAR/Total Assets

3. Supervision of members of the BOM, the Board of Executive Directors, and management staff Through inspection and supervision, the Board of Controllers finds that the Board of Management and

the Board of General Directors have complied with the current law, the company's Charter, internal management regulations and resolutions of the 2016 General Assembly of Shareholders.

Board of Management •• The Board of Management has closely supervised and promptly directed the Board of General Directors in the production and business operations and supervised the implementation of the resolutions passed by the General Assembly of Shareholders.

•• Resolutions of the Board of Management have been issued in accordance with the functions, powers and compliance with the resolutions of the General Assembly of Shareholders in compliance with the Law on Enterprises, the Charter of the Company, internal management regulations and other legal provisions.

•• The Board of Management has conducted periodic and extraordinary meetings in accordance with regulations to implement the monitoring and business operation of the Company; Board of General Directors •• The Board of General Directors has strictly exercised its functions and authority, complied with the Law on Enterprises, the Charter of the Company, the Regulation on internal management and other regulations.

•• In 2016, the Board of General Directors met with many challenges in management, but with a high sense of responsibility, the Board of Directors still strived to develop and implement appropriate policies to bring positive business results.

Comments •• In general, the direction and administration of the BOM and the Board of General Directors has been implemented in accordance with the current law, the Company's Charter, and the internal management regulations.

•• In 2016, the Board of Controllers did not receive a written request or recommendation from shareholders or a group of shareholders about the violation of the Board of Management and the Board of Executive Directors.

•• However, the Board of Management and the Board of General Directors still need to strengthen risk management and control and mitigate the material risks for the purpose of enabling the Company to develop stably and achieve its objectives and strategies by 2020, ensuring the maximum legal benefits to shareholders of the Company and its stakeholders, and taking the responsibility for the society.

•• The Company needs to improve the system of procedures and mechanisms to fully decentralize to improve productivity and promote the efficiency of internal resources.

Recommendations The analysis of financial indicators shows that the profitability of the Company in 2016 was quite low, decreasing sharply compared to previous years. Apart from the objective reasons, the Board of Controllers finds that some subjective reasons

54 | BUSINESS MANAGEMENT

from the Company as follows: •• Management system and procedures in general and construction management in particular have not been standardized. For this reason, the Board of Management and the Board of General Directors must consider the review of the quality management system and adjust the processes in the direction of eliminating redundancies and increasing labor productivity.

•• The expansion of the portfolio while the financial resources have not yet met have created a large amount of unfinished products, affecting liquidity and increasing capital cost. The Company must speed up the projects to sell products faster, increase the return on capital as well as minimize capital costs, avoid liquidity risks, develop solutions to maximize the efficiency of capital use.

•• The Board of Controllers acknowledges the efforts in management to create added value for shareholders,

employees and the community. However, the Board of General Directors was quite impatient to push up investment projects when not anticipating the impact of policy risks in 2016. Therefore, the Board of General Directors must reconsider investment projects and have appropriate financial plans to ensure good implementation of the annual production and business plans in 2017 and the completion of the strategic objective by 2020.

ON BEHALF OF THE BOARD OF CONTROLLERS

NGUYEN THANH VAN

ANNUAL REPORT 2016 | 55

INFORMATION ON SHAREHOLDERS I. INFORMATION ON THE OWNER’S EQUITY In 2016, Hoang Quan Company issued shares for payment of dividends in accordance with the Resolution of the Annual General Assembly of Shareholders dated 26/03/2016. The Company issued only common shares. Information about the capital contribution of shareholders as at 31/12/2016 is shown below: Information on the shares (as at 31/12/2016)

Value

Unit

4,266,000,000,000

VND

Volume of listed shares

426,600,000

Share

Freely convertible shares

426,600,000

Share

0

Share

726

Share

~ 972,648,000,000

VND

Charter capital

Shares not free to convertible Treasury shares Market capitalization

Treasury Stock Trading: Hoang Quan Company purchased 726 retail shares during the share issuance to pay dividends for treasury shares. In addition, in 2016, there was no fund share transaction.

II. SHARE OWNERSHIP RATIO Structure of shareholders classified by Nationality: Domestic

Number of shares

Ratio

Individual

343,101,929

80.43%

42,659,520

10.00%

Organization Foreign Individual

2,203,960

0.52%

38,634,591

9.06%

Big shareholders

46,544,220

10.91%

Internal shareholders

44,844,305

10.51%

335,211,475

78.58%

Organization

Structure of shareholders classified by relevance:

Other shareholders

Shareholder structure classified by Nationality

Structure of shareholders classified by relevance

1% 9%

11%

10% 10% 80% 79%

Domestic individual

Domestic organization

Foreign individual

Foreign organization

Big shareholders

Internal shareholders

Other shareholders

56 | BUSINESS MANAGEMENT

1. Shareholder structure by ownership type No.

Category

Shareholder structure (person)

Number of Shares

Ownership %

Number of shareholders

Organization

Individual

1

State shareholder

-

0.00%

-

-

-

2

Founding shareholder

-

0.00%

-

-

-

- Local shareholder

-

0.00%

-

-

-

- Foreign shareholder

-

0.00%

-

-

-

Big shareholder (Owning 5% or more)

46,544,220

10.91%

2

1

1

- Local shareholder

3

4

46,544,220

10.91%

2

1

1

- Foreign shareholder

-

0.00%

0

0

-

Union

-

0.00%

-

-

- Local shareholder

-

0.00%

-

-

- Foreign shareholder

-

0.00%

-

-

-

726

0.00%

1

1

-

-

-

-

5

Treasury shares

6

Shareholders owning preferred shares (if any)

7

Other shareholders

380,055,054

89.09%

8,505

56

8,449

- Local shareholder

339,216,503

79.52%

8,454

40

8,414

- Foreign shareholder TOTAL - Local shareholder - Foreign shareholder

-

40,838,551

9.57%

51

16

35

426,600,000

100.00%

8,508

58

8,450

385,761,449

90.43%

8,457

42

8,415

40,838,551

9.57%

51

16

35

2. Structure of shareholders who are major shareholders and professional securities investors No. 1

2

3

Shareholder structure (person)

Number of Shares

Ownership %

Number of shareholders

Organization

Individual

Major shareholders holding 5% or more of the shares are not individual securities investors

46,544,220

10.91%

2

1

1

- Local shareholder

46,544,220

10.91%

2

1

1

- Foreign shareholder

-

0.00%

-

-

-

An individual securities investor is a major shareholder holding 5% or more of the shares

-

0.00%

Category

-

- Local shareholder

-

- Foreign shareholder

-

An individual securities investor is a major shareholder holding less than 5% of the shares - Local shareholder - Foreign shareholder

TOTAL

37,300,953

8.74%

36

36

50,613

0.01%

21

21

-

37,250,340

8.73%

15

15

-

83,845,173

19.65%

38

37

1

List of major shareholders (owning 5% or more) No. Name of organization/individual

ID/Passport/ Business Registration No.

Date of issue Address

Number of Ownership (%) shares

1

Hoang Quan Me Kong Real Estate Services-Trading-Consultancy Joint Stock Company

1500419591

27/05/2004

97 - 99 Pham Thai Buong, Ward 4, Vinh Long City

24,341,300

5.71%

2

Cao Van Hai

264067299

12/04/2010

Phu Ha Ward, Phan Rang Thap Cham City, Ninh Thuan Province

22,202,920

5.20%

46,544,220

10.91%

TOTAL

ANNUAL REPORT 2016 | 57

List of internal shareholders who are authorized to disclose information Type of shareholders

No.

Board of Management (BOM)

1 2

Board of Directors (BOD)

Board of Controllers

Chief Accountant – Financial Director

Total

Ownership ratio

Truong Anh Tuan - Chairman and CEO

20,350,240

4.77%

Nguyen Thi Dieu Phuong Member of the Board of Directors cum Deputy General Director

18,189,840

4.26%

Name (including position)

3

Truong Thai Son - Board of Directors

4

Truong Duc Hieu - Member of BOD and Deputy General Director

572,281

0.13%

3,743,660

0.88%

5

Le Dinh Vien - Board of Directors

-

0.00%

6

Le Hung - Member of Board of Directors cum Deputy General Director

-

0.00%

7

Le Thanh Nam - Board of Directors

-

0.00%

1

Truong Anh Tuan - Chairman and CEO

-

0.00%

2

Nguyen Thi Dieu Phuong - Member of the Board of Directors cum Deputy General Director

-

0.00%

3

Truong Thai Son - Board of Directors

-

0.00%

136,080

0.03%

-

0.00%

4

Le Trong Ngoc - Deputy General Director

5

Truong Duc Hieu - Board Member and Deputy General Director

6

Vu Trong Dac - Deputy General Director

77,760

0.02%

7

Tran Thai Son - Deputy General Director

-

0.00%

8

Dang Thanh Thao - Deputy General Director

-

0.00%

9

Nguyen Van Toan - Deputy General Director

-

0.00%

10

Nguyen Thanh Phong - Deputy General Director

-

0.00%

11

Nguyen Ton - Deputy General Director

-

0.00%

12

Tran Anh Tuan - Deputy General Director

1

Nguyen Thanh Van - Head of Supervisory Board

2

-

0.00%

1,774,444

0.42%

Le Phung Nha Phuong - TV BKS

-

0.00%

3

Mai Hoang Yen - TV BKS

-

0.00%

1

Nguyen Hong Phuong

-

0.00%

2

Phan Chi Tam

-

0.00%

III. TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATED PARTIES

No.

The person performing the transaction

Relationship with internal people

Number of shares at the beginning of the period

Number of shares at the end of the period

Number of shares

Rate

Number of shares

Rate

Reasons for increase or decrease (purchase, sale, conversion, bonus ...)

1

Truong Anh Tuan

23,585,420

5.53%

20,350,240

4.77%

Received dividends from 281,320 shares Sold 3,235,180 shares

2

Nguyen Thi Dieu Phuong

18,189,840

4.26%

18,189,840

4.26%

Received dividends from 331,060 shares

3

Truong Duc Hieu

4,774,910

1.12%

3,743,660

0.88%

Received dividends from 316,660 shares Bought 1,023,550 shares Sold 2,054,800 shares

4

Nguyen Thanh Van

5,599,444

1.31%

1,774,444

0.42%

Received dividends from 280,000 shares Sold 3,825,000 shares

5

Hoang Quan Me Kong Real Estate Services-TradingConsultancy Joint Stock Company

29,741,300

6.97%

24,341,300

5.71%

Received dividends from 768,000 shares Sold 5,400,000 shares

6

Bao Linh Housing Development Investment Joint Stock Company

21,600,000

5.06%

16,200,000

3.8%

Sold 5,400,000 shares

CORE BUSINESS ACTIVITIES Real estate investment Education investment Financial investment

22

Project Social Housing

20,000 15,000

WILLINGNESS TO CONQUER ALL THE HEIGHTS

Billion VND Total capital

Apartment Across the provinces

60 | BUSINESS ACTIVITIES

REAL ESTATE INVESTMENT DECISIVE PRODUCT: SOCIAL HOUSING Since the launch of the social housing policy and it plays a key role in the government's national housing strategy, the Hoang Quan Group has been determined to select social housing as the decisive product due to the following factors: -- Humanity of the policy: Social housing is the real product and developed to meet the real housing needs of the beneficiaries of social policy, armed forces and low income people who are in trouble housing.

-- For enterprises, social housing brings about stable profit that it is not breakthrough but is sustainable and long-term, in line with the development guideline of Hoang Quan Group.

During the past 3 years, pursuant to Decree 02/NQ-CP dated 07 January 2013, Decree 188/2013/ND-CP dated 20 November 2013 and Decree 100/2015/ND-CP dated 10 October 2015, Hoang Quan Group has been investing in building a chain of 22 projects of social housing and housing for workers with a total investment of more than 20,000 billion VND. The goal of the Group is to supply to the market more than 34,000 flats throughout HCMC and the southern provinces. Of which, there are 19 social housing projects with a total of 26,400 flats and 03 housing projects for workers with a total of nearly 8,000 flats.

With the strategic orientation and capacity to deploy, Hoang Quan Group is now the pioneer in social housing development in the South of Vietnam. During the national online conference on social housing and housing for workers on 07 December 2016, chaired by Prime Minister Nguyen Xuan Phuc, Hoang Quan is one of two outstanding units nationwide to be invited to join and report directly to the Prime Minister. In particular, Viglacera Corporation in the North of Vietnam and Hoang Quan Group in the South of Vietnam are two leading companies in terms of investment in social housing and housing for workers in terms of both project quantity and quality.

In 2016, the social housing segment was halted by the end of the 30,000 bilion support credit package without a new continuation package. This has resulted in a general impact on the social housing market, affecting the investor as well as the clients who are in need of financial incentives to buy housing. However, with long-term vision, the Hoang Quan Group is still evaluating social housing as a potential and extremely safe segment. At times, this segment may be slowdown due to procedural impact, credit support, and so on. But in the long run, the development of social housing, housing for workers is a major policy, which is facilitated by the State and Government through policy incentives and support credit for investor and clients.

By 2017, many experts predict that the type of social housing, housing for workers, affordable commercial housing will thrive due to the market more and more demand for real products, reasonable price in order to meet the speed of urbanization and the real needs of workers. From the Quarter IV/2016, many large corporations and enterprises announced their investment in the affordable housing segment with large-scale projects showing that affordable social housing is an "attractive piece of cake" for the investors.

In that context, with a pioneering position and holding a series of large scale projects and clean land fund in many places, Hoang Quan Group has been ready to meet market demand,

It also accompanies the State and Government in the implementation of policy on social housing and housing for workers. With a view to promoting social housing development, by 2020, the Group will strive to complete at least 50,000 social houses and houses for workers.

PRODUCTS DIVERSIFICATION FOR BALANCED REVENUE Although the selection of social housing as a key investment segment, Hoang Quan Group understands that it is nescessary for diversification of products to ensure revenue and profitability.

Therefore, in the past time, besides the social housing, the Hoang Quan has increased its investment in commercial real estate, including: Grandora Tower luxury apartment, Office - Officetel Golden King (Ho Chi Minh City), Ham Kiem I Industrial Park (Binh Thuan), Binh Minh Industrial Park - port - urban area (Vinh Long), University of Mekong Delta (Can Tho), etc.

In particular, Hoang Quan Group has long-term plans in the area of tourism real estate with Ham Tien Tourism Services Center - Mui Ne (Phan Thiet, Binh Thuan) scale up to 198 ha. In 2016, Hoang Quan has coordinated with Binh Thuan People's Committee to successfully organize the planning design and planning faculty of Architecture University of HCMC. HCM won the first prize with the idea of "flowers from the land". After completion of the project, it will create a strong point in Southeast Asia, contributing to change the appearance of the coastal city of Phan Thiet and the entire system of coastal tourism in Vietnam.

Besides, in response to the call for renovation of old apartment buildings and houses along the canals of Ho Chi Minh city government, Hoang Quan Group has officially registered to participate in the program with a minimum of 2,000 apartments and have up to 10,000 if approved. With the ability to manage Group A projects and practical experience in the investment process as well as social housing construction, this will be the next field to mark the success of Hoang Quan.

EFFECTIVE FROM INVESTMENT In 2016, due to the impact from the end of the 30,000 billion package, revenue of the Hoang Quan Group is not high. Although Hoang Quan Group has been flexible in introducing a solution to support interest rate policy for customers, supplementing the revenue of other commercial real estate projects, its overall business results in the past year did not look as expected.

However, if seting Hoang Quan Group's sales target for 2016 in the long-term strategic vision of the Group, Hoang Quan is accumulating huge investment value and will soon turn into a successful sales in the coming period.

Up to now, the Hoang Quan Group has distributed more than 5,000 houses in society. In 2016, the Group handed over a total of 3,824 apartments including 2,822 apartments completed at HQC Plaza, HQC Hoc Mon (HCMC), Thuong Thanh Residential Area (Can Tho) and 1,002 apartments in HQC Nha Trang (Khanh Hoa).

It is expected that in 2017, Hoang Quan will continue to hand over about 8,000 social houses, workers' houses and will hand over more than 14,000 in 2018.

Up to the end of the package 3,000 billion, more than 2,100 customers at the HQC Plaza, HQC Nha Trang approved loans,

ANNUAL REPORT 2016 | 61

Social housing - HQC Binh Trung Dong Lot O, KDC Binh Trung Dong, Nguyen Duy Trinh, Binh Trung Dong Ward, District 2 Social housing - HQC An Phu Tay 35 Ho Hoc Lam St., An Lac Ward, Binh Tan District

Ha Noi HOCHIMINH CITY

Golden King 15 Nguyen Luong Bang Street, Phu My Hung, District 7

Social housing - HQC Plaza Lot CC1, Nguyen Van Linh Boulevard, Southern Saigon City, Binh Chanh

Grandora Tower Dong Van Cong, District 2 Administrative Center

Social housing - HQC Hoc Mon Nguyen Thi Soc, Xuan Thoi Dong, Ward 2, Hoc Mon

HQC Plaza 2 Social Housing Functional area 19 - New Urban Area in the City's South , An Phu Tay Commune, Binh Chanh District.

Social housing HOF - HQC Ho Hoc Lam 35 Ho Hoc Lam, An Lac Ward, Binh Tan District

disbursements fact reaching over 1,000 billion VND. Particularly, Hoang Quan Group was supported by BIDV Bank with a credit of 540 billion VND in order to develop the HQC Plaza project.

Accordingly, both Hoang Quan and its clients have been supported more than 1.5 trillion dong from the 30,000 billion VND package.

KHANH HOA Social housing - HQC Nha Trang Bac Vinh Hai Residential area Vinh Hoa Ward, Nha Trang City

In the other real estate segments, the Group has maintained stable operation, such as Ham Kiem I Industrial Park and Binh Minh Urban - Industrial Park - Port. All have achieved occupancy rates of over 50% with major domestic and international partners. With a large land fund, modern infrastructure, complete transport system and many incentives for enterprises, both industrial parks have attracted many interested investors and cooperative negotiations. .

BINH THUAN

Da Nang

Social housing – HQC Ham Kiem Ham Kiem I Industrial Park Ham Thuan Nam Ham Kiem I Industrial Park Ham Kiem and Ham My, Ham Thuan Nam

In addition, in Ho Chi Minh City, the Office - Officetel Golden King is completing by the cooperation between Hoang Quan Group and Indochina Real Estate Company and ready for operation from the third quarter of 2017. With a perfect location and green and smart design, Golden King is now the center of attraction for investment in Phu My Hung International Financial Center.

TAY NINH Social housing – HQC Tay Ninh Ward 2, Tay Ninh city Thanh Dien Hospital - Urban area Thanh Dien, Chau Thanh Tay Ninh University Bau Nang, Duong Minh Chau

CAN THO Urban area – University Mekong Delta Thuong Thanh Ward, Cai Rang District ••Thuong Thanh - Cai Rang Residential Area ••Expansion Residential Area ••Thuong Thanh new urban area ••Social housing - HQC Can Tho ••University of the Mekong Delta Social housing - HQC O Mon Chau Van Liem Ward, O Mon District

Social housing – HQC Phu Tai 135A Nguyen Hoi, Phan Thiet City Ham Tien - Mui Ne Tourist Service Center Mui Ne, Phan Thiet City

DONG NAI

Nha Trang

Tay Ninh

Dong Nai Ho Chi Minh City Tiền Giang Vĩnh Long Cần Thơ

Social housing - HQC Binh Tan Binh Tri Dong A ward and Tan Tao ward, Binh Tan District

Binh Thuan

Social Housing - HQC Dong Nai Nguyen Ai Quoc Street Quang Vinh Ward, Bien Hoa City

TIEN GIANG Social housing – HQC Tan Huong Tan Huong, Chau Thanh

VINH LONG Binh Minh Urban – Port – Industrial Park My Hoa, Binh Minh ••Mekong City ••Binh Minh port ••Social Housing – HQC Binh Minh ••Binh Minh Industrial Park ••HQC Hoa Phu

62 | BUSINESS ACTIVITIES

SOCIAL HOUSING - HQC PLAZA

1,450

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Lot CC1, Nguyen Van Linh Avenue, Binh Chanh District, HCMC Scope of the project: The project consists of 4 blocks with 23-24 floors, is built on an area of 35,290 m2 with a total of 1,735 flats.

Utilities: Although HQC Plaza is only a social housing project, the investor has paid much attention to building many utilities in order to bring a more comfortable and modern life for residents, in details: •• Shopping Center •• Amusement Park, Sports Area, Walking Street •• Polyclinics

35,290

m2

Total floor area

•• Kindergarten •• Green Park, Children's garden •• In addition, residents also enjoy a range of utilities, services, entertainment, public entertainment in the area such as Big C Supermarket, Western Car Station, Children's Hospital, Trieu An Hospital, Franco-Vietnamese Hospital, etc.

Total land area: 35,290.3 m2 Total investment: 1,450 billion VND Time of completion: From QII/2016

Handed over to customers Website: http://hqcplaza.com.vn

ANNUAL REPORT 2016 | 63

64 | BUSINESS ACTIVITIES

SOCIAL HOUSING - HQC HOC MON

554.9

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Nguyen Thi Soc Street, Xuan Thoi Dong Commune, Hoc Mon District (in opposite to Hoc Mon Wholesale Agricultural Product Market). HQC Hoc Mon is located in the central area of Hoc Mon District where the infrastructure is completed and modern. Only 200m away from National Highway No.22 (the National Highway connecting HCM Center with Cu Chi, Moc Bai – Tay Ninh). It takes only 7 minutes to arrive to the Administration Center, Hoc Mon District People’s Committee, Hoc Mon Hospital, Metro Supermarket, Coopmart Supermarket, Quang Trung Software Park, only 5 minutes to An Suong Intersection and 25 minutes to the center of Ho Chi Minh City.

Scope of the project: Scale: Basement, 4 commercial storeys, 14 apartment storeys. Total number of apartments: 562, Apartment area: 42.2m2-69.89m2. Construction area of Apartment and Commercial Center Building: 5,531m2. Area for Green park: 1,747.3m2.

70,560

m2

Total floor area

Utilities: •• 24/24 Security System, professional security staffs •• Modern monitoring camera system •• Modern fire fighting and fire prevention system •• Spacious parking basement, lifts, power and water service, internet, cable television, wireless interest are waiting for your connections a series of utilities such as café, luxurious and warm restaurant, supermarket which are available to meet all demand of the daily life.

•• Green park Time of completion: Q II/2017 Total floor area: 70,560 m2 Total investment: 554.9 billion VND Currently, HQC Hoc Mon is completing the last items. By the end of March, 2017, HQC Hoc Mon handed over 540 social housing and 17 commercial apartments.

Website: http://hqchocmon.vn

ANNUAL REPORT 2016 | 65

SOCIAL HOUSING - HOF-HQC HO NGOC LAM

600

billion VND

Investement

Investor: HCMC Housing Development Fund (Hoang Quan Consulting – Trading – Service Real Estate Company cooperates to invest and construct this project and is allowed to do business on 4 per 6 apartment blocks) Location: No.35, Ho Ngoc Lam Street, An Lac Ward, Binh Tan District, HCM. HOF - HQC Ho Hoc Lam is the connecting point between the developed and dynamic urban zones of HCMC like the districts 1, 5, 11, Tan Binh District and the new urban zone in the western south of Binh Tan District near An Lac intersection, the strategic trafic gate in the western south of the city. HOF - HQC Ho Hoc Lam is located on Ho Hoc Lam street at the center of Binh Tan District, nearing District 8 and convenient for connecting with two main roads of Vo Van Kiet and National Road 1A that lead to the city center or provinces in the Mekong Delta The site is also near the existing Tan Tao civil zone and the public administration zone, the People’s Procuracy, the People’s Court, the district’s law enforcement team, etc. The neighbourhood enjoys complete infrastructure and it is easy to go to Big C An Lac Supermarket,

71,118

m2

Total floor area

Mien Tay Bus Station, Binh Tay market, Dam Sen Cultural Park, etc.

Apart from that, it is also very convenient to go to big industrial zones such as Pou-Yuen, Tan Tao, Le Minh Xuan, etc.

Scope of the project: Scale: 1 basement, 1 half storey, and 15-storey blocks. Total number of apartments: 718. Apartment area: 46m2 - 69m2 (2 - 3 bedrooms) Utilities: HOF - HQC Ho Hoc Lam integrated immediately with internal utilities such as shopping centre, park, kindergarten, sporty area, café shops, etc. ensuring a comfortable life in your hand.

Total land area: 12,382.5 m2 Total floor area:

71,118.9 m2 Total investment: 600 billion VND Time of completion: Form QIII/2017 Status: Completion of D block, is rapidly executing 5 remaining block and preparing for project completion.

Website: http://hqchohoclam.com.vn

66 | BUSINESS ACTIVITIES

SOCIAL HOUSING - HQC NHA TRANG

550

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Bac Vinh Hai Residential Area, Vinh Hoa ward, Nha Trang City, Khanh Hoa Province •• The project is located in 4 faces of Tran Quang Dieu – Trinh Hoai Duc – Dang Thai Than – Thoai Ngoc Hau streets •• It spends 2 minutes far from Nha Trang beach •• It spends 10 minutes far from the central Nha Trang city •• Far 300 m from the northern transport stop •• Far 700 m from Vinh Hai Market •• Close to Nha Trang University, Teacher’s College, Central Preschool Education 2, Tourist College, hospital, market Project scale: •• Number of blocks : 4 blocks A1 , A2 , B1 , B2 •• Number of floors : 01 + 18 floors basement •• Total Apartments : 1,002 Apartments •• Apartment Acreage : From 46.3 m2 - 69.9 m2

92,484

m2

Total floor area

•• Site acreage : 10,842.8 m2 •• Rresidential building Acreage: 6,493 m2 •• Greenery and gardens Acreage : 2,179 m² Utilities: The life in HQC Nha Trang will be a life with sufficient and modern facilities satisfying the highest life demand from residents over available utilities at the project such as shopping centre, swimming pool immediately at the foot of the project and general surgery, gym room, kindergarten, children’s house, public areas, café shops, restaurants.

Total land area: Total floor area: Time of completion: Total Investment:

10,842 m² 92,484 m² Q III/2017 550 billion VND

Status: By the end of March, 1974, Nha Trang HQC has completed the floor concrete floor and is finishing the project.

Website: http://hoangquannhatrang.com.vn

ANNUAL REPORT 2016 | 67

SOCIAL HOUSING - HQC PHU TAI

168

billion VND

Investement

Investor: Binh Thuan Construction And Trading House Joint Stock Company Location: 135 Nguyen Hoi street , Phu Tai Ward , Phan Thiet City , Binh Thuan Province •• 5 minutes from the cnter of Phan Thiet City •• 10 minutes from Thuong Chanh beach Project scale: Including two blocks of 14 floors with a total of 306 flats with an area of 43.10m2 - 60.10m2.

•• Total area: 3,773.5m2 •• Area of green trees: 647.94 m2 (17.17%) •• Area of apartment building: 1,673 m2 (44.34%) •• Floor area (Including basement, roof): 24,251.71 m2 •• Use area: 17,770 m2

23,005

m2

Total floor area

Utilities: HQC Phu Tai offers a full range of basic utilities for residents including a concentrated commercial area, a green park, a community living area and parking.

Total land area: Total floor area: Time of completion: Total Investment:

10.75 ha 23,005 m2 Q III/2017 168 billion VND

Status: 02 block CC1, CC2: erecting formwork and building wall. CC1: 6th floor, CC2: 7th floor.

Website: http://hqcphutai.com.vn

68 | BUSINESS ACTIVITIES

SOCIAL HOUSING - HQC HAM KIEM

1,300

billion VND

Investement

198,033

Investor: Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Company Location: Located in Ham Kiem I Industrial Zone, Ham Thuan Nam District, Binh Thuan Province. The site is convenient of trafic that connects to factories in the industrial zone. 5km from Muong Man Staton and 9km from Phan Thiet City.

Project scale: 19 blocks ranging from 7–12 storeys. Total number of apartments: 3,186. Total surrounding area: 13.54 ha. Apartment area: 35 m2 - 55 m2. Total constructional area: 174,894 m2. Green area: 9,500 m2.

