trust from - · pdf filetrust from annual report. ... vision - mission - core values ......

Where you put your trust - Where you make your home

TRUST FROM

ANNUAL REPORT

BUSINESS PERFORMANCE 2016

Overview of the real estate market in 2016 62Board of Directors report 64Inspection Committee report 70 General Director Team report 72

CORPORATE GOVERNANCE

Board of Directors 88Inspection Committee 89Transactions, remunerations and interest of Board of Directors and Inspection Committee 90Share transactions of internal shareholders and related persons 91Risk management 94

SUSTAINABILITY REPORT

Overview of sustainability report 102Sustainable relationships with stakeholders 104Mechanism for engagement with stakeholders 107Assessment of top material issues 108Business performance 109Compliance with the laws 109Corporate ethics 110Corporate culture 111Product responsibility 113Environment protection and energy saving 114Occupational safety and health 115Workforce relations 116Human resource development 117Community - Social activities 120

FINANCIAL STATEMENTS

General information 124Report of Management 125Independent auditors’ report 126Consolidated balance sheet 128Consolidated income statement 130Consolidated cash fl ow statement 131Notes to consolidated fi nancial statements 133

Vision - Mission - Core values - Competitive advantage 04Chairman’s Statement 06

GENERAL INFORMATION

Overview 10Milestones 12Business scope and scale 14Full project list 15Project locations 22Typical projects in 2016 24Major events in 2016 34Honors and awards achieved in 2016 38Shareholder information 40Investor relations 43Subsidiaries, joint ventures and associates 44Development direction 46SWOT analysis 48Governance model 50 Organizational chart 51Board of Directors 52General Director Team 54Inspection Committee 56Organization and Human Resources 58

TRUE VALUES MOMENTUM FOR FUTURE GROWTH

CONTENTS ANNUAL REPORT 2016

• Transparent legal framework

• Strong fi nancial capacity

• Large land bank

• Perfect product

• Superior quality

• Dedicated services

Transparency and efficiency Transparent governance, feasible plans, strategic

operations to bring benefi ts to customers, shareholders

and society.

Outstanding qualityFocus on construction quality, creating perfect utility

system, building civilized residential community and leave

clear impression in the real estate market.

Customer benefit first Put the word “Trust” on top in every work, take the word

“Mind” to make every eff ort to complete. All the goals are

set out based on customer satisfaction.

Sustainable development Create a fi rm foundation, ensure stable and sustainable

growth, and affi rm the position of a prestigious real estate

company.

VISION CORE VALUES COMPETITIVE ADVANTAGE

VISION - MISSION CORE VALUES - COMPETITIVE ADVANTAGE

To become one of the leading real estate companies

in Vietnam through the trust established on the

competitive advantages and the valuable experience

that Khang Dien has gained over the past 15 years.

To create breakthrough development to become one

of the strongest business groups, contributing to the

community well being and social development.

MISSION

Not only Khang Dien creates new homes in diff erent

market segments to meet diverse demands, but Khang

Dien also contributes to the building of communities

complemented by green living spaces and amenities,

creating sustainable values to the customers,

shareholders and society.

4 5ANNUAL REPORT 2016

CHAIRMAN’S STATEMENT

Taking advantage of the favorable macro-economy and having the right strategy

developed the Board of Directors, Khang Dien had another great performance in

2016, when profi t after tax reached VND372 Billion, increasing by 43% compared

to 2015.

Over the past 15 years of operations, Khang Dien has brought to the market

more than 2,000 in villas and townhouses. In 2016, the Company achieved great

success with Melosa Garden (won “Best Housing Development 2016” in HCMC),

Lucasta eco villa, Feliza and, especially, The Venica - an exclusive luxurious green

oasis with 43 super premium villas, attracting a lot of attentions from the real

estate market.

In 2016, Khang Dien continued receiving the enthusiastic supports from

the strategic shareholders. The Company increased the charter capital up to

VND2,340 Billion. With strong capital base and the trust from the large banks,

the Company was confi dent in developing high-quality large scale projects.

Besides, the Company continued making new land investments and expanded

land bank to prepare for the future growth.

For 2017, with the goal of diversifying products to fully meet the demand of the

customers, in addition to the traditional products such as villas and townhouses,

the Company will deploy two high-quality apartment projects, off ering more

than 2,000 apartments at reasonable prices. Besides, the Company will expand

business presence to the Southwest of the city and build well-planned, modern

and civilized new towns of hundreds of hectares in size and with completed

amenities and utilities including hospitals, schools, commercial centers, fi nance-

banking district, sport and entertainment districts, etc.

For and on behalf of the Board of Directors, I would like to express our sincere

thanks to our valued shareholders, who have accompanied Khang Dien

through out its operating progress. With sustainable development direction, a

reputation to uphold, and a brand representing integrity and best eff ort, we

believe that Khang Dien real estate brand name will develop strongly, bringing

practical benefi ts to the shareholders and sustainable values to the customers

and society.

LY DIEN SON

Chairman

Dear valued shareholders,

WITH A SUSTAINABLE DEVELOPMENT DIRECTION,

A REPUTATION TO UPHOLD, AND A BRAND

REPRESENTING INTEGRITY AND BEST EFFORT,

WE BELIEVE THAT KHANG DIEN BRAND NAME WILL

DEVELOP STRONGLY, BRINGING PRACTICAL

BENEFITS TO THE SHAREHOLDERS AND

SUSTAINABLE VALUES TO THE CUSTOMERS AND

SOCIETY.

VND BILLIONincreasing by

43% compared to 2015.

372PROFIT AFTER TAX

6 7ANNUAL REPORT 2016

YEARSOF EXPERIENCE

IN GARDENED TOWNHOUSES

AND VILLAS PROJECT

DEVELOPMENT

With the goal of bringing the best

quality properties to customers

by the most professional services,

prime locations, fi nancial strength,

enthusiastic and experienced

workforce to lift Khang Dien brand to

a new height.

GENERAL INFORMATION

Business name: CÔNG TY CỔ PHẦN ĐẦU TƯ VÀ KINH DOANH NHÀ KHANG ĐIỀNEnglish name: Khang Dien House Trading and Investment Joint Stock CompanyAddress: Room 801, 8th Floor, Centec Building, 72 - 74 Nguyen Thi Minh Khai Street, Ward 6, District 3, Ho Chi Minh City, Vietnam. Tax code: 0302 588 596Tel: (84-8) 3820 8858Fax: (84-8) 3820 8859Email: info@ khangdien.com.vnWebsite: www.khangdien.com.vn

OVERVIEW

Stock information

Stock symbol: KDHListing date: 01/02/2010Stock exchange: Hochiminh City Stock Exchange - HOSE Charter capital: VND2,339,998,920,000Business sector: Real estate trading and investment

AuditorErnst & Young Vietnam Limited CompanyAddress: 28th Floor, Bitexco Finance TowerNo.2 Hai Trieu Street, District 1, Ho Chi Minh City, Vietnam.Tel: (84.8) 3824 5252 - Fax: (84.8) 3824 5250Website: www.ey.com/VN/en/home

10 11ANNUAL REPORT 2016 GENERAL INFORMATION

Established Khang Dien

House Trading and

Investment Company

Limited.

Increased charter capital from

VND480,699 Billion to VND750 Billion.

Offi cially launched new product line -

Mega Residence and sold out 160 units

within 5 months.

Developed Mega Ruby and Mega

Sapphire next to Mega Residence project,

creating a new residential community of

more than 10 hectares in District 9.

Increased charter capital to VND2,340 Billion.

Mega Village with more than 300 units sold,

Lucasta with 100/140 villas sold and Melosa

Garden project with more than 450 townhouses

and villas sold out.

Launched sales of The Venica, the premium

project, the bright spot in the luxury villa

segment in the East of the city.

Melosa Garden project gained great success

with “Best Housing Development” prize in

Vietnam Property Awards 2016.

In October 2016, Khang Dien was honorably

selected in Top 50 Best Listed Companies in

Vietnam by Forbes.

In November 2016, Khang Dien won the fi rst

prize about Investor Relation in Vietnam which

was organized by Vietstock.

Offi cially listed common

shares on Hochiminh City

Stock Exchange (HOSE)

under KDH ticker.

Increased charter capital

from VND332 Billion

to VND439 Billion by

issuing shares to existing

shareholders and

employees.

Developed Goldora Villa

eco villa project

(also known as Lucasta).

Increased charter capital from

VND439 Billion to VND480,699

Billion.

Developed Mega Residence

project in District 9 with 160

units.Transformed from a

limited company into a

joint stock company and

increased charter capital

from VND216 Billion to

VND332 Billion.

Increased charter capital to VND1,800 Billion.

Acquired 57.3% of Construction Investment

Shareholding Company (BCCI).

Launched sales of Mega Village, Melosa

Garden, Lucasta and The Venica projects.

Lucasta project won Vietnam Property

Awards 2015 for the best interior decoration.

2001

2014

2016

2010

2011

2013

2007

2015

Over the past 15 years, with passion, creativity and persistence, Khang Dien House Trading and Investment Joint Stock

Company has overcome diffi culties and challenges, and gradually affi rmed its prestigious brand that is consistent with the

goal of off ering customers the best real estate properties through the best professional services.

BEING CONFIDENT WITH ITS INTERNAL STRENGTH: NEARLY 500 HECTARES OF LANDBANK IN PRIME LOCATIONS - TRANSPARENT LEGAL FRAMEWORK - REASONABLE PRICES - OUTSTANDING QUALITY, KHANG DIEN HAS ESTABLISHED ITS POSITION AS A REAL ESTATE DEVELOPER OF COMPREHENSIVE SOLUTIONS WHO OFFERS THE BEST LIVING EXPERIENCE TO CUSTOMERS IN ACCORDANCE WITH THE MOTTO “WHERE YOU PUT YOUR TRUST - WHERE YOU MAKE YOUR HOME”.

With smart strategic direction, experienced and dedicated workforce, and tremendous supports from the investors

and strategic partners, Khang Dien is confi dent in its sustainable development journey, creating real estate market

breakthroughs in HCMC as well as Vietnam.

MILESTONES


FULL PROJECT LIST

COMPLETED PROJECTS

WITH OVER 15 YEARS OF EXPERIENCE, KHANG DIEN HAS AFFIRMED ITS OUTSTANDING POSITION IN THE FIELD OF REAL ESTATE DEVELOPMENT IN HCMC.

KHANG DIEN DETERMINES THAT PRODUCT AND SEGMENT DIVERSIFICATIONS ARE THE KEYS TO GROW CUSTOMER BASE. IN THE COMING YEARS, THE COMPANY WILL CONTINUE TO BETTER SATISFY CUSTOMER DEMANDS, SO EACH CUSTOMER COMING TO KHANG DIEN WILL HAS CHANCES TO CHOOSE SEVERAL REAL ESTATE PRODUCTS THAT ARE SUITABLE WITH THEIR FINANCIAL CONDITIONS REGARDLESS THE PRODUCT SEGMENTS. IN ADDITION, THE COMPANY IS CONSTANTLY PERFORMING MARKET RESEARCH TO CREATE THE BEST PRODUCTS SUITABLE TO THE PREVAILING TRENDS AND AFFORDABLE.

AT PRESENT, THE COMPANY HAS BEEN LAUNCHING MANY PRODUCT TYPES INCLUDING TOWNHOUSE, VILLA, AND APARTMENT ACROSS ALL SEGMENTS FROM GOOD TO PREMIUM CLASS, AND SUPER LUXURIOUS CLASS.

Ho Chi Minh City map

Location: Duong Dinh Hoi Street, Phuoc Long B Ward,

District 9, Ho Chi Minh City.

Land area: 10.4 ha

Product: 247 detached villas, duplex villas, gardened

townhouses, and apartments.

Execution progress:

• Legal status: 1/500 master plan approved; project land

entitlement and land ownership certifi cate of each lot

issued.

• Construction - sales: Sold out and forming a community.

KHANG DIEN - PHUOC LONG B 1

Location: Bung Ong Thoan Street, Phu Huu Ward, District 9,

Ho Chi Minh City.

Land area: 6 ha

Product: 225 detached villas, duplex villas and townhouses.

Execution progress:



issued.

• Construction - sales: Sold out and forming a community.

TOPIA GARDEN2

Location: Phuoc Long B Ward, District 9, Ho Chi Minh City

Land area: 7.1 ha

Product: 197 detached villas, duplex villas and townhouses.

Execution progress:



issued.

• Construction - sales: Sold out and 100% homebuyers

have moved in, forming a community.

RIVER TOWN 3

BUSINESS SCOPE AND SCALE


FULL PROJECT LIST(continued)

COMPLETED PROJECTS (continued)

Location: Phuoc Long B Ward, District 9, Ho Chi Minh City

Land area: 0.8 ha

Product: 29 garden townhouses.

Execution progress:

• Legal status: Land entitlement, property ownership

certifi cate of each house and handover completed.

• Construction - sales: Sold out 100%, homebuyers have

moved in, forming a community.

Location: Nguyen Duy Trinh Street, Binh Trung Dong Ward,

District 2, Ho Chi Minh City

Land area: 3 ha

Product: 876 apartments.

Execution progress:


entitlement and land ownership certifi cate of each

apartment block issued.

• Construction - sales: » Parcspring: 404 apartments, sold 99%, handed over

apartments

» Krista: 344 apartments, sold 86%, handover in

progress

» Kris Vue: 128 apartments, sold 94%, scheduled to

hand over in Quarter II/2018.

Location: Eastern Ring Road (a.k.a Vo Chi Cong Street),

Phu Huu Ward, District 9, Ho Chi Minh City

Land area: 3.2 ha

Product: 160 townhouses with construction completed.

Execution progress:



• Construction - sales: Sold out 100%; homebuyers have


Location: Phu Huu Ward, District 9, Ho Chi Minh City

Land area: 5 ha

Product: 222 townhouses with construction completed.

Execution progress:



• Construction - sales: Sold out 100%; homebuyers have


HOJA VILLA4 MEGA RESIDENCE6

APARTMENT PROJECT(JOINT-VENTURE WITH CAPITALAND)5 MEGA RUBY7


PROJECTS UNDER DEVELOPMENT



Land area: 5.7 ha

Product: 335 townhouses with garden and villas.

Execution progress:


certifi cate of each house and handover completed in

Quarter I/2017.

• Construction - sales: Sold out and 96%, homebuyers

have moved in, forming a community in Quarter I/2017.

MEGA VILLAGE8Location: Phu Huu Ward, District 9, Ho Chi Minh City

Land area: 3.1 ha

Construction density:

• Entire project: 23.9%

• Villa: 50%

Product: 43 premium villas.

Execution progress:



issued.

• Construction - sales: Completed construction of 43

units; and forming a community.

THE VENICA11

Location: Phuoc Long B, District 9, Ho Chi Minh City

Land area: 0.3 ha

Product: 15 townhouses with completed infrastructure

and house construction.

Execution progress:



issued. • Construction - sales: Completed construction of 15

units, sold out in Quarter I/2017.

FELIZA12

Location: Phuoc Long B, District 9, Ho Chi Minh City

Land area: 3.1 ha

Product: 131 townhouses with garden.

Execution progress:

• Legal status: 1/500 master plan approved, project land

entitlement issued.

• Construction - sales: 131 houses constructed and sold

out in Quarter I/2017.

MERITA13


Land area: 17.3 ha



• Villa: 50%

• Townhouse: 60% - 75%

Product: 567 gardened townhouses and villas.

Execution progress:



issued.

• Construction - sales: Completed construction and

handover of 456 houses; the 111 remaining units will be

completed in Quarter II/2017.

MELOSA GARDEN9


Land area: 8.2 ha



• Villa: 50%

Product: 140 premium villas.

Execution progress:



issued.

• Construction - sales: Completed construction and

handover of 100 units; the remaining 40 villas will be

completed in Quarter II/2017.

LUCASTA10


FUTURE PROJECTS


Land area: 3.6 ha

Product: 146 townhouses with gardens.

Execution progress:

• Legal status: Compensation completed; investment

certifi cate; 1/500 master plan approval in progress.



Land area: 4.4 ha

Product: 150 villas and townhouses with gardens.

Execution progress:

• Legal status: 1/500 master plan approved; investment

certifi cate, project land entitlement, land ownership

certifi cate in progress.

TOWNHOUSE PROJECT17

Location: Binh Trung Dong Ward, District 2, Ho Chi Minh City

Land area: 5.7 ha

Product: 159 townhouses with gardens, and premium villas.

Execution progress:

• Legal status: 1/500 master plan approved; investment

certifi cate.

BINH TRUNG PROJECT18

KIM PHAT RESIDENTIAL AREA 19Location: Phu Huu Ward, District 9, Ho Chi Minh City

Land area: 2.7 ha

Product: Premium apartments.

Execution progress:

• Legal status: Compensation completed; investment

certifi cate, 1/500 master plan, project land entitlement

in progress.

SAPPHIRE PROJECT16


Land area: 3.1 ha

Product : 118 townhouses with gardens.

Execution progress:

• Legal status: Compensation completed, 1/500 master

plan approved, investment certifi cate, project land

entitlement issued. • Construction and sales in Quarter I/2017.

GIA PHUOC PROJECT15


Land area: 1.6 ha

Product: 867 apartments.

Execution progress:

• Legal status: 1/500 master plan approved, investment

certifi cate, land ownership certifi cate.

• Construction - sales: Construction scheduled to start in

early Quarter I/2017 and sales start at the end of Quarter

II/2017.

LA ALBA APARTMENT BUILDING14


PROJECT LOCATIONS


TYPICAL PROJECTS IN 2016

THE VENICA IS A 5-STAR VILLA COMPOUND WITH 43 EXCLUSIVE AND PERFECTLY BUILT VILLAS COMPLEMENTED BY MODERN UTILITIES AND AMENITIES SUCH AS FITNESS CLUB, SWIMMING POOL, BAR, ETC. LOCATED IN A 3-HECTARE CAMPUS WITH THREE SIDES SURROUNDED BY THE RIVER OF MORE THAN 1,000M LONG, THE PROJECT IS LIKE A PEACEFUL GREEN OASIS DETACHED FROM THE BUSY URBAN LIFE.

AN EXCLUSIVE COMPOUND OF 43 VILLAS WITH 24/7 SECURITY. TWENTY FOUR UNITS SOLD IN 2016.

EXCLUSIVE LIFESTYLE

Designed in Mediterranean semi-classical style and

characterized in Italian aristocracy - the “cradle” of the

ancient nobles lifestyle famous with luxurious villas

on the picturesque hills, The Venica is like a beautiful

painting in the East of Saigon. The compound is an

artistic architectural masterpiece with luxurious and

gorgeous villas elaborately designed and detached

from the busy outside world, just for upper class.

Located at a prime position with 2 facades facing the

intersection of Do Xuan Hop Street and Song Hanh

Street, HCMC - Long Thanh - Dau Giay Expressway,

District 9, HCMC, The Venica is a “big hit” product

of Khang Dien and is considered one of the most

beautiful villa compounds in HCMC in particular and in

the Vietnam in general.


TYPICAL PROJECTS IN 2016 (continued)

A BEAUTIFUL COMPOUND OF 140 VILLAS UNDER 24/7 SECURITY. NINETY EIGHTUNITS SOLD.

ENJOY THE QUINTESSENCE OF LIFE

Choosing a dream house is very important for each

of us to enjoy a perfect life and to treasure the value

of oneself. Lucasta premium eco villas are built for

luxurious life and express the style of the owners. To

create real living values for each resident in Lucasta,

Khang Dien has collaborated with the leading

architects in Asia to create a premium resort in the

heart of Saigon.

In 8.2 hectares campus with construction density of

only 49,35%, 140 villas are surrounded by a 1 hectare

eco lake and harmonious landscape. The refi nement

shows in every architectural aspect with open green

space to catch sunshine and fresh air, delivering a

peaceful, healthy and prosperous life to all residents.

No need to travel anywhere else, you can enjoy 5-star

hospitality services with the most luxurious utilities

and amenities right in the compound. In the fresh

atmosphere, you can drop yourselves in the cool blue

water of the infi nity pool to release stress and tiredness

from work. The Gym room is equipped with modern

facilities will help you regain health and energy.

Managed by the world’s leading property manager

- CBRE, Lucasta assures the residents guaranteed

security and high-quality services for an elite residential

community.



567 VILLAS AND GARDEN TOWNHOUSES IN COMPOUND WITH 24/7 SECURITY. OPENED FOR SALES FROM NOVEMBER 2015. SOLD 456 HOUSES.

HAPPY JOURNEY

Melosa Garden compound consists of 567 villas

and gardened townhouses on 17.3 hectares of land

adjacent to Mega Village located on the Eastern Ring

Road in District 9.

Melosa Garden delivers a perfect living environment

with outstanding utilities and a breakthrough design

optimally serving the needs of the residents. The

compound off ers a peaceful, comfortable and happy

living experience.

About 4 hectares of the project is allocated for park,

green space, and high-class utilities and amenities.

Especially, swimming pool and central lake,... are drawn

from the artifi cial waterfalls in Singaporean high-class

residences. All become a prominent centre point, the

“heart” of the entire project. Besides, a public area of

modern facilities of mini-supermarket, Gym room, and

tennis courts built to meet international standards has

been completed and ready to welcome.

Melosa Garden is managed by CBRE - an international

professional real estate property management fi rm.

Construction quality is “certifi ed” by SCQC - the leading

quality management and consulting fi rm in Vietnam. In

addition, Khang Dien always stress the importance of

property ownership transparency. As a result, Melosa

Garden continues to receive the warm supports

from customers, affi rming Khang Dien’s brand and

reputation in the real estate market.



The Mega townhouse projects have been developed

since 2014 with outstanding features - “Compound

setting, modern design, high-class facilities, complete

property rights, and reasonable prices”. Those projects

have attracted many customers when Khang Dien sold

nearly 1,000 units within less than 3 years. Currently,

90% of the homebuyers have moved in and formed a

civilized and prime community on the frontage of the

Eastern Ring Road in District 9.

The Mega Townhouse Compound is really a product

line symbolizing Khang Dien’s trade mark and earning

admirations in the real estate market in the South and

in the country.

(MEGA RESIDENCE - MEGA RUBY - MEGA VILLAGE)

THE MEGA TOWNHOUSE PROJECTS


ONLY 131 HOUSES. SOLD OUT IN QUARTER I/2017.

VALUES FOR PROSPEROUS LIFE

With unique advantages, only 131 gardened

townhouses located on the frontage at the

intersection of Lien Phuong Street and Eastern

Ring Road, one of the most beautiful locations in

District 9, Merita has become a “hot” phenomenon

in the market. The townhouses are expected to be

warmly welcomed by the investment community

because its Shop Houses are easily connected to

the center of District 1, Phu My Hung new city, and

the neighboring public utilities. Especially, it has the

fastest connection to the Saigon high-tech park,

universities and shopping centers in the East of the

city.

