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ANNUAL REPORT 2019
CREATING SPACES
ENHANCING LIVES
CONTENTS
04 Vision - Mission - Core values - Competitive advantage 06 Message from Chairwoman
CHAPTER I: GENERAL INFORMATION
CHAPTER 4:SUSTAINABILITY REPORT
CHAPTER 5:FINANCIAL STATEMENTS
CHAPTER 3:CORPORATE GOVERNANCEPREFACE
101214162030 36 40 44 48 50 52 54 56 58 62 64 66
70 72 78 88
9698 100 102 104
112 114 116 118 120 124 126
133 134 135 137 139 140 142
Sustainability messageOverview of Sustainability ReportStakeholders engagementMaterial factorsThinking and acting progressivelyUsing and consuming responsiblyFocusing on the people
General informationReport of ManagementIndependent Auditors’ Report Consolidated balance sheet Consolidated income statement Consolidated cash flow statement Notes to the consolidated financial statements
Overview of real estate market in 2019Report and assessment by Board of DirectorsReport by General Director TeamReport by Inspection Committee
Structure and activities of Board of DirectorsStructure and activities of Inspection CommitteeRemunerations of Board of Directors and Inspection CommitteeShare transactions of internal shareholders and related personsRisks and risk management
CHAPTER 2: PERFORMANCE REPORT
LIST OF ABBREVIATIONS
The Company/ Khang Dien : Khang Dien House Trading and Investment Joint Stock Company
GSM : General Shareholder Meeting
BOD : Board of Directors
GDT : General Director Team
IC : Inspection Committee
IR : Investor relations
JSC : Joint Stock Company
Co., Ltd. : Company Limited
HCMC : Ho Chi Minh City
OverviewKey milestonesCore business and market placeProjects location mapList of projectsTypical projects2019 Major events2019 Awards and recognitionsShareholder informationInvestor relationSubsidiaries Business direction SWOT Governance modelBoard of DirectorsGeneral Director TeamInspection CommitteeHuman Resource Report
VISION – MISSION – CORE VALUES – COMPETITIVE ADVANTAGE
VISION
MISSION
CORE VALUES
COMPETITIVE ADVANTAGE
To become one of the top enterprises in real estate investment, operation and management.
To develop functional, high-quality projects with integrated amenities and environmental friendliness.
To create modern urban areas, green-clean living spaces and civilized communities.
To bring to every family modern and comfortable living conditions and dedicated services.
Transparency
Transparent in business operations and in relationships with shareholders and stakeholders.
Quality
Delivering committed quality and customer satisfaction.
Sustainability
Business is built on product quality, dedicated service, community responsibility, environmental friendliness and solid legal footing.
BRAND REPUTATION
After 20 years on the market Khang Dien has become a strong
brand customers love and trust.
EXPERIENCE
Understanding of the market and experience in land assembly and project development since 2001 are valuable know-how.
LAND BANK
Having large land bank in Ho Chi Minh City and the ability to grow land bank effectively in the future.
FINANCE
Financially strong and transparent with Ernst & Young auditing the books since 2007.
Having the trust and support from the key shareholders, especially the foreign
shareholders (such as Dragon Capital, VinaCapital, PYN Elite Fund and Vietnam
Holding), who maintain shareholding around 45% cumulative.
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MESSAGE FROM CHAIRWOMAN
With our direction of practicing sustainability, upholding reputation, and building brand based on our dedication and best efforts, the Company believes that the Khang Dien brand will develop further, bringing sustainable values to the customers and practical benefits to the Shareholders.
Dear valued Shareholders, Customers, Partners and fellow employees.
The year 2019 continues to be a successful year for business of Khang Dien House Trading and Investment Joint Stock Company (“Khang Dien”). In 2019, in addition to making new investments and launching new projects meeting full legal requirements, Khang Dien continued to grow its land bank, improve process and procedures, and increase management quality in order to prepare for a new journey pursuing the vision to build large-scale urban areas.
The sustainability strategy that Khang Dien always follows is that our business is legally compliant, transparent and bringing to the market quality products at reasonable prices and attractive design, which will create customers’ trust and the most practical benefit for the shareholders. Besides, Khang Dien always upholds the responsibility to support the communities, practice charitable activities, participate in anti-poverty programs, build gratitude houses, charity houses, fund scholarships across the regions as well as actively contribute to the national social security fund.
With the determination to become a professional developer in the field of real estate investment, commerce and management, the Board of Directors, General Director Team and employees always work with their best capacities, enthusiasms, devotions, knowledges and experiences in order to build large-scale residential properties and urban areas ideal for comfortable living spaces engineered by complete planning and designs; Together with each customer, we create peaceful and happy homes.
On the behalf of the Board of Directors of Khang Dien, I would like to express the most sincere thanks to our Customers and Shareholders who have accompanied Khang Dien over the years. With our direction of practicing sustainability, upholding reputation, and building brand based on our dedication and best efforts, the Company believes that the Khang Dien brand will develop further, bringing sustainable values to the customers and practical benefits to the Shareholders.
Yours sincerely,
Chairwoman
MAI TRAN THANH TRANG
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GENERAL INFORMATION CHAPTER I
OVERVIEW
KHANG DIEN HOUSE TRADING AND INVESTMENT JOINT STOCK COMPANY
CÔNG TY CỔ PHẦN ĐẦU TƯ VÀ KINH DOANH NHÀ KHANG ĐIỀN
Stock symbol: KDH
Abbreviation: KHADIHOUSE JSC
Business name: Khang Dien
Business registration: No. 0302588596 initially granted on 02 May 2007 and amended for twenty-second time on 17 October 2018 by Department of Planning and Investment in Ho Chi Minh City.
Charter capital: VND 5,444,291,090,000
Head Office: Suite 1 and 2, 11th Floor Saigon Center, 67 Le Loi, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Tel: +(84.28) 3820 8858 - Fax: +(84.28) 3820 8859
Email: [email protected]
Website: www.khangdien.com.vn
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Company was founded as a private business
KEY MILESTONES
Grew charter capital, scaled up and IPO
Continued to scale up through investment in Khang Phuc House and enhancing Khang Dien brand by high-end projects - Lucasta, The Venica
Khang Dien increased charter capital to VND 1,800 billion and launched the high-end townhouse and villa projects - Lucasta and The Venica - in District 9 near District 2 and on the key streets in the East of HCMC such as Vo Chi Cong (Ring Road 2), Lien Phuong and Do Xuan Hop.
These projects are high-end properties in compound settings elegantly designed in harmony with the environment and integrated amenities, offering the best living space to every family.
The Company increased land bank through a strategic investment into Khang Phuc House.
Khang Dien increased charter capital to more than VND 4,140 billion and completed the merge of Khang Phuc House, marking a key milestone of the sustainability preparation.
Continued to scale; launched Verosa Park - high-end townhouses & villas and Lovera Vista condo
Shares listed on Ho Chi Minh City Stock Exchange (HSX)
Khang Dien increased charter capital to VND 439 billion and listed 43.9 million common shares (stock code KDH) on Ho Chi Minh City Stock Exchange (HSX).
Scaled up and positioned Khang Dien brand through the Mega projects - garden townhouses Khang Dien increased charter capital to VND 750 billion and welcomed Dragon Capital as strategic shareholder.
The Mega projects - garden townhouses in District 9 - attracted many homebuyers and scored great success.
2001 2018
2019
2007
2010
2014
2015
Khang Dien continued to increase charter capital to more than VND 5,444 billion and launched Verosa Park – the high-end townhouse & villa compound in the East of HCMC and Lovera Vista condo in the Southwest of HCMC.
Verosa Park has 296 townhouses and villas in a compound in the center of District 9 at Lien Phuong street and Vo Chi Cong intersection, bordering District 2. It is designed with the quintessence of classical European architecture, in harmony with natural landscape. Verosa Park is a peaceful green heaven where emotions meet memorableness & fulfillment.
Lovera Vista – Khang Dien’s newest condo project in the Southwest area – consists of 1,310 condos on 1.8 hectares of land. Lovera Vista is professionally designed with
integrated amenities, meeting the demands of a variety of consumers, from young single people, young families to extended families. In addition to internal amenities, residents can access available external amenities such as green parks, supermarkets, schools, fitness centers, and medical centers, etc. all in walking distances.
Khang Dien scaled up and IPO at VND 332 billion charter capital. VinaCapital and Prudential contributed equity and became shareholders.
Continued to scale; completed the merger of Khang Phuc House and launched two large condo projects – Jamila and Safira
The Company launched Jamila and Safira in District 9 directly connecting to District 2, Thu Thiem via Vo Chi Cong Street (Ring Road 2), HCMC - Long Thanh - Dau Giay Expressway.
On 1.7 hectares of land, Jamila has 867 condos and 16 shophouses designed in modern style and completed with integrated amenities in a green and environmental friendly living space.
Likewise, with 1,570 condos and 23 shophouses an 2.7 hectares of land, Safira offers a modern, comfortable, close-to-nature and safe living space, perfectly suitable for young families.
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CORE BUSINESS AND MARKET PLACE
MARKET PLACE The business operation is in Ho Chi Minh City metropolitan areas.
CORE BUSINESS
Thu DucDist.
Binh ThanhDist.
Dist.1Dist. 3
Dist. 4Dist. 5
Dist. 8
Nha BeDist.
Dist. 6
Dist. 11
Dist.10
Dist. 7
Phu NhuanDist.
Tan BinhDist.
Go VapDist.
Dist.12
Tan PhuDist.
Dist. 9
Dist. 2
Binh TanDist.
Binh ChanhDist.
Lease and trade houses, land acquisition and transfer for property development, infrastructure investment;
Civil engineering and industrial construction works;
Real estate consulting service;
Land development;
Housing design and construction;
Real estate business.
Develop and operate industrial parks;
Develop and operate urban areas;
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THU THIEM
THAO DIEN
VO CHI CONG
(INNER RIN
G ROAD)
MAI CHI THO
HA NOI HIGHWAY
DISTRICT 7PHU MY HUNG
DISTRICT 1
DISTRICT 2 DISTRICT 9
CAT LAI FERRY
Lien Phuong
Duong Dinh Hoi
DO XUAN HOP
Melosa Garden
Mega Village
The Venica
Jamila
Feliza
Verosa Park
Hoja Villa
Mega Ruby
LucastaSa�ra
Mega Sapphire
Mega Residence
MeritaTopia Garden
HO CHI MINH - LONG THANH - DAU GIAY EXPRESSWAY
Hi - Tech ParkDistrict 9
THU DUCGolf Course
SAMSUNG CEComplex
BEN THANH Market
AN PHUGolf Course
Phu My Bridge
THU THIEM Tunnel
THU THIEM Bridge
SAI GON Bridge
Direction to Long ThanhInternational Airport
PROJECTS LOCATION MAP
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RING R
OAD 3
RING ROAD 3
XANG NGANG CANAL
PROVINCIAL
HIGHWAY 10B
TAN
TAO
- CH
O D
EM
TRAN DAI NGHIA
CHO DEM RIVER
NAT
ION
AL H
IGH
WAY
50
DOI C
ANAL
NGUYEN HUU THO
SAIGON RIVER
DIA CANAL
KINH DUONG VUONG
3/2
TRUONG CHINH
AU CO
CONG HOA
HCMC - TRUNG LUONG HIGHWAY
PROVINCIAL HIGHWAY 10
QU
ỐC
LỘ 1
A
NATIONAL HIG
HWAY 1A
QUỐC LỘ 1A
20km
Le Minh Xuan Industrial Area (Expansion area)
Tan TaoResidential Center
Area
Binh HungResidential Area
Phong Phu 5Residential Area
11AResidential Area
Le Minh XuanIndustrial Area (Existing area)
Handicraft Industrial Area (Existing area)
BINH CHANHDISTRICT
NHA BEDISTRICT
BINH TANDISTRICT
DISTRICT 1
TAN SON NHATINTERNATIONAL AIRPORT
BEN THANHMARKET
THU THIEM
DISTRICT 8
DISTRICT 5
DISTRICT 7
DISTRICT 4TE CANAL
TRINH QUANG NGHI
ĐẠI LỘ NGUYỄN VĂN LINH
ĐẠI LỘ NGUYỄN VĂN LINH
VO VAN KIET
Lovera Vista
DISTRICT 6
CRESCENT MALL
PHU MY HUNG URBAN AREA
LOTTE MART
CHO RAYHOSPITAL
SAIGONUNIVERSITY
AEON CITIMART PARKSON
SC VIVO CITY
PROJECTS LOCATION MAP (continued)
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LIST OF PROJECTS
COMPLETED PROJECTS
Location: Duong Dinh Hoi Street, Phuoc Long B Ward, District 9, HCMC Area: 10.4 hectares
Products: 247 detached villas, duplex villas, garden townhouses and condominium buildings Status and progress: Obtained Certificates of land use rights; continues to hand over the Title Certificates after the buyers have built the houses
Location: Bung Ong Thoan Street, Phu Huu Ward, District 9, HCMC Area: 6 hectares
Products: 225 detached villas, duplex villas and townhouses
Status and progress: Obtained Certificates of land use right; continues to hand over the Title Certificates after the buyers have built the houses
Location: Phu Huu Ward, District 9, HCMC Area: 5 hectares
Products: 222 townhouses
Status and progress: Handed over and put the project into use in 2014; fully handed over the houses and Title Certificates to the buyers
Location: Phu Huu Ward, District 9, HCMC Area: 5.7 hectares
Products: 323 garden townhouses
Status and progress: Handed over and put the project into use in 2015; fully handed over the houses and Title Certificates to the buyers
Location: Phu Huu Ward, District 9, HCMC Area: 3.2 hectares
Products: 158 townhouses
Status and progress: Handed over and put the project into use in 2014; fully handed over the houses and Title Certificates to the buyers
Location: Phuoc Long B Ward, District 9, HCMC Area: 7.1 hectares
Products: 197 detached villas, duplex villas and townhouses Status and progress: Obtained Certificates of land use right; continues to hand over the Title Certificates after the buyers have built the houses
KHANG DIEN - PHUOC LONG B MEGA RESIDENCE
MEGA RUBY
MEGA VILLAGE
TOPIA GARDEN
RIVER TOWN
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COMPLETED PROJECTS (continued)
Location: Phu Huu Ward, District 9, HCMC Area: 17.23 hectares
Products: 567 villas and garden townhouses
Status and progress: Handed over and put the project into use in 2015; fully handed over the houses and Title Certificates to the buyer
Location: Phu Huu Ward, District 9, HCMC Area: 8.2 hectares
Products: 140 high-end villas
Status and progress: Handed over and put the project into use in 2016; fully handed over the houses and Title Certificates to the buyers
MELOSA GARDEN
LUCASTA
Location: Phuoc Long B Ward, District 9, HCMC Area: 3.1 hectares
Products: 131 garden townhouses
Status and progress: Handed over and put the project into use in 2017; fully handed over the houses and Title Certificates to the buyers
MERITA
Location: Phu Huu Ward, District 9, HCMC Area: 3.1 hectares
Products: 43 high-end villas
Status and progress: Handed over and put the project into use in 2016; fully handed over the houses and Title Certificates to the buyers
THE VENICA
LIST OF PROJECTS (continued)
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Location: Le Minh Xuan Commune, Binh Chanh District, HCMC Area: 116 hectares
Status and progress: The project has been commissioned; 100% leased out with more than 200 enterprises leasing or purchasing lots and factories
LE MINH XUAN INDUSTRIAL AND SMALL BUSINESS PARK
Location: Phu Huu Ward, District 9, HCMC Area: 3.1 hectares Products: 118 garden townhouses
Status and progress: Handed over and put the project into use in 2017; fully handed over the houses and Title Certificates to the buyers
Location: Phu Huu Ward, District 9, HCMC Area: 1.7 hectares
Products: 867 condos and 16 shophouses
Status and progress: Handed over and put the project into use in 2018; fully handed over the condos; handing over Title Certificates to the buyers; expect to complete Title Certificates handover in 2020
ROSITA GARDEN
JAMILA
COMPLETED PROJECTS (continued)
LIST OF PROJECTS (continued)
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ON-GOING PROJECTS
Location: Phu Huu Ward, District 9, HCMC Area: 2.7 hectares Products: 1,570 condos and 23 shophouses Status and progress: Expect to begin handing over and put the project into use in the second quarter of 2020
Location: District 9, HCMC Area: 8.1 hectares Products: 293 townhouses and 3 villas Status and progress: Ongoing sales. Expect to complete handover and put the project into use in 2020.
Location: Phong Phu 4 Residential Area, Binh Chanh District, HCMC Area: 1.8 hectares
Products: 1,310 condos
Status and progress: Ongoing sales and under construction; expect to begin handing over in the second quarter of 2021
Products: Garden townhouses and villas Status and progress: Obtained project’s Certificates of land use right; is completing legal procedures of the project
SAFIRA VEROSA PARK PROJECT
LOVERA VISTA ARMENA
Location: District 9, HCMC Area: 4.3 hectares
LIST OF PROJECTS (continued)
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Location: Binh Hung Commune, Binh Chanh District, HCMC Area: 16.4 hectares Products: Townhouses and condominium buildings Status and progress: On-going project legal work
11A RESIDENCE
Location: Le Minh Xuan Commune, Binh Chanh District, HCMC Area: 109.9 hectares
Estimated scale: 10,000 laborers Status and progress: On-going project legal work
LE MINH XUAN INDUSTRIAL PARK (EXPANSION)
Products: Garden townhouses and villas
Status and progress: On-going project legal work
CLARITA
Location: District 2, HCMC
Area: 5.8 hectares with expected expansion
In addition, the Company is completing the legal procedures for the project Central Tan Tao Residential Area in Binh Tan District, Ho Chi Minh City.
FUTURE PROJECTS
LIST OF PROJECTS (continued)
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CONDOMINIUM
TYPICAL PROJECTS
The condo projects developed by Khang Dien always optimize resident densities and building footprints, giving priority to lands for green landscape and internal amenities in order to meet the increasing demand for quality housing in Ho Chi Minh City. These projects meet all legal requirements, are modernly designed, constructed with quality, well connected to traffic networks, fully supported by infrastructure and external amenities. Each building, each condo are designed and built in modern style, built to quality and harmonizing with the nature.
Products: 867 condos and 16 shophouses
Jamila is located in the Eastern gateway of Ho Chi Minh City and offer a dynamic and modern living space with full amenities and romantic landscape.
Location: Song Hanh road - HCMC - Long Thanh - Dau Giay Expressway (Do Xuan Hop Intersection), District 9, Ho Chi Minh City; 15 minutes driving to CBD and 5 minutes driving to Thu Thiem
Status & Progress: Handed over the condos and put the project into use in 2018; expect completion handover of Title Certificates to the buyers in 2020
JAMILA – FOR A BETTER LIFEINSPIRING ENERGY, FULFILLING HAPPINESS
Products: 1,570 condos and 23 shophouses
Status & Progress: Expect to begin handing over the condos and put the project into use in the second quarter of 2020
Location: Vo Chi Cong street (Ring road 2), intersected with Ho Chi Minh - Long Thanh - Dau Giay Expressway, District 9, Ho Chi Minh City; 20-minute drive from the city center
Located at the Eastern gateway of HCMC, Safira enjoys every moment of sunrise - energy for every new day. Safira has many outstanding values, from location, property right, amenities, close-to-nature life style and safety for young, modern families. Putting a lot of mind and heart to work, Khang Dien has created this quality living space with full amenities, enabling the residents to enjoy peaceful, fulfilled lives.
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VILLAS
TYPICAL PROJECTS (continued)
The villa projects developed by Khang Dien in the past 20 years offer a limited number of luxury houses in secured compounds located at carefully selected sites, elegantly designed and built, highly regarded for its close-to-nature environment.
EXCLUSIVE LIFESTYLE ENJOY THE QUINTESSENCE OF LIFE
Products: 43 luxury villas
The Venica is located in a private peninsula, hidden in the nature isolated from the busy urban life, surrounded by river on three sides and guarded by two secured gates. With the semi-classical architectural style emulating the splendor and magnificence of the Italian Venice villas, The Venica deserves to be dubbed as the living places for the upper class at home and abroad.
Location: Song Hanh road of the HCMC - Long Thanh - Dau Giay Expressway and Do Xuan Hop Street, District 9, Ho Chi Minh City; 15 minutes driving to CBD and 5 minutes driving to Thu Thiem
Status & Progress: Handed over and put the project into use in 2016; fully handed over the villas and Title Certificates to the buyers.
Products: 140 high-end detached villas and deluxe villa
Lucasta is an outstanding luxury eco-villa in the East of Ho Chi Minh City and the living space for the intellectual community and senior managers. Lucasta villa compound is surrounded by 1 hectare of man-made lake and harmonious natural landscape, offering green living space to the delicate residents.
Location: Lien Phuong Street at the center of District 9, Ho Chi Minh City; 20 minutes driving to CBD and 10 minutes to Thu Thiem
Status & Progress: Handed over and put the project into use in 2016; fully handed over the villas and Title Certificates to the buyers
NEO-CLASSICAL VILLA COMPOUND SURROUNDED BY RIVER
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TOWNHOUSE
Garden townhouse and street house are the major and traditional product lines creating Khang Dien’s reputation and brand for the past two decades since the Company’s establishment. Townhouse complex are developed aiming to meet the demand of the middle class and families who prefer landed houses with gardens.
Melosa Garden’s outstanding feature is its greenery, wide and quiet living space with 4-hectare central park and 9-level waterfall swimming pool built to Singaporean style. In addition, reasonable prices are also the factor that Melosa Garden be selected by middle-class families.Location: Vo Chi Cong street (Ring road 2),
intersected with Ho Chi Minh - Long Thanh - Dau Giay Expressway, District 9, Ho Chi Minh City; take 20-minute drive from the city center
Status & Progress: Handed over and put the project into use in 2015; fully handed over houses and Title Certificates to the buyers
Products: 567 garden townhouses and villas
THE JOURNEY TO HAPPINESS
Verosa Park is a complex of 296 high-end townhouses and villas located at a carefully selected site in the center of District 9, at Lien Phuong - Vo Chi Cong intersection, bordering District 2. The houses are designed with the quintessence of classical European architecture, in harmony with the natural landscape. Verosa Park is a peaceful green heaven where emotions meet memorableness and fulfillment.
Products: 293 high-end garden townhouses and 3 villas
Status & Progress: Ongoing sales; expect to complete handover of the houses and put the project into use in 2020
Location: District 9 next to District 2, Ho Chi Minh City
CREATE THE SOUND OF HAPPINESS
TYPICAL PROJECTS (continued)
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2019 MAJOR EVENTS
The year 2019 recorded many significant events that were very meaningful to the sustainable development of Khang Dien, in particular the construction and sale of Lovera Vista and Verosa Park projects besides Safira gratitude event and the first phase of Pink Book handover to Jamila residents.
Construction kick-off for Lovera Vista On the morning of 10 May 2019, Khang Phuc House Trading Investment Company Limited coordinated with An Phong Construction Joint Stock Company to organize the ground breaking ceremony of Lovera Vista project in the Residential Area No. 4, Phong Phu Commune, Binh Chanh District, Ho Chi Minh City.
The project consists of 5 blocks of 20 stories with 1,310 condos on 1.8 hectares of land. Lovera Vista is expected to be completed and handed over to residents at the beginning of quarter II of 2021.
More than 1,500 customers attending Safira gratitude event
Just a few months after the official introduction, Safira impressed the market when 1,570 condos were sold. To show gratitude to the customers, on 15 September 2019, Khang Dien organized the gratitude event “Owning Safira – Receiving Toyota Camry 2.5Q” with great success when more than 1,500 homebuyers attended. With Safira, Khang Dien once again earned the trust from customers. All products developed by the Company are always ensured in quality, progress and property rights.