Utilities: Kindergarten, swimming pool for children, green park, football yard, sports zone, centralized commercial zone, restaurants, parking lot.

Total land area: Total floor area: Total Investment:

m2

Total floor area

13.54 ha 198,033 m2 1,300 billion VND

Time of completion: •• Stage 1: QIV/2017 (block A1, A2) •• Stage 2: QIV/2018 (block D1, D2, A3, A4, A5, A6) •• Stage 3: QIV/2019 (block C1.1, C1.2, C3, C3, C5, C6) •• Stage 4: QIV/2020 (block B1, B2, B3)

ANNUAL REPORT 2016 | 69

SOCIAL HOUSING - HQC TAY NINH

1,776

billion VND

Investement

265,396

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: 2nd Ward, Tay Ninh City , Tay Ninh Province The area of 4,864 hectares is located in the old fish pond, ward 2, Tay Ninh city, Tay Ninh province. The project has four borders: •• North: bordering the existing residential area towardsTran Quoc Toan Street •• East: bordering Yet Kieu and Tay Ninh streets •• West: Bordering the existing residential area towards Vo Van Truyen Street •• South: bordering with Ho Van Lam and Rach Tay Ninh Streets Project scale: HQC Tay Ninh includes 10 blocks of 12 floors, divided into two sectors (excluding basements and terraces) consist of 2,498 flats with area of 34 m2 – 56 m2.

•• •• •• ••

m2

Total floor area

Total area: 50,478 m2 Green tree: 13,600 m2 Apartment building: 23,000 m2 Density of apartment building: 45.56%

Utilities: Kindergarten, community house, commercial center, swimming pool, parking lot Total floor area : 265,396 m2 Expected completion: Q III/2019 Total Investment : 1,776 billion VND Status: •• The piling of Block 1A, 1B, 2A, 2B under area 1 of the project.

•• Completed the Office and Housing sample.

Website: http://hqctayninh.com.vn

70 | BUSINESS ACTIVITIES

SOCIAL HOUSING - HQC TAN HUONG

1,226

billion VND

Investement

205,395

m2

Total floor area

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation

•• Apartment building : 29,693 m2 •• Density of Building: 49.09%

Location: HQC Tan Huong is located at Tan Huong District, Chau Thanh Commune, Tien Giang Province. The site is next to the industrial zones of Tan Huong and Long Giang. It also belongs to the key economic sector of the Western South region. With strategic location and more and more complete trafic infrastructure, from HQC Tan Huong it takes just 20 minutes to go to the center of My Tho City. It is also easy to connect to Natoinal Road 1A, highway HCMC – Trung Luong that lead to major urban centers of the naton such as Can Tho City and HCMC.

Utilities: HQC Tan Huong is fully equipped with facilites to meet the need for a modern life of the residents such as parks, community house, commercial center, sports park, kindergarten, restaurants, cafeteria, etc.

Project scale: •• Eighteen 10-storey blocks, divided into 3 zones of CN1, CN2, CN3 including 3,057 flats with are of 34 m2 – 56 m2.

•• Total area: 60,490 m2 •• Green trees: 12,266 m2

Total land area: Total floor area: Time of completion: Total Investment:

60,490 m2 205,395 m2 Q I/2018 1,226 billion VND

Status: •• The project is currently completed pile for block 3A, CN3 •• Housing sample: is under construction Website: http://hqctanhuong.com.vn

ANNUAL REPORT 2016 | 71

SOCIAL HOUSING - HQC BINH MINH

646

billion VND

Investement

126,699

Investor: Hoang Quan Me Kong Consulting - Trading - Services Real Estate Corporation Location: Within Binh Minh Industrial Park - My Hoa Commune, Binh Minh Town, Vinh Long Province The project is located in the center of the 162 ha Binh Minh Urban - Industrial Park - Port, adjacent to Dong Thanh and Hau rivers, next to National Highway 1A, at the foot of Can Tho Bridge, considered as the center of The Mekong Delta.

Project scale: HQC Binh Minh is built in an area of 39,138.6 m2, covering 4 7-storey condominiums with land use area of CC1 condominium of 13,524.1 m2; CC2 7,494.2 m2; CC3 9,037.8 m2 and CC4 9,082.5 m2.

Total flats: 2.020 (no legality)

m2

Total floor area

Utilities: Providing full utilities for demands of residents: •• Entertainment area, sport practice area, walking street, •• General clinic •• Kindergarten •• Green Tree Park, swimming pool, tennis yard, children’s garden.

Total land area : Total floor area : Time of completion : Total Investment :

39,144.6 m2 126,699.21 m2 Q IV/2017 (Block 3 - CC1) 645.8 billion VND

By the end of March 2016, HQC Binh Minh has completed the foundation for CC1 and Block 3 have completed floor beams of second floor.

Website: http://hqcbinhminh.com.vn

72 | BUSINESS ACTIVITIES

GRANDORA TOWER LUXURY APARTMENT

185

billion VND

Investement

18,238

m2

Total floor area

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation

with area from 76 m2 to 140 m2, which have various design suitable to modern lifestyle of successful young families.

Location: Grandora Tower luxury apartment is located at administrative center of District 2 – the fastest developing area of HCMC. In addition to its prime location, Grandora Tower possesses and inherits a lot of modern ultilities which cannot be seen in many other projects: adjacent to Thu Thiem New Urban Area and other luxury high-foor condominiums, Rach Chiec Sport Center, An Phu Metro, International University. Grandora Tower is an ideal place with a smooth connection of diferent areas, it takes only about 10 minutes to arrive at District 1 and Phu My Hung, District 7 through East West Avenue, Thu Thiem Tunnel and Phu My Bridge.

Utilities: The commercial center at ground foor serves for residentials only, fully satisfies their essential demands.

Underground parking area, commercial service and public area create a complete structure and ensure the best quality of life.

•• Luxury utilities such as: swimming pool, spa, gym, cafeteria, etc.

•• Other modern standards such as: internet wifi, HD television, modern elevator system, water drain and supply service, telecommunication service, fire prevention and fighting which provide an ideal space for modern life at the heart of city.

•• Smart camera system – 24/24 professional security.

Project scale: Grandora Tower luxury apartment has total lot area of 4,990.7 m2, construction density accounts for 29.6%, total construction foor area is 19,082 m2 •• The whole project is a 12-foor condominium with 99 apartments

Total land area: Total floor area: Time of completion:

4,990.7 m2 18,238.1 m2 QII/2017

Status: Grandora Tower has constructed 97%, is currently finishing the last items

ANNUAL REPORT 2016 | 73

THUONG THANH RESIDENTIAL AREA

331

billion VND

Investement

Investor: Hoang Quan Can Tho Investment Real Estate Corporation Location: Located in Thuong Thanh Ward, Cai Rang District, Can Tho City, at facade of National Highway 91 C, 1km away from the heart of Cai Rang District, adjacent to the Heart of Can Tho City. Thuong hanh Residential Area (7.3 ha) is linked to 3 other sub-projects including Thuong Thanh Extended Residential Area (7 ha), Social Housing area (10.7 ha) and Mekong Delta University (5 ha) to form the overall Project of Mekong Delta University - Urban Area with total area of 30 ha.

Project scale: Include of 525 one-ground one-foor townhouses with area of less than 70 m2.

Utilities: •• Each townhouse has a separate space with modern and luxury design. Especially, they have the view to the landscape; take full advantage of wind direction and natural

40,000

m2

Total floor area

light in order to bring the healthiest and full life.

•• In addition to available utilities at the area adjacent to the heart of Can Tho City, the project enjoys social infrastructure, technical infrastructure systems of a typical urban area which is modern and harmonious to natural landscapes with adequate utilities such as Mekong Delta University, mini-supermarket, market, kindergarten, park, children’s entertainment area, volleyball and tennis yards, football stadium, riverside café, restaurant, etc.

Total land area : 7.3 ha Total floor area: 40,000 m2 Time of completion: At present, the project has delivered 100% of houses to clients with full conditions on transportation infrastructure, internet, electricity and water in order to meet the needs of residents. Currently, the investor handed over the land use right certificate to the clients at the project.

74 | BUSINESS ACTIVITIES

HQC CAN THO

200

billion VND

Investement

Investor: Hoang Quan Can Tho Investment Real Estate Corporation Location: Thuong Thanh Ward, Cai Rang District, Can Tho City Project scale: HQC Can Tho includes four 9-storey blocks with the total number of 295 apartments Utilities: Community house, park, parking lot, next to the Mekong Delta University and other existing facilites in the neighborhood of Thuong Thanh residential area.

26,436 Total land area: Total floor are: Total Investment: Expected completion:

m2

Total floor area

6,416 m2 26,436 m2 200 billion VND 2018

ANNUAL REPORT 2016 | 75

GOLDEN KING

950

billion VND

Investement

2,775

m2

Total land area

Investor: Indochina Real Estate Development Investment Corporation (cooperation with Hoang Quan Consulting - Trading - Services Real Estate Corporation)

•• The facilities are available in Phu My Hung area such as green park, high-class cafe restaurants, health area, multipurpose sports area, etc.

Location: 15 Nguyen Luong Bang, Tan Phu Ward, District 7, HCMC

Total land area: Total floor area: Total Investment: Time of completion:

Scale: Golden King is built with total land area: 2,775m2. Total construction area (excluding 2 basements B1,B2): 36,915 m2.

Total area of basements B1 & B2: 3,791 m2. Total shopping area: 5,580.7 m2. Total retails (floor 1-4): 5 floors (40 m2 - 196 m2).

Total officetel (floor 5-21): 372 units (31.6 m2 - 323 m2). Total building height: 101 m, 21 storeys, 1 mezzanine & 2 basements.

Ceiling height: 3m Utilities: Golden King is equipped with modern multi-purpose facilities: •• High Speed Elevators, Redundant Power Systems, Fire Detection and Alarm Systems, Lightning Protection Systems, Exit & Exit Lights, etc.

2,775 m2 42,466 m2 950 billion VND Q III/2017

Status: The project has completed the reinforced concrete frame, is now completing the completion of officetel apartments

76 | BUSINESS ACTIVITIES

MEKONG CITY

1,354

billion VND

Investement

29.94

ha

Total floor area

Location: Located in Binh Minh Industrial Park (My Loi Hamlet, My Hoa Commune, Binh Minh Town, Vinh Long Province); Mekong City is one of the most modern and potential urban areas in the Mekong Delta; There is a strategic location next to National Highway 1A, right at Can Tho Bridge, only 7 minutes from downtown Can Tho, 15 kilometers from Tra Noc Airport.

Utilities: Diversified design with many types of houses, many types of architecture such as: one-story and a ground villa; townhouse with two-storey and a ground, three-storey townhouse, etc.

Modern synchronous planning with ecological park, riverside walking street, commercial center, sport center, hotel restaurant, kindergarten, intermediate vocational school, etc. adjacent to industrial park have come into operation.

Project scale: •• The project is a complex of commercial centers, houses, villas and eco-parks •• Occupying an area of 29.94 hectares in a total of 164.76 hectares of Urban - Port - Binh Minh Industrial Park.

Website: http://mekongcity.com.vn

Investor: Hoang Quan Me Kong Consulting - Trading - Services Real Estate Corporation

Total land area: Total Investment:

29.94 ha 1,354 billion VND including total investment of HQC Binh Minh

ANNUAL REPORT 2016 | 77

HAM KIEM I INDUSTRIAL PARK

273

billion VND

Investement

Investor: Hoang Quan Binh Thuan Consulting - Trading Services Real Estate Corporation Location: Ham Kiem and Ham My Commune, Ham Thuan Nam District, Binh Thuan Province..

Project scale: 146.2 ha Utilities: •• Power supply and water supply system: adequate for secondary investors (currently there are water supply stations and power stations in the industrial zone) •• Rainwater, sewage, fire fighting system, internal roads: completed •• Waste water treatment plant: has come into operation •• Customs, banks established in the Industrial Park •• Telephone, fax, broadband internet 5,000 numbers •• Vocational school, job placement, social housing, kindergarten, logictics

146.2

ha

Total land area

Investment advantage: •• Marine materials - seafood, fruits, mineral abundance •• Location: connect 4 roads (road, railway, waterway, air) •• Infrastructure: synchronous, complete with international standards •• Ground: hand over to the customer •• Hard ground: low investment •• Labor cost: cheap •• Incentives from the Government •• Investment environment is transparent Total Investment : 273 billion VND Occupancy rate: 40% of rental area Total rental units: 11 Number of units in operation: 04 Number of units under construction: 03

78 | BUSINESS ACTIVITIES

BINH MINH PORT Can Tho City

Can Tho Bridge Binh Minh Port

2,300

billion VND

Investement

Investor: Binh Minh Port Join Stock Company Location: My Hoa Commune, Binh Minh District, Vinh Long Province.

Project scale: 32 ha of Binh Minh Industrial Park - Port - Binh Minh Industrial Park (162 ha)

Binh Minh Industrial Park

32

ha

Total land area

•• Stage 1: construction and investment of equipment to continue the exploitation of goods through the port is 1,200,000 tons/year (General cargo: 720,000 tons/year: container cargo: 480,000 tons/year equivalent to 45,174 TEUs per year).

•• Stage 2: construction and investment of equipment to ensure the exploitation of goods through the port is 3,500,000 tons/year (general goods 1,400,000 tons/year, container goods: 2,100,000 tons/year ~ 200,000 TEUs/ year).

Total Investment: 2,300 billion VND

ANNUAL REPORT 2016 | 79

BINH MINH INDUSTRIAL PARK Mekong City Dong Thanh River

National Route 1A

2,000

billion VND

Investement

Investor: Hoang Quan Me Kong Consulting - Trading - Services Real Estate Corporation Location: My Hoa Commune, Binh Minh District, Vinh Long Province.

Project scale: Binh Minh Industrial Park has a total area of 90ha under the project of 162 ha Binh Minh Urban - Industrial Park - Port.

Of which: 90 ha industrial zone, 30 ha port, 40 ha Mekong city.

Utilities: •• Full electricity and water infrastructure for secondary investors (there are clean water supply and electricity supply stations in the IP) •• Rainwater, sewage, fire protection system is complete •• Waste water treatment plant: Capacity of the first stage is 2,200 m3/day-night, capacity of the second stage is 2,800 m3/day-night •• Customs, Banks, Post Offices, Clinics, Trade Centers, Restaurants, Amusement Parks, Sports Centers, Schools, Social Housing, Logistic Warehouses in the Industrial Park.

90

ha

Total land area

Investment advantage: •• Located in the heart of the Mekong Delta •• Convenient transportation (waterways, roads, airways, high speed railways are planned, adjacent to the port system - logistic Binh Minh •• Residential area for Professionals, Workers in Industrial Zone •• Near the Center for distribution and consumption of goods in the Mekong River delta (the consumption market of the South West is more than 17 million people) •• Natural resources (aquatic - seafood, fruit) •• Abundant human resources •• Modern and perfect infrastructure •• Investment environment is transparent •• Customers are large enterprises such as Logitem Vietnam belonging to Japan Logistics Corp., Greenfeed Vietnam, etc.

Total Investment: 2,000 billion VND Occupancy rate: 60% of leasable area

80 | BUSINESS ACTIVITIES

NEW PROJECTS IN 2017

HAM TIEN - MUI NE TOURIST SERVICE CENTER (198ha)

HQC BINH TAN

HQC BINH TRUNG DONG

HQC DONG NAI

ANNUAL REPORT 2016 | 81

HQC PLAZA 2

HQC AN PHU TAY

82 | BUSINESS ACTIVITIES

HAM TIEN - MUI NE TOURIST SERVICE CENTER

9,831

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Ham Tien Ward, Phan Thiet City, Binh Thuan Province Project scale: •• The commercial center (110.74 ha) includes: - Trade services - Activities of Events - sports - financial area (7.95 ha) - Educational service area (10.13 ha) - Medical service area (1 ha) •• Residential area (58.28 ha) includes commercial townhouses, social housing, villas, luxury apartments.

•• Area of existing religion (0.24 ha) •• Transportation, technical infrastructure (27.47 ha)

198

ha

Total land area

Total land area: 198 ha Total Investment: 9,831 billion VND Expected time of commencement: 2018 Time of completion: 2024

ANNUAL REPORT 2016 | 83

SOCIAL HOUSING - HQC BINH TRUNG DONG

345

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Lot O, Binh Trung Dong residential area, Nguyen Duy Trinh street, Binh Trung Dong ward, District 2, Ho Chi Minh city. HCM. HQC Binh Trung Dong is surrounded by Giong Ong To river, two fornt of Nguyen Duy Trinh and Do Xuan Hop streets opposite the Rach Chiec Sports Center. The project is located along the Sai Gon - Long Thanh Highway (200m), linking key economic areas such as Thu Thiem Commercial Area - District 2, Saigon South - District 7; near the market, schools and residential areas, convenient for business.

Project scale: HQC Binh Truong Dong contributes to complete the planning of residential area of District 2 - Ho Chi Minh City, works with 1 basement and 15 storeys of commercial and apartment with a total of 260 apartments.

26,719

m2

Total land area

Utilities: •• Security system is strictly controlled 24/24, with professional security team.

•• Modern surveillance camera system.

•• Modern fire protection system.

•• Basement for car ventilation, elevator system, electricity and water services, high speed internet, multi cable TV, etc.

•• A chain of luxury and warm cafes, restaurants , supermarkets are always ready to meet the needs of residents.

•• Medical area, multi-purpose sports area Total land area: Total floor area: Time of completion: Total Investment:

4,299.8 m2 26,719.1 m2 Q II/2018 345 billion VND

84 | BUSINESS ACTIVITIES

SOCIAL HOUSING - HQC AN PHU TAY

172.82

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: An Phu Tay Commune, Binh Chanh District, HCMC, under the overall planning area of An Phu Tay - Tan Quy Tay. Project scale: HQC An Phu Tay consists of two 8-9 storey blocks with a total of 253 flats with an area of 55.32 m2 - 65.22 m2.

Utilities: Full range of utilities to serve the needs of residents: •• Amusement Park, Sports Area, Walking Quarter •• Polyclinics •• Kindergarten •• Green park, swimming pool, tennis court, children's playground

24,871

m2

Total floor area

Total land area: 5,487 m2 Total floor area: 24,871 m2 Expected time of completion: Q II/2018 Total Investment: 172.82 billion VND Status: •• Completed piling the whole project •• Completed the construction of auxiliary items: Office of PMU, Water Supply and Drainage, Power Station, etc.

ANNUAL REPORT 2016 | 85

SOCIAL HOUSING - HQC BINH TAN

3,500

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Located in Binh Tri Dong A Ward and Tan Tao Ward, Binh Tan District

36.5

ha

Total floor area

Project scale: •• Housing for resettlement and resettlement: 2.1641 ha •• High-rise housing: 1.8498 ha •• House of villas: 3.0705 ha •• Garden house: 5.4838 ha •• Social housing: 1.4116 hectares Total land area: 36.5 ha Total Investment: ~ 3,500 billion VND

86 | BUSINESS ACTIVITIES

HQC PLAZA 2

3,466

billion VND

Investement

357,657

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location: Functional Area No.19 - New Urban Area in South City, An Phu Tay Commune, Binh Chanh District, Ho Chi Minh City. HCM. Project scale: •• Total floor area : 357,657 m²; •• High rise construction: 3-15 storeys; •• Total flats: 2,968 Total project area: 75,386.4 m2 Total land area: 31,768 m2 Total Investment: 3,466 billion VND

m2

Total floor area

ANNUAL REPORT 2016 | 87

EXPANDED THUONG THANH RESIDENTIAL AREA

A. Townhouse 1. Apartment building 2. Kindergartens 3. Land was renovated

482

billion VND

Investement

Investor: Hoang Quan Can Tho Investment Real Estate Corporation Location: Thuong Thanh Ward, Cai rang District, Can Tho City Total Investment: 482 billion VND Project scale: Thuong Thanh residential area - 7 ha extension including 387 townhouses and 12 floors apartment with about 400 flats.

7

ha

Total land area

Utilities: Kindergarten, commercial center, green park, adjacent to Mekong Delta University and existing facilities in the Thuong Thanh residential area.

Total land area: 7 ha Total floor area: •• Townhouses: 30,000 m2 •• Apartment: 27,000 m2 Expected completion: 2018

88 | BUSINESS ACTIVITIES

THUONG THANH NEW URBAN AREA

1.

2.

3.

4.

5.

6.

7.

Townhouse Dormitory - Housing for cadres Trade in services (markets) Apartment building Substation Kindergartens Intermediate practice school

821.3

billion VND

Investement

Investor: Hoang Quan Can Tho Investment Real Estate Corporation Location: Thuong Thanh Ward, Cai Rang District, Can Tho City Total Investment : 821,311,310,000 VND Project scale: Thuong Thanh new urban area consists of 628 townhouses and 10 apartment floors with about 800 flats.

10.7

ha

Total land area

Utilities: Kindergarten, commercial center, green park, adjacent to Mekong Delta University and existing facilities in the Thuong Thanh residential area.

Total land area: 10.7 ha Total floor area: •• Townhouses: 50,000 m2 •• Apartment: 53,000 m2 Expected completion: 2019

ANNUAL REPORT 2016 | 89

HQC O MON

1,239

billion VND

Investement

22.6

ha

Total land area

Investor: Hoang Quan Can Tho Investment Real Estate Corporation

Utilities: schools, commercial and service parks, green parks, complete technical infrastructure,etc.

Location: Chau Van Liem Ward, O Mon District, Can Tho City

Total land area: 22.6 ha

Total Investment: 1,239 billion VND

Total floor area: approximately 128,455 m2

Project scale: including 1,000 townhouses and 500 apartments

Expected completion: 2019

90 | BUSINESS ACTIVITIES

URBAN CENTER – TAY NINH UNIVERSITY

1.

2.

3.

4.

5.

6.

7.

8.

9.

Square Park Commercial Condominium Commercial Street House Social housing Elementary school Hospital University Vocational school

1,334

billion VND

Investement

Investor: Hoang Quan Consulting - Trading - Services Real Estate Corporation Location : Bau Nang Commune, Duong Minh Chau District, Tay Ninh Province Project scale: •• Social housing area (1 ground floor, 1 floor) •• Commercial mixed-use residential area (1 ground floor, 2 floors) •• University: 5 ha •• Hospital: 0.59 ha

22.27

ha

Total land area

•• Primary school: 0.34 ha •• Vocational school: 1 ha •• Total land area: 22.27 hectares Of which: -- Residential land: 15.68 ha -- University: 5.00 ha -- Vocational school: 1.00 ha -- Hospital: 0.59 ha Total Investment: 1,334 billion VND

ANNUAL REPORT 2016 | 91

HQC DONG NAI

520

billion VND

Investement

Investor: Hoang Quan Consulting-Trading-Service Real Estate Corporation Location: Dong Nai HQC locates at Nguyen Ai Quoc Street, Quang Vinh Ward, Bien Hoa City, Dong Nai Province •• The East: Bordering A5 Apartment Block •• The West: Bordering Mieu Binh Thien Street, land requirement at 30 m •• The South: Bordering Nguyen Ai Quoc Street, land requirement at 55 m •• The North: Bordering QH-D11 Str, land requirement at 19 m •• The land has area of 5,929.9 m2 and is located in the center area of Bien Hoa linking Ho Chi Minh City and Bien Hoa City Project Scale: HQC Dong Nai includes one basement, three commercial floors, 15 apartment floors with total 374 apartments having various area from 52 m2 to 69.5 m2 •• Maximum construction height: 70 m •• Construction density: 58% of base block, 34% of tower block

22.559 •• •• •• ••

ha

Total floor area

Total apartment floor construction area: 22,559.1 m2 Parking area: 4,421 m2 Green Park area: 1,186 m2 Internal traffic area: 1,277.9 m2

Project Utilities: •• The security system is strictly controlled during the day by the professional security team.

•• Modern camera system •• Standard fire protection system.

•• Clear parking basement, diversity elevator, electricity and water services, high speed wifi, cable TV system •• A chain of luxurious café, shops, swimming pools, kindergartens and supermarkets which are always available to meet residents’ demands.

Total land area: Total construction area: Total invested capital: Completion time:

5,929.9 m² 3,466 m² 520 billion VND per estimated Quarter 4 of 2018

92 | BUSINESS ACTIVITIES

THANH DIEN HOSPITAL URBAN AREA

1.

2.

3.

4.

5.

6.

Market Hospital Shophouse Lucky House Resettlement House Park + TDTD

892

billion VND

Investement

Investor: Hoang Quan Consulting-Trading-Service Real Estate Corporation Location: Thanh Dien Commune, Chau Thanh District, Tay Ninh Province Total land area: 181,906.60 m2. In which: •• Housing land area: 70,123.90 m2 •• Green Park + Sport area: 16,995.80 m2 •• Hospital area 40,426.60 m2 •• Market area: 12,220.70 m2 •• Traffic area: 42,139.60 m²

1.2

ha

Total land area

Project Scale: •• Resettlement area: 60 lots •• Lucky House area: 769 apartments (1 ground floor, 1 floor) •• Housing cum commercial area: 95 apartments (1 ground floor, 2 floors) •• Commune center market area: 1.2 hectares •• General hospital with 500 beds Total invested capital: 892 billion VND

ANNUAL REPORT 2016 | 93

HQC TRA VINH Investor: Hoang Quan Consulting-Trading-Service Real Estate Corporation Location: Ward 4, Tra Vinh City, Tra Vinh Province Total invested capital: 655 billion VND Scale: 1,123 houses with maximum 5 floors

1.

2.

3.

4.

Market Kindergarten Multifunction trading and services Primary school

Utilities: Shopping area, green park, kindergarten, supermarket, market, community area Total land area: 18 ha Total construction floor area: 102,965 m2 Estimated completion time: from the 4th Quarter of 2018

655

18

billion VND

Investement

ha

Total land area

HQC HOA PHU Investor: Hoang Quan Consulting-Trading-Service Real Estate Corporation Location: Inside Resettlement area of Hoa Phu Industrial Park, Loc Hoa Commune, Long Ho District, Vinh Long Province Total invested capital: 146.4 billion VND

1.

2.

3.

4.

Elementary school Hospital Driving training area HQC Hoa Phu Residential Area

3

Scale: Eighty four 2-3 floor houses and four hundred and fifteen 7 floor apartments

2

Utilities: Shopping area, green park, kindergarten, supermarket, supermarket, community area

1 4

Total land area: 14,160 m2 Total construction floor area: •• Apartment area: 15,206.2 m2 •• House area: 6,216 m2 Estimated completion time: Quarter IV/2018

146.4

billion VND

Investement

14,160

m2

Total land area

94 | BUSINESS ACTIVITIES

EDUCATION INVESTMENT ACTIVITES INVESTMENT ACTIVITIES AND ACTUAL ACHIEVEMENT Success of an enterprise is recognized by not only its business result but also its contribution to the community and society.

By considering Education investment as country future investment, during the previous time, beside Real Estate and Financial Fields, Hoang Quan Coporation has been boosting its operation in Education.

With silent but persevering activities, Hoang Quan Group has become a professional investor in Education field thanks to its slogan of considering the comprehensive development of human personality and intellect as the core value.

Up to now, Long An University of Economics and Industry, Phan Thiet University, nstitute for Development of Talents and Human Resources, Tay Nam A College of Economics and Technology, Mui Ne Tourism Vocational School… which were invested by Hoang Quan Group has come into operation and supplied thousands of young talented and skillful employees to the society.

In Can Tho, the construction of University in Mekong Delta has been roofed and shall come into operation soon with the scale of up to 5 hectares and the minimum training capacity of 13 thousands students per year. The university is oriented to operate under the modern and advanced model cooperating with famous universities and training institutes in the world. So far, Hoang Quan Corporation has collaborated with prestigious universities in America, Canada, Taiwan … on the training of highly qualified teachers and the international standard curriculum with the aiming of supplying professional human resources meeting the expectation of Vietnamese and foreign enterprises.