Merita is for civilized, dynamic and successful

residential community.



IN 2016, KHANG DIEN ONCE AGAIN ASSERTED ITS BRAND AND REPUTATION IN THE REAL ESTATE MARKET BY CONTINUING THE NEXT PHASES OF THE PROJECTS THAT HAVE RECEIVED TREMENDOUS SUPPORTS FROM HOMEBUYERS. IN PARTICULAR, THE MEGA TOWNHOUSE PROJECTS HAVE SOLD MORE THAN 1,000 UNITS WITHIN 18 MONTHS. MELOSA GARDEN HAS BEEN CONSIDERED THE PROJECTS HAVING THE MOST ATTRACTIVE LANDSCAPE AND BEST UTILITIES AND AMENITIES IN THE EAST OF THE CITY. LUCASTA IS A

PREMIUM ECO VILLA PROJECT DESIGNED WITH GREEN SPACE COVERING 65% OF THE LAND PLOT, AND THE VENICA IS AN LUXURIOUS FIVE-STAR VILLA FAMOUS FOR ITS REFINED SEMI-CLASSIC DESIGN IN MEDITERRANEAN STYLE.

THE YEAR 2016 CLOSED WITH OUTSTANDING EVENTS MARKING KHANG DIEN’S GREAT ACHIEVEMENTS IN DEVELOPMENT AND READINESS FOR NEW BREAKTHROUGHS IN 2017.

MAJOR EVENTS IN 2016

Khang Dien launched the model townhouse and villa of

Melosa Garden project at the project site on the Eastern Ring

Road, Phu Huu Ward, District 9 on January 16th 2016. Within

one month from the model house launch day, Khang Dien

fully constructed 100 houses and more than 4 hectares of

quality utilities and amenities. The homebuyers from the

fi rst phase has immediately enjoyed the convenient and

comfortable living space when moving in.

Beside prime location, Lucasta has a refi ned

design catching morning sunshine and a

rustic interior style. On the sales opening,

Khang Dien off ered special promotion

programs for early homebuyers such as

the 18% discount for advanced down

payment. After the ceremony, Lucasta

has been well received by the market and

handed over to customers in a short time.

MELOSA GARDEN LAUNCHED MODEL HOUSESJAN 16

MAR 19 LUCASTA NEW ECO VILLAS OPENED FOR SALES


Within four months after the fi rst sales launch in

October 2015, the fi rst 96 villas and townhouses

of Melosa Garden were offi cially handed over

to the fi rst group of buyers on April 10th 2016.

The ceremony was held successfully with the

participation of more than 300 customers and

representatives from the distributors, investors and

CBRE Vietnam, the property manager.

MAJOR EVENTS IN 2016 (continued)

The Venica is considered a “big hit” of Khang Dien in

luxury property segment. On the evening of April 24th

2016, the project, which was fully built, was offi cially

introduced to the customers and partners through

Gala Dinner in Mediterranean style. More than 300

prominent business leaders from large investment

funds, banks, securities fi rms, partners, and customers

of Khang Dien attended the event.

The project elevates Khang Dien’s market position to a

new height and helps implement segment diversifi cation

strategy to serve various needs of customers.

HANDING OVER THE FIRST 96 HOUSES OF MELOSA GARDENAPR 10 APR 24 “THE VENICA MOMENT” GALA DINNER

On May 23rd, 2016, Khang Dien and Coteccons held a strategic partnership signing ceremony at the

Intercontinental Asiana Saigon. Accordingly, Coteccons would become a strategic partner, design & build

general contractor for Khang Dien in the coming time. The ceremony was attended by top managements

from Khang Dien and Coteccons in the presence of 30 media agencies and marked the strategic partnership

between the two companies aiming at delivering high-quality housing projects to the society as well as

fostering prosperity to both parties.

KHANG DIEN COOPERATED WITH COTECCONS TO DEVELOP LUCASTA HIGH-CLASS VILLASMAY 23


MELOSA GARDEN WON

AT THE CEREMONY OF “VIETNAM PROPERTY AWARDS 2016”BEST HOUSING DEVELOPMENT

Melosa Garden of Khang Dien made a good impression to

the judges, who were real estate experts in Asia, with the

luxurious architectures of villas and townhouses in a green

space surrounded by river, and stressed with a more than

4 hectares high-class utility area in the center. Also

thanks to these outstanding points, Melosa Garden

modern townhouse and villa project won Best Housing

Development (Ho Chi Minh City).

VIETNAM PROPERTY AWARDS 2016 WERE A PART OF ASIAN PROPERTY AWARDS ORGANIZED BY ENSIGN MEDIA - THE LEADING PROPERTY MEDIA COMPANY IN ASIA TO HONOR THE BEST REAL ESTATE PROJECTS, CONSTRUCTION WORKS, ARCHITECTURES, AND INTERIOR DESIGNS IN VIETNAM. THE AWARDS WERE GIVEN TO THE LEADING PRESTIGIOUS REAL ESTATE WORKS BASED ON THE MOST FAIR, OBJECTIVE, AND TRANSPARENT CRITERIA IN ASIA.

TOP

BEST VIETNAMESE LISTED COMPANIES IN VIETNAM 2016

50In 2016 was the fi rst year marking the presence of Khang Dien

in Top 50 Best Vietnamese Listed Companies voted by Forbes

Vietnam. The list of companies were consolidated based on

business performance and superior quality of product.

ORGANIZED BY VIETSTOCK ENTERPRISE WITH BEST IR ACTIVITIES IN 2016

Best IR Voting Program 2016 has been an annual event

organized by Vietstock since 2011. In 2016, Vietstock

co-organized with Vietnam Association of Financial Executives

(VAFE) to hold this event.

After conducting a comprehensive survey of 639 listed

companies on two stock exchanges through two steps:

(1) Comprehensive survey on implementing obligation of

information disclosure in Vietnam securities market and (2)

organizing public voting on website to all investors in parallel

with the evaluation from fi nancial institutions. At the end,

Khang Dien won 3 major awards of IR 2016, including listed

enterprise with best IR activities, Top 5 listed enterprises with

highest voting rate from investors, and Top 5 enterprises with

highest voting rate from fi nancial institutions.

HONORS AND AWARDS ACHIEVEDIN 2016


SHARE CAPITAL OWNERSHIP PERCENTAGE

SHARE INFORMATION

According to the list of securities holders provided by Vietnam Securities Depository, the percentage of share ownership of the

Company is as follows:

Market capitalization value as of December 31st 2016

4,679,997,840,000 VND

2,339,998,920,000 Charter capital

VND 233,999,892 Number of shares

SHARES

10,000 Face value per share

VND/SHARE 233,999,892 Number of outstanding shares

SHARES

No. Shareholders

Domestic shareholders

Foreign shareholders Total

number of shares

Percentage/ChartercapitalNumber of

sharesPercentage/

Charter capitalNumber of

sharesPercentage/

Charter capital

1 State - - - - - -

2Shareholders holding

5% or more80,034,252 34.20% 51,153,116 21.85% 131,187,368 56.05%


from 1% to less than 5%21,666,136 9.26% 52,372,615 22.38% 74,038,751 31.64%


less than 1%18,301,450 7.83% 10,472,323 4.48% 28,773,773 12.31%

5 Treasury shares - - - - - -

TOTAL 120,001,838 51.29% 113,998,054 48.71% 233,999,892 100%

12%

56%32%

Shareholders holding 5% or more

Shareholders holding from 1% to less than 5%

Shareholders holding less than 1%

KDH

SHARE PRICE AND TRADING VOLUME

TREASURY SHARE TRANSACTIONS: In 2016, the Company did not have any treasury share transaction.

CAPITAL CHANGE OF OWNERSIn October 2016, the Company successfully issued 53,999,892 bonus shares to the existing shareholders to increase charter

capital.

SHAREHOLDER STRUCTURE LIST OF MAJOR SHAREHOLDERSIn many consecutive years, foreign shareholders hold around

49% of the Company’s share capital.

In many consecutive years, foreign shareholders hold around

49% of the Company’s share capital.

No. Shareholder structure

Number of shares

Ownership percentage

(%)

1 Treasury shares - -

2 Domestic shareholders 120,001,838 51.29%

Institutions 104,802,193 44.79%

Individuals 15,199,645 6.50%

3 Foreign shareholders 113,998,054 48.71%

Institutions 113,842,990 48.65%

Individuals 155,064 0.06%

TOTAL 233,999,892 100%

No. Shareholder name

Number of shares

Ownership percentage

(%)

1Tien Loc Investment

Co., Ltd.32,417,840 13.85%

2Gam Ma Investment

Co., Ltd. 26,495,303 11.32%

3A - Au Trading &

Investment Co., Ltd.21,121,109 9.03%

4Vietnam Enterprise

Limited 20,944,584 8.95%

5Vietnam Ventures

Limited 15,802,520 6.75%

6 Mutual Elite Fund 14,406,012 6.16%

TOTAL 131,187,368 56.06%

SHAREHOLDER INFORMATION


SHAREHOLDER INFORMATION (continued) INVESTOR RELATIONS

WITH THE EFFORT IN INVESTOR RELATION ACTIVITIES, KHANG DIEN HONORABLY IS ONE OF BEST IR ACTIVITIES.

investment funds from Europe, America, Hong Kong,

and Singapore. Through those meetings, Khang Dien

introduced the current projects and updated the selling

progress, showing the Company’s outstanding capability

in the market place. Information about potential projects

and land bank were also shared, so that the investors could

see Khang Dien’s true values and development possibility

in the future. In addition, Khang Dien paid high attention

to discussing long-term business plan and development

direction with the investors to build rapport between the

Company and the investors.

Besides the meetings at the Company’s offi ce, Khang

Dien actively participated in investment seminars held by

prestigious institutions, for examples, the Vietnam Access

Day held by Viet Capital in March 2016 and DC Access Day

held by Dragon Capital in May 2016 in Ho Chi Minh City.

At the seminars, the Company made presentations and

answered the questions of the investment communities,

both domestic and overseas.

RELATIONSHIPSWITH STAKEHOLDERSKhang Dien always ensures information transparency by

updating news, reports and important information relating

to the benefi ts of the stakeholders on the Company’s

website at www.khangdien.com.vn and other media

channels. The information relating to the Company’s

activities, fi nancial situation, etc. is also sent to Ho Chi Minh

City Stock Exchange and State Securities Commission in

line with regulations.

DOMESTIC AND OVERSEAS INVESTORSIn 2016 Khang Dien attracted strong attention from

domestic and overseas investors. Apart from the meetings

to update business performance quarterly, the Company

coordinated with securities companies to organize project

tours for the investors as well as held meetings with large

FOREIGN SHAREHOLDERS

Over the past 15 years operating in

the fi eld of real estate investment

and development, Khang Dien

gradually affi rmed its brand in the

market place and became a leading

real estate developer in Ho Chi Minh

city. With strong fi nance, Khang Dien

always receives the accompanying

and enthusiastic support from large

international investment funds such

as VinaCapital, Dragon Capital, PYN

Elite Fund, SAM, Vietnam Holding,

Duxton, etc.


SUBSIDIARIES OF WHICH KHANG DIEN OWNS MORE THAN 98%

BINH CHANH CONSTRUCTION GROUP INVESTMENT JSC. (BCCI) - KDH OWNS 57.31%

No. Name of subsidiaries Charter capital (VND Billion)

KDH Ownership percentage

1 Hao Khang Ltd. 123,6 100.00%

2 Long Phuoc Dien House Development and Infrastructure Building Ltd. 140 99.95%

3 Nha Pho Investment Ltd. 430 99.90%

4 Gia Phuoc Real Estate Investment and Trading Ltd. 250 99.90%

5 Tri Kiet Real Estate Investment and Trading Ltd. 17 99.90%

6 Saphire Real Estate Investment and Trading Ltd. 310 99.90%

7 International Consulting Co., Ltd. 90 99.90%

8 Kim Phat Real Estate Investment and Trading Ltd. 200 99.90%

9 Mega City Ltd. 60 99.85%

10 Saigon Spring Real Estate Trading Ltd. 100 99.80%

11 Thap Muoi Real Estate Trading and Construction Company Ltd. 150 99.80%

12 Tri Minh Real Estate Investment and Trading Ltd. 285 99.80%

13 Binh Trung Real Estate Investment and Trading Ltd. 200 99.80%

14 Lien Minh Real Estate Investment and Trading Ltd. 100 99.70%

15 Song Lap Real Estate Investment and Trading Ltd. 305 99.90%

16 Vila JSC 50 99.00%

17 Viet Huu Phu JSC 225 99.00%

18 Green Space Real Estate Trading and Investment Ltd. 280 98.01%

No. Name of company Charter capital (VND Billion)

KDH Ownership percentage

19 Binh Chanh Construction & Investment JSC. (BCCI) 867.2 57.31%

BCCI has two subsidiaries:

20 BCCI JSC

21 BCCI Development Investment Ltd.

Khang Dien group of companies consists of 21 subsidiaries

that can be arranged in two sub-groups. The fi rst is 18

subsidiaries operating in the fi eld of real estate and

construction that Khang Dien owned 98% of equity

capital. The second is BCCI group of companies, of which

Khang Dien owns 57.31% of equity capital. In general, all

subsidiaries conduct business and create revenues in Ho

Chi Minh City area.

98%

57.31%

21SUBSIDIARIES

EQUITY CAPITAL IN 18 SUBSIDIARIES

EQUITY CAPITALIN BCCI

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES


OBJECTIVES OF THE COMPANY

MEDIUM- AND LONG-TERM DEVELOPMENT STRATEGIES

Creating perfect housing products

in terms of build quality, utilities and

property rights.

Diversifi cations of products (low-

rise, high-rise) product segments

(middle, fair, high class) and locations.

Place customers’ benefi ts above all and

put the customers at the center of all

activities.

Build houses with refi ned designs,

quality materials and at reasonable

prices.

Improve business and fi nancial

performances through strengthening

governance, enhancing fi nancial capacity,

and utilizing all resources.

Ensure transparency and maximize

shareholders’ value.

• Product diversifi cation:

Besides the core product, low-

rise townhouses, the Company

will develop high-rise apartment

buildings to meet customers’

demand.

• Segment diversifi cation: Besides

mid- and high-end products, the

Company will develop low-end

product for lower middle class

customers.

• Diversifi cation of locations: In

addition to the ongoing business

in the East of the city (in District 9),

which benefi ts from infrastructure

development such as Saigon

Bridge 2, Thu Thiem Bridge, Thu

Thiem Tunnel, Ben Thanh - Suoi

Tien Metro, and Long Thanh - Dau

Giay Highway, the Company will

expand business to the South and

Southwest of the city, i.e. Binh Tan

and Binh Chanh Districts (BCCI

projects) and other good locations.

• General Director Team to review

and standardize all processes and

procedures of operations to best

serve the fast growing pace of the

Company and in compliance with

the laws.

• Step up supervising activities and

promote the role of corporate

governance and risk control

in fi nancial management,

accounting, auditing to bring best

benefi ts to the Company.

• Continue to improve transparency

about the Company’s activities and

perform information disclosure as

required.

• Provide more corporate

governance trainings for Board of

Directors, General Director Team

and Inspection Committee.

• Boost growth and increase

business value on the foundation

of sustainable development by

integrating development strategy

with corporate social responsibility.

• Implement succession planning

for top management.

• Maximize shareholders’ value and

balance stakeholders’ benefi ts in

business management.

Khang Dien set the following development strategies:

To become a leading real estate company off ering quality housing products with refi ned design, perfect living environment and

transparent property rights. Khang Dien will focus on the following goals:

PRODUCTS CUSTOMERS SHAREHOLDERS

DIVERSIFICATIONS OF PRODUCTS, SEGMENTS,

AND LOCATIONS

IMPROVE THE EFFECTIVENESS OF


SUSTAINABLE DEVELOPMENT

1 2 3

OBJECTIVES FOR BETTER COMMUNITIES AND SOCIETY

Not only builds quality houses with refi ned design, Khang Dien also actively

participates in social activities and share responsibilities with the communities in

order to build a better society. In recent years, Khang Dien participated in programs

with impacts such as donating gifts to the hospitals (Cho Ray, Pham Ngoc Thach,

Nhi Dong 1) and Binh Trieu Disabled and Orphaned Center, funding “Lighting up

Dreams” program, and charity trips to Tra Vinh, Long An, Ben Tre, Can Gio, etc.

Khang Dien did not participate in those social activities for the purpose of promoting

brand name but for the spirit of humanity and with the desire to share with the

community and to build a better society.

DEVELOPMENT DIRECTION


• Experience in real estate development

With 16 years in the real estate development

business in Ho Chi Minh City, Khang Dien has

gained broad experience about the housing

market, demand drivers, land bank development,

legal procedures and product development.

The experience creates a fi rm foundation for the

Company’s long-term sustainable development.

• Strong fi nancial capacity

Having long-term commitments from large,

international investment funds and the supports

from the largest banks in Vietnam, together with its

strong fi nancial capacity and conservative fi nancial

structure, Khang Dien always maintains a low ratio

of debt over equity.

• Experience in risk management

With strategic vision, experience, and acumen of the

top management, Khang Dien always has accurate

judgment, realistic analysis and assessment

and best decisions for risk management during

business operation.

• Large land bank

Khang Dien currently owns large land bank in good

locations in Ho Chi Minh City area and continues to

make new land investments.

• Khang Dien brand name

Khang Dien brand name is getting more recognition

in Ho Chi Minh City are, especially in the segment

of low-rise housing in compound. Having placed

reputation on top, Khang Dien is proud to be the

brand that earns solid belief from the customers.

The Company continues to diversify products and

expands scale to make Khang Dien brand stronger.

• Large market demand

Currently housing demand in Ho Chi Minh City

remains large, but the supply is short to meet the

demand. Although there are many development

projects in the area, the product structures and

features are not suitable, leading to oversupply in

the premium segment. Khang Dien’s core product

is quality housing at reasonable price, which

satisfi es market demand well.

• Infrastructure development is a catalyst for the

real estate market. The completed traffi c network in

the East of the city including Thu Thiem Bridge, Thu

Thiem Tunnel, Long Thanh - Dau Giay Expressway

and the under construction Suoi Tien Metro Line

stimulate growth of Khang Dien’s market place

in District 9, attracting a lot of customers with

real demand for housing. Besides, the area in the

Southwest of the city with great potential for

development in the future is a great opportunity for

Khang Dien.

• Advantage from macroeconomic growth and

macroeconomic policies

In 2016, Vietnam’s economy achieved stable growth

with infl ation rate less than 5%. The urbanization rate

of Vietnam reached 2.5%, which is the highest rate

among the countries in Southeast Asia. In addition,

many supportive policies from the Government have

been issued and applied. Those factors help real estate

market in 2017 have more positive changes.

• Increasing competitions from competitors

Khang Dien’s success in low-rise houses built

in compound setting with full amenities and

environment-friendly design, transparent legal

framework, reasonable prices has attracted many other

real estate developers to join this segment.

• Effects from the unstable premium housing

segment

In Quarter IV/2016, the housing market showed some

signs of oversupply in the premium segment while

demand in the middle and middle-high segments

exceeded supply. In 2016, the majority of the real estate

companies focused on developing premium housing

selling at high price due to operating expenses and

high investment cost. According to experts, this

trend contributed to the imbalance (Supply exceeds

demand while the price still increases) and, with the

growth of credit funding housing project development

in 2016, the risk in housing bubble has increased. The

oversupply in premium apartment market has been

warned by many experts. In that context, the enterprise

having enough fi nancial capacity will continue to exist

and develop, and the failing enterprises will cause

troubles with serious consequences, even creating

housing market disruption.

• Macroeconomic risks

Exchange fl uctuations: The exchange rate risk is the risk

of fi nancial loss due to its fl uctuations. The USD dollar

exchange rate volatility, fl uctuation in gold price, and

international issues such as the Trans-Pacifi c Partnership

Agreement (TPP), Brexit, Fed’s interest rate raise,

currency devaluation of China and the neighboring

countries, etc. have led to a series of reactions in the

market, which complicated forecasts.

Exchange rate fl uctuations between VND and foreign

currencies may aff ect the fi nancial situation, investment

activities and business results of Khang Dien.

• At present the Company distributes its products

through large and well-known real estate trading

fl oors. This helps the Company concentrate

resources on other activities such as project

development, land bank expansion. However, this

is a weakness because Khang Dien has not yet built

a strong internal sales force to be independent in

selling products, instead of depending on external

distribution channels.

• From 2014 up to now, the Company has achieved

strong and outstanding development. It can be

said that this is a “hot development” period, and

Khang Dien needs to supplement its personnel to

meet the growing scale of the Company. However,

with the policy of building a labor force of “quality”

rather than “quantity”, the Company applies strict

criteria in recruitment. This has made the number

of personnel short of demand. Members of General

Director Team and Board of Directors have to

concurrently hold multiple positions.

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

W

SWOT ANALYSIS


ORGANIZATIONAL CHART GOVERNANCE MODEL

KHANG DIEN OPERATES UNDER THE FORM OF JOINT STOCK COMPANY. BESIDES COMPLYING WITH THE LAWS, THE COMPANY FOLLOWS THE CHARTER THAT HAS BEEN APPROVED BY GENERAL SHAREHOLDERS’ MEETING. ORGANIZATIONAL STRUCTURE OF KHANG DIEN INCLUDES:

GENERAL SHAREHOLDERS’ MEETING

BOARD OF DIRECTORS

GENERAL DIRECTOR

DEPUTY GENERAL DIRECTOR

Finance & Accounting Department

Sales & Marketing Department

HR & Administration

Department

Project Management Department

Legal Department

INSPECTION COMMITTEE

INTERNAL AUDIT TEAM

GENERAL SHAREHOLDERS’ MEETING

Board of Directors (BOD)

The incumbent BOD of Khang Dien consists of the

Chairman and four members of BOD, in which, three

members holds positions in General Director Team and

one member is non-executive.

The Company has full set of functional departments and

project management teams.

General Director Team (GDT)

Head of the Team is the General Director. At present, the

Chairman is also the General Director. Assisting the General

Director are four Deputy General Director in charge of

legal, fi nance, construction and general aff airs.

Inspection Committee (IC)

The incumbent Inspection Committee includes one

head and two members.


Experience: In the role of Chairman

of BOD cum General Director, Mr.

Ly Dien Son has directly managed

and operated the Company since its

establishment date. Over the past 16

years, with passion, dedication, and

experience, he has led the Company

to overcome challenges and achieved

breakthrough success, developing

Khang Dien to become one of the

leading real estate developers in

HCMC.

Working history:

• From 2001 - present: Chairman

of BOD cum General Director of

Khang Dien House Trading and

Investment Joint Stock Company.

Positions in other organizations:

None.