01
Successful launch of sale training workshop for Lovera Vista and Verosa Park projectsKhang Dien successfully organized a training workshop for sales agents of Lovera Vista and Verosa Park projects on 23 July and 08 October, 2019 respectively, attracting thousands of participants. The sale team were fully provided with information about the project, legality and selling policy. With the philosophy of always doing more than what we are committed and with all our heart, Khang Dien has marked one more breakthrough with Lovera Vista and Verosa Park as ensuring the transparency of project legality and the investment into construction of infrastructure, amenities and landscape.
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2019 MAJOR EVENTS (continued)
Successful sale of Lovera Vista projectIn 2019, Khang Dien expanded business to the South of HCMC with Lovera Vista project.
On 20 October and 22 December 2019, Khang Dien launched sales and successfully sold 801 condos. Lovera Vista inherits every core value built through 20 years of development, including legal transparency, good location, satisfactory construction progress, full amenities, green living space and modern designs. The project has become particularly attractive to customers thanks to reasonable selling price and flexible financial support policy.
Hand-over the 1st batch of Pink Books to Jamila residents On 23 November, 2019, Khang Dien handed over the first batch of Pink Books to the residents. Jamila began construction in May 2017 with 4 blocks of 25 stories. At present, nearly 80% of the households have moved in. The Company is currently obtaining and handing over the Title Certificates to the residents.
Launched Verosa Park model unitsOn 15 December 2019, Verosa Park model units were officially launched to welcome customers. The model units are located on the most beautiful road of the project, overlooking airy Symphony Park with greenery that is meticulously cared for. Especially, customers can admire an ideal living space and touch all delicate designs, and feel the true beauty of the future home.
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2019 AWARDS AND RECOGNITIONS
As one of the prestigious real estate brands in Vietnam, Khang Dien is not only highly regarded in sustainable business orientation, developing projects that prosperous living value to customers, but also leaves a good impression with many honorable awards.
Particularly 2019 is the year Khang Dien affirms its position when being named in Vietnam Property Awards and Asia Property Awards with Verosa Park, Jamila, Safira. Besides, Khang Dien brand was also honored as Top 50 Best Vietnamese listed companies for the 4th consecutive year by Forbes, Top 50 best-performing companies in Vietnam 2018 by Nhip Cau Dau Tu Magazine. This shows the Company’s belief in the long journey of development, creating positive social impacts and contributing more to the country’s economic development.
Best-performing companies in Vietnam
Most prestigious listed companies in 2019
Best Vietnamese listed companies
On 27 June 2019, Khang Dien was named in “Top 50 best-performing companies in Vietnam 2018” for the fourth consecutive time. This is a valuable and prestige rank annually co-organized by Nhip Cau Dau Tu Magazine and Thien Viet Securities JSC (TVS) under the advice of the leading economic and business experts from Harvard and the reference to the prestigious rankings in the world such as Bloomberg Businessweek, Fortune, and Global Forbes to seek and honor the best-performing companies in Vietnam’s stock market.
On 08 August 2019, at the ceremony of Top 10 prestigious listed companies in Banking - Insurance - Technology 2019, Khang Dien was honored to be in the “Top 10 most prestigious listed companies” along with other leading prestigious large companies.
This result is independently built by Vietnam Report based on objective and scientific principles. The reputation of listed companies is determined based on the researches on the influence of financial factors, company image on the media and evaluation of finance and securities experts, specifically: Financial capacity shown in the latest financial statements (total assets, total revenue, profit after tax, capital efficiency, revenue growth, profits, etc.); Media reputation is assessed by Media Coding - coding of articles about companies on influential media channels; Survey on evaluation of typical shares for investment by experts; Survey on enterprises in June regarding business operations and 2019 investment plan.
On 15 August 2019, Khang Dien was named in the “Top 50 best Vietnamese listed companies” for the 4th consecutive year by Forbes Vietnam. This is a prestigious award by Forbes, aiming to honor the companies with best business performance with the capitalization up to billions of dollars through the published financial indicators on Ho Chi Minh City Stock Exchange (HSX) and Hanoi Exchange (HNX).
50 10 50 50 10 5050 10 50
TOP 50 TOP 10 TOP 50
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2019 AWARDS AND RECOGNITIONS (continued)
Both Jamila and Safira were named in the “Best Mid- End Condo Development” (HCMC) - Vietnam Property Awards 2019
Verosa Park won the Best Housing Landscape Architectural Design at Vietnam Property Awards and Asia Property Awards 2019; became a nominee for the contenter for Best Housing Development (HCMC)
Since 2017, Khang Dien has focused on developing mid-end condos in the East (Jamila, Safira) that leave behind a good impression in the market. Currently, residents have moved in, creating a civilized and modern community. Safira is expected to be handed over in the second quarter of 2020.
The Best Mid End Condo Development (HCMC) award achieved at Vietnam Property Awards 2019 motivates Khang Dien to continue developing better projects in the future, becoming more reputable as a brand in real estate market and being the first choice of customers who look for an ideal place to settle down.
With impressive and unique architectural design with quintessence of neoclassical European architecture, in harmony with pure and natural landscape, developed by Khang Dien and talented architects of Ong&Ong – a leading landscape architecture design company in Singapore, Verosa Park townhouses and villas won the highest award in Best Housing Landscape Architectural Design category and was nominated for Best Housing Development (HCMC) in Vietnam on 23 August 2019. Verosa Park continued to be nominated to join top projects in Asia and was honored at the prestigious Asia Property Awards 2019 in Thailand on 22 November 2019.
Typical Real Estate Developer 2019
Top 50 best Vietnamese enterprises
On 09 January 2020, Khang Dien was honorably awarded Vietnam Property Awards 2020 for the content “Typical Real Estate Developer 2019” by Nhip Cau Dau Tu Magazine. In 2019, Khang Dien deployed Lovera Vista project and Verosa Park luxury townhouse and villa project that attracted great attention from customers and real estate experts. Khang Dien brand built customer trust with quality, solid legal footing of housing products.
On 09 January 2020, Khang Dien was named in the Top 50 best enterprises 2019 for the first time. This is a rank for top 50 enterprises in the rank of 500 largest enterprises in Vietnam (VNR500) built by Vietnam Report in cooperation with Vietnamnet Newspaper to evaluate, honor and award enterprises that have made great contributions to the development of Vietnam economy. Main criteria of this rank are actual revenue of enterprise in recent year, current situation and prospects of revenue growth in previous years, total assets, total labors, profit after tax, return on assets (ROA), return on equity (ROE) and business reputation on the media.
TOP 50
50 10 50
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SHAREHOLDER INFORMATION
SHARE INFORMATION
Charter capital
VND 5,444,291,090,000
Number of outstanding share
544,429,109 shares
Par value per share
VND 10,000
Number of treasury share
0 shares
Market capitalization as of 31 Dec 2019
VND 14,645,143,032,100
NO. SHAREHOLDERDOMESTIC SHAREHOLDER FOREIGN
SHAREHOLDERTOTAL NUMBER OF SHARES
Number of shares
Percentage/ Charter capital
Number of shares
Percentage/ Charter capital
Number of shares
Percentage/ Charter capital
1 Government - - - - - -
2Shareholders holding 5% or above
160,662,816 29.51% 40,025,097 7.35% 200,687,913 36.86%
3Shareholders holding from 1% to less than 5%
39,992,015 7.35% 151,655,790 27.85% 191,647,805 35.20%
4Shareholders holding less than 1%
101,316,765 18.61% 50,776,626 9.33% 152,093,391 27.93%
5 Treasury shares - - - - - -
TOTAL 301,971,596 55.47% 242,457,513 44.53% 544,429,109 100%
SHARE OWNERSHIPAccording to the list of share owners closed on 31 Dec 2019 provided by Vietnam Securities Depository (VSD).
Share market price
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SHAREHOLDER INFORMATION (continued)
SHAREHOLDER STRUCTURE According to the list of share owners closed on 31 Dec 2019 provided by Vietnam Securities Depository (VSD).
No. Shareholder structure Number of shares Ownership percentage (%)
1 Treasury shares - -
2 Domestic shareholders 301,971,596 55.47%
Individuals 90,856,561 16.69%
Institutions 211,115,035 38.78%
3 Foreign shareholders 242,457,513 44.53%
Individuals 597,050 0.11%
Institutions 241,860,463 44.42%
TOTAL 544,429,109 100,00%
MAJOR SHAREHOLDERSAccording to the list of share owners closed on 31 Dec 2019 provided by Vietnam Securities Depository (VSD).
No. Shareholder name Number of shares Ownership percentage (%)
1 Tien Loc Investment Company Limited 61,950,490 11.38%
2 Gam Ma Investment Company Limited 50,632,514 9.30%
4 A Au Trading Investment Company Limited 48,079,812 8.83%
4 Vietnam Enterprise Limited 40,025,097 7.35%
TOTAL 200,687,913 36.86%
Note:
� Total ownership of Dragon Capital is around 18%.
� Total ownership of VinaCapital is around 13%.
TREASURY STOCK In 2019 the Company has no transaction related to treasury stock.
SHARES OWNED BY INTERNAL SHAREHOLDERS
Shareholders No. Name Position Total Ownership (%)
Board of Directors 1 Mai Tran Thanh Trang Chairwoman of BOD 4,937,046 0.91%
2 Ly Dien Son Deputy Chairman of BOD 6,126,100 1.13%
3 Nguyen Thi Dieu Phuong Member of BOD - -
4 Nguyen Thi Cam Van Member of BOD 1,735,500 0.32%
5 Ngo Thi Mai Chi Member of BOD cum General Director
3,497,244 0.64%
General Director Team 1 Ngo Thi Mai Chi Member of BOD cum General Director
- -
2 Bui Quang Huy Deputy General Director 65,000 0.01%
3 Truong Minh Duy Deputy General Director 288,250 0.05%
Inspection Committee 1 Pham Kim Thoa Head of Inspection Committee - -
2 Vuong Hoang Thao Linh Member of IC 3,824 0.0007%
3 Luu Thi Xuan Lai Member of IC - -
Chief Accountant 1 Nguyen Tran Cam Hien Chief Accountant 327,950 0.06%
Chief Financial Officer 1 Nguyen Thuy Trang Chief Financial Officer 499,500 0.09%
TOTAL 17,480,414 3.21%
CHANGES OF OWNER’S INVESTED CAPITALIn June 2019, the Company issued 124,205,756 shares to existing shareholders, including:
� 20,700,484 shares to pay dividends;
� 103,505,272 shares to increase charter capital from owner’s equity.
In July 2019, the Company issued 6,200,000 shares for Employee Stock Ownership Plan (ESOP).
55.47%
44.53%
DOMESTIC SHAREHOLDERS
FOREIGN SHAREHOLDERS
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INVESTOR RELATION
Khang Dien always maintains policies of engaging with stakeholders to facilitate investors and the media to understand the Company and the related matters. In 2019, the Company maintained dialogues and engagements with the shareholders, investors, securities companies and etc. to convey Company’s vision, goals, core values, business model, competitive advantages and growth potentials.
The Company announced and reported business results quarterly, every 6 months and annually as required to Ho Chi Minh Stock Exchange (HOSE), State Securities Commission of Vietnam (SSC), and posted the information on the Company's websites at URL: www.khangdien.com.vn and other communication channels as well. The Company’s
website is a source of information for everyone to learn about Khang Dien. In particular, the website has dedicated sections for shareholders’ information, news and important events including all public reports, announcements, press release and a link for KDH stock information.
To be flexible in engaging and exchanging information with the stakeholders, the Company is facilitating a number of engagement channels such as direct meetings, business result calls, emails and calls discussing the Company potentials, project tours and investor events. In 2019, the Company held meetings with the large investment funds from Europe, America, Japan, Hong Kong, Singapore, South Korea, Thailand and etc.
Top securities companies issuing reports on Khang Dien
Main events of investor relations in 2019 Awards in 2019
� Ho Chi Minh City Securities Corporation (HSC)
� Viet Capital Securities (VCSC)
� SSI Securities Corporation (SSI - HOSE)
� RongViet Securities Corporation (VDSC)
� VNDirect Securities Corporation (VNDS)
� In April 2019:
The 2019 General Annual Shareholder Meeting
Dragon Capital Investor Conference
� In May 2019: Viet Capital Vietnam Access Day
� In August 2019: Meeting securities companies
� In December 2019: Meeting investment funds
� Top 50 most effective business companies in Vietnam voted by Thien Viet Securities JSC (TVS) and Investment Bridge Journal
� Top 10 reputable listed companies in 2019 voted by Vietnam Report
� Top 50 best listed companies in Vietnam voted by Forbes Vietnam
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SUBSIDIARIES
LIST OF SUBSIDIARIES
Khang Dien has 23 subsidiaries, including:
Name of subsidiaries Head office Core business Operating status Ownership percentage (%)
(1) Thanh Phuc Real Estate Investment Ltd. Ho Chi Minh City Real estate trading In operation 99.90%
(2) Tri Minh Real Estate Investment and Trading JSC Ho Chi Minh City Real estate trading In operation 99.80%
(3) Gia Phuoc Real Estate Investment and Trading Co., Ltd. Ho Chi Minh City Real estate construction consulting and trading In operation 99.90%
(4) Saigon Spring Real Estate Trading JSC Ho Chi Minh City Real estate trading In operation 99.80%
(5) International Consulting Co., Ltd. Ho Chi Minh City Real estate construction consulting and trading In operation 99.90%
(6) Long Phuoc Dien House Development and Infrastructure Building Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.95%
(7) Hao Khang Co., Ltd. Ho Chi Minh City Real estate construction and trading In operation 100.00%
(8) Saphire Real Estate Investment and Trading Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.90%
(9) Lien Minh Real Estate Investment and Trading Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.70%
(10) Song Lap Real Estate Investment and Trading Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.70%
(11) Tri Kiet Real Estate Investment and Trading Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.90%
(12) Mega City Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.85%
(13) Vi La JSC Ho Chi Minh City Real estate trading In operation 99.00%
(14) Thap Muoi Real Estate Trading and Construction Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.80%
(15) Viet Huu Phu JSC Ho Chi Minh City Real estate trading In operation 99.00%
(16) Green Space Real Estate Trading and Investment Co., Ltd. Ho Chi Minh City Real estate trading In operation 98.01%
(17) Binh Trung Real Estate Investment Trading Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.80%
(18) Khang Phuc House Trading Investment Co., Ltd. Ho Chi Minh CityTrade real estate properties; House construction; Investment into construction and operations of industrial park infrastructure
In operation 100.00%
(19) BCCI Development Investment Co., Ltd Ho Chi Minh City Real estate trading In operation 100.00%
(20) Minh Phat Real Estate Investment Co., Ltd. Ho Chi Minh City Real estate trading In operation 51.00%
(21) Kim Phat Real Estate Investment Trading Co., Ltd. Ho Chi Minh City Real estate trading In operation 99.90%
(22) Nam Phu Property Development Co., Ltd. Ho Chi Minh City Real estate trading In operation 51.00%
(23) Thuy Sinh Real Estate JSC Ho Chi Minh City Real estate trading In operation 98.90%
The Company has neither associates nor joint ventures.
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BUSINESS DIRECTION
KEY GOALS
Completing on-going projects fast and
efficiently.
Completing legal procedures for the projects launched
in the coming years.
Maintaining earnings growth for
the shareholders.
GOALS FOR THE ENVIRONMENT, SOCIETY AND COMMUNITY � Saving energy, materials and water to reduce environmental footprint and business costs;
� Maintaining a dynamic, fair working environment with career development opportunities, as well as caring about the spiritual and material life of employees, thereby enhancing productivity and attracting talents;
� Developing real estate projects having full property rights and good quality to serve the society, thereby promoting business development and revenue growth;
� Always complying with laws, regulations and shareholders’ resolution, thereby reinforcing brand reputation and maintaining the trust of customers and partners.
MEDIUM-TERM AND LONG-TERM DEVELOPMENT STRATEGIES � Consolidating, building and training human resources, especially management team together with applying modern
management technology.
� Pursuing goals about environment, society and community in production and business, specifically in land bank development, project development and operation of residential properties and other properties;
� Diversifying real estate products that meet customers needs and the cycle of real estate market; continuing to develop land bank and improve production and business efficiency;
� Expanding cooperation with suitable strategic partners.
Completing the organization,
management and procedures for operation and management of residential
properties and the Company’s other
properties.
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S O TW
SWOT
KNOWLEDGE AND EXPERIENCE
With 20 years of real estate development and investment in Ho Chi Minh City, Khang Dien has accumulated comprehensive knowledge and experience in land assembly, legal procedures, property development and business operations.
STRONG FINANCIAL CAPACITY
Khang Dien maintains a solid financial foundation based on a safe financial structure, effective management of costs, cash flows and capital use. In addition, the Company is supported by the major shareholders, who are the leading investment funds in Vietnam such as Dragon Capital, VinaCapital and the largest banks in Vietnam such as VietinBank, VietcomBank , OCB, etc.
LAND BANK AND ABILITY TO REPLICATE
Khang Dien owns a large-scale land bank in potential areas of Ho Chi Minh City and always seeks to replicate the land being used. The Company has 20 years of hands-on experience in developing quality land bank.
KHANG DIEN BRAND
Khang Dien brand is strongly recognized in Ho Chi Minh City market place. Having put legal compliance and reputation at the top of business, Khang Dien is proud to be the brand that earns customer trust. The Company continues to diversify products and expands business to make Khang Dien brand stronger every day.
Khang Dien’s current business is focusing on Ho Chi Minh City area without expansion to the other areas, which impacts on revenue growth.
POTENTIAL MARKET
Housing demand in HCMC remains high and grows steadily every year due to biological and mechanical population growth while supply has been lagging. Additionally, the ability to supply in the market place is under pressure because the authorities are raising the requirements and standards for inputs and outputs as well as tightening licensing appraisal process for new projects. This is an opportunity for real estate companies having scale, financial capacity and good records of compliance.
FAVORABLE MACRO-ECONOMIC ENVIRONMENT
Vietnam continues to benefit from strong economic growth and political-social stability in 2019 with GDP growth rate above 7% and inflation below 4%. Besides, Vietnam’s urbanization is experiencing the fastest growth rate in Southeast Asia due to population and economic growth. In 2020, Vietnam is forecasted to maintain economic growth on the basis of political-social stability supported by the Government’s growth policy, especially for the private sector, consumption, tourism and FDI.
INCREASING COMPETITION
Other property developers are launching new projects with diverse products at better quality and competitive sale prices, which increases competition in the market place.
ECONOMIC RISKS OUTSIDE VIETNAM
Although the emerging economies like Vietnam continue to maintain high growth rate due to young population and competitive labor costs, in case of global economic growth slows down, uncertainties may have impacts on FDI and FII capital flows to Vietnam, thereby putting pressure on VND/USD exchange rate, money supply and interest rates. This will limit consumers’ ability to buy properties and affect consumer psychology.
STRENGTHS OPPORTUNITIESWEAKNESSES THREATS
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GOVERNANCE MODEL ORGANIZATIONAL CHART
Khang Dien operates in the form of a joint stock company. Besides complying with the laws, the Company strictly follows the charter that has been approved by General Shareholder Meetings.
GENERAL SHAREHOLDER MEETING According to the Law on Enterprises and the Company’s Charter, the General Shareholder Meeting is the highest governing body of the Company. GSM holds annual meetings to approve policies, orientations and business plans for the year. In addition, GSM may hold extraordinary meetings in accordance with the law and the Charter.
BOARD OF DIRECTORS BOD is the management body elected by GSM. BOD has full rights to make decisions on all important issues related to purposes and interests of the Company, except for issues under GSM control. The incumbent BOD of Khang Dien consists of the Chairwoman and 04 other members, appointed for five-year terms, in which 02 are independent non-executive, 02 are non-executive and 01 is executive.
INSPECTION COMMITTEEThe incumbent Inspection Committee includes 03 members, including 01 Chief Supervisor and 02 supervisors. Inspection Committee operates under 5-year term. IC is elected by GSM to be responsible for supervising activities of BOD and GDT in managing and running the Company, verifying business reports and financial statements and reviewing accounting books and management works. IC operates independently from BOD and GDT.
GENERAL DIRECTOR TEAM The incumbent General Director Team consists of 01 General Director and 02 Deputy General Directors. General Director is the person who is authorized by BOD to be the Company’s legal representative in charge of managing all daily activities of the Company and is responsible to BOD for the implementation of the rights and duties assigned. Deputy General Directors directly manage business operations and give advices to the General Director in making strategic decisions for the Company.
Khan
g D
ien’
s Org
aniz
atio
nal S
truc
ture
GENERAL SHAREHOLDERS’ MEETING
BOARD OF DIRECTORS
GENERAL DIRECTOR
DEPUTY GENERAL DIRECTOR
INSPECTION COMMITTEE
INTERNAL INSPECTION TEAM
PROJECT OPERATION
AND INVESTMENT
DIVISION
COST AND QUALITY
MANAGEMENT DIVISION
PROJECT MANAGEMENT
DIVISION
PROJECT LEGAL
DIVISION
CORPORATE LEGAL
DIVISION
CUSTOMER CARE AND
OPERATION MANAGEMENT
DIVISION
SALES MARKETING
& PUBLIC RELATION DIVISION
ACCOUNTING & FINANCIAL
DIVISION
HR & ADMINISTRATION
DIVSION
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BOARD OF DIRECTORS
Mrs. MAI TRAN THANH TRANGChairwoman of BODYear of birth: 1976 Qualification: Bachelor Degree in Laws, Land Management Engineer
Mr. LY DIEN SONDeputy Chairman of BOD Year of birth: 1966 Qualification: Bachelor Degree from the University of Culture
Experience: Prior to his current role as Deputy Chairman of BOD, Mr. Son held the role of Chairman of BOD cum General Director and directly managed the Company since its establishment day. With passion, dedication, and experience, he has led the Company to overcome challenges and achieve breakthrough success, developing Khang Dien to become one of the leading real estate developers in HCMC. At present, Mr. Ly Dien Son undertakes the position of Deputy Chairman of BOD, assisting the Chairwoman in strategic management and supervising General Director Team.
Working history: � 2001 - 2012: Chairman of BOD cum General Director
of Khang Dien House Trading and Investment JSC.
� 2012 - 2013: Deputy Chairman of BOD cum General Director of Khang Dien House Trading and Investment JSC.
� 2013 - March 2017: Chairman of BOD cum General Director of Khang Dien House Trading and Investment JSC.
� April 2017 - present: Deputy Chairman of BOD of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
Mrs. NGUYEN THI CAM VANMember of BOD Year of birth: 1960 Qualification: Master Degree in Land Management
Experience: With her intensive working experience in real estate project legal practice, Mrs. Van has contributed to the sustainable development and business direction of the Company in accordance with the laws.
Working history: � 1984 - 1997: HCMC Department of Land
Administration.
� 1998 - 2003: HCMC Department of Land Administration and Housing Land.
� 2003 - 2015: HCMC Department of Natural Resources and Environment; Retired in December 2015.
� April 2017 - present: Member of BOD of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
Mrs. NGUYEN THI DIEU PHUONG Member of BOD Year of birth: 1980 Qualification: Bachelor Degree in Economic - Finance, FACCA Auditor
Experience: Having almost 21 years of experience in real estate project legal practice, Mrs. Trang has many important contributions to Khang Dien through a number of key positions: Assistant to Chairman of BOD, and Deputy General Director cum Member of BOD, respectively. At present, Mrs. Trang undertakes the position of Chairwoman of BOD in charge of strategic management, especially in project legal practice, which is the foundation for Khang Dien to grow its business on the basis of transparent and solid legal footing. Mrs. Trang is the key factor for this achievement.