Besides, the real estate projects invested by Hoang Quan Group are always developed kindergarten system in order to meet the education demand of the residents as well as contribute to the project utility completion, maximizing the living value of the projects. In the past year, the Corporation has inaugurated two kindergartens in Binh Minh Urban - Port - Industrial Park (Vinh Long) and HQC Plaza (Ho Chi Minh City). According to the handover schedule, in 2017 Hoang Quan is expected to continue to open more schools in HQC Hoc Mon (Ho Chi Minh City), HQC Nha Trang... to ensure a full range of living utilities for all the residents from the families to young people.

Beside the investment and education activities, Hoang Quan Group is currently operation Hoang Quan Study Promotion Fund, which aims to encourage and accompany with the study progress of the students. Being founded from 2000, through the past 6 years of operation, the Fund has contributed more than 6 billion VND of scholarships to the Study Promotion Association, Scholarship Fund of many localities, organizations and units such as “Tiep suc den truong” (Ho Chi Minh Youth Union Newspaper), Hong Bang International Scholarship Foundation...

ANNUAL REPORT 2016 | 95

TAY NAM A COLLEGE OF ECONOMICS AND TECHNOLOGY

Location: No. 254, Le Trong Tan Street, Tay Thanh Ward, Ho Chi Minh City Facilities: Tay Nam A College of Economics and Technology has total using area of 7,940 m2 with 47 classrooms, in which there are 11 practical rooms, 4 computing rooms and lots of modern equipment for training process.

Training scale: Tay Nam A College of Economics and Technology trains 11 fields with 20 majors. It has maximum training capacity of more than 4 thousands students. Besides, the College also train short-term training courses from 1 – 3 months to improve the professional knowledge with high application for the students.

Website: http://truongtaynama.edu.vn

96 | BUSINESS ACTIVITIES

UNIVERSITY OF THE MEKONG DELTA

Investor: Hoang Quan Consulting-Trading-Service Real Estate Corporation Location: Thuong Thanh Ward, Cai Rang District, Can Tho City Total invested capital: 822 billion VND

Project Scale: The University of Mekong Delta is divided into 2 areas: 02 Training Areas with total floor area of 23,926.6 m2, 01 scientific researching area with total floor area of 7,966.1 m2 and 01 library-dormitory- service area with total floor area of 9,994.8 m2.

The University of Mekong Delta trains 15 fields and 20 majors with the maximum training scale of 10 thousands students. In which, in the first period, 10 fields/majors with the scale of 3 thousands students are expected to be trained in 2017.

Total land area: 5 ha Estimated completion time: 2019

ANNUAL REPORT 2016 | 97

PHAN THIET UNIVERSITY

Location: No. 225 Nguyen Thong, Phan Thiet City, Binh Thuan Province Facilities: Phan Thiet University has total land area of 9.5 hectares with 2 training areas being equipped with full of facilities meeting training quality requirement. Besides, there are also areas for sport, culture, art and entertainment for students. The University also has dormitory for about 400 students.

Training scale: Phan Thiet University was founded in 2009 with multi field training. It is also scientific researching area to apply and transfer technology, providing high quality human resources meeting national and area standard requirements.

The University has capacity of training up to 6 thousands students with 9 fields/majors.

Website: http://www.upt.edu.vn

98 | BUSINESS ACTIVITIES

INSTITUTE FOR DEVELOPMENT OF TALENTS AND HUMAN RESOURCES (ITH)

Location: No. 254 Le Trong Tan Street, Tay Thanh Ward, Tan Phu District, Ho Chi Minh City Facilities: Institute for Development of Talents and Human Resources locates at No. 254 Le Trong Tan Street, Tay Thanh Ward, Tan Phu District, Ho Chi Minh City. It is currently preparing for opening a training area at HQC Plaza Apartment, CC1 Lot, Nguyen Van Linh Boulevard, Saigon South New Urban Area, Binh Chanh, Ho Chi Minh City.

Training Scale: Beside its main function of human resource training and talent development, ITH also has some other functions and tasks as follows: •• Organizing studying the researches, applying and implementing the achievements and results of the new science and technology studies domestically and locally.

•• Organizing activities of human resource training and talent development.

•• Consultancy, service, propaganda and dissemination of scientific knowledge in the fields of human resource training and talent development.

•• Cooperate with domestic and foreign organizations to carry out the programs of human resource research and training.

•• Cooperate with production and business units in supplying, training and developing the human resources.

•• Organize the activities of service, psychosocial counseling, training, technology transferring, seminars, dissemination of scientific knowledge... in the field of human resources and talent development.

•• Study, seek, develop and honor talented people as well as introduce them to the Party and the State, social organizations, economists, etc., for appropriate employing plan.

Website: http://ith.edu.vn/

ANNUAL REPORT 2016 | 99

LONG AN UNIVERSITY OF ECONOMICS AND INDUSTRY

Location: No. 938, the 1st National Road, Khanh Hau Ward, Tan An City, Long An Province Facilities: Long An University of Economics and Industry has total land area of 47.5 ha with 3 training areas at the main area in Tan An City, the second branch at Duc Hoa Plastic Industrial Complex and the third branch at Tan Thanh Town, Tan Thanh District, Long An Province.

The main area has total construction floor area of 29,951 m2 consisting 40 lecture halls with the capacity of 5 thousands students/shift. These lecture halls have large and cool space and are equipped with modern training tools and a computing room system with 500 modern computers.

Training Scale: Long An University of Economics and Industry was founded in 2007 with diversity training levels for many fields. The University has capacity of training up to 6 thousands students with 8 fields including 24 majors, supplying high quality human resources to Mekong Delta area as well as the whole country.

Website: http://www.daihoclongan.edu.vn

100 | BUSINESS ACTIVITIES

FINANCIAL INVESTMENT ACTIVITY

INVESTMENT ACTIVITIES From the early days of establishment and during expanding the network of subsidiaries, associates, policy of keep expansion in the field of financial investment and develop a strong financial foundation is the strategic direction of the Hoang Quan Group.

Financial investment activities of the Group is based on the efficiency principle, which requires to maximize the use of funds but its normal business activities and high efficiency must be maintained.

With that principle, the Group has founded a membership system which links to form a closed chain from legal, design, construction, price valuation to distribution, brokerage in order to improve the return from real estate investments, and reduce cost while ensuring product quality.

In addition, capital mobilization sources were also been strengthened through the accumulation resources from businesses and shareholders such as profit, raise regulatory capital, issue share... and access to domestic and international capital markets by joining the HoSE stock exchange with its HQC code. Hoang Quan is especially focused on M&A activities of potential companies and projects and promote its cooperation with domestic and international financial institutions, investment funds to take advantage of these external forces by the general development direction of the Group and earn profits for businesses, shareholders, investors and customers.

ANNUAL REPORT 2016 | 101

102 | BUSINESS ACTIVITIES

SUBSIDIARIES, MEMBER COMPANIES AFFILIATES AND FINANCIAL RATIOS

HOANG QUAN CAN THO REAL ESTATE INVESTMENT JSC Address

27-28 Quang Trung, Phu Thu ward, Cai Rang district, Can Tho city

Business field

HOANG QUAN BINH THUAN REAL ESTATE CONSULTING – TRADING - SERVICE JSC Address

198 Nguyen Hoi, Phan Thiet city, Binh Thuan province

Real estate

Business field

Real estate

Total assets

400.0 billion VND

Total assets

384.0 billion VND

Charter Capital

794.5 billion VND

Revenue

Charter Capital

323.5 billion VND

Revenue

Direct ownership ratio

97.0%

Profit before tax

11.3 billion VND

Direct ownership ratio

96.5%

Profit before tax

4.8 billion VND

Indirect ownership ratio

0%

Profit after tax

9.4 billion VND

Indirect ownership ratio

0%

Profit after tax

4.5 billion VND

100.9 billion VND

BINH MINH PORT JOINT STOCK COMPANY Address

My Hung village, My Hoa commune, Binh Minh district , Vinh Long province

Business field

26.6 billion VND

HOANG QUAN NHA TRANG REAL ESTATE CONSULTING – TRADING - SERVICE COMPANY LIMITED Address

46 Thoai Ngoc Hau, Vinh Hoa ward, Nha Trang city, Khanh Hoa

Construction

Business field

Real estate

Total assets

1,439.9 billionVND

Total assets

175.8 billion VND

Charter Capital

600 billion VND

Revenue

Charter Capital

120 billion VND

Revenue

4.5 billion VND

Direct ownership ratio

96.5%

Profit before tax

1.2 billion VND

Direct ownership ratio

40.0%

Profit before tax

0.1 billion VND

Indirect ownership ratio

1.5%

Profit after tax

1.0 billion VND

Indirect ownership ratio

0%

Profit after tax

0.1 billion VND

71.5 billion VND

HOANG QUAN ME KONG REAL ESTATE CONSULTING – TRADING - SERVICE CORPORATION

HOANG QUAN APPRAISAL COMPANY LIMITED

Address

Lot B5 Binh Minh Residential area, My Loi village, My Hoa commune, Binh Minh district , Vinh Long province

Address

46 Thoai Ngoc Hau, Vinh Hoa ward, Nha Trang city, Khanh Hoa

Business field

Real estate

Business field

Appraisal services

Total assets

2,311.3 billion VND

Total assets

10.6 billion VND

Charter Capital

320 billion VND

Revenue

Charter Capital

5.0 billion VND

Revenue

Direct ownership ratio

32.0%

Profit before tax

1.0 billion VND

Direct ownership ratio

32.0%

Profit before tax

0.2 billion VND

Indirect ownership ratio

0%

Profit after tax

0.3 billion VND

Indirect ownership ratio

0%

Profit after tax

0.2 billion VND

83.0 billion VND

20.05 billion VND

ANNUAL REPORT 2016 | 103

TAY NAM A VOCATIONAL SCHOOL OF ECONOMICS - ENGINEERING Address

254 Le Trong Tan, Tay Thanh ward, Tan Phu district, Ho Chi Minh city

Business field

Education - Training

Total assets

6.8 billion VND

Charter Capital

6 billion VND

Revenue

Direct ownership ratio

20.0%

Profit before tax

0

Indirect ownership ratio

0%

Profit after tax

0

1.3 billion VND

BINH THUAN HOUSE TRADING & CONSTRUCTION JSC

TU CUONG TRADING - MANUFACTURING CO., LTD Address

268 Nguyen Thong, Phu Hai ward, Phan Thiet city, Binh Thuan province

Business field

Real estate

Total assets

32.8 billion VND

Charter Capital

85.4 billion VND

Revenue

0.5 billion VND

Direct ownership ratio

0%

Profit before tax

0.1 billion VND

Indirect ownership ratio

38.6%

Profit after tax

-

BINH MINH ENTERTAINMENT SERVICE - TRADING CO., LTD

Address

198 Nguyen Hoi, Phan Thiet city, Binh Thuan province

Address

139 My Loi village, My Hoa commune, Binh Minh town, Vinh Long province

Business field

Construction

Business field

Entertainment services

Total assets

745.5 billionVND

Total assets

234.7 billion VND

Charter Capital

30 billion VND

Revenue

20.7 billion VND

Charter Capital

10 billion VND

Revenue

3.3 billion VND

Direct ownership ratio

0%

Profit before tax

14.3 billion VND

Direct ownership ratio

0%

Profit before tax

1.4 billion VND

Indirect ownership ratio

32.2%

Profit after tax

11.4 billion VND

Indirect ownership ratio

29.1%

Profit after tax

BAOLINH INVESTMENT – CONSTRUCTION – HOUSING DEVELOPMENT CORPORATION Address

288 Huynh Van Banh, ward 11, Phu Nhuan district, Ho Chi Minh city

Business field

Construction

Total assets

1,442.0 billion VND

Charter Capital

80 billion VND

Revenue

Direct ownership ratio

0%

Profit before tax

3.4 billion VND

Indirect ownership ratio

20.0%

Profit after tax

2.5 billion VND

221.0 billion VND

-

SUSTAINABLE DEVELOPMENT Message from the President on sustainable development Overview of the report

Sustainable development model Governance for sustainable development Sustainable development under the GRI

SUSTAINABLE DEVELOPMENT HARMONIOUS MORE IDENTITIES

106 | SUSTAINABILITY REPORT

MESSAGE FROM THE PRESIDENT ON SUSTAINABLE DEVELOPMENT To Shareholders and Stakeholders,

Since 2015, the company has been officially re-built its Vision, Mission, Core Values. In which the Development vision orientation of the Company and its member companies is "to be the leading multidisciplinary and multi-sector group in Vietnam, and Real estate, education, finance are the main fields, creat strengths for sustainable development and international integration " with a Mission of “constantly innovate, strive to create the high quality and affordable products and services”.

A pioneer in each its product, service; bring different values to its customers and shareholders." To achieve these objectives, orientations, the Company has been based on Core Values formed from three factors of Knowledge - Creativity - Pioneers: "Knowledge is the foundation for sustainable development and competitive advantage" and a creative thinking of "keep innovating, flexible thinking and actively explore, improve products and services, apply the advanced technology in order to create sustainable values for the company, customers, partners and the community" as a "pioneer in the mission of serving customers, shareholders and society”.

With that orientation, Hoang Quan Group has identified that the sustainable development can be made only if the benefits among stakeholders, as well as contributions to the sustainable development of humanity through practical actions to protect the environment are balanced.

Therefore, the actions for sustainable development and the Company’s development goals are always paid attention by the company and its member companies. Sustainable development strategy has been built based on three goals: economic, social and environmental with the following actions: •• Actively contribute in building products of social residential housing, affordable residential housing; •• Maintain and promote sustainable, effective and long-term economic growth;

In 2016, although the company's planned income has not met, expectations of shareholders and stakeholders have not been satisfied. But being affected by the changes in the market and from policy risks, the Company’s income with profit over 20 billions dong was kept. This is considered as a well result for the spirit of striving, efforts, solidarity of the employees of the Company.

Apart from trying to ensure the interests of the employees, the company established and adopted the welfare policies to encourage employees to working long, contributing their part to the sustainable development of the Company. Not only taking care of intercompany benefits, the Company also actively contributes their part to the community and social through practical action programs, especially the activities of the Hoang Quan Study Promotion Fund, which is to contribute to the development of the next generations.

While the Company and its subsidiaries also pay attention to environmental standards, encourage to adopt energy saving initiatives, use environmentally friendly new materials...

Along with the 2016 Annual Report, the contents in the Sustainable Development Report will provide more information about the Company's impacts on the stakeholders.

Achievements reached by the company on the development path are not only thanks to the active and creative work of the whole employees but also thanks to the support and trust by shareholders, customers, partners, local authorities and other stakeholders. We undertake to keep promoting our achievements and bring the values of sustainable development for the Company itself, keep benefits of shareholders, customers, partners, the community, and actively take actions to protect and improve the environment in way of a sustainable development.

Best regard!

•• Create stable jobs for employees; •• Support in developing high quality human resources; •• Keep sustainable patterns of production and consumption; •• Take actions to respond to climate change.

Dr. TRUONG ANH TUAN President of the Board of Directors

ANNUAL REPORT 2016 | 107

The company's sustainable development can be made only if the benefits among stakeholders, as well as contributions to the sustainable development of humanity through practical actions to protect the environment are balanced.

OVERVIEW OF SUSTAINABLE DEVELOPMENT REPORT

The Sustainable Development Report provides information on key areas that affect the development strategy, operating activities in the aspect of sustainable development to shareholders, investors and stakeholders. a. Contents of the Report The 2016 Sustainable Development Report was prepared upon Guidelines for making the sustainable development report made by the Global Reporting Initiatve – GRI and a reference of the evaluation criteria of corporate governance made by Asean Corpoorate Governance Scorecard. The report was presented in accordance with Guidelines 4 under the Core Approach, which focuses on the areas of Economics, How to treat employees & Sustainable employment, Environment and Society.

Contents of the Report were posted on the Company's website at: http://hoangquan.com.vn/shareholdersrelations/

b. Scope of the Report The 2016 Sustainable Development Report was consolidated together with the Annual Report prepared by Hoang Quan Consulting - Trading - Service Real Estate Corporation and three subsidiaries including: Hoang Quan Can Tho Real Estate Investment Joint Stock Company, Binh Minh Port Joint Stock Company, Hoang Quan Binh Thuan Real Estate Consulting – Trading - Service Joint Stock Company.

The report presented the Company’s performance prepared in the fiscal year which begins as at January 1, 2016 and ends as at December 31, 2016 within Vietnam c. Contact information For information and comments to the report, please contact: Mr. Nguyen Thanh Hoai - Head of Investor Relations department, address: 286-288 Huynh Van Banh, Ward 11, Phu Nhuan district, Ho Chi Minh city Tel: (+84 8) 62928617 ext 2022 Email: qhndt@hoangquan.com.vn

110 | SUSTAINABILITY REPORT

THE ORIENTATION OF SUSTAINABLE DEVELOPMENT

Nowadays, economic benefit is no longer the only concern of enterprises and the concept of “sustainable development” is increasingly playing an important role, enterprises’ in the trend of globalization.

SOCIAL BENEFITS

ECONOMIC BENEFITS

ENVIROMENTAL PROTECTION

SUSTAINABLE DEVELOPMENT MODEL

ANNUAL REPORT 2016 | 111

SUSTAINABLE DEVELOPMENT TARGETS Sustainable development ensures the balance of interests between the Company and related parties, aiming for the long-term and sustainable development.

Targets

Contents

Solutions

Sustainable growth

•• Sustainable growth in traditional businesses •• Reviewing and selecting new business investment effectively •• Risk management and compliance control

•• Exploiting the strengths and expand the land fund in a beautiful location suitable to the tastes; Continuously improving the quality of marketing activities, sales.

•• Prioritizing the selection of effective investment projects, divesting the projects of poor efficiency.

•• Following risk management model, system for comprehensive management and effective prevention of risks, having the appropriate response when the risk occurs.

Sustainable investment efficiency

•• Ensuring a stable dividend •• Increasing transparency, equal treatment for shareholders

•• Well implementing business plans, ensuring the maintenance of stable dividends for shareholders.

•• Diversifying channels to disclose information in a timely, clear, transparent, honest and fair manner.

Human resource development

•• Ensuring economic benefits for employees •• Caring for employees’ lives •• Developing human resource

•• Improving the working environment to create conditions for employees to develop their potential, attach and dedicate to the Company.

•• Maintain and enhance the quality of activities and programs for the welfare of workers.

•• Strengthening training activities to improve professional skills, improve work efficiency.

•• Promoting innovative initiatives that bring efficiency to the Company.

Growing associates with environmental protection

•• Complying with regulations on environmental protection •• Raising awareness of environmental protection and energy conservation for staff

•• Fully complying with regulations on environmental protection.

•• Utilizing energy and resources responsibly, and increase the use of eco-friendly products.

Sharing, growing with the community

•• Contributing to promoting the development of high-quality human resources for society •• Implementing community service programs, supporting difficult circumstances

•• Continuing to maintain investment in education and training (universities, training institutes, secondary schools, preschools); Strengthening training for staff.

•• Actively engaging in community service programs, especially for children, the elderly, people with disabilities.

•• Maintaining and promoting activities of gratitude.

112 | SUSTAINABILITY REPORT

EFFECTS OF ENTERPRISES TO RELATED PARTIES

Positive influence in

Positive influence on the

ENTERPRISES

• • Risk management and compliance control • • Ensuring economic benefits for employees • • Caring for employees’ lives • • Developing human resource • • Increasing transparency

Management model for sustainable development

MARKET

Positive influence on

SOCIETY

•• Stable growth

•• Contributing to the State budget

•• Maintaining stable dividends for shareholders

•• Sharing with the community

•• Professionally serving and taking care of clients

•• Protecting the environment

•• Contribute to the sustainable development of the social housing market •• Participating in regional economic development

Impact on the economy The development of the Company has contributed to the overall development of the economy, especially in the social housing segment of the real estate market. At the same time, to participate in the development of new products in line with modern trends such as officetel, codotel, contribute significantly to the State budget.

Impact on society The company has created jobs, generating stable income for more than 500 employees, contributing to social stability.

The system of schools from kindergarten to secondary school, training institutes and universities has contributed high-quality human resources to society.

In addition, the Company actively supports the development of society through the activities of the Hoang Quan Study Encouragement Fund, actively participates in the promotion of study promotion, social security and repayment, paying gratitude, "Ve Nguon" show, etc.

Impact on the environment The company always complies with regulations and standards on environmental safety and use eco-friendly products to limit negative impacts on the environment.

Enhance the understanding of energy saving, raw materials for staff.

SUSTAINABLE DEVELOPMENT MANAGEMENT As a multidisciplinary business enterprise, pioneering the development of social housing, the Company considers the tasks to maintain economic interests and to consider the interests of the stakeholders. a. The involvement of related parties and how to define the contents of the report Related parties are identified as those who affect or are affected at certain levels by the Company’s business operations.

Information and feedback from related parties are one of the important factors influencing the Company’s mindset and method of action in managing and operating the Company’s activities.

Sustainable report’s content is determined by the Company’s and related parties’ interest level through collecting information from shareholders/investors, customers, employees, the media, agencies/associations, and local communities. * Shareholders / Investors -- Annual General Meeting of Shareholders -- Directly meeting with shareholders, investors -- Exchanging via telephone, email with Investor Relations department -- Analyst meeting * Customers -- Directly meeting -- Receiving information from the Customer Care Department -- Exchanging via email, phone * Employees -- Regular review meeting -- Activities under the flag every Monday -- Sending comments to the Board of Directors * The media -- Meeting, interviewing -- Exchanging via phone, email -- Press Release -- Press Conference * Agencies /associations -- Participating in conferences, workshops organized by the Government, Ministries, agencies and organizations.

-- Participating in the association: EuroCham Association - European Business Association in Vietnam, Vietnam Real Estate Association, and many other associations are detailed in the Hoang Quan Overview.

ANNUAL REPORT 2016 | 113

Sustainability management model ADMINISTRATIVE COUNCIL Directing strategies and approving targets and plans for sustainable development.

BOARD OF SUPERVISORS Reviewing and managing risks in plans and implementation processes.

BOARD OF DIRECTORS Developing and implementing, ensuring the implementation of the plan for sustainable development.

FUNCTION DEPARTMENT

MEMBER COMPANIES

Implementing the plan for sustainable development in accordance with the direction of the Administrative Council and the direction of the Board of Directors.

Implementing the plan for sustainable development at the unit.

EMPLOYEES Carrying out specific work to achieve the plan for sustainable development.

* Local communities -- Support scholarships for pupils - students -- Participating in community sharing activities, paying gratitude b. Identifying key issues Interacting with stakeholders helps the company grasp the concerns and efforts to address the issues identified as critical.

After summarizing the opinions and feedback of the parties consulted, the Company identified the key stakeholders including Shareholders/Investors, Clients, Employees, Agencies and Associations, Local communities in three fields: Economy, Society, and Environment.

Values for related parties Important related parties

Elements of interest

Company feedback

Shareholders/Investors

•• Dividend •• Stock price •• Transparency

•• Maintaining a stable dividend •• Enhancing corporate governance, increase investment efficiency •• Providing sufficient, timely and transparent information

Customers

•• Product quality •• On time delivery •• Customer care

•• Improving product quality, and utility services •• Requiring the Contractor to apply new techniques to speed up the construction

Employees

•• Salary and welfare policies •• Human resource development policies •• Promotion opportunities

•• Ensuring salary and welfare policies for employees •• Organizing training to improve knowledge and skills for staff •• Evaluating employees quarterly and on that basis, proposing salary increases or promotions for staff who are capable of management

Agencies/Associationst

•• Complying with the law •• Contributing to market development •• Contributing to the State budget

•• Risk management •• Actively contributing to market development •• Complying with the obligations with the State

Local communities

•• Future generations development •• Sharing with difficult circumstances

•• Maintaining and developing the Hoang Quan Study Encouragement Fund •• Regularly participating in programs, charitable activities, paying gratitude

114 | SUSTAINABILITY REPORT

SUSTAINABLE GROWTH objective factors, investors' views of valuation of HQC shares is much lower than the value of the enterprise, making it difficult to mobilize capital from the stock market. Therefore, despite the above-mentioned results, the results are quite modest.

However, in the context of the year 2016, this achievement has shown the effort, sensitivity and solidarity with the whole staff and member units.

1,422

In 2016, consolidated revenue was VND 1,114 billion, after tax profit was VND 20.1 billion, fulfilling only 15% of sales target and 4% of profit target respectively. With the policy of focusing on social housing development, the company encountered many difficulties in terms of investment capital in the phase of capital support policy for customers and social housing investors stopped. Meanwhile, under the influence of the

1,114

Revenue

1,070

Gross profit

2012

2013

32

319

388 2014

38

72

24

30

93 40

2011

108

302 125

223 2010

329

439

440

525

720

Before tax profit

2015

2016

Business performance by year

In 2016, the Company paid 8% share dividend in accordance with the profit distribution plan approved by the Annual General Meeting of Shareholders in 2016, raising the Company's chartered capital to VND 4,266 billion.

In terms of operating expenses, corporate governance costs in 2016 increased sharply by 51% compared to 2015, while sales also increased by 38% while sales fell by 22%. The main reason is due to the inaccurate forecast on the risk policy for social housing, making the company promote the construction of the machine, strengthen the team to prepare the plan to accelerate the growth but the low-performance ability has made plans to increase revenue levels not be able to keep pace with rising level of corporate management costs and cost of sales.

For the employees, the Company ensures the basic rights and also has the benefits and policies for the development of human resources for employees.

In the period 2017-2020, in addition to the social housing product line that is leading in the South, the Company continues to diversify its investment products to maximize its capital efficiency. Commercial lines which will be increased in proportion include Resort real estates (beach villas and Condotel), Mixed-use real estates (Shophouse and Officetel), Apartments (luxury, medium, cheap), Industrial real estates, Manufacturing buildings, Warehouses. Adjusting the strategic orientation is to suit the actual situation, increase profits, and aim at sustainable benefits for shareholders and at the same time, fulfilling the responsibilities of partners, customers, the community and the State budget.

ANNUAL REPORT 2016 | 115

1% 1% 1%

4%

8%

15% 57% 0%

12%

Asset structure as of 31/12/2016

Money

Fixed assets

Short-term receivables

Unfinished long-term assets

Inventory

Long-term financial investment

Other short-term assets

Other long-term assets

Long-term receivables

116 | SUSTAINABILITY REPORT

INVESTORS RELATIONS In an effort to provide complete, accurate and transparent information to investors, the Company is gradually improving and improving the quality of investor relations, enhancing the channels of transmission and receiving information such as press conferences, investor meetings, press releases, ... In the year 2016, investor relations with foreign investors are paid more attention to ensure the principle of fair treatment among shareholders.

SHARE INFORMATION No.

Expenses

Amount

1

Total trading sessions

251 trading sessions

2

Total auction volume

918,542,480 shares

3

Total auction value

4

Average volume of auction transactions / sessions

5

Highest price in 52 weeks (14/03/2016)

VND 4,367,126,000,000 3,659,532 shares VND 6,000

Investor Relations Activities In 2016, the Company actively implemented investor relations activities to bring information and activities of the Company to investors, showing the spirit of transparency, increasing the two-way interaction between enterprises and Investors.

2016 highlight events: •• Organizing the annual shareholders meeting in 2016 in the spirit of publicity, transparency; •• Meeting investors quarterly; •• Updating the accurate and timely information of the Investor Relations section at the Company's website; •• Complying with regulations on disclosure of information; •• Organizing more than 30 meetings to share information with domestic and foreign investment funds, investment organizations and individuals, securities companies to exchange and provide information on the production business activities situation for shareholders, investors.

Operational objectives for 2017: •• Maintaining and improving the quality of investor relations activities implemented in 2016; •• Maintaining a variety of interactive information channels with accurate and timely investor information; •• Attempting to make timely translations of information to ensure fairness of information between domestic and foreign shareholders.

ANNUAL REPORT 2016 | 117

ENSURE EMPLOYEE BENEFITS 1. Human resources overview As of 12.31.2016, the scale of the company's Hoang Quan and subsidiaries consists of 520 people, an increase of 28% compared to 2015.