Chairman of BOD

Year of birth: 1966

Qualifi cation: Bachelor Degree from

the University of Culture

Experience: One of the strong

points of Khang Dien in comparison

with the other real estate companies

is its practice of transparent legal

framework, and Mrs. Trang lays the

foundation of this practice.

Working history:

• 2001 - 2005: Legal consultant -

Nguyen Thi Chinh Law Offi ce.

• Oct 2005 - July 2007: Administration

Manager - Member of BOD of



• July 2007 - May 2008: Assistant

to Chairman of BOD Khang Dien

House Trading and Investment

Joint Stock Company.

• June 2008 - present: Deputy

General Director of Khang Dien




None.

Experience: Mr. Bao is responsible

for the overall corporate legal matters.

He coordinates with the departments

to build internal process, procedures,

regulations to ensure Company’s

compliance with the charter and the

laws.

Working history:

• January 2000 - July 2002: Deputy

Director of Lai Gia Trading - Service

Co., Ltd.

• February 2004 - March 2006:

Associated Lawyer at Thanh Dat Law

Offi ce.

• March 2006 - August 2007: Deputy

Director at Son Tung Real Estate

Trading - Service Co., Ltd.

• September 2007 - September

2009: Assistant to General Director

of Khang Dien House Trading and


• October 2009 - present: Deputy


House Trading and Investment Joint

Stock Company.


• Chairman of BOD of Binh Chanh

Construction Group Investment JSC.

Experience: With many years of

experience and achievements in

prestigious fi nancial 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 fi nancial strategies suitable to

each development stage and general

situation of the market.

Working history:

• 2002 - 2005: Senior Auditor of KPMG.

VinaCapital• 2006 - 2010: In charge of the

positions from Investment

Specialist to Investment Manager.

• July 1st 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.

Experience: Mr. Son has more

than 10 years working for project

legal department. He has valuable

contributions to the completion of the

Company’s project legal framework.

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


• April 2012 - April 26th 2013: Member

of BOD cum Deputy Head of Legal

Department of Khang Dien House

Trading and Investment Joint Stock

Company.

• October 2014 - present: Director,

Head of Legal Department Khang

Dien House Trading and Investment


• September 11st 2015 - present:

Member of BOD of Khang Dien


Stock Company.


None.

Khang Dien • October 2009 - present: Member

of BOD.


• Member of BOD cum General

Director of Thang Loi Textile and

Garment JSC.

• Member of Inspection Committee

of Quoc Cuong Gia Lai JSC.

• Member of BOD of Hung Vuong JSC

• Member of BOD of BCCI.

Member of BOD

Year of birth: 1976

Qualifi cation: Bachelor Degree in

Laws, Land Management Engineer

Member of BOD

Year of birth: 1975


Laws - Certifi ed Lawyer

Mr. LY DIEN SON Mrs. MAI TRAN THANH TRANG Mr. NGUYEN DINH BAO Mr. LE HOANG SON Mrs. NGUYEN THI DIEU PHUONG

Member of BOD (non-executive)

Year of birth: 1980


Economic - Finance, ACCA Auditor

Member of BOD

Year of birth: 1977


Laws, Bachelor Degree in Business

Administration

BOARD OF DIRECTORS


Mrs. MAI TRAN THANH TRANGMr. LY DIEN SON Mr. NGUYEN DINH BAO

Experience: Ms. Chi has more than 15 years of

experience in Financial - Accounting and has been

working at Khang Dien for 10 years. Ms. Chi is directly

responsible for fi nance management, investment

strategic plan and Sales & Marketing department

management.

Working history:

• January 2001 - December 2004: Accountant, Chief of

Accounting - 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: Auditor, Chief

Accountant, Chief Financial Offi cer of Khang Dien

House Trading and Investment Joint Stock Company.

• December 2015 - present: Deputy General Director

of Khang Dien House Trading and Investment Joint

Stock Company.


• August 19th 2016 - present: Member of BOD of Binh

Chanh Construction Group Investment JSC.

Experience: Mr. Nguyen Duc Trong has 14 years of

experience in project management. Before joining

Khang Dien, he had held senior positions in real estate

companies. Mr. Trong has positive contributions to

Khang Dien’s project management.

Working history:

• 2003 - 2009: Deputy General Director of Ariyana - a

subsidiary of Sovico Holdings.

• January 2011 - December 2011: Director of Green Space

Real Estate Trading and Investment Ltd.

• January 2012 - December 2013: East Region Real Estate

Trading and Investment Co., Ltd.

• 2013 - July 2015: Chairman of BOD of Nhat Vuong Trade

and Exim Service Co., Ltd.

• July 2015 - September 15th 2016: Deputy General

Director of Khang Dien House Trading and Investment


Deputy General Director

Year of birth: 1978

Qualifi cation: Bachelor Degree in Accounting


(Resigned on: September 15th 2016)

Year of birth: 1972

Qualifi cation: Master Degree in Project Management

and Master Degree in Business Administration

Ms. NGO THI MAI CHI Mr. NGUYEN DUC TRONG

GENERAL DIRECTOR TEAM

Experience: In the role of Chairman

of BOD cum General Director, Mr.

Ly Dien Son has directly managed

and operated the Company since its

establishment date. Over the past 16

years, with passion, dedication, and

experience, he has led the Company

to overcome challenges and achieved

breakthrough success, developing

Khang Dien to become one of the

leading real estate developers in

HCMC.

Working history:

• From 2001 - present: Chairman

of BOD cum General Director of




None.

General Director

Year of birth: 1966

Qualifi cation: Bachelor Degree from

the University of Culture

Experience: One of the strong

points of Khang Dien in comparison

with the other real estate companies

is its practice of transparent legal

framework, and Mrs. Trang lays the

foundation of this practice.

Working history:

• 2001 - 2005: Legal consultant -

Nguyen Thi Chinh Law Offi ce.

• Oct 2005 - July 2007: Administration

Manager - Member of BOD of



• July 2007 - May 2008: Assistant

to Chairman of BOD Khang Dien



• June 2008 - present: Deputy





None.

Experience: Mr. Bao is responsible

for the overall corporate legal matters.

He coordinates with the departments

to build internal process, procedures,

regulations to ensure Company’s

compliance with the charter and the

laws.

Working history:

• January 2000 - July 2002: Deputy

Director of Lai Gia Trading - Service

Co., Ltd.

• February 2004 - March 2006:

Associated Lawyer at Thanh Dat Law

Offi ce.

• March 2006 - August 2007: Deputy

Director at Son Tung Real Estate

Trading - Service Co., Ltd.

• September 2007 - September

2009: Assistant to General Director

of Khang Dien House Trading and


• October 2009 - present: Deputy



Stock Company.


• Chairman of BOD of Binh Chanh

Construction Group Investment JSC.


Year of birth: 1976


Laws, Land Management Engineer


Year of birth: 1975


Laws - Certifi ed Lawyer


Experience: Ms. Linh has more than 15 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 Vietnam. At

present, she is the Deputy Investment Director of VinaCapital.

In 2014, as the Chief of Inspection Committee, Ms. Linh

coordinated with the members of Inspection Committee

to check and evaluate business performance and supervise

operating activities to ensure the Company’s compliance with

the law.

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 Cosmetic Vietnam

• 2006 - 2014: Investment Manager of VinaCapital Corporate

Finance Vietnam

• 2014 - present: Deputy Investment Director of VinaCapital

Corporate Finance Vietnam


• Member of BOD of Thang Loi Textile and Garment JSC

• Member of BOD of Saigon Golf

• Member of Inspection Committee of HUD.VN Social

Housing Development JSC

• Member of Inspection Committee of Hung Vuong JSC

Experience: Mr. Hoang Manh Phong graduated from

Hochiminh City University of Technology (Major in

Construction) and holds a Bachelor Degree in Economics.

He has worked for large companies in the fi eld of real estate.

Together with other members of Inspection Committee,

Mr. Phong has valuable contributions to the improvement

of the Company’s internal control.

Working history:

• 2009 - 2012: Deputy Director cum Project Manager of

Saigon Khang Dien Company

• 2012 - 2014: Project Manager of East Region Real Estate

Trading and Investment Co., Ltd.

• 2014 - Present: Head of Project Management

Committee of Hao Khang Co., Ltd.

Positions in other organizations: None.

Experience: Mr. Dao Cong Dat has many years of

experience in human resource management and

development. He has positive contribution to the

Company’s human resource development.

Working history:

• 2007 - 2009: HR Offi cer at Nguyen Kim Trading JSC

• 2009 - present: HR Manager of Khang Dien House

Trading and Investment Joint Stock Company

Positions in other organizations: None.

Head of Inspection Committee

Year of birth: 1974

Qualifi cation:

Bachelor Degree in Economics, Bachelor Degree in Laws, and Master Degree in Business Administration

Member of Inspection Committee

Year of birth: 1969

Qualifi cation:

Bachelor Degree in Economics, Construction Engineer

Member of Inspection Committee

Year of birth: 1980

Qualifi cation:

Bachelor Degree in Laws

Ms. VUONG HOANG THAO LINH Mr. HOANG MANH PHONG Mr. DAO CONG DAT



WITH THE ONGOING STRONG BUSINESS IN THE EAST OF THE CITY, TOGETHER WITH MARKET EXPANSION IN THE CITY’S SOUTHWEST AREA, KHANG DIEN HAS EXPANDED ITS SKILLFULL WORKFORCE IN ORDER TO MEET THE COMPANY’S FAST GROWING PACE.

Increasing by 150 employees compared to 2015, up 129%343 STAFF

AS OF DECEMBER 31ST 2016, KHANG DIEN EMPLOYED

HUMAN RESOURCE MANAGEMENT REPORT

ORGANIZATIONAND HUMAN RESOURCES

Male: 215 person

Female: 128 person

37%

63%

KDH

PERSONNEL STRUCTURE BY GENDER

16%

22%62%KDH

Offi ce: 211 persons

Project: 77 persons

Sales - Marketing: 55 persons

PERSONNEL STRUCTURE BY FUNCTION

Senior management: 11 persons

Middle management: 37 persons

Junior management: 38 persons

Staff : 257 persons

75%

11%

11%3%

KDH

PERSONNEL STRUCTURE BY POSITION

PERSONNEL STRUCTURE BY AGE

Over 30 years of age: 249 persons

Under 30 years of age: 94 persons

27%

73%

KDH

University and Post-graduate: 325 persons

Others: 18 persons

PERSONNEL STRUCTURE BY QUALIFICATIONS

KDH

95%

5%


in the East and South of HCMC helps Khang

Dien expand land bank of full property

rights, diversify products and become one

of the largest real estate companies in Ho

Chi Minh City.

HECTARES

CLEAN LAND AT PRIME LOCATIONS

BUSINESS PERFORMANCE 2016

• New regulations were issued and implemented to

promote market transparency in order to protect

the benefits of the homebuyers and boost their

confidence.

• Policy on real estate lendings was also carefully

implemented to create sustainability for the market.

The adjustment of State Bank’s Circular 36, which

reduced the ratio of short-term deposits to medium

and long term loans from 60% down to 50%, had

certain impacts on the ability to access real estate

credits, helping stabilize the market toward positive

development.

• Infrastructure development has also been an

effective catalyst for the market in recent years. By

2016, Saigon Bridge 2, Thu Thiem Bridge, Thu Thiem

Tunnel, and Vo Van Kiet Street were completed,

creating a completed transportation network in the

East of the city. Besides, the Ben Thanh - Suoi Tien

Metro Line was at the final stage of construction and

especially the commissioning of the Long Thanh - Dau

Giay Expressway showed the its value of shortening

commuting time from District 9 to the city CBD to

about 10 minutes.

• Homebuyers’ awareness changed in comparison

with the previous years – developer’s reputation,

construction progress, and transparency of

entitlement and property rights became the top

factors in home purchasing decisions.

These above positive factors will support the real estate

market’s sustainable growth in 2017.

THE REAL ESTATE MARKET IN 2016 ENJOYED POSITIVE DEVELOPMENTS DRIVEN BY SUPPORTIVE GOVERNMENT POLICIES AND WELL SYNCHRONIZED

INFRASTRUCTURE DEVELOPMENTS.

POSITIVE DEVELOPMENTS OF THE REAL ESTATE MARKETMACROECONOMIC STABILITY

The real estate market in 2016 saw some positive changes due to the State’s supporting policies and ongoing infrastructure

developments. To be specifi c:In 2016, Vietnam achieved a 6.21% growth in

GDP. Although the growth rate did not meet

the target set by the Government, it was

an outstanding fi gure among the frontier

market economies. Infl ation rate stabilized

at below 5% was the main driver in lowering

input costs, reducing prices, stimulating

consumption, and promoting economic

growth. Moreover, Vietnam’s ongoing

urbanization rate of 2.5% - the highest rate

among the countries in South East Asia -

and the fast rising middle-income class has

boosted demand for real estate and housing

products.

OVERVIEW OF THE REAL ESTATE MARKET IN 2016

62 63ANNUAL REPORT 2016 BUSINESS PERFORMANCE 2016

BOARD OF DIRECTORS ASSESSMENT OF BUSINESS PERFORMANCE

ASSESSMENT ON BUSINESS PERFORMANCE 2016In 2016, the Company achieved impressive growth in revenue and profi t.

Compared to the same period: Revenues in 2016 reached VND3,932 Billion, increasing by 274% and profi t after tax belong

to the parent company’s shareholders reached VND372 Billion, increasing by 47%. Although Khang Dien delayed launching

sales of The Merita project (131 townhouses originally planned for sales in Quarter III/2016) to time the market for better prices,

business performance was strong: More than 500 houses from Mega Village, Melosa Garden, Lucasta, The Venica were sold.

According to the plan the profi t after tax of VND400 Billion

target set for the year 2016 are from two sources: VND330

Billion from Khang Dien group of companies and VND70

Billion from BCCI group of companies.

The reason for not reaching the target is the under

performance of BCCI group of companies. In 2016, BCCI

group of companies delivered 25% of the net profi t target,

aff ecting Khang Dien consolidated income. Khang Dien

group of companies reached VND354 Billion net profi t after

tax, exceeding the target by VND24 Billion and corresponding

to 107% above the target. This good result was driven by

the sales from Melosa Garden, Mega Village, The Venica, and

Lucasta projects,...

However, profi t after tax

belong to the parent

company’s shareholders

was 93% of the target

approved by the General

Shareholders’ Meeting in

April 2016.

(Unit: VND Billion)

ITEMS 2014 2015 2016Compare 2016 to 2015

Change %

Revenues 621 1,050 3,932 2,882 274%

Profi t before tax 105 317 583 266 84%

Profi t after tax 63 268 405 137 51%

Profi t after tax belong to the Parent company’s

shareholders102 253 372 119 47%

Earnings per share - EPS (VND/share) 1,610 1,020 1,590 570 56%

(Unit: VND Billion)

ITEMS Plan 2016

Result 2016

Result vs. Plan

Differential Value

Percentage %

Revenues 1,500 3,932 2,432 262%

Profi t after tax belong to the Parent company’s shareholders, including:

400 372 (28) 93%

- Khang Dien group of companies 330 354 24 107%

- BCCI group of companies 70 18 (52) 25%

THE YEAR 2016 MARKS A MAJOR SUCCESS OF KHANG DIEN BUSINESS ACTIVITIES WITH OUTSTANDING BUSINESS RESULT COMPARED TO THE PREVIOUS YEARS. THIS SUCCESS IS A FIRM FOUNDATION FOR KHANG DIEN TO CONTINUE GROWING AND CATCHING OPPORTUNITIES TO DEVELOP FURTHER IN THE FUTURE.

3,932VND BILLIONREVENUES 2016 274% compared to 2015

BOARD OF DIRECTORSREPORT


BOARD OF DIRECTORS ASSESSMENT OF GENERAL DIRECTOR TEAM PERFORMANCE

ACHIEVEMENTS

The Company successfully divested non-core assets, namely land in Long Truong

District 9 and some projects under BCCI, to raise capital for new allocation. Succeeded in rebalancing

investments

Operational effi ciency was signifi cantly improved. Products were sold out

quickly and cash collection cycle was shorten because Khang Dien handed over

the houses ahead of schedule. Although Merita project did not contribute to

2016 profi t, the outstanding business result was driven by key projects such as

Mega Village, Lucasta, The Venica, and especially Melosa Garden.

Net profi t from Khang Dien

group of companies (excluding

BCCI) exceeded the target

LIMITATIONS

Despite certain limitations, the year 2016 marked a major success of Khang Dien business activities with outstanding business

result compared to the previous years. This success is a fi rm foundation for Khang Dien to continue growing and catching new

opportunities to develop further in the coming years.

On December 3rd 2015 Khang Dien completed the acquisition of 57.3% of

Binh Chanh Construction & Investment Shareholding Company (BCCI). This is a

strategic investment of Khang Dien to develop land band in the South of HCMC,

near the key traffi c network connecting to the provinces in the West of Vietnam.

During 2016, Khang Dien restructured BCCI’s top Management Team, reviewed

the projects to form an eff ective development policy, collected receivables

and built up a better customer care policy. The restructuring was step-by-step

conducted; therefore, it would take a certain period of time for the new structure

to show its effi ciency. As a result, in the fi rst year of restructuring, BCCI only

delivered 25% of the profi t target. However, better performance and results are

expected in the coming years.

BCCI not yet delivered good

outcome as expected

Internal audit was not the focust because all the Company’s activities were

directly, permanently supervised by the General Director Team. However, in the

coming time, the Company will enhance internal audit to strengthen corporate

governance and risk management.

Internal audit

Taking advantage of the favorable capital market condition supporting chartered

capital increase, Khang Dien successfully issued 53,999,892 bonus shares, increasing

the chartered capital to VND2,339,998,920,000 and showing the Company’s strong

fi nancial position. Besides, the loans from credit institutions during the year was

deployed to fi nance the ongoing development of the projects having good sales

progress such as Mega Village, Melosa Garden, Lucasta, The Venica. The loan amount

and the payment terms were balanced against the cash receipt from the projects,

thus enhance capital effi ciency and ensure healthy capital structure.

Maintained healthy capital

structure

BOARD OF DIRECTORS HIGHLY

APPRECIATES THE EFFORTS OF THE GENERAL DIRECTOR

TEAM IN IMPLEMENTING THE BUSINESS PLAN AS SET OUT. DURING 2016,

THE GENERAL DIRECTOR TEAM FULFILLED ITS DUTIES

CAREFULLY AND WITH INTEGRITY, COMPLYING

WITH THE RESOLUTIONS OF THE SHAREHOLDERS’

MEETING AND THE BOARD OF DIRECTORS AND

MET THE NEED OF THE COMPANY’S BUSINESS

SITUATIONS.

SUPERVISION METHOD

SUPERVISION RESULTS

• Regularly reviewing and assessing the implementations of major plans

committed by General Director Team.

• Board of Directors fully participated in the regular meetings held by General

Director in order to timely give direct instructions for important issues.

• Coordinating with the Inspection Committee to comprehend the Company’s

activities and give practical suggestions to support General Director Team to

complete their duties.

• Board of Directors well conducted their supervision function to ensure

General Director Team deliver the outcome in accordance with the goals,

orientation and plan as set out, and ensure compliance with the Company

Charter and the regulations.

• Board of Directors highly appreciated the eff orts of General Director Team in

implementing the business plan. Upon the execution, General Director Team

fulfi lled their duties carefully and honestly, complying with the resolutions

of Shareholders’ Meeting and the Board of Directors as well as meeting the

Company’s business demand.

BOARD OF DIRECTORS REPORT (continued)


BOARD OF DIRECTORS DIRECTION AND PLAN

BOARD OF DIRECTORS DETERMINES THAT THE COMPANY’S BUSINESS MUST BE BUILT ON CUSTOMER TRUST. WITH THE ADVANTAGES IN STRONG LEGAL FRAMEWORK AND GOOD LAND BANK IN PRIME LOCATIONS, THE COMPANY CONFIRMS ITS MISSION OF DELIVERING TO THE CUSTOMERS PROJECTS WITH TRANSPARENT LEGAL FRAMEWORK, REASONABLE PRICE, AND QUALITY LIVING SPACE.

TO BE SPECIFIC:

CREATION OF PERFECT PRODUCTSNot just selling houses with exterior fi nish, Khang Dien

will create products with interior fi nish and ready property

titles. They are the “turnkey” products for homebuyers.

DEVELOP HUMAN RESOURCESTraining high-quality and dedicated employees to create

best products that are the true homes for every customer.

NEW LOCATIONS

Not only Khang Dien’s projects are located in the East of the

city (in District 2 and 9), but also the Company will expand

to the South such as in Binh Tan and Binh Chanh District

(BCCI’s projects) and other good locations.

EXPAND LAND BANKBesides the existing land bank of Khang Dien and more

than 500 hectares of BCCI, the Company will expand land

bank through business partnerships and joint ventures

with local and overseas partners.

SEGMENT DIVERSIFICATION

At present, the Company is focusing on many segments

from middle-class to high-class. For examples, the Mega

product line has the average sales price of VND2 Billion

to VND3 Billion per unit, Lucasta middle-class villas with

the price from VND7 Billion/unit and The Venica high-

class project with the price from VND15 Billion/unit. In the

coming time, Khang Dien will expand to the segment for

average good income homebuyers with the apartments

from VND1 Billion/unit.

FINANCIAL CAPACITY ENHANCEMENTThoroughly taking advantages of available sources of

capital together with quickly mobilization of capital at

relatively lower cost.

PRODUCT DIVERSIFICATION

Besides the key products - gardened townhouse of the

Mega product line and villas from middle to high class such

as Lucasta and The Venica - the Company is developing

high-rise apartments to satisfy demands of more customers.

To be specifi c, the latest project expected to open for sales

in Quarter II/2017 is an apartment project at Do Xuan Hop

Exit of the Long Thanh - Dau Giay Expressway, Phu Huu

Ward, District 9 with nearly 900 apartments.

COST CONTROLThe Company will focus on improving cost control

and saving during the development of quality houses,

thus enabling reasonable sales price suitable to more

customers.

WITH THE MOTTO OF CUSTOMER CENTRIC IN EVERY ACTIVITY, BOARD OF DIRECTORS IS CONFIDENT IN BUILDING THE COMPANY TO BECOME A LEADING REAL ESTATE DEVELOPER, MAXIMIZING BENEFITS AND VALUES FOR THE SHAREHOLDERS.

BOARD OF DIRECTORS REPORT (continued)


INSPECTION ACTIVITIES

Inspection Committee carries out its functions and duties

in accordance with the laws, the Company Charter and

internal regulations. In 2016, the Inspection Committee

conducted the following operations: supervising the

activities of Board of Directors and General Director Team,

monitoring business operation and fi nancial situation of

the Company. Accordingly, the Inspection Committee

performed the following tasks:

• Supervised the implementation of the Shareholders’

Meeting resolutions in 2016 on dividend distribution,

chartered capital increase by issuing bonus shares to

existing shareholders, expanding the Company’s real

estate business scope (to include pre-school education,

primary education, related architectural activities and

technical consultancy).