Working history: � 2001 - 2005: Legal consultant - Law Office.
� October 2005 - July 2007: Administration Manager - Member of BOD of Khang Dien House Trading and Investment JSC.
� July 2007 - May 2008: Assistant to Chairman of BOD Khang Dien House Trading and Investment JSC.
� June 2008 - April 2017: Member of BOD cum Deputy General Director of Khang Dien House Trading and Investment JSC.
� April 2017 - present: Chairwoman of BOD of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
Experience: With many years of experience and achievements in prestigious financial institutions, in October 2009, Mrs. Phuong was invited to join Khang Dien as a member of BOD. Since joining Khang Dien, she has had positive contributions to the Company’s development. In addition, Mrs. Phuong gives advices and supports functional departments to build financial strategies suitable to each development stage and general situation of the market.
Working history: � 2002 - 2005: Senior Auditor of KPMG.
� 2006 - 2010: In charge of the positions from Investment Specialist to Investment Manager of VinaCapital.
� July 2010 - December 2016: Investment Director - Head of Property Portfolio of Vietnam Opportunity Fund - a fund under VinaCapital.
� December 2016 - present: Deputy General Director of Vietnam Opportunity Fund.
� October 2009 - present: BOD member of Khang Dien House Trading and Investment JSC.
Positions in other organizations:
� BOD member of Ngoc Nghia Industry - Service - Trading JSC
� BOD member of Thai Hoa International Hospital JSC
� BOD member of Hung Vuong JSC
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Mr. LE HOANG SONMember of BOD (resigned in July 2019)Year of birth: 1977Qualification: Bachelor Degree in Laws, Bachelor Degree in Business Administration
Working history: � 2001 - 2003: Project Legal Specialist of Tan Binh
Investment and Construction JSC.
� 2004 - 2007: Project Legal Specialist of Cotec Housing Investment and Development JSC.
� October 2007 - April 2012: Deputy Head of Legal Department of Khang Dien House Trading and Investment JSC.
� April 2012 - April 2013: Member of BOD cum Deputy Head of Legal Department of Khang Dien House Trading and Investment JSC.
� October 2014 - March 2017: Head of Project Legal Department Khang Dien House Trading and Investment JSC.
� March 2017 - July 2019: Deputy General Director of Khang Dien House Trading and Investment JSC.
� September 2015 - July 2019: Member of BOD of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
Mrs. Ngo Thi Mai ChiMember of the Board of Directors (appointed in July 2019)Year of birth: 1978Qualification: Bachelor Degree in Accounting Financial
Experience:Mrs. Ngo Thi Mai Chi has more than 21 years of experience in finance - accounting. She joined Khang Dien in 2007 and has made many contributions to the Company’s financial - accounting management. As a member of the Board of Directors, she continues to contribute to the Company’s successes and helps the Company continue to develop in the future.
Working history: � January 2001 - December 2004: Accountant, Chief of
Account - Finance of A&B Co., Ltd.
� May 2005 - October 2007: Deputy Head of Accounting - Finance Department of Truong Thanh Furniture Corporation.
� December 2007 - November 2015: Internal control experts, Chief Accountant, Chief Financial Officer of Khang Dien House Trading and Investment JSC.
� December 2015 to February 2017: Deputy General Director of Khang Dien House Trading and Investment JSC.
� March 2017 - present: General Director of Khang Dien House Trading and Investment JSC.
� July 2019 - present: BOD member of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
BOARD OF DIRECTORS (continued)
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GENERAL DIRECTOR TEAM
Mr. LE HOANG SON
Deputy General Director (resigned in July 2019)Year of birth: 1977Qualification: Bachelor Degree in Laws, Bachelor Degree in Business Administration.
(See “Board of Directors” for details about Mr. Le Hoang Son.)
Mr. BUI QUANG HUYDeputy General DirectorYear of birth: 1984 Qualification: Master Degree in Project Management
Experience:Mr. Bui Quang Huy has more than 14 years of experience in real estate project investment and development at leading corporations in Vietnam and abroad. Currently, Mr. Huy has undertaken Deputy General Director position, in charge of project management and investment, to ensure the process of developing and managing projects meet the highest quality standards, sustainability and high efficiency.
Working history: � 2007 - 2008: Project Management Specialist of Phuc
Yen Real Estate JSC.
� 2008 - 2011: Project Manager of CapitaLand (Vietnam) Holdings Pte. Ltd.
� 2011 - 2017: Project Executive Director, Investment & Development Director of Novaland Investment Group Corporation (Novaland Group)
� 2017 - 2019: Deputy General Director of An Gia Hung Investment Construction JSC.
� February 2019 - present: Deputy General Director of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None
Mrs. NGO THI MAI CHI
General DirectorYear of birth: 1978Qualification: Bachelor Degree in Accounting FinancialMrs. Ngo Thi Mai Chi is a Member of the Board of Directors cum General Director.
(See “Board of Directors” for details about Mrs. Ngo Thi Mai Chi.)
Mr. TRUONG MINH DUY
Deputy General Director Year of birth: 1973 Qualification: Construction engineer
Experience: He has more than 25 years of experience in project management. Prior to joining Khang Dien, Mr. Duy used to hold senior positions at real estate trading and investment companies. He has made a lot of positive contributions in advising and operating the construction management at Khang Dien’s projects.
Working history: � 1997 - 2004: Design Engineer, Design Manager, and
Technical Manager at TH Hydraulics Construction Consultant Co., Ltd.
� 2005 - 2009: Head of Construction Center - Construction Technology & Building Material JSC (Cotec).
� 2009 - 2014: Head of Project Management Division - Sai Gon Thuong Tin Real Estate (Sacomreal).
� 2014 - 2016: Regional Managing Director of Nova Real Estate Investment Corporation (Novaland).
� April 2017 - present: Deputy General Director of Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
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Mrs. VUONG HOANG THAO LINHMember of Inspection CommitteeYear of birth: 1974Qualification: Bachelor Degree in Economics, Bachelor Degree in Laws, and Master Degree in Business Administration
Experience: Ms. Linh has more than 21 years of experience in accounting and auditing. She used to work as a Senior Auditor of Accounting and Consulting Co., Ltd. (A&C) and Chief Accountant at Air Energy Vietnam and Avon Comestics Vietnam. At present, she is the Deputy Investment Director of VinaCapital.
Working history: � 1996 - 2001: Senior Auditor at A&C.
� 2001 - 2003: General Accountant at New Toyo Tissue Paper Mill (Vietnam).
� 2003 - 2004: Chief Accountant of Air Energy Vietnam.
� 2004 - 2006: Chief Accountant of Avon Cosmetics Vietnam.
� 2006 - 2014: Investment Manager of VinaCapital Corporate Finance Vietnam.
� 2014 - present: Investment Director of VinaCapital Corporate Finance Vietnam.
� September 2017 - present: Member of IC at Khang Dien House Trading and Investment JSC.
Mrs. LUU THI XUAN LAI
Member of Inspection Committee Year of birth: 1978Qualification: Bachelor of Finance and Accounting
Experience: Mrs. Lai has more than 17 years of experience in accounting. She used to work as Manager of Accounting Department at the companies i.e. Traffic Work Construction Company No.507 and Thai Thinh Capital JSC and Chief Accountant for Song Lap Real Estate Investment and Trading Co., Ltd.
With her intensive working experience in large real estate enterprises, Mrs. Lai has made positive contributions in supporting to review and control construction costs, ensuring quality of the Company’s projects and compliance to law.
Working history: � 2000 - 2003: Accountant for the branch Traffic Work
Construction Company No.507.
� 2007 - 2009: Accountant for Thai Thinh Capital JSC.
� 2010 - 2011: Accountant for Eastern Real Estate Investment and Trading Co., Ltd.
� 2012 - 2013: General Accountant for Lam Vien Investment and Construction JSC.
� 2014 - April 2017: Chief Accountant for Song Lap Real Estate Investment and Trading Co., Ltd.
� April 2017 - present: Member of IC at Khang Dien House Trading and Investment JSC.
Positions in other organizations: None
Mrs. PHAM KIM THOA
Head of Inspection CommitteeYear of birth: 1975Qualification: Bachelor of Finance and Accounting
Experience: Mrs. Thoa has more than 20 years of experience in accounting. She used to work as an accountant for the companies such as Urban Development and Investment Company and Vuon Pho JSC (Vung Tau) and Chief Accountant for Tri Minh Real Estate Trading and Investment JSC. Mrs. Thoa manages Inspection Committee in evaluating business results and supervising all activities to ensure the Company’s compliance to law.
Working history: � 1998 - 2009: Deputy Manager of Accounting
Department at Urban Development and Investment Company.
� 2009 - 2010: Chief Accountant at Vuon Pho JSC.
� 2010 - April 2017: Chief Accountant at Tri Minh Real Estate Trading and Investment JSC.
� April 2017 - September 2017: Member of IC at Khang Dien House Trading and Investment JSC.
� September 2017 - present: Head of IC at Khang Dien House Trading and Investment JSC.
Positions in other organizations: None.
Positions in other organizations:
� Member of BOD of Vina Construction Machine JSC
� Head of IC of Hung Vuong Plaza JSC
� Head of IC of International Dairy Products
� Member of IC of HUD.VN Social Housing Development JSC
INSPECTION COMMITTEE
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HUMAN RESOURCE REPORT
HUMAN RESOURCE STRUCTURE OF KHANG DIEN
As of 31 December 2019, Khang Dien had 327 employees (including employees of the Parent Company and the subsidiaries), 35 employees more than that of 2018. The increase in the number of employees in 2019 was driven by business expansion and new projects deployed at the same time.
PERSONNEL STRUCTURE BY QUALIFICATIONS
Post-Graduate 16
Graduate 206
College 105
PERSONNEL STRUCTURE BY AGE
Over 45 years old 56
31 to 45 years old 183
Under 30 years old 88
PERSONNEL STRUCTURE BY GENDER
Male 192
Female 135
Personnel structure by qualifications
Personnel structure by age
Personnel structure by gender
Post-Graduate: 16
Graduate: 206
College: 105
Over 45 years old: 56
31 to 45 years old: 183
Under 30 years old: 88
Male: 192
Female: 135 59%
17%
5%
56%
63%
27%
41%
32%
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PERFORMANCE REPORTCHAPTER II
OVERVIEW OF REAL ESTATE MARKET IN 2019
ECONOMIC GROWTHAccording to the General Statistics Office, GDP grew 7.02% in 2019, exceeding the government's target of 6.6% to 6.8%. In particular, GDP of four quarters increased by 6.82%, 6.73%, 7.48%, 6.97%, respectively. Since 2011, this year’s growth is the second consecutive year Vietnam achieves growth rate of over 7%.
Attracting foreign direct investment (FDI) is said to be a bright spot of 2019 economy. According to Foreign Investment Agency (Ministry of Planning and Investment) as of 20 December 2019, FDI into Vietnam reached USD38 billion, up 7.2% as compared to the same period of last year. This is also the highest number in the past 10 years. Specifically, newly registered capital was nearly USD17 billion, adjusted and additional capital reached USD5.8 billion, and capital contributed to share purchase reached USD15.47 billion. In 2019, foreign investors invested in 19 sectors. Real estate business operation ranked second with total investment capital of USD3.88 billion, accounting for 10.2% of total registered investment capital.
Both domestic and foreign economic experts stated that Vietnam has achieved remarkable successes in growth from 2016 up to now and is likely to continue to maintain strong growth momentum in the future. However, Vietnam is also facing some challenges such as global rapid changes, impacts of Industry 4.0, and climate change.
REAL ESTATE MARKET Looking back at 2019, the experts state that despite the challenges, Vietnam’s real estate market generally developed more stable and professional and less risky than the previous years. Real estate currently plays an increasingly important role as one of the drivers for economic growth through capital investment, job creation, consumption and tax paying.
According to the industry experts, Vietnam is having strong housing demand and potential market for hospitality and industrial real estate developments. Increasing FDI inflows into the real estate sector point to strong market potentials in the medium and long terms.
In 2019, real estate projects having transparent legal work done in Ho Chi Minh City metropolitan continued to affirm their positions in the market where home buyers have been increasingly required project legal clearance.
2019 GDP
Up 7.02%Exceeding the government's target of 6.6% to 6.8%
FDI into Vietnam
Reached USD 38 billion (as of 20 December 2019)Up 7.2% as compared to the same period of last year
FDI in real estate
Reached USD3.88 billionAccounting for 10.2% of total registered investment capital
Additionally, Ho Chi Minh City's government has implemented development policy aiming for “Smart Cities” and “A City Within A City” has stimulated infrastructure development connecting the new urban centers in the East, South and Southwest with the existing urban centers, which meets the needs of homebuyers and attracts real estate investors to develop new urban centers.
According to industry experts, real estate companies currently have to cope with various challenges such as inconsistent legal documents related to real estate market as well as difficult administrative procedures of licensing new projects. Nonetheless, these two factors also create opportunities for well-capitalized, well-run, and legally transparent real estate companies in Vietnam in general and in Ho Chi Minh City in particular to grow business and take up market shares.
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REPORT AND ASSESSMENT BY BOARD OF DIRECTORS
CORPORATE GOVERNANCEIn 2019 the Company correctly and fully implemented the regulations of corporate governance and submitted the governance reports for the first 06 months and the entire 2019. Such reports are submitted to State Security Commission of Vietnam, Ho Chi Minh City Stock Exchange and to the public via the Company’s website at www.khangdien.com.vn as required.
BOARD OF DIRECTOR’S ASSESSMENT ON BUSINESS OPERATIONS
EVALUATION OF 2019 BUSINESS PERFORMANCE
ACHIEVEMENTS
The year 2019 was another year of sustainable earnings growth. Particularly, the after-tax profits of the Mother company reached VND 915 billion, 2% higher than planned and grew by 13% since 2018.
In 2019, with the effective business strategy and appreciation for true values, Khang Dien progressed on the solid foundation created from previous years.
� The 1.7 hectare Jamila project consists of 867 condos and 16 shophouses built at the end of the second quarter of 2017. At the end of the first quarter of 2019, the Company completed construction of the entire project and handed over the condos to the buyers according to the committed schedule. The key highlight of Jamila was that right after handing over the condos, the Company immediately proceeded the application for Title Certificates (“Pink Book”). The Company expects to complete Pink Book handover to all Jamila residents in 2020.
� The Company also fully sold 1,593 condos from Safira project in 2019. The Company expects to hand over the condos and put the project into use beginning in the second quarter of 2020, earlier than the contracted schedule. After handing over condos, the Company will immediately proceed the applications for Pink Books for all residents in accordance with the laws.
� In 2019, the Company also deployed construction and launched sales of Lovera Vista project in the Southwest of HCMC. The 1.8 hectare Lovera Vista project consists of 1,310 condos. Construction began in May, 2019 and sale was launched in October, 2019, after completing all legal procedures as requested by the regulations. The Company has sold 801 condos, and the remaining condos are expected to be sold out in 2020. Currently, the project is built to the 18th floor and ready for roof casting in May, 2020. The Company is focusing on construction to ensure that the handover scheduled in the second quarter of 2021 will be met as committed to the buyers.
With the motto of doing better than commitment and upholding true values, full transparent legal documents, Khang Dien’s quality condos have made good impression on the market and thus gained the trust and satisfaction of the customers and investors.
THE CONDOS PRODUCT LINE CREATED GOOD IMPRESSION ON THE MARKETFrom 2017 to 2019 Khang Dien alternately deployed 3 condo projects: Jamila, Safira and Lovera Vista with nearly 4,000 condos. These condo projects created good impressions on the market and welcomed by customers.
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REPORT AND ASSESSMENT BY BOARD OF DIRECTORS (continued)
In 2019 the Company deployed Verosa Park villas - townhouses in the high-end low-rise market segment with 296 houses. Construction of Verosa Park was completed, and sales was launched in the third quarter of 2019, after fully completing legal procedures according to the regulations. Verosa Park was highly regarded on the real estate market with high-end design and transparent legal status. As of 31 December 2019, the Company has sold 150 houses. The remaining houses are expected to be sold out in 2020. The project made great contributions to the Company’s revenue and profits in 2019.
EVALUATION ON BOARD OF DIRECTORS’ MEETINGS
� In 2019, the BOD held regular, periodic and extraordinary meetings. The meetings of the BOD were held and implemented in accordance with the Enterprise Law, Corporate Charter and Internal Control Regulations.
� The matters of business development strategies and management systems were regularly reviewed and evaluated by the BOD in the periodic meetings.
� The BOD issued Resolutions for the Company’s operations; these resolutions followed the approved procedures and were complied with the provisions of the Enterprise Law and the Company’s Charter, and in alignment with the business strategies and business plans approved by the General Shareholder Meeting (GSM).
EVALUATION ON BOARD OF DIRECTORS’ ACTIVITIES
� According to the BOD’s operation plan, the works performed by the BOD in 2019 correctly follow the Resolutions of the General Shareholder Meeting and comply with the Charter and Internal Control Regulations.
� All members of the BOD showed high senses of responsibility, correctly performed their roles, proposed many solutions and made timely and good decisions in compliance with the laws.
� The BOD led and managed the Company achieved revenue and profits targets in 2019, fully performed business duty to the State budget and delivered benefits to the Company’s shareholders.
EVALUATION ON BOARD OF DIRECTORS’ SUPERVISION ON GENERAL DIRECTOR
� The BOD fully supervised the works performed by the GDT. As a result, the BOD understood the Company’s operations, on which the GDT and BOD cooperated effectively to make timely and good decisions, policies and to execute the proposed business plan, which delivers the best profits for the Company and its shareholders.
� Supervision on the GDT was regularly and closely maintained by the BOD to ensure that the Company’s operations remained stable and in accordance with the laws.
PROFITS GROWTH
MAINTAINING PRUDENT FINANCIAL STRUCTURE
The projects that were successfully deployed in the past years, such as Jamila, Safira, Lovera Vista and Verosa Park, have made significant contributions to revenue and profits of the Company from 2017 to 2019 and in the following years. In 2019, the Company’s after-tax profits grew by 13% compared to that of 2018.
In 2019 the Company’s owner equity reached VND 7,664 billion, increased by 11% over the same period last year, accounting for 58% of the total capital and becoming the main capital source to form the Company’s assets. This is shown that the Company is steered toward financial independence and ensured safe financial structure.
Currently, Khang Dien is successful in developing townhouses, luxury villas, condos and position itself on the real estate market in Ho Chi Minh City. In the forthcoming years, Khang Dien will consider to invest in and operate
SHORTCOMINGS
BOARD OF DIRECTORS’ EVALUATION ON GENERAL DIRECTOR TEAM’S ACTIVITIES
EVALUATION BY THE INDEPENDENT MEMBER OF BOARD OF DIRECTORS ON BOARD’S ACTIVITIES
offices for lease and speed up screening for investment opportunities in order to grow its land bank in potential areas in neighboring provinces of Ho Chi Minh city.
EVALUATION OF 2019 BUSINESS PERFORMANCE (continued)
The GDT had an effective working year according to the orientation and guideline by the BOD. In addition to fulfilling responsibilities for each field as assigned, members of the GDT worked closely to tackle issues for the Company’s common benefit in order to achieve the performance goals set forth by the GSM and optimize shareholder benefits.TOWNHOUSES AND HIGH-END VILLAS
CONTINUE TO HAVE GOOD POSITIONS IN THE MARKET
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SUPERVISION RESULT ON GENERAL DIRECTOR AND THE OTHER MANAGERS
PLANS AND DIRECTIONS BY BOARD OF DIRECTORS
� In their management and operation activities, the General Director and the other Managers followed the guidelines by the BOD and the General Shareholder Meeting; always well-coordinated with the BOD to make good and timely decisions to complete the proposed business plan; well executed project implementation, well prepared resources to ensure that house handover on schedule.
� In management and operations, the General Director and other Managers showed high senses of responsibility, correctly played their roles, proposed many solutions and made the right and timely decisions for the Company’s operations in compliance with the law.
� The General Director and other Managers also completed the Company’s development-oriented tasks, through planning, control and adjustment on strategic decisions and fulfilled obligation of information disclosure as regulated.
Diversifying products and expanding market geography based on market demand
Each project has its own characteristics, therefore the Company plans to develop the most suitable product line for each market segment, bringing benefits to the customers and ensuring success for the project.
Besides the projects in District 2 and District 9, Khang Dien is expanding business in the HCMC Southwest using the existing land bank while continuing the clearance and compensation to expand land areas.
Besides, the Company continues to explore, study and seek opportunities to participate in the other potential housing opportunities in HCMC and the neighboring provinces.
Maintain healthy financial capacity
Maintaining healthy financial capacity with a large amount of cash, a proper debt to equity ratio, a balanced capital structure, effectively utilizing owner capital and low cost equity injections. As such, the Company not only utilizes the existing resources but also can effectively access external capital resources.
Optimize costs and maximize profits
Determining the key goal in project investment through selecting suitable plan and scale, the Company actively pushes project progress and thereby, enhancing profit margin of each project.
Creating perfect products
Not stopping at offering interior bare shell finish houses, Khang Dien is pushing to launch interior fully finished houses together with available Title certificates - “turnkey” products. At the same time, Khang Dien continues to focus on project amenities so that the customers can enjoy the best utilities, worthy of “Where you put your trust - Where you make your home”.
Strategic direction on corporate governance and human resource development
Setting up governance in the direction of standardizing processes and standards to strengthen labor productivity and quality.
Developing high quality and dedicated human resources. The Company is striving to create the best working environment so that the employees are assured and will stay with the Company in the long-term, which helps to create the best homes for the customers. Khang Dien is working hard to become an attractive place to work.
The BOD determines that the Company’s business must be built on the basis of customers’ trust. With the advantage of our solid legal practice and effective business strategy, Khang Dien affirms its mission to bring to the customers products having completed legal procedures, reasonable prices and good quality. Looking ahead, the BOD sets forth the following directions:
REPORT AND ASSESSMENT BY BOARD OF DIRECTORS (continued)
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REPORT BY GENERAL DIRECTOR TEAM
REPORT AND ASSESSMENT ON BUSINESS OPERATION
Unit: VND Billion
Items Plan Actual Actual vs Plan
Net Revenue 3,000 2,813 94%
Profit after tax of Parent Company 900 915 102%
Unit: VND Billion
Items 2017 2018 2019Compared to 2018
Change %
Net Revenue 3,055 2,917 2,813 (104) -4%
Profits before tax 729 1,075 1,190 115 11%
Profits after tax 502 808 915 107 13%
REVENUE
The 2019 revenue reached VND 2,813 billion, slightly declined compared to 2018. The revenue is mainly from product sales and recorded significant contributions from Verosa Park and Jamila projects.
500
1000
1500
2000
2500
3000
3500
502
3,055
808
2,917
915
2,813
PROFITS
The 2019 after-tax profits was VND 915 billion, exceeding the planned profits by 2% and increased by 13% compared to 2018, equivalent to the increase of VND 107 billion. Such profits are resulted from good cost controls and sales.
� Safira condo: Up to 31 December 2019, the Company sold out 1,593 condos. Currently, construction of Safira condo is on schedule, and it is expected that the Company will hand over condos to the customers beginning in the second quarter of 2020;
� Lovera Vista condo: Sales were opened in October, 2019 after fully approved by the authorities. In 2019 the Company sold 801 condos out of total 1,310 condos of the project. The remaining condos are expected to be sold out in 2020. Currently, construction progress is at the 18th floor and ready for roof casting in May, 2020.