Personnel structure by Gender

Hoang Quan (Holding Company)

Hoang Quan Can Tho

Hoang Quan Binh Thuan

Binh Minh Harbor

Male

209

39

50

41

Female

124

36

12

9

Total

333

75

62

50

Under 30

133

21

16

16

From 30 to 40

118

29

24

26

From 40 to 50

45

20

8

4

Over 50

32

5

14

4

Personnel structure by Age

11% 15%

35%

36% Under 30

65%

From 30 to 40

38%

Female

From 40 to 50

Male

Personnel structure by Gender

Over 50

Personnel structure by Age

1%

4% 34%

29%

BA Associate

71%

54% 7%

Local employment rate

Intermediate college Diploma and other vocational degree

Local workers

Prof./Doctorate

Other workers

Master

Personnel structure by Education level

In 2016, the company recruited 170 new employees, while a total of 183 employees retired.

118 | SUSTAINABILITY REPORT

2. Ensure employees' benefits Human resources play a fundamental role in sustainable development. Therefore, the Company always ensures the policy of salary, allowances and welfare in order to create favorable conditions for workers to work and unite with sustainable development strategy of the Company.

Expense Total salaries Total insurance costs

Hoang Quan (holding company)

Hoang Quan Can Tho

Hoang Quan Binh Thuan

Binh Minh Harbor

51,268,192,931

7,905,854,235

5,720,077,917

5,592,007,644

5,373,248,961

1,035,352,200

577,345,000

712,910,570

With a strategic vision to become the leading real estate investment, development and real estate service company in Southeast Asia, all staff are always aware and willing to commit to comply with the guideline, the goal of enterprise culture with the basic principles: -- Always uniting - overcoming difficulties - challenges.

-- Always respecting, listening and understanding the interests of customers, partners, and shareholders is the benefit of yourself.

-- Always showing enthusiasm, responsibility, dedication in work.

-- Always innovating, welcoming the opportunities to success.

Salary policy Understanding that the salary mechanism is always the employees' top concern, the Company has developed synchronous, unified, and comprehensive salary policy based on the employees' contribution and the work quality to improve the workforce efficiency, attract and maintain good staff.

The company evaluates KPI performance based on the work objectives, performance results of each individual, department. In particular, employee salaries include salaries, insurance and work completion allowances.

Reward policy In addition to the evaluation and reward system at the end of each quarter, the Company assesses and praises individual and group awards for outstanding performance.

Reward for unexpectedly ideas, improvements benefiting the company.

Reward effectively business performance based on the profitability of business results in the year.

13 month - salary bonus, holidays, New Year.

Workers welfare policy Not only does the Company concerns about the salary and bonus policy, but it also focuses on welfare policies to motivate and enhance the spiritual life to help employees associate with the Company.

In addition to welfare policies in accordance with the regulations of the State, the Company also coordinates with the Union to execute other welfare policies for workers such as mid-shift meal allowance, visiting policy, death, birthdays, visits - holidays, periodic health examinations, marriages, marital benefits, maternity allowance, etc.

In addition, the company also has a working trip, severance, and hardship allowance while ensuring the social, health, and unemployment insurance, periodic health examinations system.

Especially, the Company also has the supportive policy for staffs when buying the Company’s invested projects’ apartments and its member units.

In order to create the collective spirit within the staff and employees, every year the Company organizes performing arts and sports activities, taking care of the material and spiritual life of employees. Through this, it creates the motivation for exchanging, learning, and sharing experiences, playing a role in bringing staff closer, reproducing work force and raising productivity and working efficiency.

Some workers welfare policy are being applied: -- Visiting policy: hospitalized staff and ill families VND 3,000,000 (families are supported one time during the time the staff works at the company) -- Marriage policy: employees signing the company contract: VND 5,000,000/person; Employees working full twelve (12) months: 10,000,000 VND/person -- Maternity allowance: employees working over 12 months: 5,000,000 VND/baby -- Death policy: employees who unfortunately pass away are entitled to VND 10,000,000 per person; Families of employees (spouses, parents, biological children or legally recognized adopted children) are entitled to VND 5,000,000 per person.

-- Birthday policy: employees who sign official labor contracts are entitled to VND 500,000 per person.

-- Holiday policy; periodic health examination policy; supportive policy for employees when buying the Company’s invested projects’ apartments and its member units.

Labor safety The Company provides safe, comfortable and fully equipped facilities at the office and project sites.

Complying with occupational safety standards: Occupational Safety and Health Law 84/2015/QH13, National technical regulation on construction safety QCVN 18:2014/BXD. Regularly training, reminding on site employees about labor safety.

Severance allowance policy Employees working full 12 months or more, receive half a month's salary for each year of employment.

From one to less than six months calculated as half a year; Full six months or more calculated as one working year.

The salary for severance allowance calculation is the average salary under the labor contract of the six consecutive months before the employee leaves their job.

ANNUAL REPORT 2016 | 119

Departments

Recruiting Plan

Departments

Recruitment Request

Departments

Training Request

Human Resources Department

Recruitment Needs Consideration

Human Resources Department

Training Plan

Board of Directors

Approval

Board of Directors

Approval

Human Resources Department

Recruitment Announcement

Employees

Carrying out training activities Committing to the training process

Recruitment process

3. Human resources development Recruitment The recruitment policy is based on the principle of "right people - right job".

With the goal of recruiting dedicated, enthusiastic and qualified staffs, the recruitment policy of the company always aims at diversifying the sources of qualified and experienced candidates with professional skills, high compliance with the requirements of work, and always creates opportunities for new employees to integrate and adapt to the environment and work the fastest.

Recruitment is carried out in accordance with the Recruitment Process to select the right people for the right job, also to attract talented people.

Training -- In personnel management activities, professional and integration training, especially training for sales staff prioritized. Training activities conducted in accordance with the Training Process.

-- In 2016, the company regularly launched sales skills training courses, product knowledge, and professional skills training courses or hired outside training with the total over 1,000 hours of training.

-- The company supports partially or fully funds for employees to attend training courses, depending on the position and capacity. Employees can advance to higher positions to prepare for succession.

-- After the training, employees signed a confinement to work for the Company. Depending on funding and sponsored courses, service time will be specified.

Training process

Other Resources Development Policy To develop human resources now and in the future, the Company always focuses on developing staffs and looking for potential candidates to focus on training as leading leaders.

Apart from the salary and bonus policies, allowances and other preferential treatment policies for the employees, the Management Boards always strives to create a friendly, professional working environment and be ready to listen, share experiences with staff. Thereby encouraging and promoting initiative and creativity in work.

The company always creates chances for employees to complain, contribute opinions, and express their ambitions, directly to the Board of Directors by email or directly meeting with the General Director.

The Company also organizes meetings with the Board of Directors to create equal conditions for employees to present their suggestions and propose ideas to improve the quality of their work.

In addition, the company always pays a great attention to the resources assessment, arrangement, appointment and rotation of staff in line with their ability. Through each period, the Company has specific personnel strategies to create opportunities for employees to develop and advance in their work.

120 | SUSTAINABILITY REPORT

DEDICATED TO CUSTOMERS

NEW COZY, MODERN LIFE WITH HOANG QUAN GROUP SOCIAL HOUSES Pigging back her granddaughter around the HQC Plaza social house campus, Mrs. Truong Thi Chan shared her story. “Our family has lived here for one year. We paid in advance 200 million; we borrowed the rest from the bank for a period of 15 years at a preferential interest rate. Every month we pay them 6 million. Our 60m2 apartment is very comfortable and airy for four people.

Another HQC Plaza resident, Mr. Tran Van Tien – an office worker, said: “Social houses are appropriate with my income. I’ve lived here for more than three months. I feel that the environment and the air are very nice. The traffic is also convenient.

Mr. Tien and Mrs. Chan’s families are two of thousands of families enjoying their life at HQC Plaza social house (1,735 units in total). Here, thousands of homes were built to start new cozy, modern lives full of laughers and love.

Meanwhile, in the North West of HCM City, a new resident’s community gradually formed in the HQC Hoc Mon social house (562 units). Since the apartment delivery in December 2016, HQC Hoc Mon has been put into use with the delight of the residents in the new home.

In 2017, Hoang Quan Group will deliver and put into use HQC Nha Trang social house (1,002 units), HOQ-HQC Ho Ngoc Lam (718 units); and at the same time, continue executing projects as scheduled and investing in building more social houses in HCM City and southern provinces, accomplishing the target of supplying at least 10,000 apartments a year.

Hoang Quan understands that every apartment, though small, still a person life dream. It’s where they start their peaceful life, their loving home… And from that, with the heart of the pioneer in social housing, all the Hoang Quan Group invested projects were developed synchronously in planning, designing and ensuring every living facilities such as parks, kindergartens, preschools, clinics, supermarkets, gyms, restaurants, coffee shops, etc.

From and empty land, day by day through constructing, then completing and welcoming new residents, every project was born as spiritual children, carrying the investor’s dedication, just like Mr. Truong Anh Tuan – Chairman of the Board used to say: “Building housed is like flowering the land.”

By looking at HQC Plaza, HQC Hoc Mon is seen rising in the sunlight, looking at the beaming, joyful smiles of residents living in their dream houses, we can see that the Hoang Quan Group's revolutionary path “flowering the land” is increasingly growing with results not only having a high economic value but also being rich in humanistic value and social security.

“When we live, land is just a place When we leave, the land turned to souls…”

(Che Lan Vien)

ANNUAL REPORT 2016 | 121

122 | SUSTAINABILITY REPORT

COMMUNITY SERVICES Using the humanitarian value as a guide for all activities, Hoang Quan Group is always ready to share with the community, accompanying with society, harmoniously combine business goals and social welfare programs such as study encouragement, charity, pro-poor fund, paying gratitude, environmental protection...

Accompanying with society Founded in 2010, over the past six years, Hoang Quan Study Encouragement Fund has worked with the society to nurture young generations in the southern provinces. With the caring heart, thousands of scholarships from the fund has been given directly to pupils, students with difficult situations by Hoang Quan and prestigious institutions and organizations, helping to reduce financial worries so that they can study peacefully, pursuing their dreams for a bright future.

Statistics show that in 2016, the Hoang Quan Study Encouragement Fund awarded more than 1.1 billion VND in scholarships programs for poor studious students and Catholic businessmen's children. After more than 6 year operating, Hoang Quan Study Encouragement Fund has donated more than 7 billion VND to support, encourage and gear for generations of students to step up, to fly higher on the learning road.

01

02

Fulfilling the community mission With the orientation of sustainable development and a sense of responsibility for the community, Hoang Quan Group wishes the human values will be promoting in every staff in the system.

A good citizen not only fulfills his duties and responsibilities in the company or his family but also contributes actively to the community and builds a prosperous society.

With that spirit, the entire Board of Managers, Board of Directors and staffs of Hoang Quan Group voluntarily contributed two days salary to support the Central region people in the 2016 historic flood. Solidarity is sharing; volunteer activities become more profound and beautiful.

03

Meanwhile, throughout 2016, Hoang Quan Group also participated in doing charity, supporting the needy, sponsoring programs of the Association, business community such as Making Tet for the needy program of Labor Union District 1, Binh Chanh District, and Fund for the needy of District 2, Phu Nhuan District, sponsoring tennis tournament of Phu Nhuan District Businessmen Association...

04

01. 02. 03. 04. Participating Traditional Health Care Administration department II - Government Office 05. Hoang Quan organizing fire protection training for HQC Plaza residents and security forces 06. Hoang Quan sponsoring Entrepreneur Tennis Tournament 07. Hoang Quan organizing International Women's Day event 08. Joyful atmosphere celebrating International Women's Day 09. 10. 11. Hoang Quan organizing Full Moon Festival for children 12. Hoang Quan organizing International Children Day

05

ANNUAL REPORT 2016 | 123

06

07

08

09

10

11

12

124 | SUSTAINABILITY REPORT

EVIRONMENT PROTECTION

Primary materials usage report

With a profound awareness of the responsibility of protecting the environment, Hoang Quan and its member companies always promote environmental management, energy efficiency, eco-friendly materials, minimized environmental impacts, pollution prevention, and strict compliance with environmental standards.

Primary materials

Environmental management, energy saving Hoang Quan takes environmental management as an important task. We regularly inspire and encourage environmental activities in harmony with business, promote energy conservation awareness at the corporate office and at projects site.

•• Corporate offices and branches designed in a clean green trend. Make full use of daylight, the sunshine, and natural wind. Limit the use of air conditioning and lighting.

Encourage staff to consciously conserve and avoid wasting electricity, water, paper, and stationery, etc.

•• At projects, comply with the latest regulations and standards; enhance the use of eco-friendly energy saving equipment such as LEDs, recycled materials, non-burnt materials... Strict management of wastewater, waste, guarantee no effect and harm to the community and the general environment.

Hoang Quan always abides by the Government laws, local regulations and environmental requirements of related parties.

2016 is the first year the Company made a detailed report about using raw material and saving energy. Thus the contents had significant errors. The company will make more efforts to improve the data collection so that the environmental reports are complete and accurate.

The amount of use

Unit

Sand

33,099

m3

Rock

5,788

m3

Cement

8,198

ton

Reinforced steel

3,641

ton

Fresh concrete

14,618

m3

4,462,028

cube

Unbaked brick

386,936

cube

Block brick

712,500

m3

26,058

ton

275

m2

18,000

m2

MDF wood door

990

m2

Doors, glass aluminum windows

380

m2

Burning brick

Iron Granite Ceramic tiles

Water usage condition report Water

The amount of use

Unit

+ Purchase from water supply companies

9,574

m3

+ Underground water (wells)

11,212

m3

864

m3

+ Natural water sources (rain, rivers, lakes)

Energy usage condition report Energy + Electricity + Oil

The amount of use

Unit

514,585

kWh

12,891

liter

192

kg

+ Gas

Using green materials, controlling wastes Joining the trend of global environmental protection, Hoang Quan always tries to design green buildings, apply technology, techniques combined with strict management measures, and standardize the process of project implementation from the beginning, thereby minimizing waste and wastewater into the environment.

Criteria for measurement of waste control in construction activities Energy

Emission control

Unit

170

ton

NO2

68

mg/m3 of gas

SO2

83

mg/m3 of gas

CO

5.38

mg/m3 of gas

+ Solid waste + Waste gas

+ Liquid waste + Noise + Smoke and dust

1,260

m³

60-76.3

dBA

179

mg/m3 of gas

ANNUAL REPORT 2016 | 125

SOME TECHNICAL REGULATIONS COMPLIED BY THE COMPANY Environmental standards and regulations are fully complied with by the Company and its affiliates and in 2016, there is no case of administrative sanctions for violations of environmental regulations.

No.

Regulation type name

Content of technical regulation

Water quality 1

QCVN 08:2015/BTNMT

National technical regulation on surface water quality

2

QCVN 09:2015/BTNMT

National technical regulation on groundwater quality

3

QCVN 14:2008/BTNMT

National technical regulation on domestic wastewater quality

4

TCXDVN 33:2006/BXD

Water supply - Piping and building networks - Design standards

Air quality 1

QCVN 05:2013/BTNMT

Air quality - National technical regulation on surrounding air quality

2

QCVN 06:2009/BTNMT

Air quality - Maximum allowable concentration of toxic substances in surrounding air

3

QCVN 19:2009/BTNMT

Industrial emissions to dust and inorganic substances

4

TCVN 6438:2001

Road transport - Maximum allowable limit of emission

Quality of soil and sediment 1

QCVN 03:2015/BTNMT

National technical regulation on the permissible limit of some heavy metals in the soil

Noise and vibration 1

QCVN 26:2010/BTNMT

National technical regulation on noise

2

QCVN 27:2010/BTNMT

National technical regulation on vibration

3

TCVN 5948:1999

Acoustics - Road traffic noise when increasing speed - Maximum allowable noise level

Hazardous waste 1

QCVN 50:2013/BTNMT

National technical regulation on hazard threshold for sludge from treatment wastewater

2

QCVN 07:2009/BTNMT

National technical regulation on hazardous waste thresholds

Construction 1

QCVN 01:2008/BXD

National technical regulation on construction planning

2

QCVN 07:2010/BXD

National technical regulation on urban technical infrastructure works

Every work, project invested and implemented by Hoang Quan has: -- Estimated accurately the volume of construction materials, rational use, reducing excess surplus.

-- Collection of materials situated at the right place (end of wind direction, on high ground), avoiding loss and damage when not in use.

-- Construction items regularly inspected and maintained.

-- Water saved.

-- Measured against dust, noise; wastewater and waste are treated in accordance with the technical regulations on the environment.

-- Conserved ecology and land environment.

Most importantly, all Hoang Quan projects use eco-friendly materials, meet and comply with the latest regulations and standards, including Circular No. 09/2013/TT-BXD of the Ministry of Construction regulates the use of unbaked building materials in construction works; Directive No. 04/2013/CT-UBND of the People's Committee of HCM City on enhancing the use of unbaked building materials in construction works in HCM City; TCVN 6477: 2011 - Standard for concrete brick; TCVN 7959:2011 Standard for lightweight concrete - autoclaved aerated concrete (AAC); TCVN 9029:2011 - Standard lightweight concrete - foam concrete, unconfined air - technical requirements; TCVN 9028: 2011 - Standard mortar for lightweight concrete...

126 | SUSTAINABILITY REPORT

TABLE OF GRI-GRATIFYING ITEMS OPTIONS - CORE Targets

Description

Direct Reference / Respond

Page

DISCLOSURE OF INFORMATION ACCORDING TO THE GENERAL REGULATION Strategy and Analysis G4-1

G4-2

Statement by the organization's top leader on the relevance of sustainable development to business and strategies for sustainable development Describe the main impacts, risks, and opportunities

Sustainable Development Report - Message from the Chairman of the Board on sustainable development Sustainable Development Report - Corporate administration for Sustainable development Annual report - Report of the Board of Directors

102-103 28-33 112-113

Organizational Profile G4-3

Company's name

Annual Report - Overview Introduction

8-9

G4-4

Main services/ products

Annual Report - Overview Introduction

8-9

G4-5

Headquarters address

Annual Report - Overview Introduction

8-9

G4-6

Number of countries in which the business operates, names of countries in which the organization is operating significantly or related to sustainable development topics.

Annual Report - Overview Introduction

109

G4-7

Type of ownership, legal model

G4-8

Serving markets (including geographical divisions, service areas, and customer types)

The geographical main market is South, Vietnam, from Khanh Hoa to Can Tho with diversified types of customers in diversified types of products from social housing, commercial residences to office buildings and public parks, industrial, workshops.

G4-9

Business scale

Annual Report - Overview Introduction

8-9

G4-10

Statistics on workers

Sustainable Development Report - Human resources overview

117

G4-11

Percentage of employees who entitled to collective bargaining agreement

Sustainable Development Report - Ensuring employee benefits

118

G4-12

Describing the supply chain of the business

Annual Report - Overview Introduction

8-9

G4-13

Changes in the reporting process related to scale, structure, ownership, and supply chain

Annual Report - Report of the Board of Directors

G4-14

Prevention methods, warning in advance of issues affecting the environment

Sustainable Development Report - Environmental protection section

122-123

G4-15

The economic, social and environmental terms and principles that the business has built listing

Sustainable Development Report - Management of sustainable development

112-113

G4-16

The Associations that the business is involved in listing

Annual Report - Overview

Annual Report - Overview Introduction Sustainable Development Report - Sustainable Development Report Overview

109

Content presented throughout the Annual report

38-41

10-17

Identify key areas and boundaries G4-17

Units included in the consolidated financial statement listing + Report on whether there is any unit in Consolidated Financial Statements not mentioned in this report.

Sustainable Development Report - Sustainable Development Report Overview

G4-18

The process of defining report content and report boundaries explanation + Explain how the enterprise implements the Reporting Guidelines for defining report content.

Sustainable Development Report - Orientation for sustainable development

110-113

G4-19

Listing all Critical Areas identified in the content determination process

Sustainable Development Report - Orientation for sustainable development

110-113

109

ANNUAL REPORT 2016 | 127

Targets

Description

Direct Reference / Respond

Page

G4-20

Reporting the internal boundaries of the organization for each key area

Sustainable Development Report - Orientation for sustainable development

110-113

G4-21

Reporting the boundary outside the organization for each key area

Sustainable Development Report - Orientation for sustainable development

110-113

G4-22

Reporting the impact of any re-presentation of the information provided in the previous report and the reasons for the restatement

There are no cases of re-presentation

G4-23

Reporting significant changes in Scale and Boundary Areas compared to previous reporting periods

Sustainable Development Report - Sustainable Development Report Overview

109

Related parties consultations G4-24

List of parties involved in the business

Sustainable Development Report - Orientation for sustainable development

110-113

G4-25

Report based on selection and identification of related parties

Sustainable Development Report - Orientation for sustainable development

110-113

G4-26

Approach method with related parties participation

Sustainable Development Report - Orientation for sustainable development

110-113

G4-27

Report on the main topics and concerns of the related parties and the response of the business to these topics.

Sustainable Development Report - Orientation for sustainable development

110-113

File Report G4-28

Reporting period

Sustainable Development Report - Sustainable Development Report Overview

109

G4-29

The most recent report time

Sustainable Development Report - Sustainable Development Report Overview

109

G4-30

Reporting cycle

Sustainable Development Report - Sustainable Development Report Overview

109

G4-31

A contact for questions related to the report or the content related to the report

Sustainable Development Report - Sustainable Development Report Overview

109

109

GRI Catalog Glossary G4-32

Enterprise’s Option

Sustainable Development Report - Sustainable Development Report Overview

G4-33

Policy for the use of external guarantees of the report

Hoang Quan Group has not used external guarantees for Sustainable Development Report

Administration G4-34

Corporate governance structure, including the top management board

Annual Report -Organization chart Annual Report - Corporate administration

22-31

G4-38

Report on the composition of the highest management board and subcommittees by executive / non-executive level, independence, tenure, number of positions and key commitments, gender, members of the disadvantaged groups, ability related to economic, environmental and social impacts, representing related partiest

Annual Report - Corporate administrationt

38-45

G4-39

Chairman report of the highest department is the CEO. Function of the chairman in the administration operation, the reason for the arrangement

Annual Report - Corporate administration

38-45

Ethics and integrity G4-56

Corporate values, principles, standards and norms such as Code of Conduct and Code of Ethics

Annual Report - Mission - Vision - Core values

6-7

DISCLOSURE OF INFORMATION ACCORDING TO SPECIFIC REGULATIONS ECONOMIC LIST G4-EC1

G4-EC3

Economic values are created and allocated

Annual report - Corporate Administration

The scope of corporate responsibility for the welfare plan

Annual Report - Message of the Chairman of the Board Annual Report - Chairman's message on sustainable development Sustainable Development Report Orientation for sustainable development

38-45

110-113

128 | SUSTAINABILITY REPORT

Targets

Description

Direct Reference / Respond

G4-EC4

Financial support from the Government

Annual Report - Core business activities \ Real estate

Page

ENVIRONMENTAL LIST Material G4-EN2

The percentage of materials used is the material that can be recycled

Sustainable Development Report - Environmental protection

122-123

Reducing energy consumption

Sustainable Development Report - Environmental protection

122-123

Energy G4-EN6

SOCIAL LIST How to treat workers and create sustainable jobs Jobs G4-LA1

Total number and percentage of new and displaced employees by age group, sex, region

Sustainable Development Report - Ensuring employee benefits

117-119

G4-LA2

Welfare provided to full-time workers, not for temporary or part-time workers

Sustainable Development Report - Ensuring employee benefits

117-119

Occupational Safety and Health G4-LA6

Type of injury and injury rate, occupational disease, absence day, absentee status and total employment-related deaths by region and by sex

Never happens

Education and Training G4-LA9

Average training hours for employees by gender and by employee category

Sustainable Development Report - Ensuring employee benefits

117-119

G4LA10

Long-term skills management programs support the ability of employees to continue working and help them in terminating their employment.

Sustainable Development Report - Ensuring employee benefits

117-119

Sustainable Development Report - Ensuring employee benefits

117-119

Diversity and equal opportunity G4LA12

Composition of management levels and detailed list of employees in each category of employees by sex, age group, minority members and indicators of diversity

Human rights Child labor G4-HR5

Activities and providers identified significant risks to child labor cases and measures implemented to effectively eliminate child labor

The Company's Recruitment Policy does not employ child labor and applies similarly to the selection of suppliers

Society Local community G4-SO1

Percentage of activities involving local community participance, impact assessment and implemented development programs

Sustainable Development Report - Community activities

120-121

G4-SO2

The basis of actual or potential negative impact on the local community

Sustainable Development Report - Community activities

120-121

Responsibility for the product Customer Safety and Health G4-PR2

Total cases do not comply with voluntary rules and regulations on health effects and products safety and services in the product and service life cycle.

Never happens

List of acronyms SDR

Sustainable Development Report

FR

Financial Report

AR

Annual Report

Company

Hoang Quan Real Estate - Trading - Service Joint Stock Company

BoD

Board of Directors

SD

Sustainable Development

CEO

Chief Executive Officer

FINANCIAL STATEMENTS Report of the Board of Directors Report of independent auditors Integrated balance sheet

Integrated business performance report Integrated cash flow statement Notes to the integrated financial statement

INCREASING VALUE ENHANCING POSITION

132 | FINANCIAL STATEMENTS

STATEMENT OF THE BOARD OF MANAGEMENT The Board of Management of Hoang Quan Consulting – Trading – Service Real Estate Corporation (hereinafter referred to as ‘the Corporation’) presents this statement together with the Consolidated Financial Statements for the fiscal year ended 31 December 2016, including the Financial Statements of the Corporation and the subsidiaries (‘hereinafter collectively referred to as ‘the Group’).

BUSINESS HIGHLIGHTS Hoang Quan Consulting – Trading – Service Real Estate Corporation has been operating under the Business Registration Certificate No. 0302087938, which was registered for the first time on 23 March 2007 and amended for the 33rd time on 24 June 2016 granted by the Department of Planning and Investment of Ho Chi Minh City.

HEAD OFFICE -- Address :

No. 286-288, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

-- Tel.

:

(84-8) 39 913 808

-- Fax

:

(84-8) 39 913 064

The Corporation’s affiliates are as follows: Affiliates

Address

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 99 Inter-provincial Road 25B, Thanh My Loi Ward, District 2, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 159A, Phan Dang Luu Street, Long Huong Ward, Ba Ria – Vung Tau City, Ba Ria - Vung Tau Province

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

Lot A2 19-20 Binh Minh service - residential area for experts and employees, My Loi Hamlet, My Hoa Commune, Binh Minh District, Vinh Long Province

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 272, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

47C/2 Hamlet 3, An Phu Tay Commune, Binh Chanh District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 270, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

Hoc Mon Branch, Hoang Quan Consulting – Trading – Service Real Estate Corporation – Hoang Quan Real Estate Exchange Center

15E My Hoa 4 Hamlet, Xuan Thoi Thuong Commune, Hoc Mon District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 339, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 353, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 286, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 55C, Cay Keo Street, Tam Phu Ward, Thu Duc District, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

C 15-16 Nam Hiep Thanh Residential Area, Truong Chinh Street, Phu My Town, Tan Thanh District, Ba Ria - Vung Tau Province

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporations

T6 Vo Dinh Building, TA 14, Thoi An Ward, District 12, Ho Chi Minh City

Branch of Hoang Quan Consulting – Trading – Service Real Estate Corporation

No. 27-28, Quang Trung Street, Phu Thu Ward, Cai Rang District, Can Tho City

ANNUAL REPORT 2016 | 133

Principal business activities of the Corporation as in the Business Registration Certificate: ·· Trading houses (excluding receiving the land use right to invest in construction of infrastructure according to housing construction planning for the purpose of transferring land use right). Investing in construction and trading industrial park infrastructures. Trading in real estate; ·· Providing land brokerage services and real estate exchange services, advertising real estates, and managing real estates. Providing real estate brokerage services. Providing real estate auction services and real estate valuation services; ·· Constructing civil works; ·· Providing services of ground leveling; ·· Providing commercial brokerage; ·· Trading porcelains, handicrafts and fine arts. Trading interior decoration products; ·· Trading agricultural – seafood products, industrial foodstuff. Trading aquatic products. Trading fruits and vegetables (not operating at the head office); ·· Designing and prototyping on the computer; ·· Trading chemicals (excluding strong poisonous chemicals) and packages; ·· Trading construction materials. Trading all kinds of timber, materials serving construction industry; ·· Acting as an agent to trade and deposit goods; ·· Surveying land. Preparing investment project. Managing project. Designing civil-industrial construction. Designing construction plan; ·· Providing vocational training (not operating at the head office); ·· Consulting domestic investment, consulting foreign investment; ·· Providing commercial advertising services; ·· Constructing bridge and road; ·· Trading machinery and equipment of construction industry and printing industry; ·· Trading paddy, corn and cereals; Trading agricultural – forestry materials (excluding rice, paddy, cane-sugar, beet sugar, wood, bamboos) (not operating at the head office). ·· Providing preschool, primary, secondary and upper secondary education; ·· Providing training of colleges, universities and graduated; ·· Providing restaurant and take-away catering services; ·· Retailing cereal, foods, beverages, tobaccos and rustic tobaccos that take the most ratio in general specialized stores; ·· Retailing in supermarkets, commercial centers; ·· Processing and preserving vegetables; processing and preserving seafood and other aquaculture products; ·· Processing and preserving meat and products made of meat; ·· Producing processed dishes and foods; ·· Retailing beverages in specialized stores.