• Coordinated with the independent auditor to audit the

Company’s 6-month and year-end fi nancial statements in

order to evaluate the authenticity and fairness of fi nancial

data in compliance with the prevailing Vietnamese

accounting regulation.

• Verifi ed the compliance with the Company’s internal

regulations and proposed modifi cations for some

regulations and procedures.

• Coordinated with functional departments of the Company

to supervise the activities of affi liates (subsidiaries) in order

to enhance the Company management of these affi liates.

• Monitored information disclosure in compliance with the

laws and ensured transparency in information disclosure

to protect the interest of the shareholders.

COMMENTS AND PROPOSALS OF INSPECTION COMMITTEE• Perfecting internal control system, enhancing the roles of

internal control department in fi nancial management and

supervising the compliance and implementation of the

Company’s procedures and regulations.

• Strengthening capital base and liquidity, and managing

invested capital deployed in projects.

• The Company needed to pay more attention to project

development to improve competitive advantages in the

market.

In 2016, the real estate market showed good recovery but

Vietnam’s economy still faced diffi culties. Board of Directors

and General Director Team needed to come up with solutions

to maintain the Company’s growth in the coming years.

• Applying procedures to closely control construction and

management cost, and promote sales to increase profi t.

• Having policy to motivate, utilize and develop human

resources.

• Directing sales activities and modifying sales policy to suit

the requirements and objectives of each stage.

OPERATIONAL DIRECTION FOR INSPECTION COMMITTEE IN 2017• Implementing regular and irregular inspections as

requested by the shareholders.

• Reviewing the reasonableness and legality of the

Company’s business operation.

• Continuing to refi ne procedures to improve the effi ciency

of Inspection Committee.

• Coordinating with Board of Directors and General Director

Team in improving and enhancing internal control

effi ciency.

• Continuing reviewing and proposing solutions for issues

in the Company’s procedures, regulations and operations.

In 2017, Inspection Committee will continue its duties of

inspecting in accordance with the functions and tasks of

Inspection Committee as regulated by the Laws and the

Company’s Charter.

• Inspecting Board of Directors and General Director Team in

accordance with the resolutions of General Shareholder’s

Meeting and BOD, the Company’s Charter and internal

regulations.

• Reviewing quarterly and annually fi nancial statements

before disclosure and coordinating with the independent

auditor to audit fi nancial statements.

• The Company fully complied with the Laws and the

Company Charter in daily management.

• Board of Directors well performed its duties and rights

in planning development direction and strategy for

the Company. In 2016, Board of Directors issued many

resolutions and decisions related to the Company

activities. Board of Directors’ decisions were made in

accordance with the process and procedure and in

compliance with the resolutions of the Shareholder s’

Meetings.

• Members of BOD and General Director Team and the

other managers performed their functions and tasks

in line with the Laws, the Company Charter, and the

resolutions of the Shareholders’ Meeting.

• The Company’s operating procedures were in

compliance with the requirements of the internal

administration system. Problems were promptly

detected, suggestions and solutions were given out

timely.

• The Company disclosed information and issued reports

according to the Laws.

• Inspection Committee agreed with Board of Directors

Report, Audited Financial Statements 2016, which would

be submitted to the General Shareholders’ Meeting 2017.

RESULTS OF INSPECTION OF THE BOARD OF DIRECTORS AND THE GENERAL DIRECTOR TEAM

In 2016, Board of Directors and General Director Team

facilitated Inspection Committee in full information

disclosure about the Company’s business operation and

fi nancial position.

Inspection Committee participated in Board of Directors’

meetings and gave opinions within the scope of its

functions and duties.

Inspection Committee, Board of Directors and General

Director Team coordinated to timely address issues during

the course of inspection.

COORDINATION BETWEEN INSPECTION COMMITTEE, BOARD OF DIRECTORS, AND GENERAL DIRECTOR TEAM

Inspection Committee reviewed

six-month and full year fi nancial

statements for 2016 and agreed

with the performance items on the

fi nancial statements. The statements

suffi ciently and clearly presented

and truly refl ected the Company’s

fi nancial position.

RESULTS OF INSPECTION OF THE COMPANY’S OPERATION AND FINANCE Some major fi nancial indicators:

INDICATORS 2015 2016

LIQUIDITY

Short-term liquidity ratio 7.4 5.7

Fast liquidity ratio 1.7 2.1

CAPITAL STRUCTURE

Debt ratio/Total asset 51% 45%

Debt ratio/Owners’ equity 134% 102%

ACTIVITY RATIO

Inventory turnover 0.1 0.6

Account receivable turnover 1.6 2.6

Net revenue/Total asset 0.1 0.5

PROFITABILITY

ROS 26% 10%

ROA 3% 5%

ROE 8% 12%

INSPECTION COMMITTEE REPORT


ITEMS 2014 2015 2016Compare 2016 to 2015

Change %

Revenues 621 1,050 3,932 2,882 274%

Profi t before tax 105 317 583 266 84%

Profi t after tax 63 268 405 137 51%

Profi t after tax belong to the Parent company’s

shareholders102 253 372 119 47%

Earnings per share - EPS (VND/share) 1,610 1,020 1,590 570 56%

ASSESSMENT ON BUSINESS PERFORMANCE

REVENUE AND PROFIT

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2016

1,050

3,932

2014

621

2015

50

100

150

200

250

300

350

400

2016

253

372

2014

102

2015

Total Revenues (VND Billion)

Profit after tax belong to the Parent company’s shareholders (VND Billion)

Mega Village: 9%BCCI: 27%

Others: 1%

Long Truongprojects: 11%

Melosa: 30%

Lucasta: 11%The Venica: 11%

KDH

Total revenue in 2016

PROJECTS Revenue in 2016 Proportion

Mega Village 346 9%

Melosa 1,198 30%

Lucasta 418 11%

The Venica 426 11%

Long Truong projects 429 11%

Others 51 1%

From BCCI 1,064 27%

TOTAL 3,932 100%

1,064VND BILLION

REVENUES

CONTINUING THE DEVELOPMENT IN 2015, KHANG DIEN ACHIEVED OUTSTANDING GROWTH

IN 2016 WITH TOTAL REVENUES OF VND3,932

BILLION, INCREASING NEARLY 3 TIMES COMPARED

TO 2015.

The outstanding growth was from:

• Sales performance from the projects developed under Khang Dien group of

companies - Mega Village, Melosa Garden, Lucasta, and The Venica - was very

positive, resulting in VND2,388 Billion in revenue, contributing 61% to total

revenues.

• Transfer of projects in Long Truong - Villa Long Truong, Long Phuoc Dien Long

Truong, and Khang Dien Long Truong - delivered VND429 Billion in revenue,

contributing 11% to total revenues. The transfer of these projects was not a

part of the 2016 business plan but under the medium-term and long-term

strategy of Khang Dien in the eff ective restructuring of the existing projects.

• Total revenues consolidated from BCCI group companies was VDN1,064

Billion, a large diff erence compared to 2015. Reasons: BCCI became a

subsidiary of Khang Dien in Quarter IV/2015 (when Khang Dien completed the

purchase of 57.31% of charter capital of BCCI). Therefore, the BCCI’s revenue

consolidated into Khang Dien in 2015 was not full year and corresponding

to the consolidate time period (to be specifi c, the revenue consolidated to

Khang Dien was VND152.7 Billion in the total revenues of VND462.9 Billion of

BCCI).

Revenues recognized from: Mega Village, Melosa Garden, Lucasta,

The Venica

2,388VND BILLION

Revenue structure in 2016

Transfer of projects in Long Truong

429VND BILLION

GENERAL DIRECTOR TEAM REPORT

Total revenues from BCCI group companies

(Unit: VND Billion)

(Unit: VND Billion)

372VND BILLION

PROFIT AFTER TAX BELONG TO THE PARENT COMPANY’S SHAREHOLDERS 47% Compared to 2015


PROFIT AFTER TAX BELONG TO THE PARENT COMPANY’S

SHAREHOLDERS WAS VND372 BILLION. ALTHOUGH

REACHING 93% OF THE TARGET APPROVED BY 2016 GENERAL SHAREHOLDERS’

MEETING, THE PROFIT AFTER TAX IN 2016 GREW

BY 47% COMPARED TO THE SAME PERIOD.

According to plan, profi t after tax of Khang Dien in 2016

was set at VND400 Billion, including:

• VND70 Billion consolidated from BCCI group of

companies: According to BCCI’s business plan in 2016

approved by General Shareholders’ Meeting in April

2016, the planned profi t of the group was VND120

Billion. However, the group earned only VND30.7

Billion profi t in 2016, or 25% of the plan, leading to

VND18 Billion profi t attributed to Khang Dien at the

rate of 57.3% ownership of BCCI. This has aff ected the

consolidated business result of Khang Dien.

• VND330 Billion was set for Khang Dien group of

companies. The result was VND354 Billion of profi t

after taxes, exceeding the target by VND24 Billion,

equivalent to 7.3% of the target. This earnings were

from the projects Mega Village, Melosa Garden, The

Venica, and Lucasta in 2016. Detailed were as follows:

» Mega Village: By year-end 2016, cumulative 320/335

units sold, equivalent to 96% closing rate of the

whole project.

» Melosa Garden: Until the end of 2016, cumulative

456/567 units sold, equivalent to 80% closing rate of

the whole project.

» Lucasta: Until the end of 2016, cumulative 98/140


whole project.

» The Venica: Until the end of 2016, cumulative 24/43


whole project.

• Khang Dien successfully acquired 57.3% of BCCI in

December 2015. Until January 2016, Khang Dien

had started restructured BCCI to better suit the

market conditions and in consistency with the overall

business strategy driven by Khang Dien’s BOD. With the

participation of Khang Dien in BCCI’s BOD and General

Director Team, in 2016, BCCI made a series of changes:

rearranging personnel, restructuring project portfolio,

(liquidating ineffi cient projects, speeding up ongoing

projects), and settling outstanding legal issues.

• The restructuring aff ected the 2016 business plan of

BCCI. Ineff ective projects including Western Dragon and

510 Kinh Duong Vuong were transferred. The transfers

of these projects were not included in BCCI’s business

plan in 2016. Thus, BCCI’s profi t after tax in 2016 reached

VND30.7 Billion, equivalent to 25% of the initial plan was

VND120 Billion (Khang Dien’s consolidated profi t after

tax was VND18 Billion, equivalent in owned ratio of the

legal capital of BCCI was 57.3%)

It can be said that 2016 was a transitional year for BCCI

when its operating model was gradually adjusted to

best suit the operational model of Khang Dien, the

Parent company. Although BCCI does not meet the 2016

business target, Management of Khang Dien believes

that the restructuring in 2016 will make a positive impact

to help the business results of BCCI be better in 2017

onwards.

REASONS FOR NOT MEETING 2016 BUSINESS TARGETS

• In 2016, cost of goods sold

(COGS) was 75% of revenues,

increasing by 7% compared

to 2015, mainly driven by BCCI

group of companies. Reason: To

ensure effi cient restructure, the

group transferred some non-

core apartment projects such

as Western Dragon Apartment

and 510 Kinh Duong Vuong at

relatively low profi t. The ratio of

COGS over revenues temporarily

increased during the restructuring

period and would ease back to the

effi cient level in the coming time.

with strategic locations and effi ciency and, therefore,

minimizing loan interest expense.

• Selling expenses and administrative overheads were

reduced, accounting for 2 - 4% of revenues. This

cost saving resulted from improvement in corporate

management effi ciency and eff ective sales policies.

• The ratio of interest expense over revenues decreased

nearly 1%, which was a positive result when the

operational scale expanded but debt did not increase

accordingly. Instead of taking on more debts, the

Company eff ectively managed cash fl ow - matching

sales and debt service cash fl ows - and proactively

transfered ineff ective projects to focus on projects

COSTS AND EXPENSES

ITEMS(Proportion of Cost to Revenues)

2014 2015 2016 Compare 2016 to 2015

Cost of goods sold 85% 68% 75% +7%

Interest 6% 1% 0,2% 0%

Selling expenses 4% 6% 4% -2%

Administrative overheads 6% 7% 3% -4%

The Company’s 2016 earnings growth

not only due to the good sales but

also to the positive contribution from

the eff ective cost control.

PROFIT

Profi t after tax belong to the Parent company’s shareholders was VND372 Billion. Although reaching 93% of the target

approved by 2016 General Shareholders’ Meeting, the profi t after tax in 2016 grew by 47% compared to the same period.

(Unit: VND billion)

ITEMS Plan 2016 Result 2016Result vs. Plan

Differential Value

Percentage %

Revenues 1,500 3,932 2,432 262%

Profi t after tax belong to the Parent company shareholders, including: 400 372 (28) 93%

Khang Dien group of companies 330 354 24 107%

BCCI group of companies 70 18 (52) 25%

GENERAL DIRECTOR TEAM REPORT (continued)


ASSETS

FINANCIAL SITUATION

Revenues and Profi t in 2016 grew strongly compared to 2015, but there was no corresponding increase in total assets. For

2016 year-end, total assets of Khang Dien worth VND7,937 Billion, a slight decrease of 7% compared to 2015, equivalent to

VND605 Billion. Reason: Decrease in inventories due to quick sales and liquidation of some ineffi cient projects to reduce

debts. Detailed fl uctuations of assets are as follows:

• The items with high proportion such as Cash and cash equivalents, accounts receivable, and inventories accounted for

a major proportion of total assets in 2016. To be specifi c, the proportions of these items were 13%, 19% and 58% of total

assets (the total proportion of these three items accounted for 90% of total assets). The structure was appropriate for real

estate development and demonstrated safety in development for Khang Dien in the future.

• Although occupying a high proportion in total assets, up to 58%, the proportion of inventories has decreased by 11%

compared to 2015. The proportion of accounts receivable rose 11% compared to 2015, which was reasonable given the

growth in sales.

Total assets of the Company in 2016 decreased by 7% due to reduction in inventories. In 2016, the value of inventories fell

to VND4,618 Billion, decreasing by VND1,247 Billion, equivalent to 21%, compared to the same period.

1,00010

2,00020

3,00030

4,000

40

5,000

50

6,000

60

7,000

70

8,000

80

9,000

100

90

2016

8,5427,937

2014

3,121

2015

Total Assets(VND Billion)

Asset structure (%)Cash and cash equivalentsReceivables Long-term assetsInventories Others

Asset structure changes (Unit: VND Billion)

ITEMS 2014 Proportion 2015 Proportion 2016 Proportion

Cash and cash equivalents 435 14% 983 11% 1,059 13%

Receivables 537 17% 654 8% 1,485 19%

Inventories 2,075 67% 5,865 69% 4,618 58%

Long-term assets 37 1% 907 11% 696 9%

Others 37 1% 133 1% 79 1%

TOTAL ASSETS 3,121 100% 8,542 100% 7,937 100%

Asset value changes (Unit: VND Billion)

ITEMS 2014 2015 2016Compare 2016 to 2015

Differential Value %

Cash and cash equivalents 435 983 1,059 76 8%

Receivables 537 654 1,485 831 127%

Inventories 2,075 5,865 4,618 (1,247) -21%

Long-term assets 37 907 696 (211) -23%

Others 37 133 79 (54) -41%

TOTAL ASSETS 3,121 8,542 7,937 (605) -7%

Inventories changes (Unit: VND Billion)

No. PROJECT NAME 2014 2015 2016 Compare 2016 to 2015

1 Melosa 663 931 437 (494)

2 Lucasta - 645 462 (183)

3 Mega Village 296 188 85 (103)

4 The Venica 133 258 228 (30)

5 Merita - 135 313 178

6 Khang Dien Long Truong 229 255 10 (245)

7 High-rise townhouses - 215 235 20

8 Low-rise townhouses 161 172 220 48

9 Sapphire 131 160 173 13

10 Gia Phuoc 74 86 122 36

11 Long Phuoc Dien Long Truong 84 84 2 (82)

12 Villa Long Truong 63 63 10 (53)

13 Binh Trung Dong - 246 264 18

14 Kim Phat - - 183 183

15 BCCI’s projects - 2,205 1,712 (493)

16 Other projects 242 222 162 (60)

TOTAL 2,075 5,865 4,618 (1,247)


2014

14%

17%

67%

1%1%

2015

11%

8%

69%

11%1%

2016

13%

19%

58%

9%1%


Fluctuations in value (Unit: VND Billion)

ITEMS 2014 2015 2016Compare 2016 to 2015

Change %

Current liabilities 482 1,037 1,272 235 23%

Long-term liabilities 1,102 3,333 2,267 (1,066) -32%

Owners’ equity 1,499 3,257 3,477 220 7%

Interest of minority shareholders 38 915 921 6 1%

TOTAL ASSETS 3,121 8,542 7,937 (605) -7%

The projects with strong decreases in inventories:

Besides focusing on sales, collecting receivables and restructuring ineffi cient projects, Khang Dien has continued

developing new projects to be launched in 2017 such as Merita (inventory increased by VND178 Billion) and Kim Phat

(inventory increased by VND183 Billion).

1. Inventories of Melosa Garden, Lucasta, Mega Village, and

The Venica decreased more than VND800 Billion in total.

These projects sales went very well in 2016 with more

than 500 units sold, making signifi cant contribution to

total revenues.

2. Inventories of Khang Dien Long Truong, Long Phuoc

Dien Long Truong and Villa Long Truong decreased

nearly VND380 billion. The Company has transferred

these projects to restructure portfolio.

3. Inventories of BCCI’s projects decreased nearly VND493

Billion due to the transfer of ineffi cient projects such as

Western Dragon and 510 Kinh Duong Vuong to focus

capital for the other projects having strategic locations

and effi ciency.

CAPITAL STRUCTURE

CAPITAL STRUCTURE CHANGED ALONG WITH THE CHANGES IN TOTAL ASSETS, WITH DEBT REDUCTION AND SHAREHOLDER EQUITY INCREASE.

Fluctuation in structure: Long-term debts decreased over VND1,000 Billion,

equivalent to 32% decrease compared to the same period last year. Short-term

debts and Shareholder equity increased slightly. Capital structure changed

positively with increase in the proportion of shareholder equity (from 38%

up to 44% of total capital) and 11% decrease in the proportion of long-term

debts compared to the same period, corresponding to the 11% decrease in the

proportion of inventories.

(Unit: VND Billion)

ITEMS 2014 Proportion 2015 Proportion 2016 Proportion

Current liabilities 482 15% 1,037 12% 1,272 16%

Long-term liabilities 1,102 35% 3,333 39% 2,267 28%

Owners’ equity 1,499 48% 3,257 38% 3,477 44%

Interests of minority shareholders 38 2% 915 11% 921 12%

TOTAL EQUITY 3,121 100% 8,542 100% 7,937 100%


1020304050607080

10090

2014

15%

35%

48%

2%

2015

12%

39%

38%

11%

2016

16%

28%

44%

12%

Capital structure (%)

Current liabilitiesLong-term liabilitiesOwner’s equityInterests of minority shareholders


Return on Sales (ROS) sharply decreased from 26% to 10% because as part of restructuring BCCI and rebalance land

portfolio, Khang Dien sold some ineff ective projects (especially BCCI’s projects) with little profi ts and focus capital for the

more eff ective projects. In 2016, however, the profi tability ratios of Melosa Garden, Lucasta, Mega Village and The Venica

were higher than 2015 (minimum 26% in 2016). Therefore, in general, the decrease of ROS in 2016 was temporary, and it

would recover soon as the restructuring of BCCI is fi nished.

For 2016 short-term debts increased by VND235 Billion, equivalent to 23%

increase compared to the same period last year, mainly due to the increases

in advance payments from customers and tax liability and obligations to the

Stage Budget. The change was reasonable given the large growth in sales in

2016. The advance payments from customers will decrease over time when sales

become eligible to be recorded as revenue. The taxes and obligations to the

Stage Budget will also decrease when they are paid in line with the regulations.

Short-term debts

These were loans mainly for land and project developments. In 2016, long-term

debts decreased more than VND1,000 Billion, a positive change, showing that the

Company had good cash infl ow during the year. The cash fl ows from sales and

project transfer were used to reduce debts. To be specifi c:

• Khang Dien bought back more than 90% of VND900 Billion of the corporate

bond issued at the end of 2015 to fi nance the development of Melosa project.

By the end of 2016, the outstanding bond value was VND95 Billion (the total

amount of bond bought back in 2016 was VND805 Billion).

• The debts fi nancing Lucasta, Mega Village and The Venica also decreased.

In particular, Lucasta’s debts were reduced by VND240 Billion (from VND417

Billion at the end of 2015 down to VND175 Billion at the end of 2016) and the

VND250 Billion debts on Mega Village and The Venica were settled in 2016.

• The debts fi nancing Khang Dien Long Truong, Long Phuoc Dien Long Truong,

and Villa Long Truong were also settled when transfer procedure of these

projects was completed.

Long-term debts

Long-term debts decreased more than

1,000VND BILLION

SHAREHOLDER EQUITYAt the end of 2016 increased

from 38% up to 44% of total capital

3,477VND BILLION

At the end of 2016, the shareholder equity of the Company reached VND3,477

Billion, an increase of VND220 Billion, equivalent to 7%, compared to 2015. This

increase came from the retained earnings. Although the value of shareholder

equity increased slightly, the proportion of shareholder equity increased from

38% up to 44% as shareholder equity became the main source of capital. This

shows that the Company working toward capital independence, reducing the

dependence on external debts, reducing interest expenses, improving capital

effi ciency and ensuring safety for capital structure.

Shareholder equity

Financial ratios in 2016 were

signifi cantly improved compared to

the same period. In particular:

• Quick ratio increased from 1.7 to 2.1

times, showing that the liquidity of

the Company was improving.

• Debt over assets ratio decreased

signifi cantly from 51% to 45%,

showing the Company’s high

level of control of capital, not

dependent on external debts.

• Turnover ratios increased by 0.4 to

1.0 time, showing the effi ciency in

the Company’s asset uses.

• Return on Equity (ROE) and Return

on Assets (ROA) remained relatively

low at 12% and 5%, respectively

showed positive changes,

increasing by 2 - 4% compared to

last year.