Business performance 2019
Performance of business plan REVENUE PROFITS
At the end of 2019, net revenue and after-tax profits reached 94% and 102% of the plan approved by the General Shareholder Meeting. Though the real estate market has been facing headwinds, the Company still exceeds the planned profits by 2%, showing the Company’s efforts, growth and sustainability ability.
In general, Khang Dien continued to deliver good business result in 2019. In the year, in addition to focusing on the construction of Safira condo to ensure handover of the condos on time, the Company also launched two new projects - Verosa Park and Lovera Vista condo - and continued to receive customers supports for these two projects.
Unit: VND Billion
2017 2018 2019
In 2019 Company’s sales mainly focused on three projects: Safira condo, Lovera Vista condo, and Verosa Park villas - townhouses. The sales volumes of the above projects shown below:
The Company is focusing on construction to ensure that the condo handover will be ready in the second quarter of 2021 as committed with the customers;
� Verosa Park: The project consists of town houses and villas having high-end designs. Sales were launched in the third quarter of 2019 and up to 31 December 2019, 150 out of 296 houses of entire project have been sold. The remaining houses are expected to be sold out in 2020. This project makes great contribution to the Company’s revenue and profits in 2019.
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REPORT AND EVALUATION ON FINANCIAL ACTIVITIES
Assets
Total assets at the end of 2019 reached VND 13,237 billion, increased by 29% compared to the same period last year and steadily increased each year. Details of assets and asset structure shown below:
Unit: VND Billion
Items 2017 Proportion 2018 Proportion 2019 ProportionCompare to 2018
Change %
Cash and cash equivalents
2,592 27% 1,837 18% 1,175 9% (662) -36%
Receivables 1,548 16% 1,760 17% 3,778 29% 2,018 115%
Inventories 4,858 50% 5,817 57% 7,037 53% 1,220 21%
Long-term assets 606 6% 658 6% 910 7% 252 38%
Other assets 114 1% 156 2% 337 2% 181 116%
Total assets 9,718 100% 10,228 100% 13,237 100% 3,009 29%
2019 TOTAL ASSETS 29%
Cash and cash equivalents Receivables Inventories Long-term assets Other assets
9%
27%
18% 17% 57% 6%
16% 50% 6%
53% 7% 2%
1%2017
2018
2019
2%
� Cash and Cash equivalents: at the end of 2019, this item decreased and accounted for 9% of total assets. The reason for the decrease is that the Company spend cash to acquire lands and develop infrastructures as well as pays for constructions as required by ongoing business.
� Receivables: at the end of 2019, the receivables significantly increased over the same period last year and accounted for 29%, the large proportion of the total assets. This is mostly driven by the receivables of Verosa Park project because the project was on sale at the end of 2019 and payments have been collected on installment.
� Inventory: this item accounted for the highest proportion of total assets at 53%, equivalent to VND 7,037 billion, increased by 21% compared to the same period last year. The reason for such increase is that the Company has pushed land compensation and focused on projects that are under constructions. Inventory is mainly from Safira condo, Verosa Park, Lovera Vista condo, Tan Tao project, Thuy Sinh project, Binh Trung project, 11A project and etc.
� Overall, asset structure of 2019 does not have significant change when compared to 2018 when 3 major items: Cash and cash equivalents, Receivables, Inventory are still accounted for the largest proportion, 91% of total assets. The structure is appropriate with the characteristics of the real estate industry and demonstrates financial prudence supporting business growth in the near future.
2,000
4,000
6,000
8,000
10,000
12,000
14,000
9,718 10,228
13,237
Unit: VND Billion
2017 2018 2019
TOTAL ASSETS
ASSET STRUCTURE
29%
REPORT BY GENERAL DIRECTOR TEAM (continued)
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Capital
Along with the increase in total assets, capital also grew respectively. In particular, the owner’s equity increased and accounted for a major proportion of capital at 58%. Details of capital structure shown below:
Unit: VND Billion
Items 2017 Proportion 2018 Proportion 2019 ProportionCompare to 2018
Change Ratio %
Current liabilities 1,818 19% 2,776 27% 4,572 34% 1,796 65%
Long-term liabilities 1,709 17% 553 6% 1,001 8% 448 81%
Owner's equity 6,191 64% 6,899 67% 7,664 58% 765 11%
Total capital 9,718 100% 10,228 100% 13,237 100% 3,009 29%
2019 TOTAL CAPITAL 29%
2000,0
4000,0
6000,0
8000,0
10000,0
12000,0
14000,0
9,718 10,228
13,237
Unit: VND Billion
2017 2018 2019
TOTAL CAPITAL
Current liabilities Long-term liabilities Owner's equity
34%
19%
27% 6% 67%
17% 64%
8% 58%
2017
2018
2019
CAPITAL STRUCTURE
� Current liabilities: reached VND 4,572 billion and increased by VND 1,796 billion or by 65%, compared to the same period last year. The majority of this item is Customer Prepaids that are the contracted installment payments from the projects under constructions such as Safira condo, Lovera Vista condo. This item will decrease when the Company finished construction and hand over the condos to the customers and recognize revenue and profits.
� Long-term liabilities: mostly were bank loans and bonds to fund the development of projects and land compensation, which also increased inventory. Compared to the same period last year, debts increased by VND 448 billion, lower than the increase in inventory of VND 1,220 billion, which is 3 times higher than the debt growth. This demonstrates that the Company still focuses on using owners’ equity to fund assets and reduce the dependence on loans.
� Owner's equity: reached VND 7,664 billion, an increase of VND 765 billion, or 11% growth compared to the same period last year. This increase were mainly from the net profits together with the capital increase from ESOP in 2019. With a proportion of 58% of total capital, owner’s equity becomes the main source making up the Company's assets. This shows that the Company is oriented to financial autonomy and ensure a safe capital structure.
REPORT BY GENERAL DIRECTOR TEAM (continued)
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REPORT ON IMPROVEMENTS IN ORGANIZATIONAL STRUCTURE AND MANAGEMENT POLICIES In 2019, the Board of Directors was restructured towards independent governance, and the General Director Team continued to implement improvements about organizational structure, policies and governance of the Company.
PROJECT MANAGEMENT IMPROVEMENT SALES STRATEGY IMPROVEMENT
HUMAN RESOURCE DEVELOPMENT TRAINING
FOCUSING ON DEVELOPING THE LEGAL DEPARTMENT
DEVELOPING CUSTOMER CARE TEAM
� Knowing the importance of project management function in ongoing business of the Company, the General Director Team focused on developing the human resources for project management both in quantity and quality; Project management was regularly reviewed and consolidated towards centralized management in order to provide timely and effective support and assistance;
� The workload of each project was systematized, and at the same time, the personnel structure was rearranged. Staffs were assigned in work segments and projects in order to ensure the project progress on schedule, to quality and at reasonable cost;
� Expanded sales networks of professional real estate trading floors in Ho Chi Minh City and across the country.
� More financial support programs: in addition to the quick payment discount program, the Company connected with major banks offering preferential mortgage rates to provide suitable financial support packages for many customer segments.
� Recognizing the importance of human resources for the long-term development of Khang Dien, the Company has strengthened the training to improve professional skills through internal training and guidance from the direct management levels.
� At the same time, the Company focused on improving multidisciplinary knowledge for the employees. Staffs from the department were encouraged to participate in projects, to learn from each other's experiences.
� Knowing the central role of project legal practice to the Company's development by ensuring safety and bringing added value to the projects, the Company intensified on the job training to improve the qualifications and skills of the project legal department while in the process of performing the work;
� Determining legal compliance in the Company's operations one of the top requirements in running the Company, the legal department regularly updates knowledge and relevant legal changes, and at the same time having internal, intensive and advanced trainings.
� Customer care team represents the Company expresses caring to the customers. Therefore, regular trainings were organized to improve professionalism at work.
� In the upcoming time, the Company will continue to develop customers care team in a professional way to retain customers trust in accordance with the Company’s motto “Khang Dien - Where you put your trust - Where you make yourhome".
Financial indicators
ITEMS 2017 2018 2019
SOLVENCY RATIOS
Current ratio 5.0 3.4 2.7
Quick ratio 2.3 1.4 1.2
CAPITAL STRUCTURE
Total liabilities/Total assets 0.36 0.33 0.42
Total liabilities/Total equity 0.68 0.48 0.73
OPERATING RATIOS
Inventory turnover 0.4 0.3 0.2
Receivables turnover 2.0 1.7 0.7
Net income ⁄ Total assets 0.3 0.3 0.2
PROFITABILITY RATIOS
Return on sales (ROS) 18% 28% 33%
Return on Assets (ROA) 6% 8% 7%
Return on Equity (ROE) 11% 12% 12%
� Quick ratio: decreased from 1.4 to 1.2 times due to the shift from Cash and Cash equivalents to Inventory, which was due to land compensation and infrastructure development, and construction during the year in preparation for business activities in the upcoming years. However, the Company maintained high and ready liquidity to meet debt payment dues by keeping a relatively high amount of Cash and Cash equivalents of VND 1,175 billion at the end of the year;
� Capital structure: shown by the Debt/Owner's Equity ratio that increased from 0.48 to 0.73; the reason for this increase was due to a sharp increase in current liabilities. As analyzed previously, the increase in current liabilities is mainly due to contractual prepaids (installment payments) from the customers, so this increase does not mean that the Company is increasing its financial leverage. The ratio remains below 1, which means owner's equity is still greater than debt, indicating that the Company still focuses on financial autonomy so that it is not affected when the business environment changes;
� Operating ratios: decreased compared to the same period last year. This does not mean that the Company's asset turnover is not effective. However it is due to the impact of fractions where the denominator - inventory and receivables - increases, and the numerator - revenue and cost - decreases. As analyzed above, the inventory growth is due to the Company increases its land bank and speed up the construction progress; The receivables growth is due to the installment sales from Verosa Park products at the end of the year, and the cost falls due to effective management. Therefore, the fluctuation of the above ratios shows that the Company's operations are developing in a good way;
� Return on sales: ROS increased sharply from 28% to 33% due to strong growth in profits after tax as a result of strong sales during the year and effective cost management; ROA decreases slightly from 8% to 7% due to the increase in total assets as analyzed above; ROE still achieved 12% despite the increase in owner's equity because the company achieved profit growth.
In general, the Company has a large amount of cash ready for the expansion of land bank, a small amount of bank debt, and the capital consists primarily of owner’s equity. This capital structure represents a prudential financial structure to ensure safety and sustainability in business operations. The Company continues to grow the existing land bank at reasonable costs to ensure resources for generating stable revenue and profits, and a sustainable growth in the coming years in order to optimize benefits for the shareholders.
REPORT BY GENERAL DIRECTOR TEAM (continued)
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� Complete sales, construction, handover, procedure for Title Certificate (Pink Book) for the projects that are active such as: Jamila condo, Safira condo, Lovera Vista condo, Verosa Park luxury townhouses - villas.
� Continue the ongoing land clearance and gradually complete legal procedures for the projects in District 2, District 9, Binh Chanh and Binh Tan; Prepare for business activities in 2020 and the following years. In particular, in 2020 the Company expects to deploy constructions for two low-rise housing projects:
» District 2 Project: 5.7 hectares located in Binh Trung Dong Ward, District 2, Ho Chi Minh City with 159 townhouses and villas;
» District 9 Project: 4.3 hectares located in Phu Huu Ward, District 9, Ho Chi Minh City with 122 townhouses and villas;
No. Items 2020 Growth compared to 2019
1 Revenue VND 3,500 billion
2 Profits after tax VND 1,100 billion 20%
3 Expected dividend 10%
2020 Business planWith the business plan, the construction and handover of the above projects, the Company’s plan for revenue, profits and dividends in 2020 as follows:
� Continue to restructure the investment portfolio toward optimizing benefits for shareholders. Searching for partners who are reputable investors and financial resources for joint ventures and cooperation to implement big projects of the Company;
� Expand investments in new projects according to the following criteria: transparent legal status, reasonable price and prime location, which increases the land bank for the purpose of long-term business plan and sustainable development in the future;
� Continue to improve and complete policies, procedures as well as the structure and personnel apparatus of the Company. At the same time, strengthening supervision activities, improving the role of governance and risk controling in the following sections: finance - accounting, project management, legal and other parts of the Company.
2020 BUSINESS PLAN
General direction
REPORT BY GENERAL DIRECTOR TEAM (continued)
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REPORT BY INSPECTION COMMITTEE
RESULT OF INSPECTION ON BOARD OF DIRECTORS’ AND GENERAL DIRECTOR TEAM’S ACTIVITIES Inspection Committee performed its functions and duties according to the laws, the Company’s Charter and internal governance regulations. Members of the IC implemented the activities in 2019, including: supervising the BOD and GDT and coordinated with the BOD and GDT in monitoring the business operations and financial situation of the Company.
Result on Board of Directors � Within its scope, responsibilities and powers, the BOD issued many Resolutions and Decisions
related to the Company's operations. The Resolutions and Decisions of the BOD were issued in the correct order and in compliance with the Enterprise Law, the Securities Law, the Company's Charter, and the Internal Regulations on Corporate Governance. Activities of the BOD met the requirements on management and business operations of the Company during the year.
Result on General Director Team � The year 2019 is considered the market year which has much influence from new policies
and regulations. However, these policies are aimed at establishing a stable, sustainable and healthy competitive market. The GDT worked hard to build trust with the customers purchasing Khang Dien's products that are not only committed to quality and beautiful design, but also the explicit and transparent legal status.
� In 2019 the GDT and managers made every effort in organizing the implementation for business of the Company, and at the same time, performed well internal management duty, minimized many risks, and promptly provided suitable plans and decisions for the business situations and in compliance with the Resolutions of the GSM.
� The GDT of the Company also implemented audit works and information disclosure in accordance with the regulations.
� Reports to the shareholders on the supervision of business activities in 2018 and the 2019 operation plan by the IC.
� Supervising the use of the new capital raised from the common share offering on 06 September, 2017 approved by the GSM on 12 April, 2019.
� Supervising the implementation of cash dividend, issuing 20,700,484 shares to pay dividends to the existing shareholders, and issuing 103,505,272 shares to increase equity capital from owner’s equity, and issuing 6,200,000 shares under ESOP according to Resolution No. 01/2019/NQ_DHDCD dated 12 April, 2019 of the GSM.
� Coordinating with the independent auditor to verify the semi-annual and annual financial statements in order to assess the truthfulness and rationality
of financial data in accordance with the applicable accounting regime and standards of Vietnam.
� Checking the compliance with the Charter, the resolutions of the GSM and the BOD, internal regulations of the Company and proposing amendments to some regulations and procedures.
� Supervising the signing of the contract with Ernst & Young Vietnam Co., Ltd. on the audit of Financial statements in 2019.
� Completion of the working procedures as well as the inspection and supervision through direct activities of the IC members and the Independent Auditors to ensure compliance of the BOD and GDT.
� Monitoring the disclosure of information and ensuring transparency in accordance with the laws.
SUPERVISION ACTIVITIES BY THE INSPECTION COMMITTEE In 2019 the IC performed its functions, duties in accordance with the Company's Charter. IC inspected and supervised all activities of the Company, ensuring compliance with the laws, the Charter and the strategic goals approved by the GSM, contributing to improving the business efficiency of the Company, specifically as follows:
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SUPERVISION AND EVALUATION ACTIVITIES OF THE INSPECTION COMMITTEE ON THE OPERATION AND FINANCIAL SITUATION
� The IC agreed with the contents of the report on the business performance in 2019 with the main following criteria:
ITEMS 2019COMPARED TO 2018
$ CHANGE % CHANGE
Revenue 2,813 -104 -4%
Profits before tax 1,190 115 11%
Profits after tax of Parent Company 915 107 13%
� Until the end of 2019, the IC did not detect any unusual activities in the Company's production and business activities. The Company's business operations complied with the internal management systems and the provisions of the applicable laws.
� In addition to recognizing the performance, the IC highly appreciated the efforts that the BOD and GDT made during the year, contributing to the preparation for future development of the Company.
REPORT BY INSPECTION COMMITTEE (continued)
RESULT OF SUPERVISION AND EVALUATION ON FINANCIAL STATEMENTSAfter receiving the 2019 audited financial statements of the Company, the IC verified that the documents supporting the figures on the financial statements were presented reasonably and honestly according to the current accounting standards and regime. Based on its appraisal, the IC agreed on the following contents:
Major financial indicators:
ITEMS 2017 2018 2019
SOLVENCY RATIOS
Current ratio 5.0 3.4 2.7
Quick ratio 2.3 1.4 1.2
CAPITAL STRUCTURE
Debt/Total asset ratio 0.36 0.33 0.42
Debt/Owners’ equity ratio 0.68 0.48 0.73
OPERATING RATIOS
Inventory turnover 0.4 0.3 0.2
Account receivables turnover 2.0 1.7 0.7
Net revenue/Total asset 0.3 0.3 0.2
PROFITABILITY
Return on Sales (ROS) 18% 28% 33%
Return on Asset (ROA) 6% 8% 7%
Return on Equity (ROE) 11% 12% 12%
01
02
03
04
RESULTS OF SUPERVISION AND EVALUATION OF THE BUSINESS PERFORMANCE
Unit: VND Billion
About the accounting regime applied at the Company: The company is and has been implementing the accounting regime in accordance with the applicable law.
Making and circulating financial papers to ensure the legality and validity; the recording, opening, using and preserving of accounting books in a timely and complete manner in accordance with the prescribed forms of the current accounting regime.
The financial statement of the Company was made on 31 December, 2019 fully reflected the business and financial results of the Company and was presented in accordance with the reporting forms set forth by the relevant regulations.
The financial statements honestly and reasonably showed the important aspects and financial situation of the Company as of 31 December, 2019.
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SUGGESTIONS OF INSPECTION COMMITTEE
� IC suggests the Company to continue to consolidate, train and complete the human resources with high qualifications and experience to meet the Company’s development requirement.
� Issue additional procedures to strictly control construction costs and management expense in the Company.
� Complete regulations, internal control systems; Supplement regulations and processes of business operations to ensure efficiency and supporting the development of the Company.
� Review and balance investment activities, innovate marketing and brand promotion to develop projects to increase the Company’s competitive advantage in the market.
01
02
03
04
05
06
07
RESULT OF THE SUPERVISION AND EVALUATION ON ASSESSMENT REPORTS ABOUT THE MANAGEMENT AND ADMINISTRATION
The IC agreed with the contents in the report on the management and administration of the Company in 2019 issued by the BOD.
� The members of the BOD, GDT and other managers have performed their assigned rights and duties in accordance with the provisions of the Enterprise Law, relevant laws, the Company's Charter and the Resolutions of the GSM, ensuring the legal interests of the Company and its shareholders.
� BOD showed strategic leadership with long-term planning goals, and at the same time directs closely in each accounting period.
� In 2019, the BOD built a working program and plan, a quarterly working program and specific tasks assignment to each member, conducting quarterly BOD meetings to check and evaluate the tasks’ performance of each member and business results of the Company.
� With urgent tasks, the BOD held urgent meetings to promptly issue Resolutions for the GDT to implement.
� The Resolutions of the BOD achieved high consensus of the members of the GDT. The issued Resolutions were in compliance with the provisions of laws and the Company's Charter. The Resolutions and Decisions by the BOD were strictly and timely implemented by the GDT.
REPORT BY INSPECTION COMMITTEE (continued)
DIRECTION FOR INSPECTION COMMITTEE FOR 2020
� In 2020 IC will continue to do the tasks assigned by the GSM within the rights and duties of the IC as regulated in the Company’s Charter and bear the responsibility to the GSM.
� Supervise the operation and the activities of the BOD and GDT in accordance with the Resolutions of the GSM, the Resolutions of BOD, the Charter of the Company, and the internal management regulations of the Company.
� Strictly control all business management and administration activities of the Company through strengthening the inspection of accounting books and financial statements of the Company.
� Conduct regular and irregular inspection as requested by GSM to ensure the interests of shareholders and benefits of employees.
� Monitor the performance of business plan in 2020 which was approved by GSM.
� Appraisal of the Company's business results, financial statements and reports on management and administration of the Company in 2020.
� Continuing to deploy the revision and completion works of the internal regulations of the Company in accordance with applicable regulations, in order to improve the internal management system of the Company.
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CORPORATE GOVERNANCECHAPTER III
MEMBERSHIP AND STRUCTURE OF THE BOARD OF DIRECTORS
As of the date of 31 December, 2019, the BOD of the Company has 05 members, including 02 independent non-executive, 02 non-executive and 01 executive, and there is no change in the number of the BOD members.
The list of BOD members as follows:
No. Member of BOD Position Number of shares held
Number of share held by related
persons
Violation of law
Conflict of interest with the
Company
Benefits related to the
Company
1 Mrs. Mai Tran Thanh Trang Chairwoman 4,937,046 0 None None None
2 Mr. Ly Dien SonDeputy
Chairman6,126,100 153,028 None None None
3 Mrs. Nguyen Thi Cam VanMember
(Independent)1,735,500 0 None None None
4 Mrs. Nguyen Thi Dieu PhuongMember
(Independent)0 73,084,436 None None None
5 Mrs. Ngo Thi Mai ChiMember (General Director)
3,497,244 0 None None None
STRUCTURE AND OPERATION OF BOARD OF DIRECTORS
ACTIVITIES OF BOARD OF DIRECTORSIn 2019 the BOD held 24 meetings with the participation of all members and issued Resolutions on key issues of the Company. At the same time, the BOD timely gave instructions to resolve challenging issues and impediments in actual business operations. The BOD quickly made strategic decisions and effectively fulfilled its duties in maintaining stable and safe operations for the Company.
The Directors unanimously approved all Resolutions of the 24 meetings, among which are:
� Approving the buy-back of the pre-matured KDH_BOND2017 bonds issued in 2017 for Vietnam Debt Fund SPC and Vietnam Debt Fund SPC - A Class Segregated Portfolio with a total value of VND 150 billion;
� Approving the implementation of the plan to issue shares to pay the 2018 dividends at the rate of 5%, issuing shares to increase charter capital from owner’s equity at 25% ratio, and issuing 6,200,000 stocks under the ESOP;
� Approval for the underwriting of the unsecured credit for Khang Phuc House Trading Investment Co., Ltd. to take on debts loaned by the Orient Commercial Joint Stock Bank in order to issue guarantee certificate for condo handover to the buyers for the high-rise housing project at Phong Phu Commune, Binh Chanh District, Ho Chi Minh City;
� Approval for the underwriting of unsecured credits for Thanh Phuc Investment Co. Ltd. and Kim Phat Real Estate Investment Trading Co., Ltd. to take on debts loaned by Orient Commercial Joint Stock Bank in order to issue guarantee certificate for house handover to the buyers of the housing project at Phu Huu Ward, District 9, Ho Chi Minh City;
� Approval for the extraction of 10% of the net profits above the 2018 planned net profits as the bonus for the BOD and GDT of Khang Dien according to the meeting minute of the GSM No. 02/2018/BBH_DHDCD on 26 April, 2018;
� And some other important contents have been published in the 2019 corporate governance report posted on the Company’s website (www. khangdien.com.vn ) and Ho Chi Minh Stock Exchange (www.hsx.vn).
BOARD OF DIRECTORS’S SUPERVISION ON GENERAL DIRECTOR TEAM
� The BOD assessed business peformance in 2018, and at the same time assigned the 2019 business plan to the GDT.
� The BOD supervised and monitored the GDT in order to improve the efficiency of business operations and reaching the set targets.
� Organizing the 2019 annual GSM meeting according to regulations of laws.
� Supervising the implementation of projects and preparing resources to ensure the handover progress to the customers in accordance with the regulations.