BOARD OF MANAGEMENT AND EXECUTIVE OFFICERS The Board of Management and the Executive Officers of the Corporation during the year and as of the date of this Statement include: The Board of Management Full name

Position

Appointing date/Re-appointing date

Mr. Truong Anh Tuan

Chairman

Re-appointed on 28 March 2015

Ms. Nguyen Thi Dieu Phuong

Member

Re-appointed on 28 March 2015

Mr. Truong Duc Hieu

Member

Re-appointed on 28 March 2015

Mr. Truong Thai Son

Member

Re-appointed on 28 March 2015

Mr. Le Dinh Vien

Member

Re-appointed on 28 March 2015

Mr. Le Hung

Member

Appointed on 28 March 2015

Mr. Le Thanh Nam

Member

Re-appointed on 28 March 2015

Full name

Position

Appointing date/Re-appointing date

Mr. Nguyen Thanh Van

Chief of the Board

Re-appointed on 28 March 2015

Ms. Le Phung Nha Phuong

Member

Appointed on 28 March 2015

Ms. Mai Hoang Yen

Member

Re-appointed on 28 March 2015

The Control Board

134 | FINANCIAL STATEMENTS

STATEMENT OF THE BOARD OF MANAGEMENT

The Board of Directors Name

Position

Appointing date

Mr. Truong Anh Tuan

General Director

Appointed on 24 March 2007

Mr. Le Trong Ngoc

Deputy General Director

Appointed on 01 August 2007

Ms. Nguyen Thi Dieu Phuong

Deputy General Director

Appointed on 24 March 2007

Mr. Truong Duc Hieu

Deputy General Director

Appointed on 01 September 2011

Mr. Vu Trong Dac

Deputy General Director

Appointed on 01 September 2011

Mr. Truong Thai Son

Deputy General Director

Appointed on 09 October 2014

Mr. Le Hung

Deputy General Director

Appointed on 18 March 2015

Mr. Pham Minh

Deputy General Director

Appointed on 16 March 2015

Mr. Tran Thai Son

Deputy General Director

Appointed on 16 March 2015

LEGAL REPRESENTATIVE The Corporation’s legal representative during the year and as of the date of this statement is Mr. Truong Anh Tuan - Chairman of the Board of Management (re-appointed on 28 March 2015).

AUDITORS A&C Auditing and Consulting Co., Ltd. has been appointed to perform the audit on the Group’s Consolidated Financial Statements for the fiscal year ended 31 December 2016 RESPONSIBILITIES OF THE BOARD OF DIRECTORS The Board of Directors of the Corporation is responsible for the preparation of the Consolidated Financial Statements to give a true and fair view of the consolidated financial position, the consolidated financial performance and the consolidated cash flows of the Group during the year. In order to prepare these Consolidated Financial Statements, the Board of Directors must: ·· select appropriate accounting policies and apply them consistently; ·· make judgments and estimates prudently; ·· state clearly whether the accounting standards applied to the Group are followed or not, and all the material differences from these standards are disclosed and explained in the Consolidated Financial Statements; ·· prepare the Consolidated Financial Statements of the Group on the going-concern basis, except for the cases that the going-concern assumption is considered inappropriate; ·· design and implement effectively the internal control system in order to ensure that the preparation and presentation of the Consolidated Financial Statements are free from material misstatements due to frauds or errors.

The Board of Directors hereby ensures that all the accounting books have been fully recorded and can fairly reflect the financial position of the Group at any time, and that all the accounting books have been prepared in compliance with the applicable Accounting System.

The Board of Directors is also responsible for managing the Group’s assets and consequently has taken appropriate measures to prevent and detect frauds and other irregularities.

The Board of Directors hereby commits to the compliance with the aforementioned requirements in preparation of the Consolidated Financial Statements.

APPROVAL OF THE FINANCIAL STATEMENTS The Board of Management of the Corporation hereby approves the accompanying Consolidated Financial Statements, which give a true and fair view of the financial position as of 31 December 2016, the consolidated financial performance and the consolidated cash flows for the fiscal year then ended of the Group in conformity with the Vietnamese Accounting Standards and System and other legal regulations related to the preparation and presentation of the Consolidated Financial Statements.

For and on behalf of the Board of Management,

_____________________ Dr. TRUONG ANH TUAN Chairman of the Board of Management

ANNUAL REPORT 2016 | 135

No. 0672/2017/BCTC-KTTV

INDEPENDENT AUDITOR’S REPORT THE SHAREHOLDERS, THE BOARD OF MANAGEMENT AND THE BOARD OF DIRECTORS HOANG QUAN CONSULTING – TRADING – SERVICE REAL ESTATE CORPORATION We have audited the accompanying Consolidated Financial Statements of Hoang Quan Consulting – Trading – Service Real Estate Corporation (hereinafter referred to as ‘the Corporation’) and those of its subsidiaries (hereinafter collectively referred to as “the Group”), which were prepared on 10 March 2017 (from page 08 to page 55) including the Consolidated Balance Sheet as of 31 December 2016, the Consolidated Income Statement, the Consolidated Cash Flow Statement for the fiscal year then ended and the Notes to the Consolidated Financial Statements.

Responsibility of the Board of Directors The Board of Directors is responsible for the preparation, true and fair presentation of the Consolidated Financial Statements of the Group in accordance with the Vietnamese Accounting Standards and System as well as the legal regulations related to the preparation and presentation of the Consolidated Financial Statements; and responsible for the internal control as the Board of Directors determines necessary to enable the preparation and presentation of the Consolidated Financial Statements to be free from material misstatement due to fraud or error.

Responsibilities of Auditors Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing (VSA). Those standards require that we comply with ethical standards and requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated Financial Statements of the Group are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Group’s preparation and true and fair presentation of the Consolidated Financial Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Group’s Board of Directors, as well as evaluating the overall presentation of the Consolidated Financial Statements.

We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our audit opinion.

Opinion of Auditors In our opinion, the Consolidated Financial Statements referred to above, give a true and fair view, in all material respects, of the consolidated financial position as of 31 December 2016, the consolidated financial performance and the consolidated cash flows for the fiscal year then ended of the Group in conformity with the Vietnamese Accounting Standards and System as well as other regulations related the preparation and presentation of Consolidated Financial Statements.

Emphasis of matters Without qualifying the foregoing opinion, we would like to draw attention of the readers to the following matters: ·· As presented at Note V.18 in the Notes to the Consolidated Financial Statements, in the last 05 months of 2016 and as to the date of this report, the Corporation issued invoices, declared and paid tax for each issuance of invoices to the Ho Chi Minh City Tax Department while settling amount of outstanding tax. ·· As presented at Note V.5 in the Notes to the Financial Statements, Hoang Quan Consulting-Trading – Service Real Estate Corporation has given loans to other related parties to carry out business activities. As stipulated in the Charter of the Corporation in accordance with the provisions of the Corporate Law, the loan is subject to the authority of the Board of Management. However, the Circular No. 121/2012/TT-BTC dated 27 December 2012 of the Ministry of Finance regarding the corporate governance applicable to public companies, the borrowings and guarantees of public companies in relation to the related parties require approval from the Annual General Meeting of Shareholders.

For and on behalf of A&C Auditing and Consulting Co., Ltd.

______________________________________

______________________________________

NGUYEN MINH TRI - Deputy General Director Audit Practice Registration Certificate No. 0089-2013-008-1 Ho Chi Minh City, 10 April 2017

NGUYEN THI NGOC QUYNH -Auditor Audit Practice Registration Certificate No. 0327-2013-008-1

Head Office: 229 Dong Khoi, Dist 1, HCMC. Tel: (84.8) 38 272 295 - Fax: (84.8) 38 272 300 Branch in Ha Noi: 40 Giang Vo St, Dong Da Dist, Ha Noi Branch in Nha Trang: 148 Tran Khanh Du St, Nha Trang Branch in Can Tho: 162C/4 Tran Ngoc Que St, Ninh Kieu Dist, Can Tho www.a-c.com.vn

136 | FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET As of 31 December 2016 Unit: VND ITEMS

Code

A-

CURRENT ASSETS

100

I.

Cash and cash equivalents

110

Note V.1

Ending balance

Beginning balance

4,774,311,568,983

4,315,299,037,995

69,636,446,911

50,511,352,196

1.

Cash

111

69,636,446,911

50,511,352,196

2.

Cash equivalents

112

-

-

II.

Short-term investments

120

-

4,100,000,000

1.

Trading securities

121

-

-

2.

Provisions for devaluation of securities trading

122

-

-

3.

Held-to-maturity investments

123

-

4,100,000,000

III.

Short-term receivables

130

3,890,244,602,452

3,300,689,893,834

1.

Short-term trade receivables

131

V.3a

766,567,176,103

951,194,573,902

2.

Short-term prepayments to suppliers

132

V.4

2,598,825,007,935

1,943,637,295,357

3.

Short-term inter-company receivables

133

-

-

4.

Receivable according to the progress of construction contract

-

-

5.

Short-term loans receivable

135

V.5a

347,689,599,919

172,907,220,455

6.

Other short-term receivables

136

V.6a

234,084,498,534

279,686,538,726

7.

Allowance for short-term doubtful debts

137

V.7

(58,054,800,032)

(47,870,169,019)

8.

Deficit assets for treatment

139

V.8

1,133,119,993

1,134,434,413

IV.

Inventories

140

794,216,678,090

917,164,279,430

1.

Inventories

141

794,216,678,090

917,164,279,430

2.

Allowance for inventories

149

-

-

20,213,841,530

42,833,512,535

253,273,259

1,959,020,006

18,882,385,887

39,686,826,199

1,078,182,384

1,187,666,330

V.9

V.

Other current assets

150

1.

Short-term prepaid expenses

151

2.

Deductible VAT

152

3.

Taxes and other accounts receivable from the State

153

4.

Trading Government bonds

154

-

-

5.

Other current assets

155

-

-

V.10a

V.18

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

ANNUAL REPORT 2016 | 137

CONSOLIDATED BALANCE SHEET As of 31 December 2016

Unit: VND ITEMS

Code

Note

Ending balance

Beginning balance

B-

NON-CURRENT ASSETS

200

2,085,974,764,725

2,064,202,719,106

I.

Long-term receivables

210

1,125,690,076,379

1,112,750,170,696

1.

Long-term trade receivables

211

70,400,000,000

70,400,000,000

2.

Long-term prepayment to suppliers

212

-

-

3.

Working capital in affiliates

213

-

-

4.

Long-term inter-company receivables

214

-

-

5.

Long-term loans receivable

215

V.5b

7,815,500,000

3,228,305,000

6.

Other long-term receivables

216

V.6b

1,047,474,576,379

1,039,121,865,696

7.

Allowance for long-term doubtful debts

219

-

-

II.

Fixed assets

220

42,308,453,726

31,342,213,643

V.3b

1.

Tangible fixed assets

221

30,681,110,146

20,568,851,689

-

Historical cost

222

V.11

45,160,631,292

38,197,922,506

-

Accumulated depreciation

223

(14,479,521,146)

(17,629,070,817)

2.

Financial leased assets

224

-

-

-

Historical cost

225

-

-

-

Accumulated depreciation

226

3.

Intangible fixed assets

227

-

Initial cost

228

13,132,857,789

11,946,767,789

-

Accumulated amortization

229

(1,505,514,209)

(1,173,405,835)

III.

Investment property

230

-

-

V.12

-

-

11,627,343,580

10,773,361,954

-

Historical costs

231

-

-

-

Accumulated depreciation

232

-

-

66,297,863,179

21,768,414,411

61,370,638,435

19,466,820,276

IV.

Long-term assets in process

240

1.

Long-term work-in-process

241

V.13

2.

Construction-in-progress

242

V.14

V.

Long-term investments

1.

Investments in subsidiaries

4,927,224,744

2,301,594,135

277,447,517,548

309,433,775,895

-

-

2.

Investments in joint ventures and associates

V.2a

264,318,498,950

296,304,757,297

3.

Investments in other entities

V.2b

13,232,931,000

13,232,931,000

4.

Provisions for devaluation of long-term financial investments

V.2b

(103,912,402)

(103,912,402)

5

Held-to-maturity investments

255

-

-

VI.

Other non-current assets

260

574,230,853,893

588,908,144,461

1.

Long-term prepaid expenses

261

V.10b

572,567,150,713

585,935,111,682

2.

Deferred income tax assets

262

V.15

1,663,703,180

2,973,032,779

3.

Long-term components and spare parts and accessories

263

-

-

4.

Other non-current assets

268

-

-

5.

Goodwill

269

-

-

TOTAL ASSETS

270

6,860,286,333,708

6,379,501,757,101

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

138 | FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET As of 31 December 2016

Unit: VND ITEMS

Code

Note

Ending balance

Beginning balance

C-

LIABILITIES

300

2,812,895,437,074

2,378,387,430,734

I.

Current liabilities

310

1,963,499,626,507

1,845,439,930,143

1.

Short-term trade payables

311

V.16

57,392,042,676

60,786,336,647

2.

Short-term advances from customers

312

V.17

696,699,694,700

710,856,158,988

3.

Taxes and other obligations payable to State Budget

313

V.18

108,872,073,078

89,063,140,766

4.

Payables to employees

314

V.19

7,824,136,392

8,145,407,358

5.

Short-term accrued expenses

315

V.20

367,483,066,877

312,750,936,149

6.

Short-term inter-company payables

316

-

-

7.

Payable according to the progress of construction contracts

317

-

-

8.

Short-term unearned revenue

318

V.21

22,809,674,851

2,975,772,408

9.

Other short-term payables

319

V.22a

92,010,044,215

94,508,578,232

10.

Short-term borrowings and financial leases

320

V.23a

608,094,076,220

565,154,206,340

11.

Provisions for short-term payables

321

-

-

12.

Bonus and welfare funds

322

2,314,817,498

1,199,393,255

13.

Price stabilization fund

323

-

-

14.

Trading Government bonds

324

-

-

II.

Long-term liabilities

330

849,395,810,567

532,947,500,591

1.

Long-term trade payables

331

-

-

V.24

2.

Long-term prepayment from customers

332

-

-

3.

Long-term accrued expenses

333

-

-

4.

Inter-company payables for operating capital

334

-

-

5.

Long-term inter-company payables

335

-

-

6.

Long-term unearned revenue

336

597,316,897

149,823,799

7.

Other long-term payables

337

V.22b

246,319,431,809

273,703,543,997

8.

Long-term borowing and financial leases

338

V.23b

105,417,325,373

245,206,445,652

9.

Convertible bonds

339

V.25

484,251,822,104

-

10.

Prefered shares

340

-

-

11.

Deferred income tax payable

341

V.26

12,518,223,584

12,312,581,243

12.

Provisions for long-term payables

342

V.27

291,690,800

1,575,105,900

13.

Science and technology development funds

343

-

-

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

ANNUAL REPORT 2016 | 139

CONSOLIDATED BALANCE SHEET As of 31 December 2016

Unit: VND ITEMS

Code

Note

Ending balance

Beginning balance

D-

OWNER'S EQUITY

400

4,047,390,896,634

4,001,114,326,367

I.

Owner's equity

410

4,047,390,896,634

4,001,114,326,367

1.

Capital

411

4,266,000,000,000

3,950,000,000,000

-

Ordinary shares carrying voting right

411a

4,266,000,000,000

3,950,000,000,000

-

Preferred shares

411b

-

-

(646,800,000,000)

(646,800,000,000)

26,996,876,394

-

2.

Share premiums

412

3.

Bond conversion option

413

4.

Other sources of capital

414

5.

Treasury stocks

415

6.

Differences on asset revaluation

416

7.

Foreign exchange differences

417

8.

Investment and development fund

418

9.

Business arrangement supporting fund

10.

Other funds

11.

Retained earnings

421

-

Retained earnings accumulated

V.28

V.28

V.28

-

-

(7,260,000)

-

-

-

-

-

5,641,442,436

2,785,877,941

419

-

-

420

-

-

354,348,343,977

654,389,245,940 654,389,245,940

V.28

V.28

to the end of the previous period

421a

334,728,931,119

-

Retained earnings of the current period

421b

19,619,412,858

-

12.

Construction investment fund

422

-

-

13.

Benefit of non-controlling shareholders

429

41,211,493,827

40,739,202,486

II.

Other sources and funds

430

V.28

-

-

1.

Sources of expenditure

431

-

-

2.

Fund to form fixed assets

432

-

-

TOTAL LIABILITIES AND OWNER'S EQUITY

440

6,860,286,333,708

6,379,501,757,101

Ho Chi Minh City, 10 March 2017

LO THI TAM Preparer

NGUYEN HONG PHUONG Chief Accountant

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

Dr. TRUONG ANH TUAN General Director

140 | FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT For the fiscal year ended 31 December 2016

Unit: VND ITEMS

Code

Note

Current year

Previous year

01

VI.1

1,114,009,237,497

1,421,913,166,438

VI.2

1.

Sales

2.

Sales deductions

02

3.

Net sales

10

4.

Cost of sales

11

5.

Gross profit

20

6.

Financial income

21

7.

94,478,678,541

32,300,190,902

1,019,530,558,956

1,389,612,975,536

700,220,442,888

1,001,995,465,325

319,310,116,068

387,617,510,211

VI.4

2,032,009,731

215,744,492,325

VI.5

97,946,914,881

53,446,646,714

96,744,220,943

54,203,353,031

VI.3

Financial expenses

22

In which: Loan interest expenses

23

8.

Gain/(loss) in associates

24

V.2

1,788,166,248

5,868,393,911

9.

Selling expenses

25

VI.6

61,597,455,959

44,763,764,988

10.

General and administration expenses

26

VI.7

137,475,750,122

91,135,265,989

11.

Net operating profit

30

26,110,171,085

419,884,718,756

12.

Other income

31

VI.8

26,526,046,607

309,762,293,384

VI.9

13.

Other expenses

32

20,374,425,252

9,512,627,237

14.

Other profit

40

6,151,621,355

300,249,666,147

15.

Total accounting profit before tax

50

32,261,792,440

720,134,384,903

16.

Current income tax

51

V.18

10,655,116,302

78,323,472,607

17.

Deferred income tax

52

V.15,V.26

1,514,971,939

452,464,560

18.

Profit after tax

60

20,091,704,199

641,358,447,736

19.

Profit of the parent company

61

19,619,412,858

641,187,562,903

20.

Profit after tax of non-controlling shareholders

62

472,291,341

170,884,833

21.

Earning per share

70

VI.11

44

2,262

22.

Diluted earnings per share

71

VI.11

44

2,262

Ho Chi Minh City, 10 March 2017

LO THI TAM Preparer

NGUYEN HONG PHUONG Chief Accountant

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

Dr. TRUONG ANH TUAN General Director

ANNUAL REPORT 2016 | 141

CONSOLIDATED CASH FOW STATEMENT (Indirect method)

For the fiscal year ended 31 December 2016

Unit: VND ITEMS

Code

Note

Current year

Previous year

32,261,792,440

720,134,384,903

I.

Cash flows from operating activities

1.

Profit before tax

2.

Adjustments

-

Depreciation of fixed assets and investment properties

02

V.11, V.12

4,176,403,347

3,393,497,811

-

Provisions and allowances

03

V.7, V.27

8,901,215,913

12,046,387,393

-

Gain/ (loss) from exchange difference due to revaluation of moneytary items in foreign currencies

04

-

-

-

Gain/ (loss) from investing activities

05

V.2, VI.4, VI.8

(3,965,822,055)

(215,522,420,123)

-

Interest expenses

06

VI.5

96,744,220,943

54,203,353,031

-

Other adjustments

07

-

(306,736,011,252)

3.

Operating profit before changes of working capital

08

138,117,810,588

267,519,191,763

-

Increase/(decrease) of receivables

09

66,801,219,156

(912,051,822,534)

-

Increase/(decrease) of inventories

10

73,905,870,515

147,237,793,295

-

Increase/(decrease) of payables

11

(391,553,842,375)

(226,875,391,329)

-

Increase/(decrease) of prepaid expenses

12

15,239,707,716

(2,049,343,423)

-

Increase/(decrease) of securities trading

13

-

-

-

Interests paid

14

V.20, VI.5

(60,231,096,003)

(83,261,719,797)

-

Corporate income tax paid

15

V.18

(10,146,795,174)

(8,579,047,959)

-

Other cash inflows

16

50,000,000

9,735,057,566

-

01

Other cash outflows

17

-

-

Net cash flows from operating activities

20

(167,817,125,577)

(808,325,282,418)

(13,946,326,531)

(14,232,108,295)

II.

Cash flows from investing activities

1.

Purchases and construction of fixed assets and other long-term assets

21

2.

Proceeds from disposals of fixed assets and other long-term assets

22

1,259,090,908

-

3.

Cash outflow for lending, buying debt instruments of other entities

23

(443,976,285,082)

(134,750,822,322)

4.

Cash recovered from lending, selling debt instruments of other entities

24

239,449,211,647

923,785,234,239

5.

Investments into other entities

25

(3,000,000,000)

(1,076,572,384,046)

6.

Withdrawals of investments in other entities

26

-

216,578,000,000

4,013,039,749

112,284,633,135

(216,201,269,309)

27,092,552,711

7.

Interest earned, dividends and profits received

27

Net cash flows from investing activities

30

V.11, V.12, V.14

V.2 V.2, V.6, VI.4

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

142 | FINANCIAL STATEMENTS

CONSOLIDATED CASH FOW STATEMENT (Indirect method)

For the fiscal year ended 31 December 2016

Unit: VND ITEMS

Code

Note

Current year

Previous year

III.

Cash flows from financing activities

1.

Proceeds from issuing stocks and capital contributions from owners

31

V.28

26,996,876,394

930,000,000,000

2.

Repayment for capital contributions and re-purchases of stocks already issued

32

V.28

(7,260,000)

-

3.

Receivables from borrowings

33

V.23

766,196,454,139

113,521,345,241

4.

Repayment for loan principal

34

V.23

(390,042,580,932)

(181,763,795,042)

5.

Payments for financial leased assets

35

-

-

6.

Dividends and profit paid to the owners

36

-

(56,213,820,000)

Net cash flows from financing activities

40

403,143,489,601

805,543,730,199

Net cash flows during the period

50

19,125,094,715

24,311,000,492

Beginning cash and cash equivalents

60

50,511,352,196

26,200,351,704

Effects of fluctuations in foreign exchange rates

61

-

-

Ending cash and cash equivalents

70

69,636,446,911

50,511,352,196

V.1

V.1

Ho Chi Minh City, 10 March 2017

LO THI TAM Preparer

NGUYEN HONG PHUONG Chief Accountant

These notes form an integral part of and should be read in conjunction with the Consolidated Financial Statements

Dr. TRUONG ANH TUAN General Director

Beginning balance of the previous year

LO THI TAM Preparer

-

(646,800,000,000)

-

-

-

-

-

(646,800,000,000)

(646,800,000,000)

NGUYEN HONG PHUONG Chief Accountant

4,266,000,000,000

-

Other adjustments

Ending balance of the current year

-

Profit during the year

Extraction for funds

-

316,000,000,000

Repurchase of shares already issued

Issuance of convertible bond

Issue of shares paid by dividends

3,950,000,000,000

-

Increase due to business consolidation

3,950,000,000,000

-

Beginning balance of the current year

-

-

Extraction for funds

Profit after tax of non-controlling shareholders

Ending balance of the previous year

-

-

Dividends shared during the year

-

-

-

Increase due to recording the investments into associates in accordance with the equity method

(646,800,000,000)

-

-

-

1,320,000,000,000

930,000,000,000

1,700,000,000,000

Share premiums

Profit during the year

Capital increased from stock swap

Capital increased from stock issuance

Capital

Appendix: Statement on fluctuation in owner’s equity

-

-

-

-

-

-

-

-

-

-

-

26,996,876,394

26,996,876,394

Bond conversion option

-

-

-

-

-

-

-

-

-

-

-

-

5,641,442,436

-

2,855,564,495

-

-

2,785,877,941

2,785,877,941

334,430,125

-

-

-

-

-

2,451,447,816

Investment and development fund

-

-

-

-

-

-

-

41,211,493,827

-

-

472,291,341

-

-

40,739,202,486

40,739,202,486

40,568,317,653

170,884,833

Benefits of non-controlling shareholders

Total

4,047,390,896,634

260,673,917

(1,065,424,243)

20,091,704,199

(7,260,000)

26,996,876,394

-

4,001,114,326,367

4,001,114,326,367

40,568,317,653

170,884,833

(143,327,196)

(56,213,820,000)

9,234,165,792

641,187,562,903

673,200,000,000

930,000,000,000

1,763,110,542,382

Ho Chi Minh City, 10 March 2017

354,348,343,977

260,673,917

(3,920,988,738)

19,619,412,858

(316,000,000,000)

654,389,245,940

654,389,245,940

(477,757,321)

(56,213,820,000)

9,234,165,792

641,187,562,903

-

-

60,659,094,566

Retained earnings

Dr. TRUONG ANH TUAN General Director

(7,260,000)

-

-

-

-

(7,260,000)

Treasury stocks

Unit: VND

ANNUAL REPORT 2016 | 143

144 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the fiscal year ended 31 December 2016 I. GENERAL INFORMATION 1. Investment form Hoang Quan Consulting – Trading – Service Real Estate Corporation (hereinafter referred to as “the Corporation”) is a joint stock company.

2. Operating field The Corporation operates in various business fields.

3. Principal business activities Principal business activity of the Corporation is trading in real estate.

4. Normal operating cycle Normal operating cycle of the Corporation is from 02 to 03 years.

5. Structure of the Group The Group includes the Parent Company and 03 subsidiaries under the control of the Parent Company. All the subsidiaries are consolidated in these Consolidated Financial Statements 5a. Information on the Group’s re-structure During the year, the Group has no additional acquisition, liquidation or capital withdrawal at subsidiaries.

5b. List of subsidiaries consolidated Benefit rate

Voting rate

Company name

Address

Principal business activities

Ending balance

Beginning balance

Ending balance

Beginning balance

Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Joint Stock Company

No. 198, Nguyen Hoi Street, Phu Trinh Ward, Phan Thiet City, Binh Thuan Province

Leasing land in the industrial zone

96.5%

96.5%

96.5%

96.5%

Hoang Quan Can Tho Investment Real Estate Joint Stock Company

No. 27-28, Quang Trung Street, Phu Thu Ward, Cai Rang District, Can Tho City

Trading in real estates

97%

97%

97%

97%

Binh Minh Port Joint Stock Company

My Hung 2 Hamlet, My Hoa Commune, Binh Minh Town, Vinh Long Province

Building works of projects

96.5%

96.5%

96.5%

96.5%

5c. List of associates presented in the Consolidated Financial Statements according to the owner’s equity method Benefit rate

Voting rate

Address

Principal business activities

Ending balance

Beginning balance

Ending balance

Beginning balance

Hoang Quan Appraisal Co., Ltd.