INDICATORS 2014 2015 2016

LIQUIDITY

Short-term liquidity ratio 6.4 7.4 5.7

Fast liquidity ratio 2.1 1.7 2.1

CAPITAL STRUCTURE

Debt ratio/Total asset 51% 51% 45%

Debt Ratio/Owners’ equity 106% 134% 102%

ACTIVITY RATIO

Inventory turnover 0.3 0.1 0.6

Account receivable turnover 1.2 1.6 2.6

Net revenue/Total asset 0.2 0.1 0.5

PROFITABILITY

ROS 10% 26% 10%

ROA 2% 3% 5%

ROE 4% 8% 12%

FINANCIAL INDICATORS

THE YEAR 2016 MARKED A GREAT SUCCESS OF KHANG DIEN’S OPERATION IN DEVELOPING PROJECTS AND RESTRUCTURING BCCI. ALTHOUGH NOT REACHING THE PROFIT TARGET AS SET OUT, THE RESTRUCTURING AT BCCI WAS EXECUTED IN THE RIGHT STEPS AND WILL BRING GOOD RESULTS IN THE COMING TIME. THIS IS A FIRM FOUNDATION FOR KHANG DIEN TO SUSTAIN ITS DEVELOPMENT AND BECOME ONE OF THE LEADING REAL ESTATE COMPANIES, MAXIMIZING THE BENEFITS FOR THE SHAREHOLDERS.



IMPROVEMENTS IN ORGANIZATIONAL STRUCTURE, POLICY AND MANAGEMENT

To implement the 2016 business plan, Khang Dien determined that the improvements in organizational structure, policy,

and management were essential. Accordingly, the improvements were strongly promoted in 2016 as follows:

Determining that the leading duty of the Company is to off er the customers

perfect housing products having transparent legal framework, reasonable prices

and especially refi ned designs in an open living space, in 2016, the Company

strengthened the Architecture Division with high quality new hires. The

Architecture Division would help bring the most aesthetics to the fi nal products,

build living spaces friendly with nature, enhance living quality and create added

value to the customers.

The effi ciency of Architectural Division was tested through challenging projects

such as The Venica, Lucasta, and Melosa Garden, which won the “Best Housing

Development” Award 2016 of Asian Property Awards held by Ensign Media

to honor the best real estate projects, construction works, architecture and

designs across the country. The prize is for the best real estate projects based on

objective, fair, and transparent criteria in Asia.

ESTABLISHMENT OF ARCHITECTURAL DIVISION

Determining that project management unit is the key force in the Company’s

operation, in 2016 the Company focused on developing project management

personnel in quantity and quality, regularly reviewed and consolidated

organization toward centralized management to serve and support timely and

eff ectively decision making.

Workloads of the projects were arranged in a systematic way and distributed

promptly, personnel apparatus was rearranged simultaneously, staff was

assigned to each project to ensure execution on progress at high quality and

reasonable cost.

IMPROVEMENT OF PROJECT MANAGEMENT APPARATUS Recognizing the importance of human resources for the long-term development,

the Company has organized more training to improve professional skills through

internal training activities and instructions from direct management. To be

specifi c, the managers would quarterly evaluate the employee’s performance

and give constructive comments to help the employees improve and enhance

their professional qualifi cations.

In addition, the Company paid attention to improvement of multidisciplinary

knowledge for employees. The staff s of each department were encouraged to

participate in the projects and learn from each other. The tasks were allocated in

a scientifi c way to facilitate the employees to learn about other areas but at the

same time ensuring the progress of their work.

TRAIN AND DEVELOP HUMAN RESOURCES

Sales team is a department which is on behalf of the Company to express the

Company’s cares for the customers. Therefore, regular professional trainings

were held to improve the professionalism for Sales Team in their works:

• Consulting customers about product quality, project legality and interior design, etc.

• Guiding and assisting customers with simple procedures and preferential interest

rates at associated banks.

• Quickly resolving complaints and responding to inquiries from customers, fully

meeting the customer’s requirements in a timely manner.

• Tracking contract closing and customer liabilities until handing over ownership

certifi cate to customers.

In the future, the Company will continue consolidating and developing a more

advanced team of customer care to always create a fi rm belief in customers as

the Company’s motto “Khang Dien - Where you put your trust, where you make

you home”.

DEVELOPMENT OF SALES TEAM

Expanding collaboration network with professional real estate trading fl oors in

HCMC such as CBRE, Savils, Cengroup, Sunland, etc. to accelerate sales activities.

Intensifying fi nancial support programs to support sales. In 2016, in addition to

promotion discount at the interest rate of 18%/year for advanced payment, the

Company also worked with the large banks who off er preferential interest rates

to off er fi nancial support packages for several customer groups. These activities

shown Khang Dien’s supports in increasing the possibility of house ownership

for many customers.

Enhancing after-sales services: In 2016 Khang Dien regularly visit customers

in holidays and organized social activities to strengthen the bonding with the

communities living in the projects.

IMPROVEMENT OF SALES POLICY



BUSINESSPLAN FOR 2017

IN 2017 THE COMPANY WILL CONTINUE PROMOTING SALES, BUILDING NEW HOUSES AND HANDING OVER COMPLETED HOUSES OF MEGA VILLAGE, MELOSA, LUCASTA, AND THE VENICA. THE COMPANY WILL ALSO LAUNCH THREE NEW PROJECTS, MERITA, GIA PHUOC AND AN APARTMENT PROJECT IN PHU HUU WARD, DISTRICT 9.

Melosa Garden has scale of 17 hectares of land, adjacent to

Mega Village. The project was deployed in early 2015 with

567 villas and townhouses in a compound with high-class

utilities and amenities. The project was offi cially opened

for sale in November 2015. Until December 31st 2016, 456

units have been sold.

The Company expects to complete the sales of 111

remaining units in 2017.

Up to present, more than 90% units of Melosa Garden have

been constructed and more than 50% of these units have

been handed over to the buyers. In 2017, the Company will

complete construction and handover the remaining units

to the customers.

Merita has a scale of 3 hectares of land located on Lien

Phuong Street, Phu Huu Ward, District 9. The project has

131 townhouses in a compound with full of high-class

utilities and amenities such as swimming pool, gym center,

minimart, etc. More than 40 shop-houses among 131

townhouses are located on the frontage of Lien Phuong

Street.

Up to now, the entire infrastructure, landscape, and

utilities have been fully constructed. Total 131 units are

under construction, of which more than 50% have been

completed. The rest will be completed in the fi rst quarter of

2017. Merita Project will be opened for sales in the second

quarter of 2017 and sold out in opening day.

Lucasta has a scale of 8 hectares of land located on Lien

Phuong Street, Phu Huu Ward, District 9. Lucasta is an

eco-villa project in premium segment, including 140

detached and duplex villas having refi ned designs and in

a compound with beautiful scenery and full of high-class

utilities.

After acquiring Lucasta in Quarter III/2015, Khang Dien has

carried out refurbishment and development and offi cially

opened for sales in Quarter IV/2015. Until December 31st

2016, the 98 villas have been sold. The Company expects

to complete the sales of the remaining units and hand over

the ownership certifi cates to the buyers in 2017.

WITH THE BUSINESS PLAN FOR THE PROJECTS DESCRIBED ABOVE, KHANG DIEN EXPECTS TO SELL MORE THAN 400 TOWNHOUSES AND VILLAS AND 700 APARTMENTS IN 2017. THE ESTIMATED CONSOLIDATED PROFITS AFTER TAX IS VND500 BILLION (INCLUDING THE PROFIT FROM BCCI’S COMPANIES), INCREASING BY 35% COMPARED TO THE CONSOLIDATED PROFIT IN 2016.


Mega Village has a scale of 5.7 hectares of land in Phu Huu

Ward, District 9, in front of Inner Ring Road, 600m far away

from roundabout between HCMC - Long Thanh - Dau Giay

Highway and Inner Ring Road.

The project was deployed in the third quarter of 2014 and

off ered for sales in May 2015. Until December 31st 2016, the

project remained 15 units unsold. As expected, the 100%

sales will be completed in 2017.

At present, 335 houses of Mega Village are 95% construction

completed and handed over to customers. The remaining

works will be completed and handed over to customers in

the fi rst quarter of 2017.

Out of 335 units, 145 property ownership certifi cates have

been handed over to the buyers. The remaining ownership

certifi cates will be handed over to the buyers in the second

quarter of 2017.

The Venica has scale of 3.1 hectares of land located at

Do Xuan Hop Exit of the Long Thanh - Dau Giay Expressway,

in Phu Huu Ward, District 9, bordering District 2. The project

is like a small oasis with surrounding river and has 43 super

high class villas in a compound with superior utilities and

amenities.

The Venica has been 100% completed in construction,

infrastructure, landscape, and utilities. Ownership

certifi cates of all 43 villas have been ready before offi cially

opening for sales in April 2016. Until December 31st 2016,

24 villas of the project have been sold. The Company plans

to continue selling The Venica in 2017.

Gia Phuoc has a scale of 3 hectares of land located on D2

Street, Phu Huu Ward, District 9 and 500m far away Nguyen

Duy Trinh Street.

Gia Phuoc has 118 townhouses in a compound with high-

class utilities and amenities such as swimming pool, gym

center, minimart, etc. In 118 townhouses have about 20

units of Shop House of land located on D2 Street (land

requirement of 30m)

Gia Phuoc is expected to open for sale in Quarter II/2017

and will be completed in 2017.

The apartment project has a prime location at Do Xuan

Hop Exit of the Long Thanh - Dau Giay Expressway, in Phu

Huu Ward, District 9, HCMC. The project is located adjacent

to The Venica and The Lake View City. The project off ers

nearly 900 apartments from 45m2 to 130m2 living space

with refi ned design and full of utilities and amenities such

as 800m2 swimming pool, gym center, etc. The apartment

is designed and constructed by Hoa Binh Construction -

a prestigious contractor. At present, the project is under

construction and expected to open for sale in Quarter

II/2017.

MEGA VILLAGE 1

MELOSA GARDEN 2 LUCASTA4 MERITA5

THE VENICA 3 GIA PHUOC6 APARTMENT PROJECT IN PHU HUU WARD, DISTRICT 97


TOWNHOUSES IN COMPOUND

SETTING

of the Mega townhouse projects,

which were sold out in 2014 - 2015.

Khang Dien continues launching

a plenty of products in diff erent

segments: Melosa Garden - upgraded

product line of Mega Series, Luscata

premium eco villa, The Venica 5-star

villa, etc. to meet the real demand on

housing of local and overseas middle-

class customers.


BOARD OF DIRECTORS

BOARD OF DIRECTORS MEMBERS AND STRUCTURE INSPECTION COMMITTEE MEMBERS AND STRUCTURE

Inspection Committee consists of

three members elected by General

Shareholder’s Meeting (GMS) to

perform the inspection activities

according to the laws and the

Company’s charter, including:

No. Member Position

1 Ms. Vuong Hoang Thao Linh Head of Inspection Committee

2 Mr. Dao Cong Dat Member of Inspection Committee

3 Mr. Hoang Manh Phong Member of Inspection Committee

SUMMARY OF INSPECTION COMMITTEE’S MEETINGS

In 2016, Inspection Committee held

quarterly meetings to summarize

the performance of the year, plan for

the next year and prepare report and

suggestions to Board of Directors and

General Director Team.

Inspection Committee also attended

the meetings held by the Board of

Directors and regularly discussed

with the Board of Directors, functional

department heads, internal auditor

and independent auditor to fulfi ll the

committee’s duties.

Details of the meetings are as follows:

• Meeting minutes No. 01/2016/BB-BKS dated 29/03/2016 reviewing

unconsolidated fi nancial statements and consolidated fi nancial statements

and 2015 auditor’s report draft and assigning responsibilities to the members

of Inspection Committee in 2016

• Meeting minutes No. 02/2016/BB-BKS dated 30/06/2016 evaluating and

reviewing the implementation of the Board of Directors’ resolutions in

Quarter II.

• Meeting minutes No. 03/2016/BB-BKS dated 25/08/2016 evaluating and

reviewing the implementation of the Board of Directors’ resolutions in Quarter

III, reviewing the implementation of information disclosure procedure and

reviewing fi nancial statements for fi rst 6 months.

• Meeting minutes No. 04/2016/BB-BKS dated 29/12/2016 summarizing and

reporting the activities of Inspection Committee in 2016 and reviewing the

developments of some projects of the Company.


As of December 31st 2016, Board of

Directors of Khang Dien consisted of

fi ve Directors, including three executive

members and two non-executive

members. There was no change in

Board Directors during the year.

Details are as follows:

No. Member of BOD Position Remark

1 Mr. Ly Dien Son Chairman cum General Director

2 Mrs. Mai Tran Thanh Trang Member cum Deputy General Director

3 Mr. Nguyen Dinh Bao Member cum Deputy General Director

4 Mrs. Nguyen Thi Dieu Phuong Member Non-executive

5 Mr. Le Hoang Son Member Non-executive

BOARD OF DIRECTORS ACTIVITIES

In 2016, the Board of Directors held 33

meetings with full participation of the

Directors and issued Resolutions on

major issues of the Company. 100%RATE OF MEETING ATTENDANCE

At the same time, the Board of Director timely gave policies to solve challenging

issues and impediments materializing in actual business. The Board of Directors

also quickly made strategic decisions and eff ectively fulfi lled its duties in

maintaining stable and safe operation for the Company.

88 89ANNUAL REPORT 2016 CORPORATE GOVERNANCE

BOARD OF DIRECTORS

Beside the remunerations mentioned above, the Company did not pay any other compensations to the Board of Directors.

Remuneration of the Board of Directors:

No. Member of BOD Working time Remuneration

1 Mr. Ly Dien Son 12 months VND15,000,000/month

2 Mrs. Mai Tran Thanh Trang 12 months VND10,000,000/month

3 Mr. Nguyen Dinh Bao 12 months VND10,000,000/month

4 Mrs. Nguyen Thi Dieu Phuong 12 months VND10,000,000/month

5 Mr. Le Hoang Son 12 months VND10,000,000/month


Beside the remunerations mentioned above, the Company did not pay any other compensations to the Inspection Committee.

Remuneration of the Inspection Committee

No. Member of Inspection Committee Working time Remuneration

1 Ms. Vuong Hoang Thao Linh 12 months VND10,000,000/month

2 Mr. Dao Cong Dat 12 months VND5,000,000/month

3 Mr. Hoang Manh Phong 12 months VND5,000,000/month

TRANSACTIONS, REMUNERATIONS AND INTEREST OF BOARD OF DIRECTORS AND INSPECTION COMMITTEE

SHARE TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATED PERSONS

SHARES OWNED BY INTERNAL SHAREHOLDERS

Shareholders No. Name Position Total Ownership percentage

(%)

Board of

Directors

1 Ly Dien Son Chairman 2,340,000 1.000%

2 Mai Tran Thanh Trang Member 286,000 0.122%

3 Nguyen Dinh Bao Member 299,000 0.128%

4 Nguyen Thi Dieu Phuong Member 0 0%

5 Le Hoang Son Member 91,028 0.039%

General

Director Team

1 Ly Dien Son Chairman of BOD cum General

Director - -

2 Mai Tran Thanh Trang Member of BOD cum Deputy

General Director - -

3 Nguyen Dinh Bao Member of BOD cum Deputy

General Director - -

4 Ngo Thi Mai Chi Deputy General Director 104,000 0.044%

Inspection

Committee

1 Vuong Hoang Thai Linh Head of Inspection Committee 2,002 0.001%

2 Dao Cong Dat Member of Inspection Committee 26,000 0.011%

3 Hoang Manh Phong Member of Inspection Committee 13,000 0.006%

Financial

Director1 Tra Thanh Tra Financial Director 104,000 0.044%

Chief

Accountant 1 Nguyen Quoc An Chief Accountant - -

Authorized

person for

information

disclosure

1 Nguyen Dinh Bao Member of BOD cum Deputy

General Director- -

TOTAL 3,265,030 1.395%


TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATED PERSONS

No. Transactions conducted by Relationship with internal shareholders

Beginning number of shares

Ending number of shares Reasons for increase/decrease (purchasing,

selling, transferring, bonus, etc.)Number of share Percentage Number

of share Percentage

1 Mai Tran Thanh Trang Member of BOD cum Deputy General Director 681,900 0.379% 286,000 0.122%Portfolio restructuring and receiving bonus shares at the

rate of 30%

2 Nguyen Dinh Bao Member of BOD cum Deputy General Director 469,400 0.261% 299,000 0.128%Portfolio restructuring and receiving bonus shares at the

rate of 30%

3 Le Hoang Son Member of BOD 262,022 0.146% 91,028 0.039%Portfolio restructuring and receiving bonus shares at the

rate of 30%

4 Ngo Thi Mai Chi Deputy General Director 330,000 0.183% 104,000 0.044%Portfolio restructuring and receiving bonus shares at the

rate of 30%

5 Nguyen Duc Trong Deputy General Director 150,000 0.083% 0 0% Portfolio restructuring

6 Tra Thanh Tra Financial Director 276,000 0.153% 104,000 0.044%Portfolio restructuring and receiving bonus shares at the

rate of 30%

7 Dao Cong Dat Member of Inspection Committee 68,000 0.038% 26,000 0.011%Portfolio restructuring and receiving bonus shares at the

rate of 30%

8 Hoang Manh Phong Member of Inspection Committee 44,000 0.024% 13,000 0.006%Portfolio restructuring and receiving bonus shares at the

rate of 30%

9 Vietnam Investment Property Holdings Limited Related person, internal person 2,524,691 1.40% 962,508 0.41%Portfolio restructuring and receiving bonus shares at the

rate of 30%

10 Vietnam Investment Limited Related person, internal person 2,682,680 1.49% 3,487,484 1.49% Receiving bonus shares at the rate of 30%

11 Vietnam Investment Property Limited Related person, internal person 2,682,680 1.49% 3,487,484 1.49% Receiving bonus shares at the rate of 30%

12 Vietnam Ventures Limited Related person, internal person 7,540,400 4.19% 15,802,520 6.75% Buying share and receiving bonus shares at the rate of 30%

13 Vietnam Enterprise Limited Related person, internal person 16,111,219 8.95% 20,944,584 8.95%Portfolio restructuring and receiving bonus shares at the

rate of 30%

14 Asia Value Investment Limited Related person, internal person 1,381,380 0.77% 0 0% Portfolio restructuring

15 VOF Investment Limited Related person, internal person 3,834,320 2.13% 0 0% Portfolio restructuring

Notes: * Calculated based on the former charter capital of VND1,800,000,000,000

** Calculated based on the new charter capital of VND2,339,998,920,000

SHARE TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATED PERSONS (continued)

Investment funds: Vietnam Investment Property Holdings, Vietnam Investment Limited, Vietnam Investment Property Limited,

Vietnam Enterprise Limited, Asia Value Investment Limited, and VOF Investment Limited are under the management of

VinaCapital Corporate Finance Vietnam, who has two representatives holding important roles at Khang Dien: Nguyen Thi Dieu

Phuong - Member of BOD and Vuong Hoang Thao Linh - Member of Inspection Committee.


RISK MANAGEMENT IS INTEGRATED INTO ALL PHASES OF THE BUSINESS OPERATIONS OF KHANG DIEN GROUP OF COMPANIES (INCLUDING THE PARENT COMPANY AND MEMBER COMPANIES). AFTER GOING THROUGH THE CHALLENGING REAL ESTATE MARKET IN 2010 - 2013, WE HAVE APPROACHED RISK MANAGEMENT IN A MORE SYSTEMATIC WAY IN ORDER TO PROACTIVELY MANAGE ALL RISKS THAT MAY AFFECT THE COMPANY’S SHORT-TERM AND LONG-TERM BUSINESS OBJECTIVES.

General Director Team is responsible for implementing

risk management policies and procedures, providing

resources for risk management activities, promoting risk

management regulations and procedures, and supervising

risk management implementation to ensure safety and

eff ectiveness for Khang Dien’s activities.

Khang Dien’s subsidiaries separately manage risk by

building their own risk management strategies and policies

in line with Khang Dien’s risk management strategy and

policy.

The Company’s management positions starting

from department head and higher jointly share risk

management responsibilities with the General Director

Team. 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 reports to General Director Team. The report is

made weekly or at any time when the manager fi nds that

the possible risks and their eff ects to the Company’s daily

business activities exceeds her management ability.

General Director Team summarizes the reports then reports

the main risks, preventive measures to General Director,

who 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 Board

of Directors about major issues related to the risks and

their related business opportunities and the impacts on

business objectives and results in the current fi scal year as

well as the risks causing major impacts on the Company’s

medium-term and long-term development strategy.

Risk management principles of Khang Dien focus on

analysis and assessment of risks in a systematic way

to control, prevent and minimize the damages, losses,

and negative eff ects of the risks to the Company’s

business objectives and results. Based on this

principle, the Company’s Management evaluates and

decides to accept certain risks or not, and if accepting,

determines the degree of caution and control mode

and, in many cases, takes advantage of business

opportunities from the risks.

RISK MANAGEMENT PRINCIPLE AND PROCEDURE

IDENTIFY

MONITOR

EVALUATE

CONTROLIn 2016 Khang Dien performed risk management eff ectively. However, to implement a stronger risk management system,

the Company will refi ne risk management procedures, defi ne accountabilities and coordination among departments,

and improve awareness of risk management culture, which thereby creates a fi rm foundation for business operations and

sustainable development of Khang Dien.

PROCEDURES

Identify the risks

Group

Subsidiaries

Functional Division/Department

Measure and evaluate the risks

Recognize and monitor the risks

Risk mitigation

Risk management report

Monitor and review risk management procedure

CONTROL AND

REVIEW

RISK MANAGEMENT


In 2016, Khang Dien determined the major risk

factors and risk management solutions as follows:

RISK FACTORS

ECONOMIC AND POLICY RISKS

HOUSING MARKET RISKS

FINANCIAL RISKS

LEGAL RISKS

REPUTATION RISKS

PROJECT PROGRESS RISKS

1. 2. 3. 4. 5. 6.

Abnormally strong fl uctuation in US Dollar exchange rate,

fl uctuation in gold price, a series of integration stories

such as TPP under Donald Trump, Brexit, Fed’s interest rate

raising, China and neighboring countries intentionally

devaluing currencies, etc. have led to a series of reactions

in the fi nancial market and complicated forecasts, causing

negative eff ects on business performance and homebuyers’

and real estate investors’ confi dence. Accordingly, the

fl uctuations in exchange rate between Vietnam dong and

foreign currencies could aff ect the fi nancial condition,

investment activities, sales performance and business results

of Khang Dien.

In the fourth quarter of 2016, it was said that the Ministry of

Finance was studying to issue a law on property taxation that

aimed at the people owning the second house and more.

Accordingly, from 2016 to 2020, the Ministry of Finance

would draft a tax law applicable to the people owning

many houses to prevent speculation and to minimize risks

in real estate market. This law would impacts on real estate

investments and business operations.

According to experts, most of the real estate development

loans focused on a few large real estate companies

developing high-class housing and hospitality projects,

which increased the risk of market bubble, especially in

the high-class and luxury segments in the big cities. As a

result, the Government could soon implement control and

corrective measures in order to reduce the risk.

Mitigation measures

• Khang Dien has been focused on developing

middle-class housing projects with completely built

infrastructures and facilities and quality housing

compounds with full functionality to meet the needs of

the majority of the homebuyers.