� The BOD supervised and gave directions for the implementation of information disclosure in accordance with the regulations.
� Implementing the 2018 dividend payment, issuing shares to increase charter capital from owner’s equity and issuing shares under ESOP, which was approved by the 2019 annual GSM.
� Collecting shareholders' votings by writing on the dismiss and addition of one (01) member of the BOD for the remaining period of the 2017-2022 term.
� Completing the plan to increase charter capital in 2019, supervising the implementation according to the issued Resolution of the GSM and the Resolution of the BOD.
� Reviewing and evaluating quarterly business results in of 2019.
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STRUCTURE AND ACTIVITIES OF INSPECTION COMMITTEE
MEMBERS AND STRUCTURE OF THE INSPECTION COMMITTEEThe IC is elected by the GSM in order to conduct supervision activities in accordance with the laws and the Company's Charter; the IC consists of 03 members:
No. Member of IC Position Number of shares
held
Number of share held by related
persons
Violation of laws
Conflict of interest with the
Company
Benefits related to the
Company
1 Mrs. Pham Kim Thoa Head of IC - - None None None
2 Mrs. Vuong Hoang Thao LinhMember/
Supervisor3,824 73,084,436 None None None
3 Mrs. Luu Thi Xuan LaiMember/
Supervisor- - None None None
SUMMARY OF THE INSPECTION COMMITTEE’S ACTIVITIESIn 2019, the IC held quarterly meetings with the participation of all members/supervisors to summarize the results of the tasks performed during the period and prepare the working plan for the next period. Details of the meetings as follows:
No. Minutes of Meeting No.
Day Subject Content Attendees
1 01/2019/BBH_BKS 28/03/2019
Discussing and considering the implementation of the Resolution of the BOD in the quarter I/2019; Reviewing the implementation of information disclosure regime, examining the 2018 FS figures and preparing for the 2019 annual GSM meeting.
100%
2 02/2019/BBH_BKS 29/06/2019
Considering the implementation of the Resolution of the 2019 annual GSM and the Resolution of the BOD in the quarter II; Reviewing the implementation of information disclosure regime, supervising the notification of a signed audit contract with Ersnt & Young Co., Ltd., examining privately the FS and consolidating quarter I/2019.
100%
3 03/2019/BBH_BKS 20/08/2019
Assessing and considering the implementation of the Resolution of the 2019 annual GSM and the Resolution of the BOD in the quarter III; Reviewing the implementation of information disclosure regime, examining the FS figures for the first 6 months of 2019.
100%
4 04/2019/BBH_BKS 09/12/2019
Assessing and considering the implementation of the Resolution of the BOD in the quarter IV; Reviewing the implementation of information disclosure regime, examining the FS figures for quater III of 2019.
100%
In addition to the official meetings, the IC members/supervisors often held discussions via email, phone to complete the assigned tasks.
COORDINATION BETWEEN INSPECTION COMMITTEE AND BOARD OF DIRECTORS, GENERAL DIRECTOR TEAM, THE OTHER MANAGERS
� The IC, BOD and GDT maintained working relationships and cooperation on the principle of common interests of the Company, of the shareholders, and compliance with the provisions of laws and the Company's Charter.
� The IC worked closely with the Management of the Company to follow the targets and plans approved by the 2019 annual GSM.
� The IC attended BOD meetings and contributed ideas according to the functions and duties of the IC. The IC was facilitated by the BOD and GDT in providing sufficient information for the business and financial situation of the Company as well as meeting documents, Resolutions and Decisions of the BOD.
� In 2019, the BOD and GDT provided all necessary information and documents for the inspection and supervision work performed by the IC.
� The IC, BOD and the GDT cooperated to deal promptly with issues in the process of inspection and control in order to improve the efficiency in the management and operation of the Company.
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REMUNERATIONS OF BOARD OF DIRECTORS AND INSPECTION COMMITTEE
REMUNERATIONS OF BOARD OF DIRECTORS
REMUNERATIONS OF INSPECTION COMMITTEE
In 2019, the total remuneration to the BOD members and BOD Secretary was VND 520,000,000 (in word: Five hundred and twenty million Vietnam Dong).
According to the 2019 audited financial statements, the reported net profits exceed the profit target, therefore the BOD and GDT will receive a bonus of 3% of the net profits after tax, or VND 27,456,985,350 (according to the approved Resolution No. 01/2019/NQ_DHDCD dated 12 April, 2019 of the General Shareholder Meeting). The BOD and GDT agreed to allocate VND 26,000,000,000 from the bonus to contribute to the Fatherland Front Committee and other organizations to prevent Covid-19 and to prevent drought and saltwater intrusion in the Western provinces. The remaining amount will be decided for payment by the BOD at a suitable time.
Apart from the above-mentioned remunerations, the Company has no other payment to the BOD members.
The IC receives remuneration according to the Resolution of the 2019 Annual General Shareholder Meeting, details are as follows:
Head of IC: VND 10 million per month.
IC member: VND 5 million per month.
Apart from the above-mentioned remunerations, the Company has no other payment to the IC members.
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No.Transactions conducted by
Relationships with internal shareholders
Beginning number of shares Ending number of shares Reasons for increase/ decrease (purchasing, selling, transferring, bonus,
etc.)Number of sharesPercentage
(*)Number of shares
Percentage (**)
1Vietnam Ventures Limited
Related person
27,219,704 6.57% 26,885,615 4.94%
� Receiving share dividend and additional shares issued from owner equity.
� Investment portfolio restructuring
2Vietnam
Enterprise Limited
Related person
30,788,537 7.44% 40,025,097 7.35%
� Receiving share dividend and additional shares issued from owner equity.
� Investment portfolio restructuring
3
Vietnam Investment
Property Limited
Related person
4,318,095 1.04% 5,613,522 1.03%
� Receiving share dividend and additional shares issued from owner equity.
� Investment portfolio restructuring
4
Kiwoom Vietnam
Tomorrow Securities Master
Fund [Equity]
Related person
0 0% 170,000 0.03% � Investment portfolio
restructuring
5Viet Nam
Equity Special Access Fund
Related person
0 0% 370,000 0.07% � Investment portfolio
restructuring
6 Mai Tran Thanh Trang
Chairwoman 3,105,420 0.75% 4,937,046 0.91%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP
7 Ly Dien SonDeputy
Chairman4,097,000 0.99% 6,126,100 1.13%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP
8 Le Hoang Son
Member of BOD cum Deputy General
Director (to July 2019)
1,712,310 0.41% 2,178,002 0.40%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP and selling shares.
Notes:
* Based on the beginning charter capital of VND 4,140,233,530,000
** Based on the ending charter capital of VND 5,444,291,090,000
Investment funds: Vietnam Investment Limited, Vietnam Investment Property Limited, Vietnam Enterprise Limited, Vietnam Ventures Limited, Kiwoom Vietnam Tomorrow Securities Master Fund [Equity], Vietnam Equity Special Access Fund (VESAF) under management of VinaCapital Corporate Finance Vietnam Co., Ltd are related to 02 key officers: Nguyen Thi Dieu Phuong – Member of BOD and Vuong Hoang Thao Linh – Member of IC of Khang Dien House Trading and Investment JSC.
SHARE TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATED PERSONS
The beginning charter capital
The ending charter capital
VND 4,140,233,530,000
VND 5,444,291,090,000
No.Transactions conducted by
Relationships with internal shareholders
Beginning number of shares Ending number of shares Reasons for increase/ decrease (purchasing, selling,
transferring, bonus, etc.)Number of sharesPercentage
(*)Number of shares
Percentage (**)
9 Ngo Thi Mai Chi
General Director
1,997,880 0.48% 3,497,244 0.64%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP
10 Truong Minh Duy
Deputy General Director
152,500 0.04% 288,250 0.05%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP
11 Nguyen Tran Cam Hien
Chief Accountant
91,500 0.02% 327,950 0.06%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP
12 Nguyen Thuy Trang
CFO 115,000 0.03% 499,500 0.09%
� Receiving share dividend and additional shares issued from owner equity.
� Purchasing ESOP
13 Bui Quang Huy
Deputy General Director 0 0% 65,000 0.01% � Purchasing ESOP
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RISKS AND RISK MANAGEMENT
In 2019, Khang Dien continued to enhance the efficiency of risk management by risk identification, analysis and assessment. Based on that, the Company designed risk control response and took advantages of attractive opportunities.
RISK MANAGEMENT SYSTEMRisk management procedures of Khang Dien focus on analysis and assessment of risks in a systematic way to control, prevent and minimize damages, losses, and negative effects of risks to the Company’s effective business operation.
Process
Organization
The Company’s Management is responsible for issuing and implementing the policies and procedures for risk management and providing resources for risk management activities. The business group (including the Parent company and its subsidiaries) separately manage risks by building their own risk management strategies and policies in line with the Company’s risk management strategies and policies.
Participant Roles
The heads of the function divisions in the parent company, directors of subsidiaries and department heads play key roles in risk management of their functions, business scope or relating works. The manager of each department, division, or project is accountable for determining, analyzing and evaluating potential risks, proposing solutions to prevent within her scope, and reporting to General Director Team. The report is made weekly or at any time when the manager finds that possible risks and their effects to the Company’s daily business activities exceeds her management ability.
General Director Team summarizes the reports and subsequently reports the key risks and preventive measures to General Director. General Director reviews and evaluates the reports weekly or at any time as required and makes decisions to accept the risks or not, choses preventive measures, and approves budget for those solutions. General Director will report to the Board of Directors for final decisions about risk-related issues and their potential business opportunities and the impacts on business objectives and results in the current fiscal year as well as the risks causing impacts on the Company’s medium-term and long-term development strategy.
Identify the risks Measure and evaluate the risks
Recognize and monitor the risks
Risk mitigationRisk management
report
Monitor and review risk
management procedure
CONTROL AND REVIEW
Parent Company
Subsidiaries
Functional Division/
Department
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RISK MANAGEMENT (Continued)
COMMON RISKS AND MANAGEMENT SOLUTIONS
BUSINESS AND FINANCIAL RISKS
� Business risks are mainly related to the Company’s mistakes regarding the time of sale launch, product structure, sale speed, selling price and volume.
� Interest rate risks are related to that the Company uses loans, and the tightening of credit supplies or the increase in interest rates has great impacts on business efficiency of the Company.
� Liquidity risk is related to that the Company’s cash flow may not be able to meet payment requirements in business activities given the Company maintains bank loans and liabilities with partners and customers.
MARKET RISKS � Khang Dien’s business performance has a close
relationship with the credit cycle of the economy. Fluctuations or trend changes have significant impacts on the demand, sales figures, profit, and land bank value of the Company.
� Khang Dien faces the risks of market share loss and that fluctuations in the real estate market have adverse impacts on buyers’ psychology.
� Khang Dien also subjects to the risks of mistakes in brand positioning at company and project levels, thus affecting on its revenue.
Mitigation
� Focusing on developing projects, products that meet the housing demand of the majority of home buyers or that are least affected by credit cycles.
� Closely monitoring the macroeconomic situation, the cycle of the real estate market, housing market, and the adjustment in economic policies.
� Continuously monitoring, considering and evaluating the market, balancing product investment so as to be suitable to the demand of almost home buyers and the market.
� Be willing to re-evaluate and adjust business strategies and plans according to the reality in the market place.
Mitigation
� Maintaining enough cash for business operations and securing credit lines for project finance from the largest and safest banks.
� Proactive in managing cash flows, prioritizes loan interest payments, settling loans before maturity and restructuring loans to lower interest rates and or using fixed interest rates.
� Continues mobilizing capital from the shareholders and strategic investors in order to maintain stable, low risk capital structure.
� Strictly prudent, transparent in project legal practice and land entitlement, and full infrastructure development before sale launch to earn high credit worthiness to the banks.
� Acting with prudence and care in prefeasibility study.
MARKET RISKS
BUSINESS AND FINANCIAL
RISKS
LEGAL, PROJECT EXECUTION, AND REPUTATIONAL
RISKS
RISK RELATED TO ENVIRONMENT, OCCUPATIONAL
HEALTH AND SAFETY
KEY RISKS
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Mitigation
� Strictly complying with construction standards, codes and legal regulations on labor safety and firefighting during the development process of project.
� Always take the initiative to guide, affect and encourage the contractors to put safety above all, maintain health of employees and pay special attention to fire prevention and firefighting.
� Avoid interfering with natural geography, taking advantage of available geographic conditions to develop housing, maintaining land area for green space and lake, limiting land area covered with concrete, partially helping to reduce flooding and increasing the quality of living environment.
LEGAL, PROJECT EXECUTION, AND REPUTATIONAL RISKS � The ongoing changes and lacks of consistency among the legal documents on land development and real
estate business often put the Company in situations facing the risks of noncompliance and mistakes.
� The Company’s lack of updates of rules and regulations can lead to risks of disputes with customers and partners.
� Land clearance and compensation can face delay risk due to objective reasons, leading to delay in project implementation and increasing cost of capital.
� In purchasing land and property projects, the Company faces unknown factors relating to legal status, potential obligations and disputes.
� Khang Dien’s reputation depends on the quality of the products and after-sales services. Errors and slow processing in resolving issues can also affect the Company’s reputation.
RISK RELATED TO ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY
� Construction and operation of residential areas may cause surrounding environmental pollution.
� Environment, condition and working time in the field of land development and construction always hide risks of occupational accidents and health.
Mitigation
� The Company carefully reviews internal processes in project legal practice and requires absolute compliance.
� Frequently update for changes in legal requirements relating to real estate and laws on project investment to timely develop suitable plans and ensure compliance with the law.
� Strictly implement, and always comply with, the relevant laws and actively fulfil the obligations on finance, tax and the others to ensure complete compliance.
� Selecting reputable consultants and contractors in combination with cross-checking and independent supervision.
� Applies strict standards in measuring the experience and reputation of the selected personnel and service providers for operation and maintenance together with a strong supervision team to ensure project quality.
� Customer Care Center (CSC) hires professional property managers such as Savills, CBRE, etc. directly manage the operations and maintenance after the residents have moved in the projects. The operational team coordinates with CSC team and the project’s technical team to resolve all issues in the best way.
� When an issue attracts the attention of the media industry, Marketing and PR Department will take responsibility to share the correct and fair information and to maintain fair and open dialogue with the media, the press and the community.
RISK MANAGEMENT (Continued)
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SUSTAINABILITY REPORTCHAPTER IV
SUSTAINABILITY MESSAGE
Khang Dien has the cohesion between the labor force and the management to pursue the mission of making Khang Dien “Where you put your trust - Where you make your home”. We are committed to creating values and harmonizing the interests of stakeholders and the communities.
In 2019 Khang Dien continued to conduct business operations in consideration of sustainability key factors. The Company paid more attention to its corporate reputation and relationships with the stakeholders, including the communities, employees, partners and investors.
TRANSPARENCY - HARMONY - SUSTAINABILITY
As a public company, Khang Dien is fully aware that it is important to contribute to the building of civilized communities and quality living spaces for the society. Given that awareness, Management always uphold corporate responsibilities to the community and stakeholders.
It is Management’s main responsibility to conduct corporate governance in view of sustainable development, maintain long-term business relationships with the communities as well as stakeholders, and care for the natural environment. Given that responsibility, Management always takes the initiative in putting sustainable development factors into the Company's development strategies and business operations. This principle also makes a significant contribution to creating long-term benefits for the stakeholders and investors.
SUSTAINABILITY ROOTED IN KHANG DIEN’S CORE VALUESThe Company also allocated more resources to monitor the impacts upon the environment resulted from ongoing business operations and put forth mitigating solutions accordingly.
Today the corporate’s role and social responsibility are increasingly important and face more challenges. Khang Dien sincerely thanks its valued customers, partners, the communities and society for their supports in the past years and commits to maintaining sustainability values, striving for more advance and sustainable development each year in order to perform its social responsibility better.
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OVERVIEW OF SUSTAINABILITY REPORT
Sustainability report for 2019 is the fourth consecutive report since 2016. This report is made based on Instructions for Information Disclosure about Environment & Society by Vietnam Annual Report Awards (ARA) 2017, Vietnam Corporate Governance Code of Best Practice by SSC and IFC 2019, Handbook of Vietnam’s Sustainable Development Goals by the Ministry of Planning and Investment and Circular 155/2015/TT-BTC by the Ministry of Finance on information disclosure in the securities market.
The report is prepared in Vietnam for real estate development business, financial sector of the economy.
Information in this report is updated for the fiscal year 2019, from 01 January 2019 to 31 December 2019.
This sustainability report includes Khang Dien’s business operations (The Company: including the parent company and its subsidiaries), and it is a part of the Annual Report 2019 issued to provide information to the shareholders and stakeholders. We continue to review and evaluate sustainability factors in relation to our current business operation, identifying material issues to review and improve as well as reporting better in the sustainability reports in the following years.
CONTACT INFORMATION
We welcome feedback and suggestion to improve our practice of sustainability. Please reach out, write or call us at :
Website: www.khangdien.com.vn Tel: +84 28 3820 8858 - Ext. 634 Fax: +84 28 3820 8859 Head office: Suite 1&2, 11th Floor, Saigon Center, 67 Le Loi, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
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STAKEHOLDER ENGAGEMENT
Stakeholders Ways of engagement Main topics 2019
Distributors, Contractors, and
Suppliers
� Bilateral dialogue � Regular meetings � Project site visits and
inspections � Exchange information via
phone and email
� Quality of products and services
� Performance efficiency � Job safety, worker
health, and environmental protection
� Holding meetings and making reports on daily, weekly, monthly basis at the job site on labor safety.
Customers, Residents
� Bilateral dialogue � Customer Care Center � Customer care events and
model house visits � Interview and collecting
feedback � Consult and answer questions
via phone and email
� Quality of products and services
� Customer satisfaction � Assessment on the
efficiency and work attitude of employees
� Serving around 20,000 customers and residents
Employees
� Performance evaluation � Internal training and guidance
for new employees � Sport, team building activities � Year-end party � Gift giving on holidays � Out-door team building
� Efficiency and skills � Company policy � Occupational safety and
health � Solidarity � Coworker relationship
� 100% staffs went through regular health check and covered by health insurance
Shareholders and Investors
� Quarterly meetings for business performance
� Annual General Shareholder Meeting, Extraordinary General Shareholder Meeting
� Investor meetings � Bilateral dialogues � Project visits � Exchange information via
phone and email
� Business result � Operation status and
operational efficiency � Development direction
and strategy
� Welcoming shareholders in Annual general meeting of shareholders
� Holding meetings and dialogs with investment funds in 02 annual large investment events
� Welcoming securities companies and investment funds for visits and information exchange
Authorities
� Report and request for instructions and guidance for implementation
� Participation in Real Estate Associations
� Professional networking events � Other exchange events
� Topics about laws and state administration
� Market trend � Challenges for
enterprises
� Working with inspection delegations by the Ministry of Construction and State Securities Commission of Vietnam (SSC)
� Working with the agency of taxation
In 2019, Khang Dien maintained dialogues and interactions with its stakeholders over a number of important topics. Through meetings and communications, the Company collected and summarized the feedbacks and comments from the stakeholders. Based upon the information Management could assess the importance and necessity of each sustainability factor, and accordingly modified and made optimized resource allocation.
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IMPACT SCOPE OF MATERIAL FACTORS
Sustainability Pilar Material Factors Signification to
Khang Dien Material Factors GRI Indicator Stakeholders
Thinking and acting
progressively
Responsible business and investment
Taking into consideration sustainability factors in planning and assessment of business and investments
� Business performance � GRI 201 Khang Dien
Focusing on risk management
Integrating risk management in environment protection, labor safety, health and social responsibility into business operations
� Compliance with environmental protection laws
� Control of corruptions and conflicts of interests
� Marketing and sale responsibly
� GRI 307 � GRI 205 � GRI 417
Khang Dien, Partners, Contractors, Suppliers
Improvement and innovation
Innovating enables the Company to catch on with new social trends and meet the stakeholders’ expectation
� Business performance � GRI 201Khang Dien, Partners, Contractors, Suppliers
Using and consuming responsibly
Energy consumption and use
The level of energy consumption impacts the living conditions of the communities and contributes to climate changes
� Energy � Emissions
� GRI 302 � GRI 305
Khang Dien, Contractors, Residents
Water consumption and use
Water is a limited resource the Company should contribute to preserve
� Water � GRI 303Khang Dien, Contractors, Residents
Creating and discharging waste
Increasing recycling, reducing waste, contributing to environmental protection
� Waste � GRI 304Khang Dien, Contractors, Residents
Impact on supply chain
The project investor can influence its supply chain in consuming, using materials responsibly
� Materials � GRI 301Khang Dien, Partners, Contractors, Suppliers
Focusing on the people
Labor diversityEncouraging diversity in age, gender, appearance, ethnic group, religion, etc.
� Relations with employees � Diversity and equality
� GRI 402 � GRI 405
Khang Dien
Labor safety and occupational health
Business operations can be affected by labor accidents and employees’ health
� Labor safety and occupational health
� GRI 403Khang Dien, Partners, Contractors, Suppliers
Community support Supporting the local communities
can enhance company’s reputation � Local communities � GRI 413
Khang Dien Local communities
MATERIAL FACTORS
In 2019, Khang Dien reviewed and assessed and accordingly restructured the 10 key material factors of the Company’s sustainable development in the subsequent years and the future. These factors were put into three sustainability pillars with reference to the sustainability factors under the GRI Standards:
Khang Dien regularly reviews and evaluates its sustainability material factors. The consideration and assessment of those material issues are based on the Company's core values with reference to the following documents: GRI Standards by GlobalReporting.org, Handbook of Vietnam's Sustainable Development Goals by the Ministry of Planning and Investment and Circular 155/2015/TT-BTC by the Ministry of Finance giving guidance on information disclosure in the securities market.
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THINKING AND ACTING PROGRESSIVELY
Forward-looking in thinking and actions is the foundation that enables the Company to innovate in business. This, in turns, brings to the customers and communities better experiences, which makes the Company adaptable and able to grow in ever changing business conditions.
CONDUCT BUSINESS AND INVESTMENTS RESPONSIBLY
Each strategic decision on investments and business operations by Management is taken into account the impacts on the environment and the Company’s reputation to the communities and society. From land bank development to the planning, design - construction and marketing - sales, the Company focuses on limiting the impacts on the natural environment and lives of the local
When integrating risk management into strategic decisions and business operations, Management takes initiatives in precaution and preparation for possible problems affecting on the Company's going concern and efficiency, especially the risks relating to the environment, labor safety and occupational health and reputation. Given the that mindset, Management issues company policies to control corruption and conflict of interests, to comply with the environmental laws and to be responsible for products and marketing - sales. The Board of Directors and General Director Team conduct regularly project site tours as well as chair weekly meetings with the managers to monitor policy implementation.
In corporate governance, Management applies the highest standards of governance as required by the laws (Enterprise law, Circular 155/2015/TT-BTC by the Ministry of Finance giving guidance on information disclosure in the securities market, Government's Decree No.71/2017/NĐCP on governance of public corporations and Circular No.95/2017/TT-BTC by the Ministry of Finance on governance of public corporations). Accordingly, Management issues management policies, processes, procedures including monitoring policies and processes for internal transactions, transactions by stakeholders and risk management. (Please refer to Chapter III: Corporate Governance for more details).
FOCUSING ON RISK MANAGEMENT
communities, choosing the most reasonable methods and solutions to optimize costs, prices for the customers.
The 2019 business operations and performance show that customers and the communities continue to support the Company.
(Please refer to Chapter II: Performance Report for more details).