No. 270, Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City

Making valuation of real estates, investment projects

32%

32%

32%

32%

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company

My Hung 2 Hamlet, My Hoa Commune, Binh Minh Town, Vinh Long Province

Trading in real estates

32%

32%

32%

32%

Hoang Quan Nha Trang Consulting - Trading - Service Real Estate Joint Stock Company

No. 26, Yersin Street, Van Thang Ward, Nha Trang City, Khanh Hoa Province

Trading in real estates

40%

40%

40%

40%

Tay Nam A Economic and Technical Vocational Training School

No. 254, Le Trong Tan Street, Tay Thanh Ward, Tan Phu District, Ho Chi Minh City

Education

20%

20%

20%

20%

Binh Thuan Housing Construction and Trading Joint Stock Company

No. 198, Nguyen Hoi Street, Phu Trinh Ward, Phan Thiet City, Binh Thuan Province

Building various kinds of houses

32.21%

37.46%

32.21%

37.46%

Tu Cuong Trading Production Co., Ltd.

No. 268 Nguyen Thong Street, Phu Hai Ward, Phan Thiet City, Binh Thuan Province

Leasing

38.6%

38.6%

38.6%

38.6%

Binh Minh Trading Services and Entertainment Company Limited

No. 139 My Loi Hamlet, My Hoa Commune, Binh Minh Town, Vinh Long Province

Trading, service

29.1%

-

29.1%

-

Company name

ANNUAL REPORT 2016 | 145

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

6. Statement on information comparability on the Consolidated Financial Statements The figures in the current year can be comparable with corresponding figures in the previous year.

The financial performance of a subsidiary, which is bought or sold during the period, are included in the Consolidated Income Statement from the date of acquisition or until the date of selling investments in that subsidiary.

7. Employees As of the balance sheet date, there have been 543 employees working for the Group companies (at the beginning of the year: 578 employees).

The Financial Statements of the Parent Company and those of subsidiaries used for consolidation are prepared in the same fiscal year and apply consistently accounting policies to the same types of transactions and events in similar circumstances. In the case that the accounting policy of a subsidiary is different from the accounting policy applied consistently in the Group, the Financial Statements of that subsidiary will be properly adjusted before being used for the preparation of the Consolidated Financial Statements.

II. FISCAL YEAR AND ACCOUNTING CURRENCY 1. Fiscal year The fiscal year of the Group is from 01 January to 31 December annually.

2. Accounting currency unit The accounting currency unit is Vietnamese Dong (VND) since the Group’s transactions are primarily made in VND. III. ACCOUNTING STANDARDS AND SYSTEM 1. Accounting System The Group applies the Vietnamese Accounting Standards and System issued in accordance with the Circular No. 200/2014/TT-BTC dated 22 December 2014 guiding the Vietnamese Accounting System, the Circular No. 202/2014/TT-BTC dated 22 December 2014 giving guidance on the preparation and presentation of Consolidated Financial Statements and other Circulars guiding the implementation of Vietnamese Accounting Standards of the Ministry of Finance in preparation and presentation of the Consolidated Financial Statements.

2. Statement on the compliance with the Accounting Standards and System The Board of Directors ensures to follow all the requirements of the Vietnamese Accounting Standards and System, which were issued together with the Circular No. 200/2014/TT-BTC dated 22 December 2014, the Circular No. 202/2014/TT-BTC dated 22 December 2014 as well as other Circulars guiding the implementation of Vietnamese Accounting Standards of the Ministry of Finance in preparation and presentation of the Consolidated Financial Statements.

IV. ACCOUNTING POLICIES 1. Accounting convention All the Consolidated Financial Statements are prepared on the accrual basis (except for the information related to cash flows).

2. Consolidation bases The Consolidated Financial Statements include the Financial Statements of the Parent Company and those of its subsidiaries. A subsidiary is an enterprise that is controlled by the Parent Company. The control exists when the Parent Company has the power to directly or indirectly govern the financial and operating policies of the subsidiary to obtain economic benefits from its activities.

In determining the control power, the potential voting right arising from options or debt and capital instruments that can be converted into common shares as of the balance sheet date should also be taken into consideration.

Intra-group balances in the Balance Sheet and intra-group transactions and unrealized profits resulting from these transactions must be completely eliminated. Unrealized losses resulting from intra-group transactions are also eliminated unless costs cannot be recovered.

Benefits of non-controlling shareholders reflect profit or loss and net assets of subsidiary, which are not hold by the Group and presented in a separate item of the Consolidated Income Statement and Consolidated Balance Sheet (classified under “Owner’s equity”). Benefits of non-controlling shareholders include the values of their non-controlling profits at the initial date of business combination and those arise within the ranges of changes in owner’s equity from the date of business combination.

The losses arising in the subsidiaries are attributed equally to the ownership rate of non-controlling shareholders, even if such losses are higher than the interest owned by these shareholders in net assets of the subsidiaries.

3. Cash and cash equivalents Cash includes cash on hand and demand deposit in bank.

Cash equivalents consist of short-term investments of which the due dates cannot exceed 03 months from the dates of the investments and the convertibility into cash is easy, and which do not have a lot of risks in the conversion into cash as of the recording date.

4. Financial investments Held-to-maturity investments KInvestments are classified as held-to-maturity investments that the Group intends and is able to hold to maturity. Heldto-maturity investments include term deposits (including debentures and promissory note), bonds, preferred shares that the issuer are required to re-purchase at a certain date in the future and held-to-maturity loans for the purpose of receiving periodical interest as well as other held-to-maturity investments.

Held-to-maturity investments are initially recognized at cost including the purchase cost and other transaction costs.

After initial recognition, these investments are recorded at recoverable value. Interest from these held-to-maturity investments after acquisition date is recognized in the profit or loss on the basis of the interest income to be received.

Interests arising prior to the Group’s acquisition of held-tomaturity investments are recorded as a decrease in the costs as at the acquisition time.

146 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

When there are reliable evidences proving that a part or the whole investment cannot be recovered and the loss are reliably determined, the loss is recognized as financial expenses during the period while the investment value is derecognized.

Loans Loans are determined at original costs less allowance for doubtful debts. Allowance for doubtful debts of loans is made on the basis of estimated losses.

Investments in associates An associate is an entity which the Group has significant influence but not the control to govern the financial and operating policies. Significant influence is the right to participate in making the associate’s financial and operating policies but not control those policies.

Investments in associates are recorded as in the owner’s equity method. Accordingly, the investment into associate is initially recorded at costs on the Consolidated Financial Statements and then adjusted for the post acquisition change in the Group’s share of net assets of the associate. If the Group’s share of loss of an associate exceeds or equals the carrying amount of an investment, the investment is then reported at nil (0) value on the Consolidated Financial Statements, except when the Group has obligations to pay on behalf of the associate to satisfy obligations of the associate.

The Financial Statements of the associate are prepared for the fiscal year that is the same with the Consolidated Financial Statements of the Group. In the case that the accounting policy of an associate is different from the accounting policy applied consistently in the Group, the Financial Statements of that associate will be properly adjusted before being used for the preparation of the Consolidated Financial Statements.

Unrealized profits/ (losses) arising from transactions with associates are eliminated in proportion to the amount under the Group’s ownership in the preparation of the Consolidated Financial Statements.

Investments in equity instruments of other entities Investments in equity instruments of other entities include such investments in equity instruments that do not enable the Group to have the control, joint control or significant influence on these entities.

Investments in equity instruments of other entities are initially recognized at costs, including cost of purchase plus other directly attributable transaction costs. Values of these investments are derecognized for dividends and profits arising in the periods prior to the acquisition of such investments. Dividends and profit arising in the periods after the acquisition of investments are recorded into the revenue. Particularly, the dividends paid in form of shares are not recorded as an increase in values, but the increasing quantity of shares is followed up.

Provisions for impairment of investments in equity instruments of other entities are made as follows:

·· For investments in listed shares or fair value of investments which is reliably measured, provisions are made on the basis of the market value of shares. ·· For investments of which the fair value cannot be measured at the time of reporting, provisions are made on the basis of the losses suffered by investees, at the rate equal to the difference between the actual capital invested by investors and the actual owner’s equity multiplying (x) by the Group’s rate of capital contribution over the total actual capital invested by investors in these investees.

Increases/ (decreases) in the provisions for impairment of investments in equity instruments of other entities are recorded into financial expenses as of the balance sheet date.

5. Receivables Receivables are recognized at the carrying amounts less allowances for doubtful debts. ·· The classification of receivables as trade receivables and other receivables is made according the following principles: ·· Trade receivables reflect receivables concerning the commercial nature arising from purchase and sale transactions between the Group and customers who are independent to the Group, inclusive of receivables for the exports entrusted to other entities. ·· Other receivables reflect receivables not concerning the commercial nature and irrelevant to purchase and sale transactions.

Allowance is made for each doubtful debt on the basis of the debt age or estimated loss as follows: ·· As for outstanding debt: - 30% of the value of debts outstanding from over 6 months to under 1 year.

- 50% of the value of debts outstanding from 1 year to under 2 years.

- 70% of the value of debts outstanding from 2 years to under 3 years.

- 100% of the value of debts outstanding from over 3 years. ·· As for doubtful debts: Allowance is made on the basis of the estimated loss.

Increases/ (decreases) in the obligatory allowance for doubtful debts as of the balance sheet date are recorded into general and administration expenses.

6. Inventories Inventories are recognized at the lower of cost or net realizable value.

Cost of inventories is determined as follows: ·· For merchandises: Costs comprise costs of purchases and other directly relevant costs incurred in bringing the inventories to their present location and conditions. ·· Work-in-process: Costs comprise expenses of project implementation. ·· For finished real estate: Costs comprise expenses of land use right, direct costs and relevant general expenses incurring during the investment in real estate construction.

ANNUAL REPORT 2016 | 147

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Stock-out costs are determined in accordance with the weighted average method and recorded in line with the perpetual method.

obtained from the use of these assets. Those which do not meet the above conditions will be recorded into operation costs during the year.

Net realizable value is the estimated selling price of inventories in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

When a tangible fixed asset is sold or disposed, its historical cost and accumulated depreciation are written off, then any gain or loss arising from such disposal is included in the income or the expenses during the year.

Allowance for inventories is recognized for each type of inventories when their costs are higher than their net realizable values. Increases/ (decreases) in the obligatory allowance for inventories as of the balance sheet date are recorded into costs of sales.

Tangible fixed assets are depreciated in accordance with the straight-line method over their estimated useful lives. The depreciation years applied are as follows: Fixed assets

Years

7. Prepaid expenses

Buildings and structures

10 - 50

Prepaid expenses comprise actual expenses arising and relevant to financial performance in several accounting periods. Prepaid expenses of the Group mainly include land rental, tools and repair expenses. These prepaid expenses are allocated over the prepayment period or period of corresponding economic benefits generated from these expenses.

Machinery and equipment

08 - 10

Vehicles

06 - 10

Office equipment

03 - 05

Prepaid land rental Prepaid land rental reflects the rental already prepaid for the land being used by the Group and is allocated into expenses in accordance with the straight-line method over the lease term (i.e. 42 years).

Tools Expenses of tools being put into use are allocated into expenses during the period in accordance with the straightline method for the maximum period of 02 years.

Expenses for repair of fixed assets Expenses for repair of fixed assets arising once with high value are allocated into expenses in accordance with the straight-line method for the maximum period of 03 years.

Other expenses Insurance premiums and prepaid house rental are allocated into expenses according to the term of insurance policy and lease term.

8. Operating leased assets

10. Intangible fixed assets Intangible fixed assets are determined by their initial costs less accumulated amortization.

Initial costs of intangible fixed assets include all the costs paid by the Group to bring the asset to its working condition for its intended use. Other costs relevant to intangible fixed assets arising subsequent to initial recognition are included into operation costs during the period only if these costs are associated with a specific intangible fixed asset and result in future economic benefits expected to be obtained from the use of these assets.

When an intangible fixed asset is sold or disposed, its initial costs and accumulated amortization are written off, then any gain or loss arising from such disposal is included in the income or the expenses during the year.

The Group’s intangible fixed assets include: Land use right Land use right includes all the actual expenses paid by the Group directly related to the land being used such as expenses to obtain the land use right, compensation for house removal, land clearance and ground leveling, registration fees, etc.

A lease is classified as an operating lease if it transfers substantially all the risks and rewards incident to ownership belonging to the lessor. The lease expenses are allocated in the Group’s operation costs in accordance with the straightline method over the lease term and are not depend on the method of lease payment.

Impermanent land use right

46

9. Tangible fixed assets

compensation for house removal, land clearance

20

Tangible fixed assets are determined by their historical costs less accumulated depreciation. Historical costs of tangible fixed assets include all the expenses paid by the Group to bring the asset to its working condition for its intended use. Other expenses arising subsequent to initial recognition are included into historical costs of fixed assets only if it can be clearly demonstrated that the expenditure has resulted in future economic benefits expected to be

The land use right and compensation for house removal, land clearance are amortized in accordance with the straight-line method as follows: Years

Computer software Expenses attributable to computer software, which is not a part associated with the relevant hardware, will be capitalized. Costs of computer software include all the expenses paid by the Group until the date the software is put into use. Computer software is amortized in accordance with the straight-line method from 05 years to 10 years.

148 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

11. Construction-in-progress

13. Contractual arrangement

Construction-in-progress reflects the expenses (including relevant loan interest expenses following the accounting policies of the Group) directly related to the construction of plants and the installation of machinery and equipment to serve for production, leasing, and management as well as the in-progress repair of fixed assets. These assets are recognized at their historical costs and not depreciated.

Jointly controlled assets

12. Business combination The business combination is accounted by applying acquisition method. The costs of business combination include the fair values as at the acquisition date of the exchanged assets, the incurred or assumed liabilities as well as the equity instruments issued by the Group in exchange for control of the acquires, plus any cost directly attributable to the business combination. The acquired assets, the identifiable and contingent liabilities assumed from the business combination are recognized at their fair values as at the acquisition date.

If the business combination covers some accounting periods, the cost of business combination equals the total investment made at the date of obtaining the control of subsidiaries plus the amount of previous investments which are re-evaluated at fair value as at the date of obtaining the control of subsidiaries. The difference between the re-evaluated amount and the cost of investment shall be recorded in the financial performance provided that the Group does not have any significant influence on subsidiaries prior the date of obtaining the control and the investment in subsidiaries is presented in line with the cost method. In case where the Group has significant influence on the subsidiaries prior the date of obtaining the control and the investment in subsidiaries is presented in line with the equity method, the difference between the re-evaluated amount and the cost of investment determined in line with the equity method shall be recorded in the financial performance; and the difference between the investment determined in line with the equity method and the cost of investment shall be directly recorded in “Retained earnings” of the Consolidated Balance Sheet.

The excess of the cost of business combination over the ownership share of the Group in the net fair value of the assets, the identifiable and contingent liabilities of acquire which are recognized at the date obtaining the control of subsidiaries is recognized as goodwill. If the ownership share of the Group in the net fair value of the assets, the identifiable and contingent liabilities of acquires which are recognized at the date of obtaining the control of subsidiaries exceeds the cost of business combination, the difference will be included in the financial performance.

Benefits of non-controlling shareholders as at the date of business combination is initially measured on the basis of the ownership share of non-controlling shareholders in the fair values of the assets, the liabilities and the inherent liabilities recognized.

In respect of its interest in jointly controlled assets, the Group shall recognize in its Financial Statements:

·· The Group’s share of the jointly controlled assets, classified according to the nature of assets. ·· Any liabilities that the Group has incurred. · · The Group’s share of any liabilities incurred jointly with the other venturers in relation to the activities of joint venture. ·· Any income from the sale or use of the Group’s share of the products/services of the joint venture, together with its share of any expenses incurred by the joint venture. ·· Any expenses that the Group has incurred in respect of its interest in the joint venture.

Fixed assets and investment property contributed into the contractual arrangement without transferring the ownership into the joint ownership of the venturers are not recognized as a decrease in assets. In case the Group received the assets contributed into the joint venture, these assets shall be recognized as assets kept on other’s behalf instead of an increase in asset and owner’s equity.

Fixed assets and investment property contributed into the contractual arrangement of which the ownership are transferred and the formation of jointly-controlled assets is in process are recognized as a decrease in assets and corresponding value is recorded as an increase into construction-in-progress. After jointly controlled assets completed and put into use, the Group records an increase in its assets on the basis of its share of these assets.

14. Payables and accrued expenses Payables and accrued expenses are recorded based on the amounts payable for goods and services already used. Accrued expenses are recorded based on reasonable estimates for the amounts payable.

The classification of payables as trade payables, accrued expenses and other payables is made on the basis of following principles:

·· Trade payables reflect payables of commercial nature arising from the purchase of goods, services, or assets, of which the seller is an independent entity with the Group, inclusive of payables for import through entrustment. ·· Accrued expenses reflect expenses for goods, services received from suppliers or supplied to customers but have not been paid, invoiced or lack of accounting records and supporting documents; pay on leave payable to employees; and accrual of operation expenses. ·· Other payables reflect payables of non-commercial nature and irrelevant to purchase, sales of goods or provisions of services.

Payables and accrued expenses are classified as short-term or long-term items in the Balance Sheet basing on their remaining period as of the balance sheet date.

ANNUAL REPORT 2016 | 149

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

15. Provisions for payables

Provisions are recorded when the Group has present obligations (legal or constructive) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

If time causes material effects, the provisions will be determined by deducting the amount to be spent in future to settle the liability at the pre-tax discount rate that reflects the assessments of the time value of money and the specific risks from this liability in the current market. The increase in provisions due to the effect of time will be recognized as a financial expense.

The Company’s provisions for payables only include expenses on warranty of construction works of Binh Minh Port Joint Stock Company.

Provisions for warranty expenses are made for each type of construction works under the commitment of warranty.

16. Convertible bonds Convertible bonds are the ones that can be converted into a determinable number of shares as defined in the issuance plan.

At the date of initial recognition, convertible bonds are classified into liability component (the principal) and equity component.

The principal of convertible bonds is recognized as a liability while the equity component (share option) of convertible bonds is recognized as owner’s equity. The principal of convertible bonds is measured by discounting the nominal value of the future payments (including principal and interest) to the present value at the interest rate of similar bonds without the option to convert into shares then minus issuing costs of convertible bonds.

If the interest rate of a similar bond cannot be determined, the common loan interest rate on the market ruling as at the time of issuing convertible bonds will be used to measure the present value of future payments. The value of the equity component of convertible bonds is the difference between total proceeds from the issue of convertible bonds and value of the liability component of convertible bonds at the time of issue.

Issuing costs of convertible bonds are allocated matching the term of bonds under the straight-line method or the effective interest rate method and recognized in financial expenses or capitalized. At the time of initial recognition, issuing costs of convertible bonds are recorded as a decrease or an increase in the principal depending on the allocation method, i.e. the straight-line method or the effective interest rate method respectively. Periodically, issuing costs of convertible bonds are allocated by recording as an increase in the principal and recognized in financial expenses or capitalized in consistence with the recognition of accrued interest payable of bonds.

Upon the maturity date, the value of share option of convertible bonds, which is reflected at the owner’s equity is transferred to share premiums regardless the bond holders perform their conversion option into shares. In case the bond holders do not exercise their conversion option into shares, the principal of convertible bonds is recorded as a decrease corresponding to the repayment of principal. In case the bond holders exercise

their conversion option into shares, the principal of convertible bonds is recorded as a decrease, and the investment of bond holders is recorded as an increase corresponding to the face value of additionally issued shares. The differences between the principal of convertible bonds greater than the value of additionally issued shares at face value are recorded as an increase in share premiums.

17. Owner’s equity Capital Capital is recorded according to the actual amounts invested by shareholders.

Share premiums Share premiums are recorded in accordance with the difference between the issuance price and face value upon the IPO, additional issue or the difference between the reissuance price and carrying value of treasury shares and the equity component of convertible bonds upon maturity date.

Expenses directly related to the additional issue of shares and the re-issuance of treasury shares are recorded as a decrease in share premiums.

Bond conversion options Bond conversion options which are value of equity component of convertible bonds issued by the Group at the time of reporting, are determined by the difference of total amount earned from convertible bond issue and value of equity component of convertible bonds. At the date of initial recognition, the value of bond conversion options is separately recognized into owner’s equity. At the maturity date of bonds, the option value is recorded as share premiums.

Treasury shares When a share capital in the owner’s equity is re-purchased, the amount payable including the expenses related to the transaction is recorded as treasury shares and a corresponding decrease in owner’s equity then is recognized. When this share capital is reissued, the difference between the re-issuance price and carrying value of treasury shares is recorded in “share premiums”.

18. Profit distribution Profit after corporate income tax is distributed to the shareholders after appropriation for funds under the Charter of the Corporation as well as legal regulations and approved by the Annual General Meeting of Shareholders.

The distribution of profits to the shareholders is made with consideration toward non-cash items in the retained earnings that may affect cash flows and payment of dividends such as profit due to revaluation of assets contributed as investment capital, profit due to revaluation of monetary items, financial instruments and other non-cash items.

Dividends are recorded as payables upon the approval of the Annual General Meeting of Shareholders.

19. Recognition of sales and income Sales of merchandises Sales of merchandises are recognized when the following conditions are satisfied:

·· The Group transfers most of risks and benefits incident to the ownership of merchandises to customers.

150 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

·· The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the merchandises sold. ·· The amount of sales can be measured reliably. Where the contracts stipulate that buyers have the right to return products, goods purchased under specific conditions, sales are recorded only when those specific conditions are no longer exist and buyers retains no right to return merchandises (except for the case that such returns are in exchange for other goods or services). ·· The Group received or shall probably receive the economic benefits associated with sale transactions. ·· The cost incurred or to be incurred in respect of the sale transaction can be measured reliably. ·· Sales of service provision ·· Sales of service provision shall be recognized when all of the following conditions are satisfied: ·· The amount of sales can be measured reliably. When the contract stipulates that the buyer is entitled to return the services provided under specific conditions, sales is recognized only when these specific conditions are no longer existed and the buyer is not entitled to return the services provided. ·· The Group received or shall probably receive the economic benefits associated with the provision of services. ·· The stage of completion of the transaction at the end of reporting period can be measured reliably. ·· The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

In case the service is provided in many periods, the revenue is recognized during the year on the basis of the service completion rate as of the balance sheet date.

Sales of real estates Sales of real estates that invested by the Group shall be recognized when all of the following conditions have been satisfied:

·· Real estates are fully completed and handed over to the buyers, and the Group has transferred to the buyer the significant risks and rewards associated with ownership of the real estates. ·· The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the real estate sold. ·· The amount of sales can be measured reliably. ·· The Group received or shall probably receive the economic benefits associated with the transaction. ·· The costs incurred or to be incurred in respect of the transaction can be measured reliably.

In case the customer has the right to complete the interior of the real estate and the Group completes the interior of the real estate according to the designs, models, and customer requirements under the separate contract, sales are recognized upon the completion and handover of the main construction works to customers.

Sales from real estate sold in form of land plots Sales of plots of land as real estate sold under irrevocable contracts shall be recognized when all of the following conditions have been satisfied:

·· The Group has transferred to the buyer the significant risks and rewards of ownership of the land use right. ·· The amount of sales can be measured reliably. ·· The costs incurred or to be incurred in respect of the transaction can be measured reliably. ·· The Group received or shall probably receive the economic benefits associated with the transaction.

Income from leasing operating assets Income from leasing operating assets is recognized in accordance with the straight-line method during the lease term. Rentals received in advance for several periods are allocated to revenues in consistence with the lease term.

When lease term takes more than 90% useful term of assets, income shall be recognized once regarding advances rental when all of the following conditions are satisfied:

·· The lessee has no right for irrevocable contracts and the Group has no obligation to refund prepaid amount under any conditions and modes. ·· Advances from leasing is not under 90% expecting receipt from the contract during lease term and the lessee has to pay totally rental within 12 months from start date of lease. ·· All risks and profits connecting to ownership of lease assets have transferred to the lessee. ·· The cost of leasing can be measured reliably.

Interest Interest is recorded, based on the term and the actual interest rate applied in each particular year.

Dividends and profit shared Dividends and profit shared are recognized when the Group has the right to receive dividends or profit from the capital contribution. Particularly, the dividends paid in form of shares are not recorded as an increase in value, but the increasing quantity of shares is followed up.

20. Construction contract Construction contract is a contract agreed for acquisition of an asset or combined assets closely relevant or mutually dependent on their design, technology, function or basic using purpose.

When the outcome of the construction contracts is estimated reliably: ·· For construction contracts in which the contractor is entitled to pay according to construction progress: sales and expenses relevant to the contracts are recognized to corresponding completed assignment determined by the Group as of the balance sheet date. ·· For the construction contracts stipulating that the contractors are paid according to the work actually performed, revenue and costs related to these contracts are recognized in proportion to the stage of completion of contract activity as confirmed in the invoices made by the customers.

ANNUAL REPORT 2016 | 151

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Increases/ (decreases) in revenue of the works done, compensation receivable and other receivables are only recognized upon the agreement with customers.

When the outcome of the construction contracts cannot be estimated reliably: ·· Contract revenue is recognized only to the extent that contract costs incurred are expected to be reliably recoverable. ·· Contract costs are only recognized as actually incurred.

The difference between the accumulated revenue from the construction contract already recognized and the accumulated amount in the invoices according to the planned progress of contract is recognized as an amount receivable or an amount payable according to the planned progress of the construction contracts.

21. Sales deductions Sales deductions include sales allowances, sales returns incurred in the same period of providing goods, merchandises, services, in which revenues are derecognized.

In case of goods, merchandises, services provided in the previous years but sales allowances, sales returns incurred in the current year, revenues are derecognized as follows: ·· If sales allowances, sales returns incur prior to the release of the Consolidated Financial Statements, revenues are derecognized on the Consolidated Financial Statements of the current year. ·· If sales allowances, sales returns incur after the release of the Consolidated Financial Statements, revenues are derecognized on the Consolidated Financial Statements of the following year.

22. Borrowing costs Borrowing costs are interests and other costs that directly incurs in connection with the borrowing.

Borrowing costs are recorded as an expense when it is incurred. In case the borrowing costs are directly attributable to the construction or the production of an asset in progress, which takes a substantial period of time (over 12 months) to get ready for intended use or sales of the asset, these costs will be included in the cost of that asset. To the extent that the borrowings are especially for the purpose of construction of fixed assets and investment properties, the borrowing cost is eligible for capitalization even if construction period is under 12 months. Incomes arisen from provisional investments as loans are recognized as a decrease in the costs of relevant assets.

In the event that general borrowings are partly used for the acquisition, construction or production of an asset in progress, the costs eligible for capitalization will be determined by applying the capitalization rate to average accumulated expenditure on construction or production of that asset. The capitalization rate is computed at the weighted average interest rate of the borrowings not yet paid during the year, except for particular borrowings serving the purpose of obtaining a specific asset.

23. Expenses Expenses are those that result in outflows of the Group’s economic benefits and are recorded at the time of transactions or when incurrence of the transaction is reliable regardless of whether payment for expenses is made or not.

Expenses and their corresponding revenues are simultaneously recognized in accordance with matching principle. In the event that matching principle conflicts with prudence principle, expenses are recognized based on the nature and regulations of accounting standards in order to guarantee that transactions can be fairly and truly reflected.

24. Corporate income tax Corporate income tax includes current income tax and deferred income tax.

Current income tax Current income tax is the tax amount computed based on the taxable income. Taxable income is different from accounting profit due to the adjustments of temporary differences between tax and accounting figures, non-deductible expenses as well as those of non-taxable income and losses brought forward.

Deferred income tax

Deferred income tax is the amount of corporate income tax payable or refundable due to temporary differences between book values of assets and liabilities serving the preparation of the Financial Statements and the values for tax purposes. Deferred income tax liabilities are recognized for all the temporary taxable differences. Deferred income tax assets are recorded only when there is an assurance on the availability of taxable income in the future against which the temporarily deductible differences can be used.