• Khang Dien has been carefully selected project

locations in the new inner districts of Ho Chi Minh City,

where urbanization and infrastructure development

have been speedy and attracting investment capital,

and convenient for the homebuyers in the region and

neighboring provinces.

• The Company closely monitored the macroeconomic

situation, the cycle of the real estate market, housing

market, and the adjustment in State policies by

maintaining good relationships with local authorities,

professional associations, major fi nancial institutions

and leading experts, etc. to well understand and predict

the developments of economic, market and policy.

• The Company has been willing to re-evaluate and adjust

business strategy and plans closely to the reality in the

market.

ECONOMIC AND POLICY RISKS

middle and middle-high segments continued to experience

short supply. The indigestion in high-class apartments has

been warned by many experts. Currently, the supply of luxury

apartments was estimated to be 20,000 - 30,000 units with

sales prices ranging from a few billion to ten billion dong.

In this context, the enterprises having enough fi nancial

resources would continue to exist and grow, and the weak or

failed enterprises would cause negative consequences, even

disruption in the housing market.

Mitigation measures

• Khang Dien has continuously monitored, reviewed and

evaluated market conditions, rebalanced investment

portfolio to best suit the purchasing power of the

majority of the homebuyers.

• The Company has been creating products that bring

true value and excellent living quality to meet the needs

of customers in the long term.

The recovery and growth of the housing market during the

past 3 years has led to surges in new investments from the

well-known housing developers as well as attracted new

investors to join the market. This has created an increasingly

competition in products and services.

The above-mentioned names have been the enterprises

leading the market trend. They have pursued the goal of rapid

growth in market shares and revenues. In competition directly

or indirectly with Khang Dien, they have focused on off ering

products selling at relatively higher prices because of their

higher operating and investment costs. According to experts,

the above trend driving market imbalance (oversupply but the

prices have been rising), and with the high growth in housing

development credit in 2016, the risk in housing bubble would

increase.

In Quarter IV/2016, the housing market showed some signs

of over supply in the premium segment while the demand in

HOUSING MARKET RISKS

RISK MANAGEMENT (continued)


One of the events mostly concerned by the real estate

industry has been the State Bank’s amendment draft

to Circular 36/2014/TT-NHNN. Accordingly, two points

aff ecting the real estate market: Keeping the ratio of short-

term capital used for medium-term and long-term loans at

60% in 2016, reducing it to 50% from January 1st 2017 and

to 40% from January 1st 2018. This amendment draft raises

the risk coeffi cient of real estate business and sets out a

roadmap of limiting credit fl owing into the real estate

market in two years from 2016.

In Vietnam, the development of real estate market has

been dependent on the credit for project development.

Accordingly, that the credit institutions tighten capital

supply will cause negative eff ects on the market. In the

short term, interest rate will rise, and it will be more diffi cult

to obtain credits for real estate development since the

banks have to restructure their capital bases. In the long

term, the real estate market will be under serious impact.

Therefore, the ability to mobilize capital from the banks has

been a major risk factor in Khang Dien’s business operation.

Mitigation measures

• The Company always maintains enough cash for

business operations through credit lines for project

fi nance from the largest and safest banks.

• The Company always manages cash fl ows and prioritizes

loan interest payments, settling loans before maturity

and restructuring loans with lower interest rates and or

using fi xed interest rates.

• Management continues to mobilize capital from the

shareholders and strategic investors in order to maintain

stable, low risk capital structure.

• Khang Dien always practice transparent project legal

framework, land entitlement, property ownership and

full infrastructure development before sales to earn the

trust from the banks.

Khang Dien reputation depends not only on the ability to

develop the projects but also on the quality of operational

management and after-sales services. At presence Vietnam

lacks property management professionals and after-

sales service providers because they are relatively new

professions.

Though Khang Dien carefully prepares information during

the project planning phase, the information is not perfect

and many factors evolve during project deployment phase,

resulting in many changes. On the other hand, since the

construction process is normally long, and because of the

changes during the construction, the fi nal products will

not completely follow the initial design. This directly aff ects

the reputation and brand name of Khang Dien.

The reputation also depends on quality of products and

customer care services after handover (after-sales services).

Any delay and poor quality in handling technical issues

will cause negative eff ects. The reputation depends on the

quality of operating management after the residents have

moved to live. Poor maintenance, slow and inadequate

repairs and management of internal utilities and services,

landscapes and especially lacks of security will increase the

risk of incidents as well as create negative impacts on the

Company.

Mitigation measures

• Khang Dien applies strict experience and reputation

criteria in screening for third parties performing

operation and maintenance activities. The Company also

has an inhouse team responsible for frequent monitoring

operation in the most eff ective way with quality assurance.

• Customer Care Center assigns after-sales specialists on

duty at the project sites after the residents have moved

in. The team of after-sales staff s coordinates with the

project’s technical team, security team and operational

team to solve the problems in the best way.

• When a problem attracts the attention of the media

industry, Marketing and PR Department will take

responsibility to share correct and fair information and

to maintain fair and open dialogue with the media, the

press and the community.

FINANCIAL RISKS REPUTATION RISKS

Mitigation measures

• To timely predict, respond and help the Company with

best preparation for the changes in legal environment,

Khang Dien maintains an inhouse legal department in

charge of monitoring and updating changes in laws

and timely advising Management on how to utilize

opportunities and minimize losses when a new policy

or law impacting the real estate market.

Khang Dien is exposed to legal risks associated with

changes in Government policies. In 2016, the laws

related to land, housing, real estate trading, construction,

and investment was still in the refi ning process, and the

guidelines still faced many obstacles when applying to the

practice.

In regard of procedures, there are some confl icts and

inconsistency among the legal documents, and it is

diffi cult to apply some new laws in practice due to the

lacks of by-law documents giving detailed guidelines for

land entitlement procedures, especially in the fi eld of land

using and owning.

The above-mentioned factors not only contribute to

increasing operating costs and project investment costs of

Khang Dien but also lead to disruptions, or even stagnation

in the project development and business operation at

Khang Dien.

LEGAL RISKS

For large-scale projects related to land clearance and

compensation and land use transformation, the Company

normally needs from 2 years to 3 years to complete the

process and complete all legal procedures to launch the

projects.

The time required for land clearance and compensation

and legal procedures usually depends on many unforeseen

factors, causing delays. Therefore, the Company cannot

actively control the project schedule in this context.

Mitigation measures

• Khang Dien has developed a process for implementing

the legal procedures professionally and quickly to ensure

project execution on schedule, earning credibility and trust

from customers.

• The Company has maintained professional and sustainable

relationships with Government authorities to constantly

be updated on the procedures for land clearance and

compensation, land ownership, and project investment.

• Khang Dien continuously holds dialogues and cooperates

with Government authorities, comply with the laws and

proactively fulfi ll all fi nancial obligations, taxes and other

expenses, etc. to ensure full entitlement.

• Khang Dien always cares about and support the

communities and the individuals aff ected by the

Company’s land clearance. The Company always makes

compensations to the aff ected parties at market prices

and implements fully the liabilities under State Regulation.

PROJECT PROGRESS RISKS

RISK MANAGEMENT (continued)


HOURSENJOYING THE GREEN AND MODERN LIVING SPACE Each product has typical features with

green space and river in combination

with innovative infrastructures. This

prime location is suitable to create a

modern and environment-friendly living

space, nourishing dreams of the future

generations.

SUSTAINABILITYREPORT

We determines that our Company

can only successfully implement its

sustainable development strategy

only when harmoniously combining

economic growth with fulfi lling

responsibilities with the environment,

community, and society.

Simultaneously, Khang Dien always

tries to balance the benefi ts between

the stakeholders and the Company at

presence and in the future in order to

implement the strategy.

OVER THE PAST 15 YEARS, KHANG DIEN HAS BEEN CONTRIBUTING TO THE LOCAL COMMUNITIES, THE SOCIETY AND THE IMPROVEMENT OF LIVING QUALITY THROUGH OFFERING MEANINGFUL UTILITIES TO THE HOMEBUYERS. WITH OUR CORE VALUES BASED ON “TRUE VALUES”, KHANG DIEN IS PROUD TO MARK ITS PRESENCE IN THE REAL ESTATE MARKET AND BRING “TRUE VALUES” TO ALL STAKEHOLDERS.

IS THE KEY FOR SUSTAINABLE DEVELOPMENT OF THE COMMUNITIES.

SCOPE, BOUNDARY AND CYCLE OF REPORT

The report is prepared in Vietnam for

real estate development and operations

of Khang Dien group of companies.

Information in this report is updated

for the fi scal year 2016, from January

1st 2016 to December 31st 2016.

This report includes the activities of

the Parent company, the subsidiaries

(except for Binh Chanh Construction

and Investment JSC. - a public company

and having its own sustainability report),

and the project management units

under the Parent company. The report

refl ects the business performance of the

group in 2016 and highlights the group’s

direction and goals for sustainable

development in the coming years.

METHOD OF DETERMINATION OF REPORT CONTENTS

Our approach to sustainable

development is based on our

core values of the past 15 years:

transparency and effi ciency, quality

focus, putting customer benefi ts

above all, compliance with the laws,

and contribution to the communities.

The issues related to sustainable

development are constantly reviewed

by Khang Dien in relation to current

activities so as to clearly determine

material issues and accordingly, to

review, improve and fully present in

the next sustainability reports.

CONTACT INFORMATION

We welcome feedback and suggestion to improve our practice of sustainability. Please

reach out, write or call us at:

• Website: https://www.khangdien.com.vn/ (Contact)

• Telephone: (84-8) 3820 8858 - Fax: (84-8) 3820 8859

• Address: Room 801, 8th Floor, Centec Tower,

72 - 74 Nguyen Thi Minh Khai Street, Ward 6, District 3, HCMC

• Email: [email protected]

CONTENTS OF SUSTAINABILITY REPORT

The sustainability report of 2016

is an integral part of the annual

report and marks the fi rst year

Khang Dien approaches reporting

in a more structural way about

the major aspects of sustainable

development as well as their impacts

on environment, society, economics

and corporate governance.

In 2016, Khang Dien applied

Guidelines on implementation of

sustainability report in Annual Report

Guidelines 2016 by Vietnam Annual

Report Awards (ARA), Instructions

for Disclosing Information about

Environment & Society of SSC, IFC

and the Circular No.155/2015/TT-

BTC by the Ministry of Finance giving

guidance on information disclosure

in the security market. Besides,

we refered to GRI4 Guidelines

to determine material areas

aff ecting the stakeholders to build

a comprehensive view in forming

the report contents and giving out

sustainable business strategies in the

future.

OVERVIEW OFSUSTAINABILITY REPORT

STABLERESIDENCE

102 103ANNUAL REPORT 2016 SUSTAINABLE DEVELOPMENT REPORT

STAKEHOLDERS ARE IMPORTANT FOR THE SUSTAINABLE DEVELOPMENT AND SUCCESS OF KHANG DIEN. WE ALWAYS LISTEN TO UNDERSTAND THE ASPIRATIONS AND THE NEEDS OF THE KEY STAKEHOLDERS VIA DIALOGUE OR EMAIL. On the 14th and 15th of September 2016, representatives

from Khang Dien presented more than 420 gift sets to

the children of Khang Dien’s residential communities. The

gift sets are a part of the warm and meaningful Middle

Autumn Festival that Khang Dien organized to celebrate

the beautiful childhood years of the children.

SUSTAINABLE RELATIONSHIPS WITH STAKEHOLDERS

CUSTOMERS

Customer feedback is vital to Khang Dien’s sustainable

development. Our customers are mostly homebuyers

around 30 years old who buy home to live in, have stable

income or available capital, and have strict requirements

for quality, infrastructures, and living environment.

Therefore, Khang Dien always fi nds ways to improve

business operations and quality of products and services to

bring better values to the customers. Customer satisfaction

and trust in our “true values” embedded in the living

environment created by Khang Dien will be the foundation

for the Company’s sustainable development.

Our Customer Care Center welcomes feedback from

the customers through multiple channels, including

interviewing residents and existing customers about

their satisfaction with our quality of products and services

(conduct interviews together with CBRE), maintaining

dialogue with the project visitors, and other customer care

activities associated with the Company’s tradition.

SOME EVENTS OF CUSTOMER CARE CENTER IN 2016

“Happy Moment” Competition was held by Khang Dien

to facilitate networking, sharing and cohesion in the

residential communities developed by Khang Dien, which

fosters a high-quality and civilized life.

“Happy Moment” Competition1

“Warm Middle Autumn Festival” program2

As part of the after-sales services, customer caring and

enhancing the spiritual life of the residents living at the

communities Khang Dien developed, representatives

from Khang Dien visited and gave calendar books on the

occasion of Dinh Dau Tet holidays 2017 to the households.

This activity not only shows the Company’s attention to the

residents but also expresses the Company’s appreciations

to the customers who always believe in and accompany

the Company.

Employees are the most valuable assets for the Company’s

sustainable development. Therefore, Khang Dien always

pays high attention to the investment in human resources,

in particular:

• Create a professional and fair working environment and

ensure stable income for all employees.

• Frequently open training courses on profession and

skills to work eff ectively.

• Apply policies of preferential treatment and rewards for

individuals with good performance in the year. At the

same time, studying to issue and modify policies for

transparent, fair salaries, bonuses, and allowances that

are reasonable with the eff orts and dedications of the

employees.

• Organize team-building, sport and entertainment

activities to care for the spiritual life of employee.

In addition, Human Resources Department maintains

regular dialogues with employees to share new ideas and

listen to their aspirations and legitimate demands on the

basis of respecting the employees.

Staff from HR Department focus on guiding and supporting

new employees to understand the basic values, vision,

mission, corporate culture and organizational structure of

the Company. The activities to support new employees are

usually maintained until fi nishing probationary period in

order to facilitate them to integrate with the existing team

and get to know their jobs better.

EMPLOYEES

Giving “Dinh Dau Tet holidays 2017 calendar books” to the residents3


Khang Dien determines the key stakeholders are the

parties creating eff ects or being aff ected by the Company’s

business operations, including customers, employees,

shareholders - investors, distributors, contractors -

suppliers, local authorities - state agencies, and the media

- the press. Khang Dien builds and develops sustainable

relationships with the key stakeholders with the desire of

meeting their long-term needs. The relationships are based

on trust, transparency and consistency in all of Khang

Dien’s activities.

In 2016, Khang Dien paid more attention to the issues

related to sustainable development. The Company actively

approached the stakeholders through multiple channels of

communication and joint activities. The mechanism for Khang

Dien’s engagement with its stakeholders are described below.

Khang Dien team of investor relation offi cers are responsible

for maintaining and supporting the contact and dialogue

between the Company’s management and the shareholders

as well as the investment community. Information about our

investor relations activities is presented in Page 43 - “Investor

Relations” in Annual Report 2016.

In December 2016, Khang Dien was honored with the

Certifi cate of Merit from the Chairman of HCMC People’s

Committee for the company’s achievements in building and

developing HCMC Real Estate Association in consecutive

years and for its contributions to the competition movement

on the occasion of the 3rd Congress of HCMC (2016 - 2021).

SHAREHOLDERS AND INVESTORS

The most important topics for dialogues between Khang

Dien and the contractors, suppliers are labor safety, health

of workers, and environmental protection. These topics have

an important infl uence and, thus, Khang Dien requests all

contractors and suppliers to maintain certain health and

safety policies for workers and take measures to minimize

the impacts on the environment.

The Company’s Project Management Units hold monthly

meetings with the leaders of contractors, suppliers about

labor safety and health of workers and environmental

protection. Contractors maintain regular meetings at site

every morning of the work day to inform the related contents

and draw lessons for better management. The Company’s

leadership, including the General Director and Deputy

General Directors, regularly pays a visit and inspects the job

sites to detect labor safety, site hygiene and environmental

protection issues.

DISTRIBUTORS, CONTRACTORS, AND SUPPLIERS

Khang Dien is a member of HCMC Real Estate Association,

and through the association we maintains dialogues with

the local authorities and State agencies over the topics

related to the business, including giving feedback on new

laws and the topics on sustainable development for the real

estate companies and the real estate market in general.

Strictly complying with the laws and regulations on tax

obligations and environment protections.

Actively coordinating with the local authorities in making

new investments and constructions to complete projects

one time, contributing to the State budget and create jobs

for the local communities.

STATE AGENCIES

Building a good relationship with the media and press on

the principle of transparency and legality.

The disclosed message and information are guaranteed for

accuracy and clarity to help the people have a corrective

view on the brand name as well as the development and

core values of the Company.

Calmly handling and correcting the false information that

may aff ect the Company’s reputation.

FOR MEDIA AND PRESS

Stakeholders Ways of engagement Main topics

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 effi ciency

• Job safety, worker health, and

environmental protection

Customers • 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 effi ciency and

work attitude of employees

Employees • Performance evaluation

• Internal training and guidance for

new employees

• Sport, team building activities

• Year-end party

• Gift giving on holidays

• Outing

• Effi ciency and skills

• Company policy

• Occupational safety and health

• Solidarity

• Coworker relationship

Shareholders and

Investors

• Quarterly meetings for business

performance

• Annual General Shareholder

Meeting, Extraordinary General

Shareholder Meeting

• Investor meetings

• Bilateral dialogue

• Project visits

• Exchange information via phone

and email

• Business result

• Operation status and operational

effi ciency

• Development direction and

strategy

State agencies • Report and request for advice and

guidance for implementation

• Participation in Real Estate

Associations

• Professional networking events

• Other exchange events

• Topics about laws and State

management

• Market trend

• Diffi culties of enterprises

For media and press • Interview

• Press release

• TVC advertisements, PR articles

• Disclosure on business result

• Information disclosure upon the

events

SUSTAINABLE RELATIONSHIPS WITH STAKEHOLDERS (continued)

MECHANISM FOR ENGAGEMENT WITH STAKEHOLDERS


To set the direction and boundary for 2016 sustainable

development report contents and preparation for the regular

report, Khang Dien Management undertook a materiality

assessment to defi ne what really matters to the Company and

to the key stakeholders. The determination and assessment

of material issues were based on the Company’s core values

of over the past 15 years of operations and development,

Guidelines on Annual Report 2016 by Vietnam Annual Report

Awards (ARA), Guideline on disclosure of information about

The above material issues have large infl uences and impact

both inside and outside the Company.

Khang Dien constantly explores new methods to improve

productivity and passion at work for the employees.

1. Business performance 2. Compliance with the laws

3. Corporate ethics

4. Corporate culture

5. Product responsibility

6. Environmental protection and Energy conservation

7. Occupational safety and health

8. Workforce relationships

9. Human resource development

10. Sharing with communities

environment & society of SSC and IFC, and the Circular no.

155/2015/TT-BTC by Ministry of Finance giving guidance on

information disclosure in securities market. In addition, Global

Real Estate Sustainability Benchmark (GRESB) and GRI G4

Construction and Real Estate Sector Disclosure were referred.

Accordingly, Khang Dien identifi ed 10 most important

material issues to the Company and to the stakeholders,

which are organized into four main groups as follows:

ECONOMIC EFFICIENCY


ENVIRONMENT & ENERGY

HUMAN

The goal of the Company is to develop quality projects

while using resources eff ectively and effi ciently,

contributes to the economic growth of HCMC, and creates

a working environment encouraging dedication and

performance.

Business performance plays an important role in creating

sustainable values for the Company and the stakeholders.

For further information, please see Report of Management in

Page 72 and Financial Statements in Page 124.

COMPLIANCE WITH THE LAWS

COMPLIANCE WITH THE LAWS


Khang Dien Management Team and the entire work forces

of Khang Dien always comply with the laws on corporate

governance and real estate business operations, including

the Enterprise Law 2014, Real Estate Business Law 2015,

Law on Construction, Law on Housing, etc. Over the

past 15 years, Khang Dien has been a leading company

in compliance with legal regulations on real estate

investment, property development and real estate services.

Khang Dien’s constant delivery of housing products with

transparent legal framework to the market over the past 15

years is a strong evidence of compliance.

Khang Dien Management applies the highest governance

standards prescribed by the laws (Law on Enterprise,

Circular No. 121/2012/TT-BTC stipulating corporate

governance applied to public companies and Circular No.

155/2015/TT-BTC by Ministry of Finance giving guidance

on information disclosure in securities market) and bases

upon the Company’s core values to implement rules on

management, governance procedure, and execution

including policies, inspection programs and process of

internal transactions, transactions of related parties and

risk management. Please see Corporate Governance for

further information in Page 88.

ASSESSMENT OF TOP MATERIAL ISSUES

BUSINESS PERFORMANCE


make empty promises or provide inaccurate information

to homebuyers and the market. This is very important for

the housing projects developed by the Company and as

such, the information about the functions, aesthetics and

architecture of the sample house printed on sales materials

is prepared as accurate as possible and closely to the actual

products handed over to the homebuyers.

Although Khang Dien cannot maintain an absolute

control of the product information released to the market

through the distributors, the Company always infl uence

the distributors to comply with business ethics through

training the sales team about project legality, planning,

technical infrastructure, social infrastructure and, especially,

reputation of the project owner. Khang Dien absolutely

prohibits the distributors to raise sales prices above those

given by Khang Dien to make quick profi ts.

Khang Dien approaches market competition in a positive

way through healthy competition. The Company’s

competitive advantage is based on selling skills,

professional brokerage and product diff erentiation. We

strictly prohibit any unfair competition.

Khang Dien’s culture is considered a brand

development policy that is shown in several

layers:

Besides, the corporate culture and characters are inherited and passed through generations of leadership who constantly

develop and refi ne Khang Dien’s corporate image in the future. At a deeper level, the corporate culture is the spirit and

value system of Khang Dien.

Some corporate characters of Khang Dien are:

Khang Dien totally prohibits all activities that may lead

to confl ict of interest with the Company in daily works,

business and coordination with related parties. The

Company’s Management applies the principles of splitting

responsibilities, cross-appraisal and cross-check, and

teamwork to facilitate employees to monitor and remind

each other.

At the highest level, the Board of Directors carefully review

Company’s important decisions related to large investments

before approval, and the Inspection Committee strictly

supervises the executions of the decisions. This will help

ensure the reasonableness of decision making and balance

of interests among the related parties.

PREVENTION OF CONFLICT OF INTEREST

Over the past 15 years, Khang Dien has always practiced

project development, sales and marketing based on

ethical principles and fairness. The Company prohibits

project development teams, sales and marketing teams to

BUSINESS ETHICS

OVER THE PAST 15 YEARS, KHANG DIEN HAS ALWAYS PRACTICED PROJECT DEVELOPMENT, SALES AND MARKETING BASED ON ETHICAL PRINCIPLES AND FAIRNESS. THE COMPANY PROHIBITS PROJECT DEVELOPMENT TEAMS, SALES AND MARKETING TEAMS TO MAKE EMPTY PROMISES OR PROVIDE INACCURATE INFORMATION TO HOMEBUYERS AND THE MARKET. THIS IS VERY IMPORTANT FOR THE HOUSING PROJECTS DEVELOPED BY THE COMPANY AND AS SUCH, THE INFORMATION ABOUT THE FUNCTIONS, AESTHETICS AND ARCHITECTURE OF THE SAMPLE HOUSE PRINTED ON SALES MATERIALS IS PREPARED AS ACCURATE AS POSSIBLE AND CLOSELY TO THE ACTUAL PRODUCTS HANDED OVER TO THE HOMEBUYERS.