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APICRM����������������������������
IMPROVEMENT AND INNOVATIONKhang Dien always believes that improvements and innovation enable the Company to come up with better solutions to increase operation efficiency, productivity, which in turn enables the provision of higher quality services to customers and residents. As a result, during the course of business, Khang Dien always listens to feedbacks, comments from customers, residents, the communities, partners, etc., and combines about 20 years of hands-on experience in order to find improvements and new solutions.
Likewise, the successful application of new technical solutions in the development and management of high-rise apartment buildings enables the Company to shorten construction schedules, cut costs while ensuring quality requirements. In 2019, the Company continued to work with the contractors in applying wall sliding formwork in combination with in on-site assembly of pre-casted concrete walls, which helps shortening the construction time and also eliminating the risk of wall surface cracking due to shrinkage when the project is put into use.
In 2019, the Company successful launched API integration between the CRM system (commencing in 2018) and T-Soft enterprise accounting system, and at the moment are considering to upgrade the systems to ERP in the following year. Based on hands-on experience and the present, future requirements for business operations, this system integration reduces administrative workload and shares real time information, which enables the managers to make quicker and more effective decisions.
Deposit receivables
Collection of deposit
Contract installment payment receivables
Collection of installment payments
Penalty interest receivables
Collection of penalty interests
The accounting software receives receivable information from CRMThe accounting software returns receipt/collection information to CRM
Property management fee receivables
Collection of property management fees
Note:
THINKING AND ACTING PROGRESSIVELY (continued)
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USING AND CONSUMING RESPONSIBLY
Construction and property management always impact the environment through the uses of energy, water resource and waste creation. Particularly, energy consumption generates greenhouse gas emission and carbon - one of main drivers of climate changes, of which the world in general and Vietnam in particular are experiencing in recent years. Water is an indispensable resource for life, but water resource in Vietnam is limited and increasingly subjected to the impacts of climate changes. In addition, speedy urbanization across Vietnam in recent years has made the environment worsen when the growing population is proportionate to the increasing waste volume. Currently, waste treatments are the urgent problems in many economic centers and the cities that have high population densities such as Hanoi and Ho Chi Minh City.
To pursue the mission of making the Company "Where you put your trust - Where you make your home” for the communities and society, Khang Dien is actively contributing to the reduction of impacts on the environment. At present, the Company’s portfolio does not include any commercial properties (which consume the most resources than the other types), and all properties managed by the Company are high-rise and low-rise residential properties. Accordingly, the key factors on which Khang Dien is focusing on are the consumption of resources in project development (before projects are put into use) and waste management after projects are put into use.
ENERGY CONSUMPTION
CREATING AND DISCHARGING WASTE
IMPACT ON SUPPLY CHAIN
For each project development plan in 2019, the Company allocated at least 50% of the land for green area and water surface, thus to minimize the concrete surface absorbing and releasing heat energy. The Company’s design team continues to apply environment friendly options including natural lighting and ventilation, setback and buffer space to reduce direct sunshine contact and covering the roof with green trees. High-rise buildings developed by Khang Dien use eco-friendly bricks (unbaked, unfired, no carbon and greenhouse effect generated) in accordance with current regulations. In addition, exterior paints with high thermal insulation are used in combination with opening spaces in high-rise buildings and green spaces to reduce heat absorption. These solutions are intended to reduce the amount of heat absorbed by the buildings, thereby reducing power consumption from air conditioning systems.
Khang Dien is focusing on waste management to minimize the impacts on the environment when the projects are put into use, mainly to prevent air and water pollutions around the project sites and the communities. After the projects are put into use, the property management teams implement waste sorting at sources (dangerous waste, domestic waste, recyclable waste) and call on the residents to optimize the use of packages, plastic containers in order to reduce plastic waste. All projects have waste water sorting and treatment systems as regulated by the authorities before waste waters are discharged into the urban discharge systems.
Clean water is a limited resource and water cost is increasing. Therefore, the Company strikes to minimize the consumption of clean water in gradings and construction. For examples, we use natural water at the construction sites to clean construction equipment, roads and job sites. In addition, the site steering committees inspect daily and stop water leakage at the projects. In order to save water, the Company also focuses on growing grasses, drought-tolerant trees, and keeps the construction sites, roads and grounds clean to reduce water consumption for cleaning.
Khang Dien acknowledges that sustainable development practices require the participation of not only the Company itself but also its supply chain. Given that awareness, the Company's design team is working hard in selecting the materials, equipment that have less impacts on the environment and less effect on the communities’ health. We also apply risk management in choosing contractors, suppliers etc. in order to protect our reputation from problems related to contractors’ or vendors’ reputations.
WATER CONSUMPTION
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FOCUSING ON THE PEOPLE
Human is always the main factor for Khang Dien’s growth. Therefore, the Company maintains policies to create a dynamic, diversified and equal-opportunity working environment so that the employees can improve in the long term.
EMPLOYEE DIVERSITY
LABOR SAFETY AND OCCUPATIONAL HEALTH
At Khang Dien each employee is an integral part ensuring the smooth operation of the bigger team, and all employees are interconnected with the corporate culture, the general operations of the Company (the parent company, subsidiaries). Management highly values experiences, broad views and multi-cultural environment created from its employee diversity because this diversity stimulates improvements and innovations, which enables the Company to well adapt with the ever changing business environment.
Khang Dien always treats its employees in an equal manner and appreciates the long-term relations between the company and employees. The Company highly values “kindness” in treating its employees and accordingly, facilitating the employees to improve and get recognized
Like the previous years, the Company continued to maintain the occupational health and safety policies and monitor the compliance. In project development, the Company strictly adhered to the required standards on occupational safety and fire protection throughout the development life cycle. To be specific, Khang Dien carefully reviewed safety, health and fire prevention factors in all steps, from architectural and structural design, MEP to landscape. During construction, the Company actively guided and encouraged the contractors to put labor safety above all, keeping workers healthy and especially, paying high attention to fire prevention in high-rise projects. In order to strengthen the efficiency, Khang Dien held monthly meetings with the contractors about occupational safety and fire protection.
based on their personal capacities, business performance and especially the “kindness” of their peers. The Company tolerates differences in age, gender, religion, ethnicity and appearance, etc. To facilitate employee integration, the Company regularly organizes teamwork activities that coordinates personnel from all departments with different gender, age, cultural background and living experiences, which facilitates workers to exchange experiences and accumulate work and life knowledge.
In 2019, Khang Dien continued to pursue the policy of improving average income for the employees through the annual review and adjustment of annual income to match with the labor market and the performance of the Company. In order to motivate employees, the Company continued to issue ESOP to all employees.
(Please refer to Human Resource Report for more details).
To protect employees’ health, Khang Dien continued to provide social insurance - health insurance and periodic health checks. In 2019, the Company continued to maintain a private health insurance package for all employees. For spiritual health, the Company maintained the friendly, open working environment, welfare programs, cares in national holidays and the New Year. Management actively took care of the spiritual lives of employees through collective activities such as organizing birthday parties for employees, giving gifts to female employees on Woman Days and supporting employees when they are sick.
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COMMUNITY SUPPORTIn 2019 Khang Dien continued to maintain the tradition of supporting the communities, contributing to the long-term sustainability of the Vietnamese society, and preserving the inherently culture of the Company. This also enhances the notable values in each member of Khang Dien, driving towards building and preserving the Company's image and reputation.
Given the value “Life is not just about receiving”, like many past years, in 2019, Khang Dien’s employees joined Management in nonprofit activities such as:
� Visiting and presenting 500 gifts to the people in Da Tong commune, Dam Rong district, Lam Dong province;
� Presenting 346 gifts to the poor in Chu Se district, Gia Lai province;
� Building water wells in highland provinces such as: Kontum, DakLak and etc., where always lack water in dry seasons;
FOCUSING ON THE PEOPLE (continued)
� Presenting 1,000 gifts on the end-year occasion in order to make the most favorable conditions to the people in communes, wards in Binh Chanh District, Binh Tan District, District 9 so as to give them a happy and meaningful new year together with their family;
� Visiting and sponsoring 500 gifts and scholarships to pupils in all levels with poor condition in Tien Giang and Kien Giang provinces;
� Sponsoring fatal disease cases with poor condition in Ho Chi Minh hospitals.
In the future, Khang Dien will continue community-support activities regularly and improve in both quality and quantity for a better, more civilized society.
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FINANCIAL STATEMENTSCHAPTER V
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KHANG DIEN HOUSE TRADING AND INVESTMENT
JOINT STOCK COMPANY
Consolidated financial statements
For the year ended 31 December 2019
CONTENTS
Pages
General information 133
Report of management 134
Independent auditors’ report 135 - 136
Consolidated balance sheet 137 - 138
Consolidated income statement 139
Consolidated cash flow statement 140 - 141
Notes to the consolidated financial statements 142 - 170
THE COMPANY
Khang Dien House Trading and Investment Joint Stock Company (“the Company”) is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No. 4103006559 issued by the Department of Planning and Investment (“DPI”) of Ho Chi Minh City on 2 May 2007, as amended.
The Company’s shares were listed on the Ho Chi Minh City Stock Exchange (“HOSE”) with code KDH in accordance with Decision No. 11/QD-SGDHCM issued by HOSE on 21 January 2010.
The current principal activities of the Company and its subsidiaries (“the Group”) are to trade and lease houses, receive land use rights to construct houses for sale and lease, invest in construction of infrastructure in compliance with residential construction scheme to transfer land use rights, undertake engineering and industrial construction works, to provide real-estate consulting services.
The Company’s registered head office is located at Room 1 and 2, 11th Floor, Saigon Centre, 67 Le Loi Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam.
BOARD OF DIRECTORS
Members of the Board of Directors during the year and at the date of this report are:
Ms Mai Tran Thanh Trang Chairwoman
Mr Ly Dien Son Deputy Chairman
Ms Nguyen Thi Dieu Phuong Member
Ms Nguyen Thi Cam Van Member
Ms Ngo Thi Mai Chi Member appointed on 12 July 2019
Mr Le Hoang Son Member resigned on 12 July 2019
BOARD OF SUPERVISION
Members of the Board of Supervision during the year and at the date of this report are:
Ms Pham Kim Thoa Head
Ms Vuong Hoang Thao Linh Member
Ms Luu Thi Xuan Lai Member
MANAGEMENT
Members of the Management during the year and at the date of this report are:
Ms Ngo Thi Mai Chi General Director
Mr Truong Minh Duy Deputy General Director
Mr Bui Quang Huy Deputy General Director appointed on 19 April 2019
Mr Le Hoang Son Deputy General Director resigned on 12 July 2019
LEGAL REPRESENTATIVE
The legal representative of the Company during the year and at the date of this report is Ms Ngo Thi Mai Chi.
AUDITORS
The auditor of the Company is Ernst & Young Vietnam Limited.
GENERAL INFORMATION
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Management of Khang Dien House Trading and Investment Joint Stock Company (“the Company”) is pleased to present this report and the consolidated financial statements of the Company and its subsidiaries (“the Group”) for the year ended 31 December 2019.
MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the consolidated financial position of the Group and of the consolidated results of its operations and its consolidated cash flows for the year. In preparing those consolidated financial statements, management is required to:
» select suitable accounting policies and then apply them consistently;
» make judgements and estimates that are reasonable and prudent;
» state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and
» prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue its business.
Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure that the accounting records comply with the applied accounting system. It is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Management confirmed that it has complied with the above requirements in preparing the accompanying consolidated financial statements.
STATEMENT BY MANAGEMENT
Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2019 and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to the preparation and presentation of the consolidated financial statements.
For and on behalf of management:
Ngo Thi Mai ChiGeneral Director
Ho Chi Minh City, Vietnam25 March 2020
TO: THE SHAREHOLDERS OF KHANG DIEN HOUSE TRADING AND INVESTMENT JOINT STOCK COMPANY
We have audited the accompanying consolidated financial statements of Khang Dien House Trading and Investment Joint Stock Company (“the Company”) and its subsidiaries (“the Group”) as prepared on 25 March 2020 and set out on pages 137 to 170, which comprise the consolidated balance sheet as at 31 December 2019, and the consolidated income statement and the consolidated cash flow statement for the year then ended and the notes thereto.
MANAGEMENT'S RESPONSIBILITY
The Company’s management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to the preparation and presentation of the consolidated financial statements, and for such internal control as management determines is necessary to enable the preparation and presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
AUDITORS’ RESPONSIBILITY
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. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements 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 auditors’ 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 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's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
REPORT OF MANAGEMENT INDEPENDENT AUDITORS’ REPORTReference: 60766189/21094873-HN
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OPINION
In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated financial position of the Group as at 31 December 2019, and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to the preparation and presentation of the consolidated financial statements.
ERNST & YOUNG VIETNAM LIMITED
Duong Le Anthony Deputy General DirectorAudit Practicing Registration CertificateNo. 2223-2018-004-1
Ho Chi Minh City, Vietnam
25 March 2020
Ly Hong MyAuditorAudit Practicing Registration Certificate No. 4175-2017-004-1
VND’000Code ASSETS Notes Ending balance Beginning balance
100 A CURRENT ASSETS 12,326,995,869 9,570,063,085
110 I. Cash and cash equivalents 4 1,174,994,416 1,835,706,312
111 1. Cash 430,646,149 443,546,419
112 2. Cash equivalents 744,348,267 1,392,159,893
120 II. Short-term investment 5 32,490,641 -
123 1. Held-to-maturity investments 32,490,641 -
130 III. Current accounts receivable 3,777,835,110 1,760,315,570
131 1. Short-term trade receivables 6 1,614,477,111 828,283,414
132 2. Short-term advances to suppliers 7 1,700,470,697 700,570,628
136 3. Other short-term receivables 8 463,768,688 234,410,909
137 4. Provision for doubtful short-term receivables 6 (881,386) (2,949,381)
140 IV. Inventory 9 7,037,108,743 5,817,380,412
141 1. Inventories 7,037,108,743 5,817,380,412
150 V. Other current assets 304,566,959 156,660,791
151 1. Short-term prepaid expenses 10 250,231,916 95,407,524
152 2. Value-added tax deductible 54,259,655 61,177,845
153 3. Tax and other receivables from the State 75,388 75,422
200 B. NON-CURRENT ASSETS 910,329,204 657,831,596
210 I. Long-term receivables 95,819,247 122,872,740
211 1. Long-term trade receivables 6 77,954,214 64,683,136
212 2. Long-term advances to suppliers 7 1,728,585 46,961,085
216 3. Other long-term receivables 8 18,136,448 13,228,519
219 4. Provision for doubtful long-term receivables 6 (2,000,000) (2,000,000)
220 II. Fixed assets 47,761,628 34,460,515
221 1. Tangible fixed assets 11 47,761,628 34,460,515
222 Cost 109,142,032 91,489,116
223 Accumulated depreciation (61,380,404) (57,028,601)
227 2. Intangible fixed assets - -
228 Cost 339,700 339,700
229 Accumulated amortisation (339,700) (339,700)
230 III. Investment properties 12 99,666,817 5,170,373
231 1. Cost 104,566,383 17,441,610
232 2. Accumulated depreciation (4,899,566) (12,271,237)
240 IV. Long-term asset in progress 629,487,717 465,990,890
242 1. Construction in progress 13 629,487,717 465,990,890
250 V. Long-term investments 14 14,300,000 14,300,000
253 1. Investment in other entity 14,000,000 14,000,000
255 2. Held-to-maturity investments 300,000 300,000
260 VI. Other long-term assets 23,293,795 15,037,078
261 1. Long-term prepaid expenses 10 10,957,661 6,186,801
262 2. Deferred tax assets 31.3 9,563,044 4,565,973
269 3. Goodwill 15 2,773,090 4,284,304
270 TOTAL ASSETS 13,237,325,073 10,227,894,681
INDEPENDENT AUDITORS’ REPORT (continued)Reference: 60766189/21094873-HN
CONSOLIDATED BALANCE SHEETas at 31 December 2019B01-DN/HN
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VND’000
Code RESOURCES Notes Ending balance Beginning balance
300 C. LIABILITIES 5,572,964,711 3,328,395,397
310 I. Current liabilities 4,571,654,220 2,775,104,328
311 1. Short-term trade payables 16 695,698,468 284,445,768
312 2. Short-term advances from customers 17 2,772,929,571 1,366,862,318
313 3. Statutory obligations 18 294,417,957 239,336,951
315 4. Short-term accrued expenses 19 75,424,337 50,898,854
318 5. Short-term unearned revenues 20 1,330,504 2,039,502
319 6. Other short-term payables 21 319,815,817 168,189,771
320 7. Short-term loans 23 377,291,025 631,774,123
322 8. Bonus and welfare fund 22 34,746,541 31,557,041
330 II. Non-current liabilities 1,001,310,491 553,291,069
332 1. Long-term advances from customers 17 26,526,233 60,874
333 2. Long-term accrued expenses 19 69,227,791 84,266,104
336 3. Long-term unearned revenues 20 10,159,880 25,014,730
337 4. Other long-term liabilities 21 436,260,677 47,376,709
338 5. Long-term loans 23 405,200,418 336,509,323
341 6. Deferred tax liabilities 31.3 52,500,279 58,708,180
342 7. Long-term provisions 1,435,213 1,355,149
400 D. OWNERS’ EQUITY 7,664,360,362 6,899,499,284
410 I. Capital 7,664,360,362 6,899,499,284
411 1. Share capital 24.1 5,444,291,090 4,140,233,530
411a - Shares with voting rights 5,444,291,090 4,140,233,530
412 2. Share premium 24.1 720,153,163 1,724,205,883
418 3. Investment and development fund 24.1 133,577,863 93,173,953
421 4. Undistributed earnings 24.1 1,327,039,024 906,630,515
421a - Undistributed earnings by the end of prior year 411,806,179 98,552,322
421b - Undistributed earnings of current year 915,232,845 808,078,193
429 5. Non-controlling interests 25 39,299,222 35,255,403
440 TOTAL LIABILITIES AND OWNERS’ EQUITY 13,237,325,073 10,227,894,681
VND’000
Code ITEMS Notes Current year Previous year
01 1. Revenue from sale of goods and rendering of services 26.1 2,844,774,366 2,920,026,535
02 2. Deductions 26.1 (31,420,938) (3,431,112)
10 3. Net revenue from sale of goods and rendering of services 26.1 2,813,353,428 2,916,595,423
11 4. Cost of goods sold and services rendered 27 (1,312,924,322) (1,677,391,701)
20 5. Gross profit from sale of goods and rendering of services 1,500,429,106 1,239,203,722
21 6. Finance income 26.2 41,460,133 199,814,534
22 7. Finance expenses 28 (41,617,734) (88,660,889)
23 - In which: Interest expense (1,519,427) (31,709,502)
24 8. Share of profit of associates - 3,999,718
25 9. Selling expenses 29 (115,390,554) (99,262,050)
26 10. General and administrative expenses 29 (162,284,584) (158,135,349)
30 11. Operating profit 1,222,596,367 1,096,959,686
31 12. Other income 30 32,910,340 36,938,967
32 13. Other expenses 30 (65,666,550) (58,397,094)
40 14. Other loss 30 (32,756,210) (21,458,127)
50 15. Accounting profit before tax 1,189,840,157 1,075,501,559
51 16. Current corporate income tax expense 31.1 (284,168,467) (267,438,458)
52 17. Deferred tax income 31.3 11,204,972 1,530,139
60 18. Net profit after tax 916,876,662 809,593,240
61 19. Net profit after tax attributable to shareholders of the parent 915,232,845 808,078,193
62 20. Net profit after tax attributable to non-controlling interests 1,643,817 1,515,047
70 21. Basic earnings per share (VND’000/share) 33 1.69 1.46
71 22. Diluted earnings per share (VND’000/share) 33 1.69 1.46
CONSOLIDATED BALANCE SHEET (continued)as at 31 December 2019
CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2019B01-DN/HN B02-DN/HN
Luu Thi Minh HieuPreparer
25 March 2020
Nguyen Tran Cam HienChief Accountant
Ngo Thi Mai ChiGeneral Director
Luu Thi Minh HieuPreparer
25 March 2020
Nguyen Tran Cam HienChief Accountant
Ngo Thi Mai ChiGeneral Director
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VND’000
Code ITEMS Notes Current year Previous year
I. CASH FLOWS FROM OPERATING ACTIVITIES
01 Accounting profit before tax 1,189,840,157 1,075,501,559
Adjustments for:
02Depreciation and amortisation (including amortisation of goodwill)
11, 12, 15 9,344,289 7,796,198
03 Reversal of provision (2,067,995) (7,889,682)
05 Profits from investing activities (41,460,133) (199,555,050)
06 Interest expenses 28 1,588,101 31,709,502
08 Operating profit before changes in working capital 1,157,244,419 907,562,527
09 Increase in receivables (2,006,442,350) (829,602,706)
10 Increase in inventories (1,268,707,451) (896,541,404)
11 Increase in payables 2,470,492,144 505,086,105
12 Increase in prepaid expenses (159,595,252) (14,829,520)
14 Interest paid (89,909,787) (114,489,485)
15 Corporate income tax paid 18 (229,395,213) (255,916,699)
17 Other cash outflows from operating activities 22 (37,214,410) (20,219,113)
20 Net cash flows used in operating activities (163,527,900) (718,950,295)
II. CASH FLOWS FROM INVESTING ACTIVITIES
21Purchase and construction of fixed assets and other long-term assets
(234,743,660) (161,298,238)
22 Proceeds from disposal of fixed assets - 500,909
23 Payment of term deposits (92,490,641) (44,300,000)
24 Collection of term deposits 60,000,000 44,000,000
26 Proceeds from sale of investments in other entities - 599,722,000
27 Interest and dividends received 66,422,658 80,873,709
30 Net cash flows (used in) from investing activities (200,811,643) 519,498,380
III. CASH FLOWS FROM FINANCING ACTIVITIES
31Capital contribution from non-controlling interest and issuance of shares
96,500,000 326,910,109
33 Drawdown of borrowings 534,764,080 344,815,743
34 Repayment of borrowings (720,624,757) (1,034,223,366)
36 Dividend paid 24.2 (207,011,676) (193,917,029)
40 Net cash flows used in financing activities (296,372,353) (556,414,543)
VND’000
Code ITEMS Notes Current year Previous year
50 Net decrease in cash and cash equivalents (660,711,896) (755,866,458)
60 Cash and cash equivalents at beginning of year 1,835,706,312 2,591,572,770
70 Cash and cash equivalents at end of year 4 1,174,994,416 1,835,706,312
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2019
CONSOLIDATED CASH FLOW STATEMENT (continued)for the year ended 31 December 2019B03-DN/HN B03-DN/HN
Luu Thi Minh HieuPreparer
25 March 2020
Nguyen Tran Cam HienChief Accountant
Ngo Thi Mai ChiGeneral Director
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
142
143
AN
NUA
L RE
PO
RT 2019
142
143
1. CORPORATE INFORMATION
Khang Dien House Trading and Investment Joint Stock Company (“the Company”) is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No. 4103006559 issued by the Department of Planning and Investment (“DPI”) of Ho Chi Minh City on 2 May 2007, as amended.
The Company’s shares were listed on the Ho Chi Minh City Stock Exchange (“HOSE”) with code KDH in accordance with Decision No. 11/QD-SGDHCM issued by HOSE on 21 January 2010.
The current principal activities of the Company and its subsidiaries (“the Group”) are to trade and lease houses, receive land use rights to construct houses for sale and lease, invest in construction of infrastructure in compliance with residential construction scheme to transfer land use rights, undertake engineering and industrial construction works, to provide real-estate consulting services.
The Company’s registered head office is located at Room 1 and 2, 11th Floor, Saigon Centre, 67 Le Loi Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam.
The number of Group’s employees as at 31 December 2019 was 327 (31 December 2018: 292).