Carrying values of deferred corporate income tax assets are considered as of the balance sheet date and will be reduced to the rate that ensures enough taxable income against which the benefits from part of or all of the deferred income tax can be used. Deferred corporate income tax assets, which have not been recorded before, are considered as of the balance sheet date and are recorded when there is certainly enough taxable income to use these unrecognized deferred corporate income tax assets.

Deferred income tax assets and deferred income tax liabilities are determined at the estimated rate to be applied in the year when the assets are recovered or the liabilities are settled based on the effective tax rates as of the balance sheet date.

Deferred income tax is recognized in the Income Statement. In the case that deferred income tax is related to the items of the owner’s equity, corporate income tax will be included in the owner’s equity.

The Group shall offset deferred tax assets and deferred tax liabilities if: ·· The Group has the legal right to offset current income tax assets against current income tax liabilities; and ·· Deferred income tax assets and deferred income tax liabilities are relevant to corporate income tax which is under the management of one tax authority either: - Of the same subject to corporate income tax; or

152 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

- The Group has intention to pay current income tax liabilities and current income tax assets on a net basis or recover tax assets and settle tax liability simultaneously in each future period to the extent that the majority of deferred income tax liabilities or deferred income tax assets are paid or recovered.

25. Related parties A party is considered a related party of the Group in case that party is able to control the Group or to cause material effects on the financial decisions as well as the operations of the Group. A party is also considered a related party of the Group in case that party is under the same control or is subject to the same material effects.

Considering the relationship of related parties, the nature of relationship is focused more than its legal form.

26. Segment reporting A business segment is a distinguishable component of the Group that is engaged in manufacturing or providing products or services and that is subject to risks and returns that are different from those of other business segments.

A geographical segment is a distinguishable component of the Group that is engaged in manufacturing or providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments.

Information on segment is made and presented in compliance with the accounting policies for the preparation and presentation of the Consolidated Financial Statements of the Group.

V. ADDITIONAL INFORMATION ON THE ITEMS OF THE CONSOLIDATED BALANCE SHEET 1. Cash and cash equivalents Ending balance Beginning balance Cash on hand

20,484,189,059

41,146,410,829

Deposits in banks

49,152,257,852

9,364,941,367

Total

69,636,446,911

50,511,352,196

Deposits in banks as of the balance sheet date include the deposit at SeABank – Ho Chi Minh City Branch for the amount of VND 20 billion which is restricted and is used to pay for loans when they are due in January 2017.

2. Financial investments The Group’s financial investments include investments in associates and investments in other entities. Information on Group’s financial investments is as follows: Ending balance

Beginning balance

Original cost

Profit after the investment date

Total

Original cost

Profit after the investment date

Total

-

-

-

5,813,333,333

590,354,231

6,403,687,564

Hoang Quan Appraisal Co., Ltd. (2)

1,600,000,000

85,398,530

1,685,398,530

1,600,000,000

30,440,353

1,630,440,353

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company (3)

166,560,927,946

Viet Architecture Corporation (1)

Hoang Quan Nha Trang Co., Ltd. (4)

2,832,968,076 169,393,896,022 166,560,927,946

346,088,973 166,907,016,919

48,000,000,000

42,989,681

48,042,989,681

48,000,000,000

5,822,284

48,005,822,284

MeGaSky Joint Stock Company (5)

-

-

-

309,367,000

(309,367,000)

-

Tay Ninh Urban Development & Construction Joint Stock Company (6)

-

-

-

26,187,528,000

2,840,337,091

29,027,865,091

Tay Nam A Economic and Technical Vocational Training School (7)

1,200,000,000

1,705,296

1,201,705,296

1,200,000,000

982,056

1,200,982,056

Binh Thuan Housing Construction and Trading Joint Stock Company (8)

17,089,451,155

10,916,520,991

28,005,972,146

18,331,041,315

11,768,779,075

30,099,820,390

Tu Cuong Trading Production Co., Ltd. (9)

13,200,000,000

(211,462,725)

12,988,537,275

13,200,000,000

(170,877,360)

13,029,122,640

Binh Minh Trading Services and Entertainment Company Limited (10)

3,000,000,000

-

3,000,000,000

-

-

-

Total

250,650,379,101

13,668,119,849 264,318,498,950 281,202,197,594

15,102,559,703 296,304,757,297

ANNUAL REPORT 2016 | 153

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

(1) The Group has transferred all shares of Viet Architecture Corporation.

(2) The Group has invested VND 1,600,000,000, equivalent to 32% of charter capital in Hoang Quan Appraisal Co., Ltd. (3) The Group has invested VND 166,560,927,946, equivalent to 32% of charter capital in Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company.

(4) The Group has invested VND 48 billion, equivalent to 40% of charter capital in Hoang Quan Nha Trang Co., Ltd. (5) The Group has transferred all shares of MeGaSky Joint Stock Company.

(6) The Group has transferred all shares of Tay Ninh Urban Development & Construction Joint Stock Company.

(7) The Group has invested VND 1.2 billion, equivalent to 20% of charter capital in Tay Nam A Economic and Technical Vocational Training School.

(8) The Group has invested VND 17,089,451,155, equivalent to 32.21% of charter capital in Binh Thuan Housing Construction and Trading Joint Stock Company.

(9) The Group has invested VND 13,200,000,000, equivalent to 38.6% charter capital in Tu Cuong Trading Production Co., Ltd. (10) The Group has invested VND 3,000,000,000, equivalent to 29.1% charter capital in Binh Minh Trading Services and Entertainment Company Limited.

The Group’s ownership values in joint ventures, associates are as follows: Beginning balance of ownership

Capital contribution/ (transfer) during the year

Gain or loss during the year

Dividends, profits shared

Viet Architecture Corporation

6,403,687,564

(5,813,333,333)

(590,354,231)

-

-

-

Hoang Quan Appraisal Co., Ltd.

1,630,440,353

-

54,958,177

-

-

1,685,398,530

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company

166,907,016,919

-

338,948,358

-

Hoang Quan Nha Trang Co., Ltd.

48,005,822,284

-

37,167,397

-

-

48,042,989,681

-

(309,367,000)

-

-

309,367,000

-

Tay Ninh Urban Development & Construction Joint Stock Company

29,027,865,091

(26,187,528,001)

(805,897,090)

(2,034,440,000)

-

-

Tay Nam A Economic and Technical Vocational Training School

1,200,982,056

-

723,240

-

-

1,201,705,296

Binh Thuan Housing Construction and Trading Joint Stock Company

30,099,820,390

(1,241,590,160)

2,793,205,762

(1,448,840,018)

(2,196,623,828)

28,005,972,146

Tu Cuong Trading Production Co., Ltd.

13,029,122,640

-

(40,585,365)

-

-

12,988,537,275

-

3,000,000,000

-

-

3,000,000,000

296,304,757,297

(30,551,818,494)

1,788,166,248

(3,483,280,018)

260,673,917 264,318,498,950

MeGaSky Joint Stock Company

Binh Minh Trading Services and Entertainment Company Limited Total

Other Ending balance of adjustments ownership

2,147,930,745 169,393,896,022

The operation of associates The associates are in normal operation and there is no significant change in comparison with the previous year.

Transactions with associates Significant transactions between the Group and its associates are as follows:­­ Current year

Previous year

43,643,199,091

26,010,696,364

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company Sales of real estate and construction service provision Prepayment for materials and execution

555,700,000,000

-

-

3,072,000,000

Lending money

24,320,000,000

7,575,891,000

Lending merchandises

10,765,850,000

-

Borrowing, collection on other’s behalf

62,145,102,000

30,842,984,983

-

647,149,610

Dividends received

Loan interest expenses

154 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Current year

Previous year

-

200,000,000

1,041,668,056

210,000,000

Lending

4,048,045,471

380,000,000

Brokerage commission

2,661,856,832

-

20,103,183,646

5,252,625,092

-

5,573,873,864

12,000,000,000

-

Work execution expenses

226,987,476,883

217,331,526,131

Advance for executing projects

189,767,801,034

280,692,409,047

1,624,430,000

1,000,150,000

20,785,457,637

1,000,000,000

Borrowing

-

3,521,650,000

Loan interest payable

-

592,749,372

-

13,200,000,000

3,000,000,000

-

Capital contribution for business cooperation

-

120,000,000,000

Lending money

-

8,058,650,000

Hoang Quan Appraisal Co., Ltd. Lending Tay Nam A Economic and Technical Vocational Training School Lending Hoang Quan Nha Trang Co., Ltd.

Binh Thuan Housing Construction and Trading Joint Stock Company Provision of construction services Proceeds from lease Proceeds from consultancy

Dividends Lending money

Tu Cuong Trading Production Co., Ltd. Capital contribution Binh Minh Trading Services and Entertainment Company Limited Capital contribution

2b. Investments in other entities Ending balance

Beginning balance

Original cost

Provisions

Original cost

Provisions

Ninh Thuan Tourist Joint Stock Company

1,000,000,000

-

1,000,000,000

-

KIS Vietnam Securities Corporation

1,080,000,000

(103,912,402)

1,080,000,000

(103,912,402)

Vina Young Corporation

2,108,880,000

-

2,108,880,000

-

Kien Giang Investment and Construction Consulting Joint Stock Company

5,988,000,000

-

5,988,000,000

256,051,000

-

256,051,000

-

2,800,000,000

-

2,800,000,000

-

13,232,931,000

(103,912,402)

13,232,931,000

(103,912,402)

HDBank Phu Quoc Investment Development Infrastructure Corporation Total

Fair values Fair value of investments with listed price is determined at the listed price as of the balance sheet date. The Group has not determined the fair value of the investments without listed price because there is no specific instruction on determination of fair value.

Provisions for investments in other entities Fluctuations in provisions for investments in other entities are as follows:

Beginning balance Reversal Ending balance

103,912,402 103,912,402

ANNUAL REPORT 2016 | 155

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

3. Short-term/long-term trade receivables 3a. Short-term trade receivables Receivables from related parties Viet Architecture Corporation

Ending balance

Beginning balance

272,825,899,601

71,508,980,088

357,929,202

357,929,202

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company

43,212,819,323

17,943,300,323

Nam Quan Investment Joint Stock Company

17,336,729,637

24,898,690,040

Hoang Quan Education Investment Limited Company

92,580,120,000

7,850,260,000

Hoang Quan Building Management and Service Co., Ltd.

83,997,336,091

-

Bao Linh Housing Development & Construction Investment Joint Stock Company

13,835,829,488

8,970,708,379

7,742,225,905

957,887,602

473,955,480

-

13,288,954,475

10,530,204,542

493,741,276,502

879,685,593,814

492,779,217,700

861,898,055,202

962,058,802

17,787,538,612

766,567,176,103

951,194,573,902

Ending balance

Beginning balance

8,800,000,000

8,800,000,000

8,800,000,000

8,800,000,000

61,600,000,000

61,600,000,000

61,600,000,000

61,600,000,000

70,400,000,000

70,400,000,000

Ending balance

Beginning balance

Binh Thuan Housing Construction and Trading Joint Stock Company Tay Ninh Urban Development and Construction Joint Stock Company Related individuals Receivables from other customers Customers purchasing real estates Other customers Total

3b. Long-term trade receivables

Receivables from related parties Ms. Truong Nguyen Song Van - receivables for share transfer Receivables from other customers Ms. Nguyen Thi Diem - receivables for share transfer Total

4. Short-term prepayments to suppliers Prepayments to related parties Viet Architecture Corporation

1,970,091,103,855 1,475,213,177,665 7,567,344,958

4,847,303,532

127,673,856

-

507,061,694,017

7,061,694,017

-

123,000,000,000

80,551,833,000

-

Bao Linh Housing Development & Construction Investment Joint Stock Company

907,663,424,731

814,976,504,205

Binh Thuan Housing Construction and Trading Joint Stock Company

374,729,290,349

432,147,713,889

Nam Quan Investment Joint Stock Company

53,085,350,144

48,782,360,257

Board of Management

39,304,492,800

Hoang Quan Law Co., Ltd. Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company Hoang Quan Nha Trang Co., Ltd. Tay Ninh Urban Development & Construction Joint Stock Company

Prepayments to other suppliers

44,397,601,765

628,733,904,080

468,424,117,692

Gia Bao Construction Design Investment Limited Company

258,600,625,147

194,204,078,846

Viet Phuong Nam Investment Company Limited

150,000,000,000

-

Other suppliers

220,133,278,933

274,220,038,846

Total

2,598,825,007,935 1,943,637,295,357

156 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

5. Receivables for loans 5a. Receivables for short-term loans Lending to related parties (*) Viet Architecture Corporation Hoang Quan Law Co., Ltd.

Ending balance

Beginning balance

237,058,790,597

95,409,286,080

11,883,345,465

8,944,553,113

383,200,000

383,200,000

30,972,732,758

15,022,732,758

Hoang Quan Nha Trang Co., Ltd.

4,428,045,471

380,000,000

Tay Nam A Economic and Technical Vocational Training School

1,251,668,056

210,000,000

80,878,088,313

19,509,951,342

5,329,457,637

-

-

347,228,211

46,435,066,620

12,570,204,620

1,096,137,920

-

Hoang Quan Education Investment Limited Company

12,902,200,000

-

Hoang Quan Building Management and Service Co., Ltd.

21,543,080,000

-

10,585,000

-

19,190,980,857

28,825,150,036

754,202,500

8,812,852,500

-

403,413,500

Lending to other organizations or individuals

110,630,809,322

77,497,934,375

Total

347,689,599,919

172,907,220,455

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company

Bao Linh Housing Development & Construction Investment Joint Stock Company Binh Thuan Housing Construction and Trading Joint Stock Company Indochina Investment Development Real Estate Corporation Nam Quan Investment Joint Stock Company Tay Ninh Urban Development & Construction Joint Stock Company

Hoang Quan Group Company Limited Mr. Phan Chi Tam Binh Minh Trading Services and Entertainment Company Limited Thien Phat Construction Investment Co., Ltd.

(*) Loan to related parties is to run the business. As stipulated in the Charter of Hoang Quan Consulting – Trading – Service Real Estate Corporation in accordance with regulations of the Corporate Law, this loan is subject to authority of the Board of Management. However, according to the Circular No. 121/2012/TT-BTC dated 27 December 2012 of the Ministry of Finance regarding the corporate governance applicable to public companies, loans and guarantee of public companies in relation to related parties require approvals from the Annual General Meeting of Shareholders.

5b. Receivables for long-term loans Lending to related parties Binh Minh Trading Services and Entertainment Company Limited Lending to other individuals Nguyen Thuy Bao Tram Nguyen Thi Huynh Total

Ending balance

Beginning balance

7,015,500,000

-

7,015,500,000

-

800,000,000

-

800,000,000

800,000,000

-

2,428,305,000

7,815,500,000

3,228,305,000

6. Other short-term/ long-term receivables 6a. Other short-term receivables Ending balance

Beginning balance

Value

Allowance

Value

110,629,321,382

-

6,923,436,506

-

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company – Dividends shared

3,072,000,000

-

3,072,000,000

-

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company – Lending merchandises

11,588,763,838

-

-

-

Hoang Quan Nha Trang Co., Ltd.

93,000,000,000

-

-

-

269,378,668

-

894,418,606

-

Executive Officers - advances

1,196,928,876

-

2,957,017,900

-

Binh Thuan Housing Construction and Trading Joint Stock Company – dividends

1,502,250,000

-

-

-

Receivables from related parties

Board of Management - advances

Allowance

ANNUAL REPORT 2016 | 157

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Ending balance

Beginning balance

Value

Allowance

Value

123,455,177,152

10,764,479,128

272,763,102,220

12,151,478,000

7,640,500,000

-

7,690,640,000

-

Advances

22,595,720,939

3,540,402,851

84,588,992,350

8,685,039,352

Viet Phuong Nam Investment Co., Ltd. - Amount received from capital transfer

77,287,650,000

-

168,000,000,000

-

15,931,306,213

7,224,076,277

12,483,469,870

3,466,438,648

234,084,498,534

10,764,479,128

279,686,538,726

12,151,478,000

Ending balance

Beginning balance

Receivables from other organizations and individuals Mortgages, deposits

Other short-term receivables Total

Allowance

6b. Other long-term receivables Receivables from related parties – Capital contribution as in the Business Co-operation Contract Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company

1,036,717,161,696 1,036,717,161,696 322,019,300,000

322,019,300,000

200,000,000,000

200,000,000,000

120,000,000,000

120,000,000,000

394,697,861,696

394,697,861,696

10,757,414,683

2,404,704,000

Ho Chi Minh City Housing Development Fund - Capital contribution as in the Business Co-operation Contract

5,431,445,000

221,200,000

Mortgages, deposits

5,325,969,683

2,183,504,000

Indochina Investment Development Real Estate Corporation

(2)

Binh Minh Trading Services and Entertainment Company Limited Thien Phat Construction and Investment Co., Ltd.

(1)

(3)

(4)

Receivables from other organizations and individuals

1,047,474,576,379 1,039,121,865,696

Total

Capital contribution as in the Business Co-operation Contract with Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company is to carry out the project of building social houses at Binh Minh Industrial Park, My Hoa Commune, Binh Minh Town, Vinh Long Province.

(1)

Capital contribution as in the Business Co-operation Contract with Indochina Investment Development Real Estate Corporation is to carry out the project of Royal Tower at Tan Phu Ward, District 7, Ho Chi Minh City.

(2)

Capital contribution as in the Business Co-operation Contract with Binh Minh Trading Services and Entertainment Company Limited is to invest in entertainment – service area at Lots 1A, 1B, 1C and 1D of Binh Minh Industrial Park project.

(3)

(4)

Capital contribution as in the Business Co-operation Contract with Thien Phat Construction and Investment Co., Ltd. is to invest in 26-hectare O Mon Resettlement Area.

7. Doubtful debts Ending balance Outstanding period

Original costs

Beginning balance Recoverable amount

Outstanding period

Original costs

Recoverable amount

Advances

1- 3 years

3,867,621,018

327,218,167

1- 3 years

10,217,386,238

1,532,346,886

Trade receivables

1- 3 years

2,003,252,400

-

1- 3 years

2,003,252,400

79,490,660

Lending

1- 3 years

55,011,450,994

24,279,364,189

1- 3 years

84,642,152,730

65,065,031,475

Other receivables

1- 3 years

7,224,076,277

-

1- 3 years

9,790,546,648

6,324,108,000

Prepayments to suppliers

1- 3 years

13,527,998,507

-

1- 3 years

13,527,998,507

337,173,675

Deficit assets for treatment

1- 3 years

1,114,434,413

87,451,221

1- 3 years

1,114,434,413

87,451,221

82,748,833,609

24,694,033,577

121,295,770,936

73,425,601,917

Current year

Previous year

47,870,169,019

34,402,599,831

-

1,809,354,778

Total

Fluctuations in allowances for short-term doubtful debts and loans are as follows: Beginning balance Increase due to business combination Additional extraction

10,184,631,013

11,658,214,410

Ending balance

58,054,800,032

47,870,169,019

158 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

8. Deficit assets for treatment Deficit amount received from the sale of goods on transaction floors.

9. Inventories Ending balance Materials and supplies Work-in-process - Construction expenses - Project investment expenses Finished goods

Beginning balance

4,155,196,405

4,679,181,406

530,161,694,292

637,947,806,332

494,395,959,892

602,182,071,932

35,765,734,400

35,765,734,400

1,013,362,534

-

181,280,803

182,521,985

Real estate merchandises

258,705,144,056

274,354,769,707

Total

794,216,678,090

917,164,279,430

Merchandises

Some real estate merchandises and uncompleted project expenses have been mortgaged to secure the loans from SeABank – Ho Chi Minh City Branch, BIDV – Northern Saigon Branch and Agribank - Can Tho Branch.

10. Long-term/ short-term prepaid expenses 10a. Short-term prepaid expenses Tools

Ending balance

Beginning balance

67,961,446

1,467,759,648

Other expenses

185,311,813

491,260,358

Total

253,273,259

1,959,020,006

Ending balance

Beginning balance

570,035,384,985

584,497,170,651

2,079,405,144

1,355,499,267

452,360,584

82,441,764

572,567,150,713

585,935,111,682

10b. Long-term prepaid expenses Land rental Tools Repair expenses Total

11. Tangible fixed assets Buildings and structures

Machinery and equipment

Vehicles

Office equipment

Total

Beginning balance

9,074,182,942

36,497,619

27,875,835,180

1,211,406,765

38,197,922,506

Acquisition during the year

2,470,829,840

6,705,272,727

594,545,454

144,000,000

9,914,648,021

Transfer from construction-in-progress

5,155,350,241

-

-

-

5,155,350,241

(14,251,290)

-

(8,023,212,273)

(69,825,913)

(8,107,289,476)

16,686,111,733

6,741,770,346

20,447,168,361

1,285,580,852

45,160,631,292

684,654,132

36,497,619

5,559,604,572

719,406,852

7,000,163,175

-

-

-

-

3,075,467,428

36,497,619

13,638,691,186

878,414,584

17,629,070,817

630,318,510

213,074,485

2,854,626,257

146,275,721

3,844,294,973

Historical costs

Liquidation, disposal Ending balance In which: Assets fully depreciated but still in use Assets waiting for treatment Depreciation Beginning balance Depreciation during the year Liquidation, disposal Ending balance

(14,251,290)

-

(6,909,767,441)

(69,825,913)

(6,993,844,644)

3,691,534,648

249,572,104

9,583,550,002

954,864,392

14,479,521,146

5,998,715,514

-

14,237,143,994

332,992,181

20,568,851,689

Net book values Beginning balance

ANNUAL REPORT 2016 | 159

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Ending balance

12,994,577,085

6,492,198,242

10,863,618,359

330,716,460

30,681,110,146

In which: Assets temporary not in use

-

-

-

-

-

Assets waiting for treatment

-

-

-

-

-

Some tangible fixed assets, of which the net book values are VND 5.396.368.581, have been mortgaged to secure the loans from LienVietPostBank – Ho Chi Minh City Branch and National Citizen Bank- Transaction Office.

12. Intangible fixed assets Land use right

Computer software

Total

11,776,264,789

170,503,000

11,946,767,789

-

636,090,000

636,090,000

550,000,000

-

550,000,000

12,326,264,789

806,593,000

13,132,857,789

-

170,503,000

170,503,000

1,002,902,835

170,503,000

1,173,405,835

295,003,124

37,105,250

332,108,374

1,297,905,959

207,608,250

1,505,514,209

Initial costs Beginning balance Acquisition during the year Transfer from construction-in-progress Ending balance In which: Assets fully amortized but still in use Amortization Beginning balance Amortization during the year Ending balance Net book values Beginning balance

10,773,361,954

-

10,773,361,954

Ending balance

11,028,358,830

598,984,750

11,627,343,580

Assets temporary not in use

-

-

-

Assets waiting for liquidation

-

-

-

In which:

13. Long-term work-in-process Ending balance Historical cost

Recoverable amount

Beginning balance Historical cost

Recoverable amount

Projects of Hoang Quan Consulting - Trading - Service Real Estate Corporation

14,209,617,073

14,209,617,073

14,209,617,073

14,209,617,073

Projects of Hoang Quan Can Tho Investment Real Estate JSC

44,510,585,698

44,510,585,698

4,343,844,541

4,343,844,541

2,650,435,664

2,650,435,664

913,358,662

913,358,662

61,370,638,435

61,370,638,435

19,466,820,276

19,466,820,276

Beginning balance

Increases

Inclusion into fixed assets

Ending balance

Binh Minh Port

948,297,591

1,014,101,818

-

1,962,399,409

Construction of unburned material production factory

603,540,841

4,605,261,000

(5,061,128,115)

147,673,726

-

2,576,562,500

-

2,576,562,500

550,000,000

-

(550,000,000)

-

Projects of Hoang Quan Binh Thuan Consulting - Trading - Service Real Estate JSC Total

14. Construction-in-progress

Investment in land use right in Can Tho Land lots in Phu An Urban Area, Cai Rang District, Can Tho City Other expenses Total

199,755,703

135,055,532

(94,222,126)

240,589,109

2,301,594,135

8,330,980,850

(5,705,350,241)

4,927,224,744

160 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

15. Deferred income tax assets Deferred income tax assets related to temporarily deductible differences. Details of increases/ (decreases) during the year are as follows: Beginning balance Inclusion into operation results Ending balance

Current year

Previous year

2,973,032,779

2,973,032,779

(1,309,329,599)

-

1,663,703,180

2,973,032,779

16. Short-term trade payables Ending balance Beginning balance Payables to related parties

8,472,396,840

Viet Architecture Joint Stock Company Tay Ninh Urban Development & Construction Joint Stock Company Hoang Quan Law Co., Ltd.

14,894,707,749

877,600,000

186,007,000

-

12,207,886,000

-

422,326,144

7,594,796,840

1,854,917,147

-

223,571,458

48,919,645,836

45,891,628,898

15,036,123,538

30,036,123,538

Construction Building Joint Stock Company 507

2,212,465,546

2,383,981,000

CDH Joint Stock Company

1,000,000,000

1,000,000,000

30,671,056,752

12,471,524,360

57,392,042,676

60,786,336,647

Nam Quan Investment Joint Stock Company Binh Thuan Housing Construction and Trading Joint Stock Company Payables to other suppliers Hoc Mon Trade Joint Stock Company

Other suppliers Total

Outstanding debts The Corporation has no outstanding trade payables.

17. Short-term advances from customers Ending balance Beginning balance Advances from related parties

292,610,819,030 335,482,360,967

Hoang Quan Nha Trang Co., Ltd.

-

Viet Architecture Joint Stock Company Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company Bao Linh Housing Development & Construction Investment Joint Stock Company Advances from other customers

30,000,000,000

-

12,871,541,937

272,326,335,918

272,326,335,918

20,284,483,112

20,284,483,112

404,088,875,670 375,373,798,021

Customers purchasing real estates Other customers Total

402,979,219,374

373,406,524,725

1,109,656,296

1,967,273,296

696,699,694,700 710,856,158,988

18. Taxes and other obligations to the State Budget Beginning balance

VAT on local sales Corporate income tax Corporate income tax temporarily paid on the amount received in advance from the transfer of real estates

Increase

Payables

Receivables

Amount payable

-

116,739,595

1,902,219,865

80,912,021,656

Ending balance Amount already paid

Payables

-

2,018,959,460

-

11,276,817,677 (10,146,795,174)

82,042,044,159

-

Receivables

590,419,050

1,070,926,735

16,671,500

(597,674,699)

16,671,500

1,078,182,384

4,675,204,098

-

3,364,109,472

(901,181,449)

7,138,132,121

-

Property tax

-

-

28,459,658,660 (28,077,918,940)

381,739,720

-

Other taxes

2,113,922,595

-

21,000,000

(159,199,712)

1,975,722,883

-

771,573,367

-

14,729,730,023

(202,500,155)

15,298,803,235

-

89,063,140,766

1,187,666,330

59,770,207,197 (40,085,270,129) 108,872,073,078

1,078,182,384

Personal income tax

Fees, legal fees, and other duties Total

ANNUAL REPORT 2016 | 161

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

At the beginning of fiscal year, Hoang Quan Consulting – Trading – Service Real Estate Corporation (“the Corporation”) has owed taxes payable to the State Budget for an amount of VND 80 billion. However, the Corporation sent documents to competent authorities, inlcuding Government Office, Ministry of Finance, Ministry of Construction, People’s Committee of Ho Chi Minh City and Department of Finance of Ho Chi Minh City asking for offsetting these overdue tax obligations against the Corporation’s benefits receivable from the State Budget so the Corporation can raise capital to develop social housing projects while the State’s support to social housing has not been scheduled.

Particularly, the Corporation proposes to offset its tax obligation against the refundable land use levy paid for HQC Plaza Social Housing project in Binh Chanh District, Ho Chi Minh City for the amount of VND 22,894,269,326 and to refund for resettlement land at Ben Luc Resettlement Area, Zone 17 – Municipal South New Urban Area upon the Corporation’s handover of 13,749.81 m2 to the People’s Committee of District 8 for resettlement arrangement. Simultaneously, the Corporation also sent the Official Letter to the General Department of Taxation, the Tax Department of Ho Chi Minh City to ask for offsetting land use levy, the amount paid for resettlement land and deductible VAT against these overdue tax obligations, of which the estimated amount to be refunded is VND 100 billion.