THE CULTURE OF KHANG DIEN IS BUILT AND PROMOTED AROUND THE COMPANY’S TRADITION OF CONNECTING PEOPLE, PROMOTING CONTRIBUTIONS, AND INCREASING VALUES OF ALL EMPLOYEES IN ORDER TO BEST COMPLETE THE BUSINESS OBJECTIVES SET BY THE MANAGEMENT AND, AT THE SAME TIME, CONTRIBUTE TO THE SUSTAINABLE DEVELOPMENT OF THE COMPANY.

Culture is refl ected in the daily work through the communication language

with colleagues, partners, customers and in the business reports and

administrative procedures at the Company.

First layer

It is refl ected through working spirit the employees express through their

determination, their attitudes and reactions to the issues of right and wrong

and whether they create benefi t or loss to the Company or not.

Second layer

Culture is the foundation for employees’ actions. It is faith, perceptions,

thoughts, and emotion in sub-consciousness of each employee working at

Khang Dien. It is the default, distinction, and foundation for the values and

actions of each employee.

Third layer

1 2 3

Quality of products and

services is paramount.

Working environment

is friendly to promote

employees’ dedication and

long term commitment.

Professionalism and

responsibility are expressed in

the work performed.

CORPORATE ETHICS

CORPORATE CULTURE


KHANG DIEN’S CULTURE IS CLEARLY SHOWN THROUGH THE FOLLOWING VALUES:

• Employees are recognized and respected as an integral part of the general

development of Khang Dien, regardless of their positions.

• Employees are trained and are encouraged to participate in training to be

ready for new challenges.

• Build a dynamic and highly interactive working environment that facilitates

employees to strive to achieve higher goals and create sharings for all levels

and departments in the Company.

• The spirit of creativity, improvement, and innovation at work that brings

better effi ciency is always encouraged and appreciated.

• Attract and retain talents. Ensure employee job satisfaction.

• All policies, regulations, rules, code of ethics and other guidelines are well

explained for implementation and are clearly and practically implemented.

• Focus on fostering succession and expansion of recruitment, training and

development of young and suitable human resources.

Employees are the most valuable asset

• Every customer of Khang Dien is respected as a valued partner. Therefore, all

products and services are aimed at bringing satisfaction to the customers

and affi rming the position of Khang Dien in their minds.

• Constantly improve and complete customer care policies. Place reputation at

top to retain trust from customers, investors, shareholders and society.

• Maintain fair and transparent relationships with partners on the basis of

mutual benefi t; Bring worthy values to shareholders through profi t growth

based on the activities in compliance with the laws and business ethics.

Over the past 15 years, Khang Dien has been complying with the laws of land use,

housing, building, and real estate services. For our customers, we are committed to:

• Fulfi lling all requirements and obligations on land use rights, land entitlement,

project planning, fi re prevention and fi refi ghting, wastewater treatment,

infrastructure, housing design, and land entitlement before launching

housing products in the market.

• Handing over house and property ownership certifi cate no later than the day

specifi ed in the purchase contract and within the time period allowed by the

laws.

• Complying with the laws on purchase and sales of existing houses and

houses to be built in the future.

During the design and build processes, Khang Dien always sets the objectives and

requirements at the highest quality possible, not below Vietnamese Standards

and with reference to international standards such as BIS, AIS or Euro Code.

In terms of expertise, Khang Dien’s project management team has many years

of experience in design and construction management. The team’s practical

experiences are accumulated from Khang Dien’s outstanding projects such as

The Venica, Lucasta, and Melosa Garden and from the working time at leading

companies in Vietnam such as Meinhardt Group, Apave, SWA, MIA, Cofi co and

Coteccons.

To ensure product quality, Khang Dien works with leading partners in Vietnam

such as NQH, Kyta, Haysom (design consultants), HBC, Coteccons (construction

contractors), CBRE (operation management), and SCQC, Apvae (supervision-

quality management consultant). We are committed to providing product

warranty coverage not lower than the level required by the laws (in many cases

the warranty period exceeds one year).

After the project has been put into operation and the homebuyers have moved

in, Khang Dien assigns staff s from Project Management Unit and Customer Care

Center to be on duty at the project until the community management board

is established. Our management staff s regularly check and coordinate with the

design and construction contractors, material and equipment suppliers, and

operation managers to carry out not only the warranty obligations as agreed with

the customers but also regular maintenance for the projects or whenever there is

any technical problem.

For eff ective management, Khang Dien and the representatives from the

communities agree to issue regulations for the residences and assign personnel

to monitor compliance. Any questions and complaints from the residents will be

handled by the representatives from Khang Dien’s Customer Care Center (on duty

at the residence) in coordination with the operational manager within 24 hours

after verifi cation.

LEGAL COMMITMENTRESPECT PEOPLE

HANDLING QUESTIONS AND COMPLAINTS FROM THE RESIDENTS

• The development of Khang Dien’s products and projects cannot be separated

from the development of the communities. Therefore, Khang Dien aims to

off er high quality products and projects to co-develop with the communities

and society.

• Actively participate in bringing eff ective solutions to protect the environment

and the communities.

• Contribute to the local communities as a member of the society by supporting

and participating in charitable activities such as helping the poors, giving

supports to the victims of natural disasters.

Co-development with the communities and society

RESPECT COMMUNITIES

PROJECT QUALITY COMMITMENT

On the principle of mutual benefit

RESPECT PARTNERS

CORPORATE CULTURE (continued)

PRODUCT RESPONSIBILITY


IN THE GENERAL TREND OF PUBLIC COMPANIES AND REAL ESTATE ENTERPRISES TO PURSUE THE GOAL OF DEVELOPING GREEN PROJECTS, THE YEAR 2016 MARKS THE FIRST YEAR KHANG DIEN APPROACHES ENVIRONMENTAL PROTECTION MOVEMENT IN A MORE STRUCTURAL WAY.

AS A REAL ESTATE DEVELOPER WORKING DIRECTLY WITH DISTRIBUTORS, CONTRACTORS AND SUPPLIERS, KHANG DIEN PURSUES THE GOAL OF ENSURING SAFETY AND HEALTH AT THE CONSTRUCTION SITES, IN THE RESIDENTIAL COMPOUNDS AFTER THE PROJECTS COME INTO OPERATIONS, AND ESPECIALLY IN THE COMMUNITIES WHERE KHANG DIEN IS DOING BUSINESS.

In project development, the Company strictly adheres to

the construction standards and regulations and the laws

on occupational safety and fi re protection throughout the

development life cycle. To be specifi c, Khang Dien carefully

reviews the issues of safety, health and fi re prevention from

the architectural, structural design to MEP to landscape.

During construction, although Khang Dien cannot maintain

absolute control of the entire construction process, the

Company always actively guides and encourages the

contractors to put labor safety above all, maintain health for

workers, and pay attention to fi re prevention and fi refi ghting

in high-rise building projects.

In order to enhance the eff ectiveness of labor safety control,

maintain health and minimize the risk of fi re and explosion,

Khang Dien holds monthly meetings with contractors about

the topics and issues related to occupational safety and

fi re protection. In addition, at least once a quarter, Khang

Dien Management conducts unplanned inspections and

pays surprise visits to the project sites and the residential

communities to rectify and timely deal with issues.

In 2016, there were no fatal occupational accidents and no

fi res in the all of Khang Dien’s companies and units, including

member companies and project sites.

With the motto of harmonious development and in

consideration of climate changes, the Company focuses

on developing housing projects about 10km - 20km away

from the city center and in accordance with the city’s

master plan in District 2 and District 9, which helps reduce

the compression in urban land uses, traffi c congestion, and

dust and noise pollution. The projects developed by Khang

Dien avoid interference with natural geography, utilize the

geography to develop housing, maintain land for trees

and water surface (up to 60% of the project area), and limit

concreting to control fl ood.

ENVIRONMENTAL PROTECTION

As a real estate developer, Khang Dien is interested in

building an energy effi cient and environmentally friendly

society. Khang Dien always focuses on saving electricity

and water in daily activities as well as minimizing waste.

The Company maintains paper-saving culture through

reusing 100% of one-side printed paper and encourages

email in daily communication. At the fi eld offi ces of Project

Management units, subsidiaries, and Parent company, air

conditioning systems will automatically turn off after 6 p.m.

and turn on after 8 a.m. Similarly, offi ce lighting systems

will turn off after 6 p.m. and turn on locally at the desks

where employees work overtime.

At each project, rainwater is collected and waste water

is treated to meet the standards for watering trees. Air

conditioning systems, refrigerators, and high-power

electrical appliances used in the model houses are

using Inverter technology to save up to 40% of power

consumption. In design, Khang Dien pays attention to

natural lighting by planning layout of each house or the

entire building with at least two sides directly exposed

to nature. The typical house has ceiling height of 3m and

uses large glass panels of 2m - 2.7m in height so that

the residents do not need to use electric lights before 5

p.m., contributing to energy savings. Lighting equipment

selected is employing Led technology, saving up to 70%

of electricity consumption.

Similarly, Khang Dien’s designs give priority to natural

ventilation, minimizing the use of electric fans for forced

ventilation. In case the forced ventilation is required, the

fans with DC motor technology that reduce up to 30% of

power consumption are selected. For water savings, the

types of sanitary appliances, showers, faucets, etc. with low

fl ow are selected, for example, 3,8/4,5L dual-fl ush toilets of

Toto are used.

ENERGY SAVING

ENVIRONMENT PROTECTION AND ENERGY SAVING

OCCUPATIONAL SAFETY AND HEATH

of electricity consumption

Lighting equipment selected is employing Led technology,

saving up to

70%


KHANG DIEN CONSIDERS EMPLOYEES ITS MOST VALUABLE ASSET.

Khang Dien always prioritizes the obligations with

employees in order to create equality for the employees in

their relationships with the Company.

In 2016, Khang Dien continued signing and implementing

the collective bargaining agreement, contributing to the

balance of interests, creating a close bonding between the

employees and management. All Khang Dien’s employees

are entitled to important policies in the collective bargain

agreement. In particular, the agreement gives detailed

stipulations on salary, bonus, allowance and other

remunerations, and the creation of a safe, comfortable

working environment for the workforce. In contrast, the

employees are obliged to complete the assigned works, to

comply with the working regulations of the Company.

This agreement is negotiated and signed by the

representatives of employees and the employer on the

principle of voluntariness, equality and publicity.

Therefore, the Company continuously amends policies on

salary, bonus, welfare, etc. to enhance the quality of human

resources.

Social insurance - Health insurance - Unemployment

insurance and periodic health examination are fully covered

in accordance with the laws and the Company’s general

policies.

Besides, the Company applies the policy of fi ve working days

and 40 working hours per week. This enables the employees

to have more time for personal life.

In addition, the Company cares for the spiritual life of

employees through social activities such as organizing

birthday parties for employees, giving gifts to female

employees on Woman Day, supporting employees when

they are sick, etc.

Every year the Company fi nances overseas travels for

the whole staff to relax and visit the typical works and

architecture in developed countries in Southeast Asia such as

Singapore, Malaysia, Thailand, etc. This is also an opportunity

for staff to broaden knowledge, enhance vision and develop

professional skills.

EMPLOYEE POLICY

Khang Dien always makes every eff ort to improve the

average income of employees by reviewing and adjusting

salaries to the labor market’s medium level and the

Company’s business performance.

To motivate employees, the Company always rewards

employees having excellent performances or great

contributions to the Company’s development. The reward

policy at Khang Dien includes bonus on the occasion of

major holidays, year-end bonus, bonus for completion

ahead of schedule, etc.

Besides good salary, bonus and welfare, Khang Dien’s

employees benefi t from ESOP off ered to all employees who

are working in Khang Dien. This increases the cohesion and

motivation for employees and contributes to the general

development of the Company.

In human resource development, Khang Dien pays

attention to updating salary and bonus policy to ensure

growth in employee incomes on the basis of equity.

Accordingly, the employee income level tends to increase

compared to previous years.

SALARY AND BONUS POLICY

INSURANCE AND OTHER WELFARE POLICIES

100% KHANG DIEN’S EMPLOYEES ARE ENTITLED TO IMPORTANT POLICIES IN THE COLLECTIVE BARGAIN AGREEMENT.

through practical exchanges as well as makes the staff

more confi dent in proposing solutions. Management also

grasps the strengths and shortcomings of employees to

best use the strengths or to overcome the shortcomings.

Khang Dien constantly develops a professional,

enthusiastic, experienced and dedicated workforce. The

Company always focuses on building a workforce with not

only high professionalism but also good working attitude,

aiming toward a professional and eff ective team.

Khang Dien’s employees are always given favorable

conditions to train and promote. Succession planning is

conducted based on the assessment of current personnel

who have good capability and desire to work for the

Company in the long term. Accordingly, the Company

maintains programs to develop the potential personnel to

suitable management positions.

Khang Dien’s human resources development focuses on

talent management and is widely practiced in functional

departments, not just in Human Resource Department.

Even in unfavorable economic conditions, good human

resource management is the key factor for development

and maintaining competitive advantage for the Company.

Human resource development in Khang Dien is inherited

and developed. New and old values are intertwined, shared

and complemented with each other, creating the core

values of Khang Dien. This has made Khang Dien’s initial

breakthrough in the past years and will promote Khang

Dien’s overall strengths in new challenges.

The philosophy of Human Resource Management at Khang

Dien is based on daily interactions between management

and staff on how to achieve the best results. This helps

the staff to focus more on problem solving and also

creates opportunities for management to train employees

HUMAN RESOURCE DEVELOPMENT AT KHANG DIEN IS INHERITED AND DEVELOPED. NEW AND OLD VALUES ARE INTERTWINED, SHARED AND COMPLEMENTED WITH EACH OTHER, CREATING THE CORE VALUES OF THE COMPANY.

WORKFORCE RELATIONS

HUMAN RESOURCE DEVELOPMENT


In addition, Khang Dien constantly improves working

environment to enhance the cohesion of employees,

implements employee-centric welfare policies to increase

employee benefi ts, and acknowledges the contributions of

employees to the Company’s development.

Khang Dien always focuses on building a friendly working

environment for development. In 2016, the Company held

many activities for employees, including “Looking for Khang

Dien representative face” competitions, entertainment

programs on special occasions such as year-end party, etc.

In addition, the Company pays attention to recruitment

and training policies to meet the Company’s needs for

expansion and new development. For instance, in 2016

the policy on developing and attracting quality human

resources having deep practical relevant experience

suitable for the Company’s short-term and long-term

development strategies achieved certain results.

In 2016, Khang Dien recruited 50 new positions accross

departments. Recruitments were widely announced

throughout the Company’s communication system, via

the Company’s website and mass media to ensure equal

opportunities for all candidates and, thereby, to select the

employees with appropriate qualifi cations, good morals,

and long-term commitments with the Company. Each

position is subject to specifi c criteria and is recruited in

accordance with the Company’s procedures.

The policy on human resource training and development is

considered one of Khang Dien’s sustainable development

strategies. The Company encourages employees to

participate in training courses domestically and abroad to

improve their professional skills to meet the Company’s

needs. Training programs mainly focus on the practical

needs of the work such as project management, fi nancial

management, human resource management, etc. and soft

skills such as communication, presentation, negotiation.

HUMAN RESOURCE DEVELOPMENT (continued)

DEVELOP A STRONG, ACTIVE, CREATIVE WORKFORCE


KHANG DIEN ALWAYS CONSIDERS SOCIAL CONTRIBUTIONS AS A PART OF THE COMPANY’S RESPONSIBILITIES TO THE COMMUNITIES IN ORDER TO CONTRIBUTE TO THE LONG-TERM AND SUSTAINABLE DEVELOPMENT OF VIETNAM SOCIETY. KHANG DIEN DEMONSTRATES ITS SOCIAL RESPONSIBILITY THROUGH PRACTICAL ACTIONS SUCH AS CARING FOR THE COMPANY’S EMPLOYEES, CREATING STABLE JOBS, DEVELOPING SUSTAINABLE BUSINESS, AND CREATING A GOOD WORKING ENVIRONMENT SO THAT THE EMPLOYEES CAN ENJOY A STABLE AND HAPPY LIFE. WITH KHANG DIEN, THESE ACTIONS ALSO CONTRIBUTE TO THE BUILDING OF A CIVILIZED AND PROSPEROUS SOCIETY. THIS IS THE SOCIAL RESPONSIBILITY THAT THE COMPANY ALWAYS PRIORITIZES.

In addition, over the past years, Khang Dien has always been active in supporting the poors by sponsoring and encouraging

employees to participate in the programs of gratitude, poverty reduction, supporting the fl ood victims, etc. as well as

organizing charity activities to support the poors.

COMMUNITY - SOCIAL ACTIVITIES

Recognizing and promoting the spirit of “Living is giving, not only receiving for yourselves” and deeply

understanding the diffi culties of the people in An Thoi Dong Commune (Can Gio District - HCMC), Khang Dien

donated 155 gift sets with total value of VND116,500,000 to facilitate a prosperous Tet holidays for them.

1 JANUARY 10TH 2016

To encourage and maximize the spirit of solidarity and jointly building a wealthy and strong country of the

Vietnamese youth and students, Khang Dien supported Vietnam National University Ho Chi Minh City to

successfully organize “Green Summer Volunteer Campaign” - a meaningful activity that left deep impressions in

the heart of each participant.

2 JUNE 23RD 2016

Understanding and sharing with the unfortunate lives, Khang Dien donated VND50,000,000 to support The

Ho Chi Minh City Association for the Support of People with Disabilities and Orphans, motivating them to

overcome the diffi culties ahead.

6 JANUARY 10TH 2017

With the spirit of sharing, Khang Dien assigned staff s to visit and give 100 gift sets to 80 pupils and 20

disadvantaged families at the meeting hall of Thanh Hai Commune, Thanh Phu District, Ben Tre Province.

Moreover, Khang Dien representatives visited 10 families living under hardship and gave 10 gift sets with the

value of VND100,000,000.

3 OCTOBER 8TH 2016

Thanh Phong Commune is one of the most remote and poorest coastal communes in Ben Tre Province. Due to

inconvenient geographical conditions, especially salt and aluminum contamination, the people here cannot drill

water wells. They do not have fresh water and have to use rainwater for all living needs. Recognizing the needs

for clean water of the people in this commune, in 2016 Khang Dien donated 70 plastic water tanks with capacity

of 1,200 liters worth a value of VND118,300,000.

4 NOVEMBER 5TH 2016

With the spirit of solidarity, for many years, Khang Dien’s staff s have joined with the Company in volunteering

activities such as contributing VND50,000,000 to the Blind Association of Ben Tre Province, supporting social

security in My Phu Commune, etc.

5

IN THE FUTURE, THE COMPANY WILL ALWAYS BE INTERESTED IN COMMUNITY SERVICE ACTIVITIES. THE COMPANY WILL ACTIVELY DEVELOP THESE ACTIVITIES BOTH IN QUALITY AND QUANTITY TO BUILD A BETTER SOCIETY.

SOME TYPICAL ACTIVITIES


VND BILLIONOF TOTAL

CONSOLIDATED ASSETS

The year 2016 witnessed the

Company’s growth in revenue

and profi t, to be specifi c, revenue

increased by 274% and profi t after

tax belong to the parent company’s

shareholders increased by 47%

compared to the same period.

FINANCIALSTATEMENTS

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 Certifi cate No. 4103006559 issued by the Department of

Planning and Investment 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 with code KDH in accordance with Decision

No. 11/QD-SGDHCM issued by the Ho Chi Minh City Stock Exchange on 21 January 2010.

The current principal activities of the Company 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 houses construction scheme to transfer land use rights,

undertake engineering and industrial construction works, and to provide real-estate consulting services.

The Company’s registered head offi ce is located at Room 801, 8th Floor, Centec Tower, 72-74 Nguyen Thi Minh Khai Street,

Ward 6, District 3, 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:

Mr Ly Dien Son Chairman

Ms Nguyen Thi Dieu Phuong Member

Ms Mai Tran Thanh Trang Member

Mr Nguyen Dinh Bao Member

Mr Le Hoang Son Member

BOARD OF SUPERVISION

Members of the Board of Supervision during the year and at the date of this report are:

Ms Vuong Hoang Thao Linh Head

Mr Dao Cong Dat Member

Mr Hoang Manh Phong Member

MANAGEMENT

Members of the Management during the year and at the date of this report are:

Mr Ly Dien Son General Director

Ms Mai Tran Thanh Trang Deputy General Director

Mr Nguyen Dinh Bao Deputy General Director

Mr Nguyen Duc Trong Deputy General Director resigned on 15 September 2016

Ms Ngo Thi Mai Chi Deputy General Director

LEGAL REPRESENTATIVE

The legal representative of the Company during the year and at the date of this report is Mr Ly Dien Son.

Ms Ngo Thi Mai Chi is authorised by Mr Ly Dien Son to sign the consolidated fi nancial statements for the year ended 31

December 2016 in accordance with the Letter of Authorisation No. 03/2016/QD-KD dated 4 January 2016.

AUDITORS

The auditor of the Company is Ernst & Young Vietnam Limited.

Management of Khang Dien House Trading and Investment Joint Stock Company (“the Company”) is pleased to present

its report and the consolidated fi nancial statements of the Company and its subsidiaries (collectively referred to as “the

Group”) for the year ended 31 December 2016.

MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the consolidated fi nancial statements of each fi nancial year which give a true and fair view of

the consolidated fi nancial position of the Group and of the consolidated results of its operations and its consolidated cash

fl ows for the year. In preparing those consolidated fi nancial 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 fi nancial statements; and

• prepare the consolidated fi nancial 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 fi nancial 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 confi rmed that it has complied with the above requirements in preparing the accompanying consolidated

fi nancial statements.

STATEMENT BY MANAGEMENT

Management does hereby state that, in its opinion, the accompanying consolidated fi nancial statements give a true and

fair view of the consolidated fi nancial position of the Group as at 31 December 2016 and of the consolidated results of its

operations and its consolidated cash fl ows for the year then ended in accordance with Vietnamese Accounting Standards,

Vietnamese Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of

consolidated fi nancial statements.