1. C
ORP
ORA
TE IN
FORM
ATI
ON
(con
tinu
ed)
Corp
orat
e st
ruct
ure
The
Com
pany
inve
sted
in 2
3 su
bsid
iarie
s loc
ated
in H
o Ch
i Min
h Ci
ty, w
hich
are
con
solid
ated
into
the
Gro
up’s
cons
olid
ated
fina
ncia
l sta
tem
ents
:
Nam
e of
sub
sidi
arie
sLo
cati
onBu
sine
ss a
ctiv
itie
sSt
atus
% o
f ow
ners
hip
and
voti
ng ri
ghts
31 D
ecem
ber
2019
31 D
ecem
ber
2018
(1)
Than
h Ph
uc In
vest
men
t Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.90
99.9
0
(2)
Tri M
inh
Real
Est
ate
Trad
ing
and
Inve
stm
ent J
oint
Sto
ck C
ompa
nyH
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.8
099
.80
(3)
Gia
Phu
oc R
eal E
stat
e Tr
adin
g an
d In
vest
men
t Com
pany
Lim
ited
Ho
Chi M
inh
City
Cons
ult,
cons
truc
t and
tr
ade
real
est
ate
prop
ertie
s O
pera
ting
99.9
099
.90
(4)
Sprin
g Sa
i Gon
Rea
l Est
ate
Trad
ing
Join
t Sto
ck C
ompa
nyH
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.8
099
.80
(5)
Inte
rnat
iona
l Con
sulti
ng C
ompa
ny L
imite
dH
o Ch
i Min
h Ci
tyCo
nsul
t, co
nstr
uct a
nd
trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.90
99.9
0
(6)
Long
Phu
oc D
ien
Hou
sing
and
Infra
stru
ctur
e D
evel
opm
ent
Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.95
99.9
5
(7)
Hao
Kha
ng O
ne M
embe
r Com
pany
Lim
ited
Ho
Chi M
inh
City
Cons
truc
t and
trad
e re
al
esta
te p
rope
rtie
sO
pera
ting
100.
0010
0.00
(8)
Saph
ire R
eal E
stat
e In
vest
men
t and
Tra
ding
Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.90
99.9
0
(9)
Lien
Min
h Re
al E
stat
e Tr
adin
g an
d In
vest
men
t Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.70
99.7
0
(10)
Song
Lap
Rea
l Est
ate
Trad
ing
and
Inve
stm
ent C
ompa
ny L
imite
dH
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.7
099
.70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 31 December 2019 B09-DN/HN
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
144
145
AN
NUA
L RE
PO
RT 2019
144
145
1.
CORP
ORA
TE IN
FORM
ATI
ON
(con
tinu
ed)
Corp
orat
e st
ruct
ure
(con
tinue
d)
The
Com
pany
inve
sted
in 2
3 su
bsid
iarie
s loc
ated
in H
o Ch
i Min
h Ci
ty, w
hich
are
con
solid
ated
into
the
Gro
up’s
cons
olid
ated
fina
ncia
l sta
tem
ents
: (co
ntin
ued)
Nam
e of
sub
sidi
arie
sLo
cati
onBu
sine
ss a
ctiv
itie
sSt
atus
% o
f ow
ners
hip
and
voti
ng ri
ghts
31 D
ecem
ber
2019
31 D
ecem
ber
2018
(11)
Tri K
iet R
eal E
stat
e Tr
adin
g an
d In
vest
men
t Co
mpa
ny L
imite
dH
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.9
099
.90
(12)
Meg
a Ci
ty C
ompa
ny L
imite
d H
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.8
599
.85
(13)
Vi L
a Jo
int S
tock
Com
pany
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.00
99.0
0
(14)
Thap
Muo
i Rea
l Est
ate
Trad
ing
and
Cons
truc
tion
Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.80
99.8
0
(15)
Viet
Huu
Phu
Join
t Sto
ck C
ompa
nyH
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.0
099
.00
(16)
Khon
g G
ian
Xanh
Rea
l Est
ate
Inve
stm
ent a
nd
Trad
ing
Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g98
.01
98.0
1
(17)
Binh
Tru
ng R
eal E
stat
e In
vest
men
t and
Tra
ding
Co
mpa
ny L
imite
dH
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
99.8
099
.80
(18)
Khan
g Ph
uc H
ouse
Tra
ding
Inve
stm
ent
Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties,
hous
e co
nstr
uctio
n,
cons
truc
tion
inve
stm
ent,
trad
ing
infra
stru
ctur
e of
indu
stria
l par
ks
Ope
ratin
g10
0.00
100.
00
1.
CORP
ORA
TE IN
FORM
ATI
ON
(con
tinu
ed)
Corp
orat
e st
ruct
ure
(con
tinue
d)
The
Com
pany
inve
sted
in 2
3 su
bsid
iarie
s loc
ated
in H
o Ch
i Min
h Ci
ty, w
hich
are
con
solid
ated
into
the
Gro
up’s
cons
olid
ated
fina
ncia
l sta
tem
ents
: (co
ntin
ued)
Nam
e of
sub
sidi
arie
sLo
cati
onBu
sine
ss a
ctiv
itie
sSt
atus
% o
f ow
ners
hip
and
voti
ng ri
ghts
31 D
ecem
ber
2019
31 D
ecem
ber
2018
(19)
BCCI
Dev
elop
men
t Inv
estm
ent C
ompa
ny
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g10
0.00
100.
00
(20)
Min
h Ph
at R
eal E
stat
e In
vest
men
t Com
pany
Li
mite
d H
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
s O
pera
ting
51.0
051
.00
(21)
Kim
Pha
t Rea
l Est
ate
Inve
stm
ent a
nd T
radi
ng
Com
pany
Lim
ited
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g99
.90
99.9
0
(22)
Nam
Phu
Rea
l Est
ate
Dev
elop
men
t Com
pany
Li
mite
d H
o Ch
i Min
h Ci
tyTr
ade
real
est
ate
prop
ertie
sO
pera
ting
51.0
051
.00
(23)
Thuy
Sin
h Re
al E
stat
e Jo
int S
tock
Com
pany
Ho
Chi M
inh
City
Trad
e re
al e
stat
e pr
oper
ties
Ope
ratin
g98
.90
98.9
0
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
146
147
AN
NUA
L RE
PO
RT 2019
146
147
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
2. BASIS OF PREPARATION
2.1 Accounting standards and system
The consolidated financial statements of the Group expressed in thousands of Vietnam dong (“VND’000”), are prepared in accordance with Vietnamese Enterprise Accounting System and Vietnamese Accounting Standards issued by the Ministry of Finance as per:
» Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 1);
» Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 2);
» Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 3);
» Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 4); and
» Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 5).
Accordingly, the accompanying consolidated financial statements, including their utilisation are not designed for those who are not informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the consolidated financial position and consolidated results of operations and consolidated cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam.
2.2 Applied accounting documentation system
The Group’s applied accounting documentation system is the Voucher Journal and the General Journal system.
2.3 Fiscal year
The Group’s fiscal year applicable for the preparation of its consolidated financial statements starts on 1 January and ends on 31 December.
2.4 Accounting currency
The consolidated financial statements are prepared in VND which is also the Group’s accounting currency.
2.5 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries for the year ended 31 December 2019.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continued to be consolidated until the date that such control ceases.
The financial statements of the subsidiaries are prepared for the same reporting year as the Company, using consistent accounting policies.
All intra-company balances, income and expenses and unrealised gains or losses result from intra-company transactions are eliminated in full.
Non-controlling interests represent the portion of profit or loss and net assets not held by the Company’s shareholders and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet.
Impact of change in the ownership interest of a subsidiary, without a loss of control, is recorded in retained earnings.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and short-term, highly-liquid investments with an original maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.
3.2 Inventories
Inventory property
Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value (“NRV”).
Cost includes:
» Freehold and leasehold rights for land;
» Amounts paid to contractors for construction; and
» Borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, construction overheads and other related costs.
NRV is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date and discounted for the time value of money if material, less costs to completion and the estimated costs of sale.
The cost of inventory property recognised in the consolidated income statement on disposal is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold.
Other inventories
Inventories are stated at the lower of cost incurred in bringing each product to its present location and condition, and NRV.
NRV represents the estimated selling price in the ordinary course of business less the estimated costs to complete and the estimated costs necessary to make the sale.
The perpetual method is used to record inventories, which are valued as follows:
Raw materials - cost of purchase on a weighted average basis.
Provision for obsolete inventories
An inventory provision is created for the estimated loss arising due to the impairment of value (through diminution, damage, obsolescence, etc.) of inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date.
Increases or decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement.
3.3 Receivables
Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other debtors, after provision for doubtful debts.
The provision for doubtful debts represents amounts of outstanding receivables at the balance sheet date which are doubtful of being recovered. Increases or decreases to the provision balance are recorded as general and administrative expenses in the consolidated income statement.
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
148
149
AN
NUA
L RE
PO
RT 2019
148
149
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.4 Fixed assets
Fixed assets are stated at cost less accumulated depreciation and amortisation.
The cost of a fixed asset comprises its purchase price and any directly attributable costs of bringing the fixed asset to working condition for its intended use.
Expenditures for additions, improvements and renewals are added to the carrying amount of the fixed assets and expenditures for maintenance and repairs are charged to the consolidated income statement as incurred.
When fixed assets are sold or retired, any gain or loss resulting from their disposal (the difference between the net disposal proceeds and the carrying amount) is included in the consolidated income statement.
3.5 Leased assets
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset.
Where the Group is the lessee
Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over the lease term.
Where the Group is the lessor
Assets subject to operating leases are included as the Group’s investment properties in the consolidated balance sheet. Initial direct costs incurred in negotiating an operating lease are recognised in the consolidated income statement as incurred.
Lease income is recognised in the consolidated income statement on a straight-line basis over the lease term.
3.6 Depreciation and amortisation
Depreciation of tangible fixed assets and amortisation of intangible fixed assets are calculated on a straight-line basis over the estimated useful life of each asset as follows:
Building and structures 10 - 20 years
Machinery and equipment 3 - 10 years
Means of transportation 6 - 10 years
Office equipment 3 years
ISO certificate 3 - 10 years
Computer software 3 - 10 years
3.7 Investment properties
Investment properties are stated at cost including transaction costs less accumulated depreciation.
Subsequent expenditure relating to an investment property that has already been recognised is added to the net book value of the investment property when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing investment property, will flow to the Group.
Depreciation of investment properties is calculated on a straight-line basis over the estimated useful life of each asset as follows:
Infrastructure 25 – 46 years
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.7 Investment properties (continued)
Investment properties are derecognised when either they have been disposed of or when the investment properties are permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the assets is recognised in the consolidated income statement in the year of retirement or disposal.
Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment properties when, and only when, there is change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale. The transfer from investment property to owner-occupied property or inventories does not change the cost or the carrying value of the property for subsequent accounting at the date of change in use.
3.8 Borrowing costs
Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds.
Borrowing costs are recorded as expense during the year in which they are incurred, except to the extent that they are capitalised as explained in the following paragraph.
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily take a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset.
3.9 Prepaid expenses
Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated balance sheet and amortised over the period for which the amounts are paid or the period in which economic benefits are generated in relation to these expenses.
The following types of expenses are recorded as prepaid expense and are amortised or recognised consistently with revenue to the consolidated income statement:
» Prepaid rental;
» Tools and supplies;
» Commission fees;
» Discounts; and
» Industrial park’s renovation costs.
3.10 Business combinations and goodwill
Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of business combination.
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
150
151
AN
NUA
L RE
PO
RT 2019
150
151
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.10 Business combinations and goodwill (continued)
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost the business combination over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortisation. Goodwill is amortized over 10-year period on a straight-line basis. The parent company conducts the periodical review for impairment of goodwill of investment in subsidiaries. If there are indicators of impairment loss incurred is higher than the yearly allocated amount of goodwill on the straight-line basis, the higher amount will be recorded in the consolidated income statement.
When the acquisition of subsidiaries does not represent a business combination, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised.
3.11 Investments
Investment in other entity
Investment in other entity is stated at its acquisition cost.
Held-to-maturity investments
Held-to-maturity investments are stated at their acquisition costs. After initial recognition, held-to-maturity investments are measured at recoverable amount. Any impairment loss incurred is recognised as expense in the consolidated financial statements and deducted against the value of such investments.
Provision for diminution in value of investments
Provision of the investment is made when there are reliable evidences of the diminution in value of those investments at the balance sheet date. Increases or decreases to the provision balance are recorded as finance expense in the consolidated income statement.
3.12 Payables and accruals
Payables and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group.
3.13 Accrual for severance pay
The severance pay to employee is accrued at the end of each reporting year for all employees who have been in service for more than 12 months up to 31 December 2008 at the rate of one-half of the average monthly salary for each year of service up to 31 December 2008 in accordance with the Labour Code and related implementing guidance. The average monthly salary used in this calculation is revised at the end of each reporting year following the average monthly salary of the 6-month period up to the reporting date. Increases or decreases to the accrued amount other than actual payment to employee will be taken to the consolidated income statement.
This accrued severance pay is used to settle the termination allowance to be paid to employee upon termination of their labour contract following Article 48 of the Labour Code.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.14 Appropriation of net profits
Net profit after tax (excluding negative goodwill arising from a bargain purchase) is available for appropriation to shareholders after approval by shareholders at the annual general meeting, and after making appropriation to reserve funds in accordance with the Group’s Charter and Vietnam’s regulatory requirements.
The Group maintains the following reserve funds which are appropriated from the Group’s net profit as proposed by the Board of Directors and subject to approval by shareholders at the annual general meeting:
Investment and development fund
This fund is set aside for use in the Group’s expansion of its operation or of in-depth investment.
Bonus and welfare fund
This fund is set aside for the purpose of pecuniary rewarding and encouraging, common benefits and improvement of the employees’ benefits, and presented as a liability on the consolidated balance sheet.
3.15 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding trade discount, rebate and sales return. The following specific recognition criteria must also be met before revenue is recognised:
Sale of completed properties
Revenue is recorded when the significant risks and returns have been transferred to the buyer, which is normally on unconditional exchange of contracts. For conditional exchanges, sales are recognised only when all the significant conditions are satisfied.
Sale of land lots and related infrastructure
The Group applies the revenue recognition method as guided in the Official Letter No. 17239/BTC-CDKT dated 20 December 2017 of Ministry of Finance. Accordingly, sublease rentals are recognised on a straight-line basis over the lease terms when the Group progressively receives less than 90% of total rentals. The remaining rentals will be recognised in full upon cumulative receipt of 90% of total rentals.
Rental income
Rental income arising from operating leases is recorded to the consolidated income statement and accounted for on a straight-line basis over the terms of the lease.
Rendering of services
Revenue is recognised upon completion of the services provided.
Interest income
Interest income is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectability is in doubt.
Dividend income
Dividend income is recognised when the Group’s entitlement as an investor to receive the dividend is established.
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153
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.16 Taxation
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted as at the balance sheet date.
Current income tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to equity, in which case the current income tax is also dealt with in equity.
Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to offset current tax assets against current tax liabilities and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, carried forward unused tax credit and unused tax losses, to the extent that it is probable that taxable profit will be available against which deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Previously unrecognised deferred income tax assets are re-assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date.
Deferred tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to equity, in which case the deferred tax is also dealt with in the equity account.
Deferred tax assets and liabilities are offset when there is a legally enforceable right for the Group to offset current tax assets against current tax liabilities and when they relate to income taxes levied on the same taxable entity by the same taxation authority.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.17 Earnings per share
Basic earnings per share amount is computed by dividing net profit for the year attributable to ordinary shareholders of the Company (after adjusting for the bonus and welfare fund) by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit after tax attributable to ordinary equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
3.18 Segment information
A segment is a component determined separately by the Group which is engaged in providing products or related services (business segment), or providing products or services in a particular economic environment (geographical segment), that is subject to risks and returns that are different from those of other segments.
As the Group’s revenue and profit are derived mainly from real estate business in Vietnam while other sources of revenue are not material as a whole, the management accordingly believed that the Group operates in a sole business segment of real estate. Geographical segment of the Group is in Vietnam only. Accordingly, segment information is not presented.
3.19 Related parties
Parties are considered to be related parties of the Group if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions, or when the Group and other party are under common control or under common significant influence. Related parties can be enterprise or individual, including close members of the family of any such individual.
4. CASH AND CASH EQUIVALENTSVND’000
Ending balance Beginning balance
Cash on hand 12,751,358 8,394,057
Cash in banks 417,894,791 435,152,362
Cash equivalents (*) 744,348,267 1,392,159,893
TOTAL 1,174,994,416 1,835,706,312
(*) Cash equivalents represent bank deposits with maturity less than 3 months and earning interest at the rates ranging from 4.5% to 5.5% per annum.
5. SHORT-TERM INVESTMENT
Short-term investment includes held-to-maturity investments, which represent bank deposits with maturity of six months and earning interest at the rate ranging from 5.8% to 7.2% per annum.
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155
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155
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
6. TRADE RECEIVABLES VND’000
Ending balance Beginning balance
Short-term 1,614,477,111 828,283,414
Receivables from sales of residential land properties 1,614,477,111 828,283,414
- Phu An Real Estate Business Investment Co., Ltd. 189,865,957 -
- Others 1,424,611,154 828,283,414
Long-term 77,954,214 64,683,136
Receivables from sales of residential land properties 77,954,214 64,683,136
TOTAL 1,692,431,325 892,966,550
Provision for doubtful receivables (2,881,386) (4,949,381)
In which:
Short-term (881,386) (2,949,381)
Long-term (2,000,000) (2,000,000)
NET 1,689,549,939 888,017,169
7. ADVANCES TO SUPPLIERS VND’000
Ending balance Beginning balance
Short-term 1,700,470,697 700,570,628
Advances for transfer of land use right 1,244,320,795 585,270,768
Advances for construction services 448,064,465 71,237,908
Advances for consulting services - 40,000,000
Others 8,085,437 4,061,952
Long-term 1,728,585 46,961,085
Advances for construction services 1,728,585 1,961,085
Advances for transfer of land use right - 45,000,000
TOTAL 1,702,199,282 747,531,713
8. OTHER RECEIVABLESVND’000
Ending balance Beginning balance
Short-term 463,768,688 234,410,909
Advances for projects compensation 390,657,926 153,702,026
Provisional corporate income tax (i) 55,713,905 50,250,581
Others 17,396,857 30,458,302
Long-term 18,136,448 13,228,519
Overpaid land use fee 6,399,496 6,399,496
Deposits 5,048,500 3,248,571
Others 6,688,452 3,580,452
TOTAL 481,905,136 247,639,428
8. OTHER RECEIVABLES (continued)
(i) In accordance with Circular No. 96/2015/TT-BTC issued by the Ministry of Finance on 22 June 2015 which provides guidelines for implementation of the Law on Corporate Income Tax, the Group is entitled to provisionally pay tax at the rate of 20% on turnover received by cash from its customers less corresponding expenses or at the rate of 1% on cash collections from its customers.
9. INVENTORIESVND’000
Ending balance Beginning balance
Properties under development (*) 6,828,333,749 5,601,254,871
Real estate properties 208,321,111 215,929,549
Raw materials 453,883 195,992
TOTAL 7,037,108,743 5,817,380,412
(*) Properties under development comprise on-going projects to develop the following residential land properties:VND’000
Ending balance Beginning balance
Khang Phuc - Tan Tao Residential Zone 2,428,853,680 1,784,874,162
Saphire Phu Huu 1,280,602,155 444,960,370
Khang Phuc - Binh Hung 11A Residential Zone 470,472,151 449,866,363
Thuy Sinh Phu Huu (**) 422,791,129 403,082,852
Binh Trung - Binh Trung Dong (**) 380,864,855 334,240,034
Others (**) 1,844,749,779 2,184,231,090
TOTAL 6,828,333,749 5,601,254,871
(**) Parts of these projects were pledged to obtain loans from banks (Note 23).
The Group capitalised borrowing costs for the year ended 31 December 2019 amounting to VND’000 85,074,932 (for the year ended 31 December 2018: VND’000 74,055,706). These costs relate to borrowings obtained to finance the development and construction of the Group’s property projects.
10. PREPAID EXPENSESVND’000
Ending balance Beginning balance
Short-term 250,231,916 95,407,524
Commission fees 161,921,346 45,441,206
Discounts 63,660,875 25,401,616
Others 24,649,695 24,564,702
Long-term 10,957,661 6,186,801
Le Minh Xuan Expansion Industrial Park’s renovation costs 5,932,455 2,216,475
Others 5,025,206 3,970,326
TOTAL 261,189,577 101,594,325
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157
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157
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN
11.
TAN
GIB
LE F
IXED
ASS
ETS
VND
’000
Build
ings
and
st
ruct
ures
Mac
hine
ry a
nd
equi
pmen
tM
eans
of
tran
spor
tati
onO
ffice
equ
ipm
ent
Tota
l
Cost
Begi
nnin
g ba
lanc
e21
,420
,436
43,9
21,2
3321
,180
,934
4,96
6,51
391
,489
,116
New
pur
chas
e8,
838,
557
9,11
8,16
62,
159,
192
-20
,115
,915
Disp
osal
--
(310
,167
) (2
,152
,832
) (2
,462
,999
)
Recl
assifi
catio
n-
(1,3
36,5
92)
1,43
9,51
0(1
02,9
18)
-
Endi
ng b
alan
ce30
,258
,993
51
,702
,807
24
,469
,469
2,71
0,76
310
9,14
2,03
2
In w
hich
:
Fully
dep
reci
ated
660,
728
27,7
17,4
594,
796,
893
2,14
7,68
535
,322
,765
Acc
umul
ated
dep
reci
atio
n
Begi
nnin
g ba
lanc
e(1
2,31
3,24
5)(3
3,46
8,82
6)(6
,436
,320
)(4
,810
,210
)(5
7,02
8,60
1)
Dep
reci
atio
n fo
r the
yea
r (1
,237
,498
)(2
,498
,302
)(2
,886
,572
)(1
85,9
56)
(6,8
08,3
28)
Disp
osal
--
310,
167
2,14
6,35
8 2,
456,
525
Recl
assifi
catio
n3,
639,
460
460,
355
(4,4
46,7
48)
346,
933
-
Endi
ng b
alan
ce(9
,911
,283
) (3
5,50
6,77
3)
(13,
459,
473)
(2,5
02,8
75)
(61,
380,
404)
Net
car
ryin
g am
ount
Begi
nnin
g ba
lanc
e9,
107,
191
10,4
52,4
0714
,744
,614
156,
303
34,4
60,5
15
Endi
ng b
alan
ce20
,347
,710
16
,196
,034
11
,009
,996
207,
888
47,7
61,6
28 12. INVESTMENT PROPERTIES
VND’000
Infrastructure
Cost
Beginning balance 17,441,610
Transfer from inventory 57,855,814
Transfer from construction in progress 55,439,830
Sold, disposed (26,170,871)
Ending balance 104,566,383
Accumulated depreciation
Beginning balance (12,271,237)
Depreciation for the year (1,024,747)
Sold, disposed 8,396,418
Ending balance (4,899,566)
Net carrying amount
Beginning balance 5,170,373
Ending balance 99,666,817
The fair values of investment properties at the balance sheet date had not yet been formally assessed and determined, but the management believed that it was much higher than properties’ carrying values considering that investment properties have been almost fully rented out at the balance sheet date.