The Corporation’s proposal is consistent with the Law on social housing and approved by the competent authorities. However, as at the date of this statement, the Corporation has not had its taxes offset or been refunded to fulfill obligations to the State Budget.

Meanwhile, according to the Law on tax management, the Tax Department of Ho Chi Minh City allows the Corporation to issue invoices, declare and pay tax upon each invoicing to the Tax Department while settling outstanding tax.

Value added tax (VAT) The Group companies have paid VAT in accordance with the deduction method. The tax rates applied are as follows: -

Social housing

5%

-

Other activities

10%

Corporate income tax The Group has to pay corporate income tax at the rate of 20% on the taxable income. Particularly, income from the sales, lease, lease and then purchase of social housing is subject to corporation income tax at the rate of 10%.

Corporate income tax of the Group includes: Hoang Quan Consulting – Trading – Service Real Estate Corporation

8,353,803,098

Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Joint Stock Company

16,443,214

Hoang Quan Can Tho Investment Real Estate Joint Stock Company

2,594,722,106

Binh Minh Port Joint Stock Company

311,849,259

Total

11,276,817,677

Determination of corporate income tax liability of the Group companies is based on prevailing regulations on tax. Nonetheless, these tax regulations may change from time to time and tax regulations applicable to variety of transactions can be interpreted differently. Hence, the tax amounts presented in the Consolidated Financial Statements can be changed upon the inspection of tax authorities.

Corporate income tax provisionally paid for the amount received in advance from the transfer of real estates The Group has to pay provisionally corporate income tax at the rate of 01% on the amount received in advance from the transfer of real estates in accordance with regulations of the Circular No. 78/2014/TT-BTC dated 18 June 2014 of the Ministry of Finance. The Group will finalize the accounts of corporate income tax payable for this activity upon handing-over of real estates.

Other taxes The Group has declared and paid these taxes in line with the prevailing regulations.

19. Payables to employees This item reflects salary to be paid to employees.

20. Short-term accrued expenses Project expenses Loan interest expenses House rental Other expenses Total

Ending balance

Beginning balance

327,681,561,701

298,216,325,077

35,803,258,661

10,538,832,219

3,622,159,939

3,622,159,939

376,086,576

373,618,914

367,483,066,877

312,750,936,149

162 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

21. Short-term unearned revenues Prepayment for leasing land at Ham Kien I Industrial Park

Ending balance

Beginning balance

2,193,715,074

2,066,681,498

Other short-term unearned revenues

20,615,959,777

909,090,910

Total

22,809,674,851

2,975,772,408

Ending balance

Beginning balance

9,995,600,830

17,062,561,470

-

99,000,000

22. Other short-term/long-term payables 22a. Other short-term payables Payables for borrowings to related parties Viet Architecture Joint Stock Company Hoang Quan Appraisal Co., Ltd. Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company Binh Thuan Housing Construction and Trading Joint Stock Company Hoang Quan Education Investment Company Limited Nam Quan Investment Joint Stock Company

310,423,138

310,423,138

4,867,622,744

9,619,216,244

1,650,000

3,691,650,000

-

3,342,272,088

229,795,380

-

Bao Linh Housing Development & Construction Investment Joint Stock Company

3,332,348,292

-

Indochina Investment Development Real Estate Corporation

1,253,761,276

-

Payables to other entities and individuals

82,014,443,385

77,446,016,762

Kien Giang Investment and Construction Consulting Joint Stock Company – Receipt of invested capital

52,341,003,030

50,887,215,989

Receipt of mortgages, deposits

6,623,174,700

-

Apartment maintenance fee payable

5,672,143,096

-

Trade Union’s expenditure

1,365,254,256

-

Social insurance premiums, health insurance premiums, unemployment insurance premiums

1,556,334,721

-

Other short-term payables

14,456,533,582

26,558,800,773

Total

92,010,044,215

94,508,578,232

Ending balance

Beginning balance

22b. Other long-term payables This item reflects borrowings from members of the Board of Management.

22c. Outstanding debts The Group has no other outstanding payables.

23. Short-term/long-term borrowings and financial lease 23a. Short-term borrowings and financial lease

Short-term borrowings and financial lease payable to other organizations and individuals Short-term loans from banks

74,369,000,000

64,500,000,000

Loan from Agribank – Can Tho Branch (i)

74,369,000,000

64,500,000,000

Short-term loans from other organizations and individuals

35,000,000,000

-

Current portion of long-term loans (See Note No. V.23b)

498,725,076,220

500,654,206,340

Total

608,094,076,220

565,154,206,340

(i) Loan from Agribank - Can Tho Branch is to supplement the working capital. This loan is secured by mortgaging assets which are projects in process of the Group.

ANNUAL REPORT 2016 | 163

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Details of increases/ (decreases) of short-term borrowings during the year are as follows: Beginning balance

Transfer from long-term borrowings

Borrowing during the year

Amount already paid duringthe year

Ending balance

Short-term loans from banks

64,500,000,000

-

83,830,247,200

(73,961,247,200)

74,369,000,000

Short-term loans from other organizations and individuals

-

-

35,000,000,000

-

35,000,000,000

Current portion of long-term loans

500,654,206,340

269,517,354,841

-

(271,446,484,961)

498,725,076,220

Total

565,154,206,340

269,517,354,841

118,830,247,200

(345,407,732,161)

608,094,076,220

23b. Long-term borrowings and financial lease Ending balance

Beginning balance

BIDV – Northern Saigon Branch (i)

-

177,011,789,252

Agribank – Mac Thi Buoi Branch

-

26,694,000,000

102,900,000,000

37,854,756,400

741,225,373

1,049,600,000

1,776,100,000

2,596,300,000

105,417,325,373

245,206,445,652

Sacombank

(ii)

(iii)

LienVietPostBank - Ho Chi Minh City Branch (iv) National Citizen Bank - Saigon Branch (v) Total (i).

The loan from BIDV – Northern Saigon Branch is to invest in HQC Plaza social housing project. The loan period is 42 months from the first loan disbursement date and the grace period is 18 months. This loan is secured by mortgaging the land use right of project, assets on land to be formed in the future and right receivable from apartments of HQC Plaza project.

(ii).

This is the loan from Agribank – Mac Thi Buoi Branch. This loan is secured by mortgaging the Land Use Right Certificates.

(iii).

Loan from Sacombank is to pay the expenses used to invest in projects at the interest rate applied to 12-month deposit plus 4,5%/year. The loan period is 36 months, starting for the first loan disbursement date. This loan is secured by mortgaging the Land Use Right Certificates of the Corporation, Binh Minh Port Joint Stock Company and Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company.

(iv).

The loan from LienVietPostBank - Ho Chi Minh City Branch is to purchase a vehicle at the interest rate of 7,5% in the first 12 months, but from the 13th month onwards, the interest rate is equal to the deposit interest rate plus the interest rate margin (which is determined to each specific period of time). The loan period is 60 months. The loan repayment is made monthly and the first repayment was made on 29 June 2015. This loan is secured by mortgaging the assets formed from this loan.

(v).

The loan from National Citizen Bank - Saigon Branch is to purchase a vehicle at the interest rate of 9% in the first 12 months, but from the 13th month onwards, the interest rate is equal to the deposit interest rate plus the interest rate margin (which is determined to each specific period of time). The loan period is 60 months. The loan repayment is made monthly and the first repayment was made on 25 March 2015. This loan is secured by mortgaging the assets formed from this loan.

Schedule of payment for long-term borrowings is as follows: Ending balance

Beginning balance

Under 01 year

498,725,076,220

500,654,206,340

From 01 year to 05 years

105,417,325,373

245,206,445,652

Total

604,142,401,593

745,860,651,992

Details of increases/ (decreases) of long-term borrowings are as follows: Beginning balance

245,206,445,652

Increases

174,363,083,333

Amount already paid during the year

(44,634,848,771)

Transfer to current portions of long-term loans

(269,517,354,841)

Ending balance

105,417,325,373

23c. Outstanding borrowings and financial leases Ending balance Principal

Interest

Agribank – Mac Thi Buoi Branch

-

SeABank – Ho Chi Minh Branch

75,506,886,968

Total

75,506,886,968

Beginning balance

Total

Principal

Interest

Total

-

-

32,679,000,000

-

32,679,000,000

-

75,506,886,968

82,166,738,694

-

82,166,738,694

-

75,506,886,968 114,845,738,694

-

114,845,738,694

Loans from banks

164 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

24. Bonus and welfare funds Beginning balance

1,199,393,255

Increases due to the appropriation from profit

1,065,424,243

Other increases

50,000,000

Ending balance

2,314,817,498

25. Convertible bonds During the year, the Group issued convertible bonds to some investors to fund Binh Minh Port project (phase 1) according to the Resolution dated 26 March 2016 of the Annual General Meeting of Shareholders in 2016. Details of these convertible bonds are as follows: -

Type of bond

:

Convertible bonds not secured by any collateral

-

Form of bond

:

Nominal recording

-

Type of converted bond

:

Common share

-

Time of issuance

:

20 July 2016

-

Principal maturity

:

01 year starting from the issue date

-

Number of bonds issued

:

5,000,000 bonds

-

Face value

:

VND 100,000/ bond

-

Selling price of bond

:

VND 100,000/ bond

-

Total value by face value

:

VND 500,000,000,000

-

Interest rate

:

06%/year

-

Collaterals

:

None

-

Conversion rate

:

01 : 10 (on maturity day, 01 bond is converted into 10 shares)

-

Bond transfer

:

The bonds are limited in transfer for the minimum period of 01 year from the date of offer completion.

-

Discount rate

:

12.05%/year

-

Value of principal

:

VND 473,003,123,606

-

Value of bond conversion options

:

VND 26,996,876,394

Values of principal and bond conversion options are as follows: Ending balance Principal

473,003,123,606

Value of which the bond principal is increased

11,248,698,498

Total bonds converted

484,251,822,104

Bond conversion options

26,996,876,394

26. Deferred income tax liabilities

Revenue recorded in advance Valuation of assets upon business combination Total

Beginning balance

Recognition in financial performance

Ending balance

10,726,075,783

241,631,123

10,967,706,906

1,586,505,460

(35,988,782)

1,550,516,678

12,312,581,243

205,642,341

12,518,223,584

The corporate income tax used to determine values of deferred income tax liabilities is 20% (previous year: 22%).

27. Provisions for long-term payables Provisions for long-term payables related to warranty of construction works. Details of increases/ (decreases) are as follows: Beginning balance Reversal Ending balance

1,575,105,900 (1,283,415,100) 291,690,800

ANNUAL REPORT 2016 | 165

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

28. Owner’s equity 28a. Statement of the fluctuation in the owner’s equity Information on the fluctuation in the owner’s equity is presented in the attached Appendix.

According to the Resolution dated 26 March 2016 of the Annual General Meeting of Shareholders in 2016, the Corporation issued 31,600,000 common shares to current shareholders to pay dividends.

On 24 June 2016, the Corporation was granted the 33rd amended Business Registration Certificate by the Department of Planning and Investment of Ho Chi Minh City regarding the increase in charter capital up to VND 4,266 billion.

28b. Shares Ending balance

Beginning balance

Number of shares registered to be issued

426,600,000

395,000,000

Number of shares already sold to the public

426,600,000

395,000,000

·

Common shares

426,600,000

395,000,000

·

Preferred shares

-

-

Number of shares repurchased

(726)

-

·

Common shares

(726)

-

·

Preferred shares

-

-

Number of outstanding shares

426,599,274

395,000,000

·

Common shares

426,599,274

395,000,000

·

Preferred shares

-

-

Face value per outstanding share: VND 10,000.

28c. Share premiums Share premiums arisen from the issuance of shares for swap in 2015 are as follows: Quantity

Issuance value

Values by face value

Share premiums

Hoang Quan Can Tho Investment Real Estate Joint Stock Company

35,009,890

178,550,439,000

350,098,900,000

(171,548,461,000)

Hoang Quan Binh Thuan Consulting – Trading – Service Real Estate Joint Stock Company

28,657,850

146,155,035,000

286,578,500,000

(140,423,465,000)

Binh Minh Port Joint Stock Company

30,900,000

157,590,000,000

309,000,000,000

(151,410,000,000)

Indochina Investment Development Real Estate Corporation Total

37,432,260

190,904,526,000

374,322,600,000

(183,418,074,000)

132,000,000

673,200,000,000

1,320,000,000,000

(646,800,000,000)

28d. Profit distribution During the year, the Corporation distributed its profit in accordance with the Resolution dated 26 March 2016 of the Annual General Meeting of Shareholders in 2016 as follows: VND ·

Dividends of 2015 distributed to shareholders in form of shares

2,485,989,899

·

Appropriation for investment and development fund

2,485,989,899

·

Appropriation for bonus fund

1,065,424,243

29. Off-balance sheet items Foreign currencies As of the balance sheet date, cash is USD 264.15 (beginning balance: USD 277.35).

166 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

VI. ADDITIONAL INFORMATION ON THE ITEMS OF THE CONSOLIDATED INCOME STATEMENT 1. Sales 1a. Gross sales Current year

Previous year

977,583,539,130

1,364,792,600,385

Sales of constructions

82,820,877,319

44,745,035,640

Sales of service provisions

49,908,614,802

6,393,033,465

Sales of trading in real estates

Others Total

3,696,206,246

5,982,496,948

1,114,009,237,497

1,421,913,166,438

1b. Sales to related parties Apart from the transactions of selling goods and providing services with associates presented in Note No. V.2b. Transactions of selling goods and providing services with related parties which are not associates are as follows: Current year

Previous year

2,507,954,485

2,658,249,998

Related individuals Sales of trading in real estates Hoang Quan Education Investment Company Limited

-

Sales of trading in real estates Hoang Quan Building Management and Service Co., Ltd.

94,262,736,364 Â

Sales of trading in real estates Nam Quan Investment Joint Stock Company Sales of trading in real estates Sales returns

-

128,314,388,182

-

 83,882,813,052

94,177,579,918

(47,645,101,000)

-

12,000,000,000

-

477,610,847

-

1,050,591,099

-

Bao Linh Housing Development & Construction Investment Joint Stock Company Sales from consultancy Sales from brokerage Tay Ninh Urban Development & Construction Joint Stock Company Sales of merchandises, finished goods

2. Sales deductions This item reflects sales returns.

3. Costs of sales Current year

Previous year

607,840,803,131

970,290,416,682

Costs of construction activities

72,658,138,562

29,566,974,180

Costs of service provisions

16,238,892,822

1,844,097,701

Costs of trading in real estate

Other costs Total

3,482,608,373

293,976,762

700,220,442,888

1,001,995,465,325

Current year

Previous year

235,721,849

222,072,202

4. Financial income Bank deposit interest Interest on loans given Dividends and profit received Proceeds from capital transfer Total

-

20,338,879,223

1,795,486,982

6,088,066,900

800,900

189,095,474,000

2,032,009,731

215,744,492,325

ANNUAL REPORT 2016 | 167

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

5. Financial expenses Current year

Previous year

96,744,220,943

54,203,353,031

-

(756,706,317)

1,202,693,938

-

97,946,914,881

53,446,646,714

Current year

Previous year

33,799,850,552

27,429,275,369

Tools and supplies

355,238,205

261,053,127

Depreciation/ (amortization) of fixed assets

905,200,276

729,205,303

Loan interest expenses Provision for/ (Reversal of) provision for devaluation of trading securities and investment loss Other financial expenses Total

6. Selling expenses Expenses for employees

External services rendered

11,158,412,102

6,107,539,583

Other expenses

15,378,754,824

10,236,691,606

Total

61,597,455,959

44,763,764,988

Current year

Previous year

7. General and administration expenses Expenses for employees

49,547,970,943

30,684,455,958

Office stationery

2,544,015,768

1,708,490,750

Depreciation/ (amortization) of fixed assets

2,676,794,020

2,624,508,390

549,658,879

1,016,110,044

Allowance/ (reversal of allowance) for doubtful debts

10,184,631,013

11,658,214,410

External services rendered

34,630,213,079

23,559,055,258

Other expenses

37,342,466,420

19,884,431,179

137,475,750,122

91,135,265,989

Current year

Previous year

145,646,076

-

-

304,748,222,757

11,816,599,341

3,983,735,270

8,845,674,743

-

Taxes, fees, and legal fees

Total

8. Other income Proceeds from liquidation, disposal of fixed assets Proceeds from low-cost purchase of subsidiaries Fines for violation of the contract Collection of power and water charges of construction works Other income Total

5,718,126,447

1,030,335,357

26,526,046,607

309,762,293,384

Current year

Previous year

-

3,486,000,000

46,207,000

2,907,740,053

14,665,551,560

-

2,000,000,000

-

9. Other expenses Compensations Tax fines, tax collected in arrears and fine for administrative violations Fine for late payment of tax Expenses on liquidation of Apartment B26, Tam Binh Project, Thu Duc Other expenses Total

3,662,666,692

3,118,887,184

20,374,425,252

9,512,627,237

168 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

10. Operating costs Materials and supplies Labor Depreciation/ (amortization) of fixed assets External services rendered Other expenses Total

Current year

Previous year

33,749,917,449

44,624,064,387

129,921,554,145

74,510,452,018

3,996,459,439

3,556,994,604

661,580,837,712

845,797,891,574

273,201,339,842

101,141,739,532

1,102,450,108,587

1,069,631,142,115

Current year

Previous year

19,619,412,858

641,187,562,903

11. Earnings per share 11a. Basic/ diluted earnings per share

Accounting profit after corporate income tax of the Parent Company’s shareholders Appropriation for bonus and welfare funds

(1,000,000,000)

(1,065,424,243)

Profit used to calculate basic/ diluted earnings per share

18,619,412,858

640,122,138,660

426,599,274

282,975,000

44

2,262

Current year

Previous year

395,000,000

170,000,000

31,600,000

31,600,000

(726)

-

The average number of ordinary shares outstanding during the year Basic/ diluted earnings per share

Average ordinary shares outstanding during the year are calculated as follows: Ordinary shares outstanding at the beginning of the year Effects of ordinary shares issued to share dividends Effects of shares repurchased Effects of ordinary shares issued in 2015 Average ordinary shares outstanding during the year

-

81,375,000

426,599,274

282,975,000

11b. Other information During the year, Hoang Quan Consulting – Trading – Service Real Estate Corporation had raised its charter capital from retained earnings. Basic earnings per share of the previous year were adjusted due to effects of this event. This adjustment has decreased basic earnings per share of the previous year down from VND 2,551 to VND 2,262.

There are no transactions relating to common shares or potential common shares occurring from the balance sheet date to the date of these Consolidated Financial Statements.

VII. ADDITIONAL INFORMATION ON THE ITEMS OF THE CONSOLIDATED CASH FLOW STATEMENT Non-cash transactions During the year, the Group has the following non-cash transactions: Capital increased from undistributed profit

Current year

Previous year

316,000,000,000

-

Capital increased from swapping shares Transfer of unpaid investment

673,200,000,000 70,400,000,000

VIII. OTHER DISCLOSURES 1. Transactions and balances with related parties The related parties of the Group consist of key managers, their related individuals and other related parties.

1a. Transactions and balances with the key managers and their related individuals The key managers include members of the Board of Management and the Executive Officers (Board of Directors and Chief Accountant). The key managers’ related individuals include their close family members.

ANNUAL REPORT 2016 | 169

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Transactions with the key managers and their related individuals The Group has no transactions of sales of goods and service provision with the key managers and their related individuals.

Other transactions during the year with members of the Board of Management and the Executive Officers are as follows: Current year

Previous year

545,064,107,636

282,632,253,018

Members of the Board of Management Borrowings from the Board of Management The Executive Officers

-

Loan interest

-

71,752,284

Lending

-

22,554,391,422

Receivables from and payables to the key managers and their related individuals Receivables from and payables to the key managers and their related individuals are presented in Notes No. V.3, V4, V.5, V6 and V.22.

Income of the key managers Income of the key managers during the year is VND 4,986,406,667 (previous year: VND 4,586,480,000).

1b. Transactions and balances with other related parties Other related parties of the Group include: Other related parties

Relationship

Hoang Quan Appraisal Co., Ltd.

Associate

Hoang Quan Mekong Consulting – Trading – Service Real Estate Joint Stock Company

Associate

Hoang Quan Nha Trang Consulting - Trading - Service Real Estate Joint Stock Company

Associate

Tay Nam A Economic and Technical Vocational Training School

Associate

Binh Thuan Housing Construction and Trading Joint Stock Company

Associate

Tu Cuong Trading Production Co., Ltd.

Associate

Binh Minh Trading Services and Entertainment Company Limited

Associate

Bao Linh Housing Development & Construction Investment Joint Stock Company

Related company

Viet Architecture Corporation

Related company

Hoang Quan Education Investment Company Limited

Related company

Hoang Quan Law Co., Ltd.

Related company

Nam Quan Investment Joint Stock Company

Related company

Hoang Quan Building Management and Service Co., Ltd.

Related company

Tay Ninh Urban Development & Construction Joint Stock Company

Related company

Hoang Quan Group Company Limited

Related company

Mui Ne Tourism Vocational College

Related company

Indochina Investment Development Real Estate Corporation

Shareholder and business cooperator

Transactions with other related parties Apart from transactions with associates presented in the Notes No. V.2b as well as transactions of sales of goods and service provision with other related parties which are not subsidiaries and associates presented in Note No. VI.1b, the Group also has other transactions with other related parties as follows: Current year

Previous year

Bao Linh Housing Development & Construction Investment Joint Stock Company Construction expenses

127,513,719,732

352,516,255,431

Advance for executing projects

237,746,213,861

847,489,001,478

72,214,136,971

11,843,916,619

Borrowing

1,283,549,000

869,000,000

Receipt of deposit for share transfer

2,048,799,292

-

Fines for violation of the contract

4,461,760,000

-

Lending

170 | FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

Current year

Previous year

378,181,819

1,463,636,364

-

530,000,000

144,437,348,738

45,200,095,766

Hoang Quan Law Co., Ltd. Legal service fee Lending Nam Quan Investment Joint Stock Company Lending Borrowing Purchase of materials Fines for violation of the contract

9,229,795,380

69,365,977,318

24,786,020,206

-

4,461,760,000

-

12,938,105,602

22,514,976,338

1,253,761,276

-

3,635,792,352

4,513,404,464

-

100,000,000

Indochina Investment Development Real Estate Corporation Lending Borrowing Viet Architecture Corporation Lending Borrowing Leasing vehicles

-

181,818,184

Sales of materials

12,778,041,937

-

Expenses on design consultancy

11,183,581,155

14,637,530,941

Lending

1,096,137,920

-

Dividends shared

2,034,440,000

907,509,600

Construction expenses

7,386,164,545

20,288,460,909

87,584,500,000

-

1,045,523,154

-

21,543,080,000

-

13,285,333,813

-

Tay Ninh Urban Development & Construction Joint Stock Company

Advance for executing projects Sales of finished goods Hoang Quan Building Management and Service Co., Ltd. Lending Hoang Quan Education Investment Company Limited Lending

The prices of goods and services provided to other related parties are agreed by the parties involved by themselves. The purchases of goods and services from other related parties are done at the agreed prices.

Receivables from and payables to other related parties Receivables from and payables to other related parties are presented in Notes No. V3, V4, V.5, V6, V.16, V.17 and V.22.

The receivables from other related parties are unsecured and will be paid in cash.

2. Segment information The Group’s principal business activity is trading in real estate (accounting for 88% of total sales of the Group) mainly in Southern areas; therefore, it is not subject to present the segment reporting according to the guidance of Vietnamese Accounting Standards.

ANNUAL REPORT 2016 | 171

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)

For the fiscal year ended 31 December 2016

3. Comparative figures The Group has made retrospective restatements of the investment by contributing capital under joint cooperation agreements and advanced payment from buyers at the beginning of the year. The restatement’s impacts on the integrated financial statement are as follows: Code

Unadjusted figures

Adjustments

Adjusted figures

Other long-term receivables

216

2,183,504,000

1,036,938,361,696

1,039,121,865,696

Investments in other entities

253

1,050,171,292,696

(1,036,938,361,696)

13,232,931,000

Short-term advances from customers

312

382,321,935,272

328,534,223,716

710,856,158,988

Short-term unearned revenues

318

331,509,996,124

(328,534,223,716)

2,975,772,408

Consolidated Balance Sheet

4. Subsequent events On 23 December 2016, Hoang Quan Consulting – Trading – Service Real Estate Corporation signed the Share Transfer Contract with Bao Linh Housing Development & Construction Investment Joint Stock Company. Accordingly, Hoang Quan Consulting – Trading – Service Real Estate Corporation will transfer all capital contributed to its subsidiary - Binh Minh Port Joint Stock Company at value of VND 472,048,799,292. The share transfer will be completed in 2017.

Apart from the foregoing event, there have been no material subsequent events which need any adjustments on the figures or the disclosures in the Consolidated Financial Statements.

Ho Chi Minh City, 10 March 2017

LO THI TAM Preparer

NGUYEN HONG PHUONG Chief Accountant

Dr. TRUONG ANH TUAN General Director

KNOWLEDGE NURTURES PROSPERITY

SYSTEM OVERVIEW System Operating Functions Investor Relation Department Contact

174 | SYSTEM OVERVIEW

SYSTEM OPERATING FUNCTIONS

REAL ESTATE

•• Real Estate Investment: Residential, Apartment, Office Building, Industrial Park...

•• Marketing, distributing, managing and brokering.

EDUCATION

•• Education and Development Investment: University, College and Trade School.

•• Cooperating and training for human resource development.

FINANCE

•• Capital Contribution, M&A. •• Financial & Security Investment.

DESIGN

•• Civil project, Industrial project, Township & Industrial Park planning.

•• Project consulting, investment planning, construction supervising.

CONSTRUCTION

•• Leveling, infrastructure and civil project construction.

•• Interior, exterior design & construction, and material trading.

LEGAL COUNSELLING

•• Service of legal and real estate counselling.

•• Represent client to join proceedings.

ASSET APPRAISAL

•• Real Estate, Investment Projects.

•• Properties auction, Market research.

HOANG QUAN CORPORATION HQC USA LLC

TU CUONG TRADING PRODUCTION CO., LTD.

MEÂ KOÂNG

NHA TRANG

CAÀN THÔ

BÌNH THUAÄN

REAL ESTATE

IC E - SERV

ASSET APPRAISAL

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L GA LE

VI CE

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THIEN PHAT CONSTRUCTION INVESTMENT LTD

DESI GN

FIN

FI NA NC E

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EDUCATION

UCT TR NS

T TRUC ION NS O

MEKONG DELTA UNIVERSITY

CO

AL ESTATE - C RE

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BINH MINH TRADING SERVICES & ENTERTAINMENT COMPANY LIMITED

HQ BUILDING MANAGEMENT AND SERVICES COMPANY LIMITED

HOANG QUAN

BINH THUAN

CORPORATION LTD

TEYA CO.,LTD

CONTACT INVESTOR RELATIONS DEPARTMENT FOR MORE INFORMATION Hoang Quan Consulting - Trading – Service Real Estate Corporation Head Office: 286-288 Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City, Vietnam Tel:

+84 8 6292 8617

-

Fax: +84 8 6292 8486

Email:

qhndt@hoangquan.com.vn

Website:

www.hoangquan.com.vn

HQC Plaza

Ham Tien Tourist Service Center – Mui Ne (198ha)

KNOWLEDGE - INNOVATION - PIONEERING HOANG QUAN CONSULTING - TRADING – SERVICE REAL ESTATE CORPORATION (STOCK CODE: HQC) Head Office: 286-288 Huynh Van Banh Street, Ward 11, Phu Nhuan District, Ho Chi Minh City Tel: +84 8 6292 8617 | Fax: +84 8 6292 8486 Email: qhndt@hoangquan.com.vn Website: www.hoangquan.com.vn

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