13. CONSTRUCTION IN PROGRESSVND’000
Ending balance Beginning balance
Le Minh Xuan Expansion Industrial Park 629,487,717 465,990,890
14. LONG-TERM INVESTMENTS VND’000
Ending balance Beginning balance
Investment in other entity (Note 14.1) 14,000,000 14,000,000
Held-to-maturity investment (Note 14.2) 300,000 300,000
TOTAL 14,300,000 14,300,000
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
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159
AN
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158
159
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
14. LONG-TERM INVESTMENTS (continued)
14.1 Investment in other entity
Ending balance Beginning balance
Amount VND’000
% of interest
Amount VND’000
% of interest
CVH Spring Company Limited 14,000,000 5 14,000,000 5
14.2 Held-to-maturity investments
These represent 30 bonds at par value of VND’000 10,000/bond with an original maturity of 10 years and earning interest at the reference saving account rate plus 0.8% per annum issued by Vietnam Joint Stock Commercial Bank for Industry and Trade – Hanoi Branch.
15. GOODWILL The movements in goodwill during the year are as follows:
VND’000
Cost
Beginning and ending balances 34,008,874
Accumulated amortisation
Beginning balance (29,724,570)
Amortisation for the year (1,511,214)
Ending balance (31,235,784)
Net carrying amount
Beginning balance 4,284,304
Ending balance 2,773,090
16. SHORT-TERM TRADE PAYABLES VND’000
Ending balance Beginning balance
RICONS Construction Investment Joint Stock Company 258,715,812 -
An Phong Construction Co., Ltd. 236,133,913 -
Hoa Binh Construction Group Joint Stock Company 120,061,256 173,057,094
Others 80,787,487 111,388,674
TOTAL 695,698,468 284,445,768
17. ADVANCES FROM CUSTOMERSVND’000
Ending balance Beginning balance
Short-term 2,772,929,571 1,366,862,318
Advances received for transfer of houses and apartments (*) 2,611,735,095 1,204,918,193
Advance received for transfer of project (**) 161,000,000 161,000,000
Others 194,476 944,125
Long-term 26,526,233 60,874
Advances received for transfer of houses and apartments (*) 26,526,233 60,874
TOTAL 2,799,455,804 1,366,923,192
(*) These represent advances based on agreed progress billings from customers who buy houses and apartments of the Group’s projects which are under construction. The Group will hand over houses and apartments to customers upon completion of construction and recognise revenue correspondingly.
(**) This represents advance received from Minh An Trading Investment Joint Stock Company for transfer An Duong Vuong project in accordance with the Contract No. 99/2017/HDK/BCCI-MA dated 11 May 2017 and appendixes.
18. STATUTORY OBLIGATIONS
VND’000
Beginning balance
Payable for the year
Payment made in the year Ending balance
Corporate income tax 215,561,269 294,275,580 (229,395,213) 280,441,636
Value-added tax 22,607,379 76,712,588 (86,814,135) 12,505,832
Personal income tax 975,064 13,038,060 (12,564,081) 1,449,043
Others 193,239 2,817,302 (2,989,095) 21,446
TOTAL 239,336,951 386,843,530 (331,762,524) 294,417,957
19. ACCRUED EXPENSESVND’000
Ending balance Beginning balance
Short-term 75,424,337 50,898,854
Project development costs 35,885,011 37,045,254
Commission fees 18,448,934 -
Interest expense 6,638,220 9,953,647
Others 14,452,172 3,899,953
Long-term 69,227,791 84,266,104
Project development costs 69,227,791 84,266,104
TOTAL 144,652,128 135,164,958
BÁ
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THƯ
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161
AN
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RT 2019
160
161
B09-DN/HNNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
20. UNEARNED REVENUESVND’000
Ending balance Beginning balance
Short-term 1,330,504 2,039,502
Advances received for land leases of Le Minh Xuan Industrial Park 1,330,504 2,039,502
Long-term 10,159,880 25,014,730
Advances received for land leases of Le Minh Xuan Industrial Park 10,159,880 25,014,730
TOTAL 11,490,384 27,054,232
21. OTHER PAYABLESVND’000
Ending balance Beginning balance
Short-term 319,815,817 168,189,771
Maintenance fund 152,764,996 120,280,767
Deposits received 149,020,738 38,332,469
Others 18,030,083 9,576,535
Long-term 436,260,677 47,376,709
Capital received from Investment Cooperation Contracts (“ICCs”) (i) 362,000,000 -
Deposits received 46,343,967 16,808,063
Land compensation payables (ii) 21,115,860 23,205,857
Others 6,800,850 7,362,789
TOTAL 756,076,494 215,566,480
(II) There are capital received from Phuc Dat Real Estate Joint Stock Company and Nam Hung Real Estate Investment and Development Limited Company under ICCs amounting to VND’000 252,000,000 and VND’000 110,000,000, respectively, with the term of 18 months from 9 December 2019, to develop Residential project with area of 164,226 m2 in Binh Hung Ward, Binh Chanh District, Ho Chi Minh City.
(ii) This represents land compensation payables to owners of raw land where the Group is going to develop Hamlet 2 Tan Tao Residential project. This payable will be subsequently paid out of the developed land lots from the said project.
22. BONUS AND WELFARE FUNDVND’000
Current year Previous year
Beginning balance 31,557,041 26,663,602
Increase 40,403,910 25,112,552
Decrease (37,214,410) 20,219,113
Ending balance 34,746,541 31,557,041
23.
LOA
NS
VN
D’0
00
Begi
nnin
g ba
lanc
eIn
crea
seD
ecre
ase
Recl
assi
ficat
ion
Endi
ng b
alan
ce
Shor
t-te
rm63
1,77
4,12
3-
(720
,591
,425
)46
6,10
8,32
737
7,29
1,02
5
Bond
s (N
ote
23.1
) 14
9,96
6,66
7-
(149
,966
,667
)22
4,95
2,67
122
4,95
2,67
1
Curre
nt p
ortio
n of
long
-ter
m lo
ans (
Not
e 23
.2)
481,
807,
456
-(5
70,6
24,7
58)
241,
155,
656
152,
338,
354
Long
-ter
m33
6,50
9,32
353
4,79
9,42
2-
(466
,108
,327
)40
5,20
0,41
8
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s (N
ote
23.1
) -
449,
905,
342
-(2
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52,6
71)
224,
952,
671
Loan
s fro
m b
anks
(Not
e 23
.2)
336,
509,
323
84,8
94,0
80-
(241
,155
,656
)18
0,24
7,74
7
TOTA
L 96
8,28
3,44
653
4,79
9,42
2(7
20,5
91,4
25)
-78
2,49
1,44
3
23.1
Bo
nds
Det
ails
of b
onds
issu
ed a
re a
s fol
low
s:
Endi
ng b
alan
cePr
inci
pal r
epay
men
t ter
mPu
rpos
eIn
tere
st ra
teD
escr
ipti
on o
f co
llate
ral
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D’0
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p.a
.
Bond
s iss
ued
at p
ar v
alue
449,
905,
342
21 M
ay 2
020
and
21 M
ay 2
021
To fi
nanc
e w
orki
ng
capi
tal
12U
nsec
ured
In w
hich
:
Shor
t-ter
m22
4,95
2,67
1
Long
-term
224,
952,
671
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
162
163
AN
NUA
L RE
PO
RT 2019
162
163
23.
LOA
NS
(con
tinu
ed)
23.2
Lo
ans
from
ban
ks
Det
ails
of lo
ans f
rom
ban
ks a
re a
s fol
low
s:
Bank
Endi
ng
bala
nce
VN
D’0
00Pr
inci
pal r
epay
men
t ter
mPu
rpos
e
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rest
ra
te%
p.a
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escr
ipti
on o
f col
late
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ent C
omm
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al Jo
int S
tock
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k –
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tric
t 4 B
ranc
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om 1
5 Se
ptem
ber 2
020
to 1
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ecem
ber 2
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nanc
e Th
uy S
inh
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pro
ject
11La
nd u
se ri
ght a
nd a
ssoc
iate
d as
sets
of t
he L
and
No.
56,
Map
No.
14,
Phu
Huu
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d, D
istric
t 9,
Ho
Chi M
inh
City
Loan
245
,119
,000
1 Ju
ly 2
020
To fi
nanc
e Bi
nh T
rung
- Bi
nh
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g D
ong
resid
entia
l pro
ject
10.8
Real
est
ate
prop
ertie
s at Q
uart
er 2
, Phu
Huu
W
ard,
Dist
rict 9
, Ho
Chi M
inh
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Viet
nam
Join
t Sto
ck C
omm
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al B
ank
for I
ndus
try
and
Trad
e –
Ho
Chi M
inh
Bran
ch
Loan
142
,410
,497
16
Apr
il 20
20To
fina
nce
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ng -
Binh
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ung
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g re
siden
tial p
roje
ct11
Land
use
righ
ts o
f 51,6
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2 and
ass
ociat
ed a
sset
s of
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ng -
Binh
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ng D
ong
proj
ect
Loan
229
,056
,604
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om 2
7 M
arch
202
0 to
27
Mar
ch 2
021
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nanc
e Ph
ong
Phu
4 Zo
ne p
roje
ct11
Land
use
righ
ts o
f 6,8
76 m
2 and
ass
ocia
ted
asse
ts
of P
hong
Phu
4 Z
one
proj
ect
TOTA
L33
2,58
6,10
1
In w
hich
:
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nt p
ortio
n15
2,33
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4
Long
-term
180,
247,
747
24.
OW
NER
S’ E
QU
ITY
24.1
M
ovem
ents
in o
wne
rs’ e
quity
VND
’000
Shar
e ca
pita
lSh
are
prem
ium
Inve
stm
ent a
nd
deve
lopm
ent f
und
Und
istr
ibut
ed
earn
ings
Tota
l
Prev
ious
yea
r
Begi
nnin
g ba
lanc
e 3,
360,
000,
000
1,08
7,45
7,37
568
,061
,401
698,
075,
764
5,21
3,59
4,54
0
Issua
nce
of n
ew sh
ares
58
6,32
3,17
063
6,74
8,50
8-
-1,
223,
071,
678
Net
pro
fit fo
r the
yea
r-
--
808,
078,
193
808,
078,
193
Cons
olid
atio
n’s d
iffer
ence
due
to sh
ares
swap
tran
sact
ion
--
-(1
61,4
70,9
49)
(161
,470
,949
)
Appr
opria
tion
of n
et p
rofit
-
-25
,112
,552
(25,
112,
552)
-
Tran
sfer
to b
onus
and
wel
fare
fund
--
-(2
5,11
2,55
2)(2
5,11
2,55
2)
Div
iden
d sh
are
193,
910,
360
--
(193
,910
,360
)-
Div
iden
d pa
id-
--
(193
,917
,029
)(1
93,9
17,0
29)
Endi
ng b
alan
ce4,
140,
233,
530
1,72
4,20
5,88
393
,173
,953
906,
630,
515
6,86
4,24
3,88
1
Curr
ent y
ear
Begi
nnin
g ba
lanc
e 4,
140,
233,
530
1,72
4,20
5,88
393
,173
,953
906,
630,
515
6,86
4,24
3,88
1
Issua
nce
of n
ew sh
ares
(i)
1,09
7,05
2,72
0 (1
,004
,052
,720
)-
-93
,000
,000
Net
pro
fit fo
r the
yea
r-
--
915,
232,
845
915,
232,
845
Appr
opria
tion
of n
et p
rofit
-
-40
,403
,910
(4
0,40
3,91
0)
-
Tran
sfer
to b
onus
and
wel
fare
fund
--
-(4
0,40
3,91
0)
(40,
403,
910)
Div
iden
d sh
are
(i)20
7,00
4,84
0 -
-(2
07,0
04,8
40)
-
Div
iden
d pa
id-
--
(207
,011
,676
)(2
07,0
11,6
76)
Endi
ng b
alan
ce5,
444,
291,
090
720,
153,
163
133,
577,
863
1,32
7,03
9,02
47,
625,
061,
140
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
B09-
DN
/HN
NO
TES
TO T
HE
CON
SOLI
DA
TED
FIN
AN
CIA
L ST
ATE
MEN
TS (c
ontin
ued)
as a
t 31
Dec
embe
r 201
9 an
d fo
r the
yea
r the
n en
ded
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
164
165
AN
NUA
L RE
PO
RT 2019
164
165
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
24. OWNERS’ EQUITY (continued)
24.1 Movements in owners’ equity (continued)
(i) On 17 June 2019, the Company completed the issuance of 103,505,272 bonus shares from share premium and 20,700,484 ordinary shares to paid dividends to existing shareholders at par value of VND 10,000/share in accordance with the Resolution No. 01/2019/NQ-DHDCD dated 12 April 2019. On 1 July 2019, the Company received the 23rd amended Enterprise Registration Certificate issued by the DPI of Ho Chi Minh City, approving the increase in charter capital from VND’000 4,140,233,530 to VND’000 5,382,291,090.
On 2 July 2019, the Company completed the issuance of 6,200,000 ordinary shares to employees under ESOP with the price of VND 15,000/share in accordance with Resolution No. 01/2019/NQ-DHDCD dated 12 April 2019. On 11 July 2019, the Company received the 24nd amended Enterprise Registration Certificate issued by the DPI of Ho Chi Minh City, approving the increase in charter capital from VND’000 5,382,291,090 to VND’000 5,444,291,090.
24.2 Capital transactions with owners and distribution of dividendsVND’000
Current year Previous year
Contributed share capital
Beginning balance 4,140,233,530 3,360,000,000
Increase 1,304,057,560 780,233,530
Ending balance 5,444,291,090 4,140,233,530
Dividends
Dividend declared 414,016,516 387,827,389
Dividend paid 414,016,516 387,827,389
24.3 Share capital
Quantity
Ending balance Beginning balance
Authorised shares 544,429,109 414,023,353
Issued and paid-up shares
Ordinary shares 544,429,109 414,023,353
Shares in circulation
Ordinary shares 544,429,109 414,023,353
Pair value of outstanding share: VND 10,000/share (2018: VND 10,000 share).
25. NON-CONTROLLING INTERESTSVND’000
Ending balance Beginning balance
Contributed charter capital 35,977,444 32,477,444
Undistributed earnings 3,055,792 2,511,973
Increase from asset acquisitions 265,568 265,568
Investment and development fund 418 418
TOTAL 39,299,222 35,255,403
26. REVENUES
26.1 Revenue from sale of goods and rendering of servicesVND’000
Current year Previous year
Gross revenue 2,844,774,366 2,920,026,535
Of which:
Sale of residential land properties 2,745,247,150 2,864,133,739
Sale of land use right and related infrastructure (*) 52,829,156 13,220,893
Rendering of services 42,628,314 39,809,570
Operating lease 4,069,746 2,862,333
Less (31,420,938) (3,431,112)
Sale returns (29,528,487) (1,921,455)
Trade discounts (1,892,451) (1,509,657)
Net revenue 2,813,353,428 2,916,595,423
Of which:
Sale of residential land properties 2,713,826,212 2,860,702,627
Sale of land use right and related infrastructure (*) 52,829,156 13,220,893
Rendering of services 42,628,314 39,809,570
Operating lease 4,069,746 2,862,333
(*) During the year, the Group recognised revenue from industrial land and related infrastructure in accordance with accounting policy as described in Note 3.15. If this revenue is recognised on a straight-line basis over the lease terms, the impact of revenue, cost of sales and gross profit of the Group for the current year are presented below:
VND’000
Outright revenue recognition
Revenue recognition on a straight-line basis
Revenue 52,829,156 1,330,643
Cost of sales (17,524,899) (386,815)
Gross profit 35,304,257 943,828
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
166
167
AN
NUA
L RE
PO
RT 2019
166
167
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
26. REVENUES (continued)
26.2 Finance incomeVND’000
Current year Previous year
Interest income 38,460,133 62,713,074
Gains on disposal of investments - 137,065,083
Others 3,000,000 36,377
TOTAL 41,460,133 199,814,534
27. COSTS OF GOODS SOLD AND SERVICES RENDERED VND’000
Current year Previous year
Cost of residential land properties sold 1,243,255,306 1,642,795,277
Cost of services rendered 51,448,373 30,289,573
Cost of land use right and related infrastructure 17,524,899 3,843,282
Cost of operating lease 695,744 463,569
TOTAL 1,312,924,322 1,677,391,701
28. FINANCE EXPENSES VND’000
Current year Previous year
Discounts for early payments 28,684,068 44,258,521
Loan interest 1,519,427 31,709,502
Finance support for customers 11,345,565 6,062,436
Loss from disposal of investments - 4,773,681
Others 68,674 1,856,749
TOTAL 41,617,734 88,660,889
29. SELLING EXPENSES AND GENERAL AND ADMINISTRATIVE EXPENSES VND’000
Current year Previous year
Selling expenses 115,390,554 99,262,050
Commission fees 59,966,545 47,657,092
Advertising expenses 23,948,009 14,089,009
Sale supporting fees 10,519,529 16,899,172
Labour costs 7,540,701 6,532,013
Others 13,415,770 14,084,764
General and administrative expenses 162,284,584 158,135,349
Labour costs 92,074,429 71,668,457
Expenses for external services 45,731,559 54,668,984
Depreciation expenses 4,994,990 4,229,750
Others 19,483,606 27,568,158
TOTAL 277,675,138 257,397,399
30. OTHER INCOME AND EXPENSES VND’000
Current year Previous year
Other income 32,910,340 36,938,967
Income from management services 22,971,811 11,839,112
Penalties on violation of contracts 6,794,869 21,060,637
Others 3,143,660 4,039,218
Other expenses (65,666,550) (58,397,094)
Expenses for management services (47,129,757) (19,993,906)
Penalties on violation of contracts (14,197,140) (10,593,634)
Support expenses for land revocation - (11,222,560)
Others (4,339,653) (16,586,994)
OTHER LOSS (32,756,210) (21,458,127)
BÁ
O C
ÁO
THƯ
ỜN
G N
IÊN
2019
168
169
AN
NUA
L RE
PO
RT 2019
168
169
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedB09-DN/HN B09-DN/HN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then ended
31. CORPORATE INCOME TAX
The statutory corporate income tax ("CIT") rate applicable to the Company and its subsidiaries is 20% of taxable profits.
The Company and its subsidiaries tax returns are subject to examination by the tax authorities. As the application of tax laws and regulations are susceptible to varying interpretations, amounts reported in the consolidated financial statements could be changed at a later date upon final determination by the tax authorities.
31.1 CIT expenseVND’000
Current year Previous year
Current CIT expense 269,296,721 254,128,261
Adjustment for under accrual of tax from prior years 14,871,746 13,310,197
Deferred tax income (11,204,972) (1,530,139)
TOTAL 272,963,495 265,908,319
Reconciliation between CIT expense and the accounting profit before tax multiplied by CIT rate is presented below:
VND’000
Current year Previous year
Accounting profit before tax 1,189,840,157 1,075,501,559
At CIT rate of 20% 237,968,029 215,100,312
Adjustments:
Non-deductible expenses 4,288,178 3,988,130
Losses in subsidiaries not yet recognised as deferred tax asset 13,654,507 23,039,927
Non-taxable income - 2,525,622
Share of profit in associates - (799,944)
Consolidation adjustments (3,784,567) 10,722,853
Tax losses carried forward (517,919) (1,978,778)
Adjustment for under accrual of tax from prior years 14,871,746 13,310,197
Adjustment of tax loss under tax authorities’ decision 6,483,521 -
CIT expense 272,963,495 265,908,319
31.2 Current tax
The current CIT payable is based on taxable profit for the current year. The taxable profit of the Group for the year differs from the profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date.
31. CORPORATE INCOME TAX (continued)
31.3 Deferred tax
The following are the deferred tax assets and liabilities recognised by the Group and the movements thereon, during the current year and previous year:
VND’000
Consolidated balance sheet
Consolidated income statement
Ending balance Beginning balance Current year Previous year
Deferred tax assets
Accrued interest expenses 8,805,871 3,777,766 5,028,105 (3,295,551)
Provisions for doubtful debts 400,000 400,000 - 400,000
Accrual for severance pay 173,029 157,016 16,013 148,230
Tax loss - - - (17,469,782)
Unrealised profit - - - (68,632)
Accrued expenses - - - (7,274)
Accrued interest income (155,668) (136,763) (18,905) (62,096)
Adjustment due to consolidation of subsidiaries
339,812 367,954 (28,142) 367,954
TOTAL 9,563,044 4,565,973 4,997,071 (19,987,151)
Deferred tax liabilities
Tax loss 25,966,594 24,436,895 1,529,699 11,857,981
Accrual for severance pay 111,200 111,200 - (165,839)
Accrued expenses 358,502 - 358,502 (10,541,844)
Provisions for doubtful debts - - - (400,000)
Unrealised profit - - (216,192)
Accrued interest income (10,588,847) (3,500,986) (7,087,861) 18,281,177
Profit from sale of land properties but not yet taxable
(33,235,179) (33,235,179) - (779)
Adjustment due to consolidation of subsidiaries
(35,112,549) (46,520,110) 11,407,561 2,702,786
TOTAL (52,500,279) (58,708,180) 6,207,901 21,517,290
Net deferred tax income 11,204,972 1,530,139
32. TRANSACTIONS WITH RELATED PARTIES
Remuneration to members of the Board of Directors, Management and the Board of Supervision: VND’000
Current year Previous year
Salaries and bonus of Board of Directors and Management 10,183,446 7,745,630
Allowance of Board of Supervision 240,000 240,000
TOTAL 10,423,446 7,985,630
B09-DN/HNNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at 31 December 2019 and for the year then endedNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSas at 31 December 2019 and for the year then ended (continued) B09-DN/HN
33. EARNINGS PER SHARE
The Group used following data to calculate the basic and diluted earnings per share:VND’000
Current yearPrevious year
(adjusted)
Net profit after tax attributable to ordinary equity holders of the Company 915,232,845 808,078,193
Less bonus and welfare fund (*) - (40,403,910)
Net profit attributable to ordinary equity holders of the Company 915,232,845 767,674,283
Weighted average number of ordinary shares (**) 541,320,616 524,503,883
Earnings per share
- Basic (VND’000/share) 1.69 1.46
- Diluted (VND’000/share) 1.69 1.46
(*) Profit used to compute earnings per share for the year ended 31 December 2018 have been restated to the amounts reported in the consolidated financial statements for the year ended 31 December 2018 to reflect the actual appropriation of bonus and welfare fund from undistributed net income of 2018 in accordance with the Resolution of Shareholders at annual general meeting dated 12 April 2019.
Bonus and welfare fund for the year ended 31 December 2019 is not approved by Shareholders as at the date of these consolidated financial statements.
(**) The weighted average number of ordinary shares for the year ended 31 December 2018 has been retrospectively adjusted for the bonus and dividend shares issued on 17 June 2019.
There have been no dilutive potential ordinary shares during the year and up to the dates of these consolidated financial statements.
34. OPERATING LEASE COMMITMENTS
The Group leases office premises under operating lease arrangements. Future minimum lease payables at the balance sheet dates were as follows:
VND’000
Ending balance Beginning balance
Less than 1 year 11,457,995 13,045,611
From 1 to 5 years - 14,950,871
TOTAL 11,457,995 13,045,611
35. EVENT AFTER THE BALANCE SHEET DATE
There is no matter or circumstance that has arisen since the balance sheet date that requires adjustment or disclosure in the consolidated financial statements of the Group.
Luu Thi Minh HieuPreparer
25 March 2020
Nguyen Tran Cam HienChief Accountant
Ngo Thi Mai ChiGeneral Director
Suite 1 and 2, 11th Floor Saigon Center,67 Le Loi, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam(84.28) 3820 8858 (84.28) 3820 8859info@ khangdien.com.vn www.khangdien.com.vn
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KHANG DIEN HOUSE TRADING AND INVESTMENT JOINT STOCK COMPANY