For and on behalf of Management:

Ly Dien SonGeneral Director

23 March 2017

GENERAL INFORMATION REPORT OF MANAGEMENT

Ly Dien SonGeneral Director

23 March 2017

124 125ANNUAL REPORT 2016 FINANCIAL STATEMENTS

TO: THE SHAREHOLDERS OF KHANG DIEN HOUSE TRADING AND INVESTMENT JOINT STOCK COMPANY

We have audited the accompanying consolidated fi nancial statements of Khang Dien House Trading and Investment Joint

Stock Company (“the Company”) and its subsidiaries (collectively referred to as “the Group”) as prepared on 23 March

2017 and set out on pages 128 to 169, which comprise the consolidated balance sheet as at 31 December 2016, and the

consolidated income statement and consolidated cash fl ow statement for the year then ended and the notes thereto.

MANAGEMENT’S RESPONSIBILITY

Management is responsible for the preparation and fair presentation of these consolidated fi nancial statements in

accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory

requirements relevant to preparation and presentation of the consolidated fi nancial statements, and for such internal

control as management determines is necessary to enable the preparation and presentation of consolidated fi nancial

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 fi nancial 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 fi nancial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated

fi nancial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the

risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those

risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the

consolidated fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but

not for the purpose of expressing an opinion on the eff ectiveness 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 fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion, the consolidated fi nancial statements give a true and fair view, in all material respects, of the consolidated

fi nancial position of the Group as at 31 December 2016, and of the consolidated results of its operations and its

consolidated cash fl ows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese

Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of the

consolidated fi nancial statements.

ERNST & YOUNG VIETNAM LIMITED

Le Quang Minh Deputy General Director Audit Practicing Registration Certifi cateNo. 0426-2013-004-1

Nguyen Thanh SangAuditorAudit Practicing Registration Certifi cate No. 1541-2013-004-1

Ho Chi Minh City, Vietnam

23 March 2017

INDEPENDENT AUDITORS’ REPORTReference: 60766189/18707863-HN

ERNST & YOUNG VIETNAM LIMITED

Le Quang Minh Nguyen Thanh Sang


VND’000

Code ASSETS Notes Ending balance Beginning balance

100 A. CURRENT ASSETS 7,241,327,083 7,635,495,663

110 I. Cash and cash equivalents 4 1,059,489,169 982,506,232

111 1. Cash 629,593,202 327,058,577

112 2. Cash equivalents 429,895,967 655,447,655

120 II. Short-term investment 510,000 44,010,000

123 1. Held-to-maturity investments 510,000 44,010,000

130 III. Current accounts receivable 1,485,091,191 653,811,135

131 1. Short-term trade receivables 5.1 724,960,167 140,792,661

132 2. Short-term advances to suppliers 5.2 469,339,840 437,470,264

136 3. Other short-term receivables 6 294,115,578 79,296,364

137 4. Provision for short-term doubtful receivables 5.1 (3,324,394) (3,748,154)

140 IV. Inventories 7 4,617,788,265 5,865,283,119

141 1. Inventories 4,617,788,265 5,865,283,119

150 V. Other current assets 78,448,458 89,885,177

151 1. Short-term prepaid expenses 24,403,102 19,048,337

152 2. Value-added tax deductible 46,951,778 70,561,966

153 3. Tax and other receivables from the State 7,093,578 274,874

200 B. NON-CURRENT ASSETS 695,584,455 907,442,132

210 I. Long-term receivables 85,444,073 102,943,172

211 1. Long-term trade receivables 5.1 74,741,495 87,740,748

212 2. Long-term advances to suppliers 5.2 5,640,101 7,776,784

216 3. Other long-term receivables 6 14,848,477 15,211,640

219 4. Provision for doubtful long-term receivables 5.1, 6 (9,786,000) (7,786,000)

220 II. Fixed assets 27,546,965 31,676,523

221 1. Tangible fi xed assets 8 27,488,654 31,570,764

222 Cost 88,206,671 87,696,935

223 Accumulated depreciation (60,718,017) (56,126,171)

227 2. Tangible fi xed assets 9 58,311 105,759

228 Cost 1,786,749 1,786,749

229 Accumulated amortisation (1,728,438) (1,680,990)

230 III. Investment properties 10 81,725,597 84,913,865

231 1. Cost 127,557,936 131,865,214

232 2. Accumulated depreciation (45,832,339) (46,951,349)

240 IV. Long-term assets in progress 272,425,330 439,962,190

242 1. Construction in progress 11 272,425,330 439,962,190

250 V. Long-term investments 12 208,584,801 226,571,499

252 1. Investments in associates 193,015,770 210,515,935

253 2. Investment in other entity 17,135,455 17,135,455

254 3. Provision for diminution in value of long-term investments (1,566,424) (1,079,891)

260 VI. Other long-term assets 19,857,689 21,374,883

261 1. Long-term prepaid expenses 3,797,804 4,467,670

262 2. Deferred tax assets 26.3 5,224,286 3,937,866

269 3. Goodwill 14 10,835,599 12,969,347

270 TOTAL ASSETS 7,936,911,538 8,542,937,795

VND’000

Code RESOURCES Notes Ending balance Beginning balance

300 C. LIABILITIES 3,539,099,200 4,369,914,071

310 I. Current liabilities 1,272,169,292 1,037,388,780

311 1. Short-term trade payables 15.1 80,103,089 48,948,085

312 2. Short-term advances from customers 15.2 670,114,574 500,980,970

313 3. Statutory obligations 16 179,043,886 105,562,090

314 4. Payables to employees 4,134,796 6,862,257

315 5. Short-term accrued expenses 17 50,391,260 50,044,620

318 6. Short-term unearned revenues 18 8,045,738 2,600,794

319 7. Other short-term payables 19 74,976,265 88,846,528

320 8. Short-term loans 20 194,351,572 218,819,525

322 9. Bonus and welfare fund 11,008,112 14,723,911

330 II. Non-current liabilities 2,266,929,908 3,332,525,291

331 1. Long-term trade payables 15.1 176,432 50,657,501

332 2. Long-term advances from customers 15.2 80,629,339 82,010,966

333 3. Long-term accrued expenses 17 88,832,160 106,699,017

336 4. Long-term unearned revenues 18 210,189,314 208,197,968

337 5. Other long-term liabilities 19 101,197,965 118,060,269

338 6. Long-term loans and debts 20 1,699,929,119 2,699,216,325

341 7. Deferred tax liabilities 26.3 84,038,381 65,914,288

342 8. Long-term provisions 1,937,198 1,768,957

400 D. OWNERS’ EQUITY 4,397,812,338 4,173,023,724

410 I. Capital 4,397,812,338 4,173,023,724

411 1. Share capital 21.1 2,339,998,920 1,800,000,000

411a - Shares with voting rights 2,339,998,920 1,800,000,000

412 2. Share premium 21.1 619,915,240 1,159,914,160

418 3. Investment and development fund 21.1 47,936,288 34,915,354

421 4. Undistributed earnings 21.1 468,978,713 262,238,257

421a - Undistributed earnings up to the end of prior year 97,203,991 8,880,729

421b - Undistributed earnings of current year 371,774,722 253,357,528

429 5. Non-controlling interests 920,983,177 915,955,953

440 TOTAL LIABILITIES AND OWNERS’ EQUITY 7,936,911,538 8,542,937,795

B01-DN/HN

CONSOLIDATED BALANCE SHEET as at 31 December 2016

Nguyen Tran Cam HienPreparer

Nguyen Quoc AnChief Accountant

Ngo Thi Mai ChiDeputy General Director

23 March 2017


VND’000

Code ITEMS Notes Current year Previous year

01 1. Revenue from sale of goods and rendering of services 22.1 3,938,432,166 1,051,919,567

02 2. Deductions 22.1 (6,789,172) (1,979,159)

10 3. Net revenue from sale of goods and rendering of services 22.1 3,931,642,994 1,049,940,408

11 4. Cost of goods sold and services rendered 23 (2,951,969,940) (712,293,831)

20 5. Gross profi t from sale of goods and rendering of services 979,673,054 337,646,577

21 6. Finance income 22.2 16,495,930 79,355,805

22 7. Finance expenses 24 (110,647,824) (59,149,887)

23 - In which: Interest expense (8,648,089) (8,513,956)

24 8. Share of profi t of associates 10,724,635 14,909,885

25 9. Selling expenses (173,123,320) (61,982,142)

26 10. General and administrative expenses (117,510,214) (76,331,379)

30 11. Operating profi t 605,612,261 234,448,859

31 12. Other income 25 13,804,653 98,911,387

32 13. Other expenses 25 (36,818,962) (16,099,085)

40 14. Other (loss) profi t 25 (23,014,309) 82,812,302

50 15. Accounting profi t before tax 582,597,952 317,261,161

51 16. Current corporate income tax expense 26.2 (160,404,227) (47,325,157)

52 17. Deferred income tax expense 26.3 (16,837,673) (1,492,591)

60 18. Net profi t after tax 405,356,052 268,443,413

61 19. Net profi t after tax attributable to shareholders of the parent 371,774,722 253,357,528

62 20. Net profi t after tax attributable to non-controlling interests 33,581,330 15,085,885

70 21. Basic earnings per share 28 1,59 1,02

71 22. Diluted earnings per share 28 1,59 1,02

VND’000


I. CASH FLOWS FROM OPERATING ACTIVITIES

01 Profi t before tax 582,597,952 317,261,161

Adjustments for:

02 Depreciation (including amortisation of goodwill)8, 9, 10,

149,847,117 2,800,949

03 Provision 2,062,773 1,513,155

05 Profi ts from investing activities (27,220,566) (193,071,126)

06 Interest expenses 24 8,648,089 8,513,956

08 Operating profi t before changes in working capital 575,935,365 137,018,095

09 (Increase) decrease in receivables (629,467,719) 368,351,152

10 Decrease (increase) in inventories 1,424,146,799 (454,600,244)

11 Increase in payables 109,012,971 210,496,836

12 Increase in prepaid expenses (4,684,899) (19,795,536)

14 Interest paid (145,678,130) (19,285,993)

15 Corporate income tax paid (92,391,951) (34,888,013)

17 Other cash outfl ows from operating activities (39,387,120) (2,466,657)

20 Net cash fl ows from operating activities 1,197,485,316 184,829,640

II. CASH FLOWS FROM INVESTING ACTIVITIES

21 Purchase of fi xed assets and other long-term assets (4,308,358) (7,924,229)

22 Proceeds from disposal of long-term assets - 2,596,182

24 Collection of term deposits 43,500,000 -

25Payments for investments in other entities (net of cash

acquired)- (2,111,911,540)

26 Proceeds from sale of investments in other entities - 111,080,340

27 Interest and dividends received 47,072,412 12,144,584

30 Net cash fl ows from (used in) investing activities 86,264,054 (1,994,014,663)

III. CASH FLOWS FROM FINANCING ACTIVITIES

31 Issuance of new shares 560,000 1,605,786,551

33 Drawdown of borrowings 1,737,593,712 2,798,056,427

34 Repayment of borrowings (2,818,920,145) (1,946,055,857)

36 Dividend paid 21.2 (126,000,000) (100,784,572)

40 Net cash fl ows (used in) from fi nancing activities (1,206,766,433) 2,357,002,549

B02-DN/HN B03-DN/HN




23 March 2017

CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2016

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2016


CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2016 (continued)

VND’000


50 Net increase in cash and cash equivalents 76,982,937 547,817,526

60 Cash and cash equivalents at beginning of year 982,506,232 434,688,706

70 Cash and cash equivalents at end of year 4 1,059,489,169 982,506,232

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 Certifi cate 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 with code KDH in accordance with

Decision No. 11/QD-SGDHCM issued by the Ho Chi Minh City Stock Exchange 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

houses construction scheme to transfer land use rights, undertake engineering and industrial construction works,

to provide real-estate consulting services, to trade industrial infrastructure, to provide construction consulting, site

clearance and brokerage on land properties.

The Company’s registered head offi ce is located at Room 801, 8th Floor, Centec Tower, 72-74 Nguyen Thi Minh Khai

Street, Ward 6, District 3, Ho Chi Minh City, Vietnam.

The number of Group’s employees as at 31 December 2016 was 339 (31 December 2015: 221).Nguyen Tran Cam HienPreparer



23 March 2017

B03-DN/HN B09-DN/HN

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS as at 31 December 2016 and for the year then ended


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.9 2. BASIS OF PREPARATION

2.1 Accounting standards and system

The consolidated fi nancial 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


• Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese


• 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 fi nancial 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 fi nancial position, consolidated results of operations and consolidated cash

fl ows 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 fi scal year applicable for the preparation of its consolidated fi nancial statements starts on 1 January and

ends on 31 December.

2.4 Accounting currency

The consolidated fi nancial statements are prepared in VND which is also the Group’s accounting currency.

2.5 Basis of consolidation

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries for the

year ended 31 December 2016.

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 fi nancial 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 profi t 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, separately from the parent shareholders’ equity.

Impact of change in the ownership interest of a subsidiary, without a loss of control, is recorded in retained earnings.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS as at 31 December 2016 and for the year then ended (continued) B09-DN/HN

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 insignifi cant risk of change in value.

3.2 Inventories

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.

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

Net realisable value 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 profi t or loss on disposal is determined with reference to the specifi c

costs incurred on the property sold and an allocation of any non-specifi c costs based on the relative size of the

property sold.

3.3 Receivables

Receivables are presented in the consolidated fi nancial 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 expense in the consolidated income statement.

3.4 Fixed assets

Fixed assets are stated at cost less accumulated depreciation and amortisation.

The cost of a fi xed asset comprises its purchase price and any directly attributable costs of bringing the fi xed asset

to working condition for its intended use.

Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and

expenditures for maintenance and repairs are charged to the consolidated income statement as incurred.

When fi xed assets are sold or retired, any gain or loss resulting from their disposal (the diff erence between the net

disposal proceeds and the carrying amount) is included in the consolidated income statement.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 fulfi lment of the arrangement is dependent on the use

of a specifi c 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 fi xed assets and amortisation of intangible 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

Offi ce equipment 3 years

ISO certifi cate and 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 recognized is added to the net

book value of the investment property when it is probable that future economic benefi ts, in excess of the originally

assessed standard of performance of the existing investment property, will fl ow 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

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 benefi t is expected from its disposal. The diff erence

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 capitalized 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 capitalized 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 benefi ts are generated

in relation to these expenses.

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. Identifi able assets and liabilities and

contingent liabilities assumed in a business combination are measured initially at fair values at the date of business

combination.

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 identifi able 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 diff erence is recognized directly in the consolidated income statement. After initial recognition, goodwill is

measured at cost less any accumulated amortization. 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.

3.11 Investments

Investments in associates

The Group’s investment in its associate is accounted for using the equity method of accounting. An associate is an

entity in which the Group has signifi cant infl uence that is neither subsidiaries nor joint venture. The Group generally

deems they have signifi cant infl uence if they have from and above 20% of the voting rights.

Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post acquisition

changes in the Group’s share of net assets of the associates. Goodwill arising on acquisition of the associate is

included in the carrying amount of the investment. Goodwill is not amortised and subject to annual review for

impairment. The consolidated income statement refl ects the share of the post-acquisition results of operation of

the associate.


3.11 Investments (continued)

Investments in associates (continued)

The share of post-acquisition profi t (loss) of the associates is presented on the face of the consolidated income

statement and its share of post-acquisition movements in reserves is recognized in reserves. The cumulative post-

acquisition movements are adjusted against the carrying amount of the investment. Dividend received from

associates reduces the carrying amount of the investment.

The fi nancial statements of the associates are prepared for the same reporting year and use the same accounting

policies as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those

of the Group.

Investments in other entities

Investments in other entities are stated at their acquisition costs.

Provision for investments

Provision is made for any diminution in value of the investments in capital of other entities at the balance sheet

date in accordance with the guidance under Circular No. 228/2009/TT-BTC dated 7 December 2009 and Circular

No. 89/2013/TT-BTC dated 28 June 2013 issued by the Ministry of Finance. Increases or decreases to the provision

balance are recorded as fi nance expense in the consolidated income statement.

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 fi nancial statements and deducted against the value of such investments.

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.




3.14 Appropriation of net profits

Net profi t after tax (excluding negative goodwill arising from a bargain purchase) is available for appropriation to

shareholders after approval in 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 profi t 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 benefi ts and improvement

of the employees’ benefi ts, 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 benefi ts will fl ow 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 specifi c recognition criteria must also be met before

revenue is recognised:

Sale of completed property

A property is regarded as sold when the signifi cant risks and returns have been transferred to the buyer, which is

normally on unconditional exchange of contracts. For conditional exchanges, sales are recognized only when all the

signifi cant conditions are satisfi ed.

Sale of industrial plots and related infrastructure

When the lease period is more than 90% of the useful life of the assets, the Company recognised the sales from lease

of land lots and related infrastructures at the entire rental amount received in advance when all these conditions

are met:

a. The lessee is not entitled to cancel the lease contract and the lessor has no obligation to repay the amount

received in advance in all cases and in all forms;

b. The amount received in advance from the lease is not less than 90% of the total lease amount expected to get

under the contract during the lease term and the lessee must pay the entire amount of lease within 12 months

from the beginning of the lease;

c. Almost all the risks and benefi ts associated with ownership of the leased asset are transferred to the lessee;

d. The Company must estimate relatively the full cost of the lease.

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.


3.15 Revenue recognition (continued)

Rendering of services

Revenues are recognised upon completion of the services provided.

Interest

Revenue is recognised as the interest accrues (taking into account the eff ective yield on the asset) unless collectability

is in doubt.

Dividend

Income is recognised when the Group’s entitlement as an investor to receive the dividend is established.

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 off set when there is a legally enforceable right for the Group to off set

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 diff erences at the balance sheet date between the

tax base of assets and liabilities and their carrying amount for fi nancial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary diff erences.

Deferred tax assets are recognised for all deductible temporary diff erences, carried forward unused tax credit and

unused tax losses, to the extent that it is probable that taxable profi t will be available against which deductible

temporary diff erences, carried forward unused tax credit and unused tax losses can be utilised.

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.




3.16 Taxation (continued)

Deferred tax (continued)

Deferred tax assets and liabilities are off set when there is a legally enforceable right for the Group to off set 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.

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 suffi cient taxable profi t 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 profi t will allow the deferred tax assets to

be recovered.

3.17 Earnings per share

Basic earnings per share amount is computed by dividing net profi t for the year attributable to ordinary shareholders

of the Group (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 profi t after tax attributable to ordinary equity

holders of the Group (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 diff erent from those of other segments. As the Group’s revenue

and profi t 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.

4. CASH AND CASH EQUIVALENTS

VND’000

Ending balance Beginning balance

Cash on hand 5,407,855 3,462,062

Cash in banks 624,185,347 323,596,515

Cash equivalents (*) 429,895,967 655,447,655

TOTAL 1,059,489,169 982,506,232

(*) Cash equivalents represent short-term bank deposits with maturity of less than three months and earn interest

at the rate from 4.3% to 6.4% per annum.

5. TRADE RECEIVABLES AND ADVANCES TO SUPPLIERS

5.1 Trade receivables

VND’000


Short-term 724,960,167 140,792,661

Trade receivables from sales of residential land properties to customers 723,683,404 139,515,898

- Thuan Phat Real Estate Company Limited 392,178,240 -

- Cuu Long Real Estate Company Limited 94,083,090 -

- Others 237,422,074 139,515,898

Trade receivables from a related party (Note 27) 1,276,763 1,276,763

Long-term 74,741,495 87,740,748

Trade receivables from customers 74,741,495 87,740,748

TOTAL 799,701,662 228,533,409

Provision for short-term doubtful receivables (3,324,394) (3,748,154)

Provision for long-term doubtful receivables (2,000,000) -

NET 794,377,268 224,785,255

5.2 Advances to suppliers

VND’000


Short-term 469,339,840 437,470,264

Advances to subcontractors 341,367,875 358,601,186

- Tay Nam Real Estate Company Limited 117,985,000 -

- Others 223,382,875 358,601,186

Advance for transfer of land use rights 127,971,965 78,869,078

Long-term 5,640,101 7,776,784

Advances to subcontractors 5,640,101 7,776,784

TOTAL 474,979,941 445,247,048



6. OTHER RECEIVABLES

VND’000


Short-term 294,115,578 79,296,364

Receivables under Investment Cooperation Contracts (“ICC”) 232,635,200 -

- Dong Tien Real Estate Company Limited (“Dong Tien”) (*) 226,000,000 -

- Thuan Thanh Real Estate Trading Investment Company Limited

(“Thuan Thanh”) (**)

6,635,200 -

Provisional corporate income tax (***) 54,963,918 61,717,678

Advance to employees 4,149,889 4,961,477

Others 2,366,571 12,617,209

Long-term 14,848,477 15,211,640

Advances for development of projects 11,634,814 11,634,814

Others 3,213,663 3,576,826

TOTAL 308,964,055 94,508,004

Provision for long-term doubtful receivables (7,786,000) (7,786,000)

NET 301,178,055 86,722,004

(*) This represents the investment to Dong Tien to develop a project at Phu Huu Ward, District 9, Ho Chi Minh City

on an area of 35,007 m2 in accordance with ICC No. 003/2016/HDHT/TMINH-DT dated 14 December 2016.

(**) This represents the investment to Thuan Thanh to develop a residential area project at Phuoc Long B Ward,

District 9, Ho Chi Minh City on an area of 1,731.8 m2 (“Feliza project”) in accordance with ICC No. 001/2016/

HDHT/TT-KD dated 23 March 2016.

(***) In accordance with Circular No. 96/2014/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 Company 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 pending the appropriate recognition of

sales and cost of sales from those transactions.

7. INVENTORIES

VND’000


Properties under development (*) 4,605,781,609 5,853,216,021

Merchandise goods 11,685,745 11,780,466

Raw material 320,911 286,632

TOTAL 4,617,788,265 5,865,283,119

(*) Properties under development comprise on-going projects to develop the following residential land properties:

VND’000


BCCI - Tan Tao Residential Zone 728,929,323 577,368,750

Khong Gian Xanh Phu Huu (“Lucasta”) (**) 462,103,047 645,075,242

Song Lap Phu Huu (“Melosa”) (**) 436,892,411 930,704,865

BCCI - 11A Residential Zone 393,794,690 380,387,975

Thap Muoi Phuoc Long B (**) 313,081,174 134,532,635

Binh Trung - Binh Trung Dong 263,553,900 246,000,577

Thanh Phuc Building (**) 234,795,339 214,680,523

Quoc Te Phu Huu (**) (“The Venica”) 227,559,493 257,785,201

Thanh Phuc Phu Huu (**) 219,944,864 171,893,431

BCCI - 2nd Resettement Zone Phong Phu 197,782,000 197,782,000

BCCI - An Duong Vuong 197,196,000 196,646,000

BCCI - 4th Resettlement Zone Phong Phu (**) 193,066,198 461,770,747

Kim Phat Phu Huu 182,679,132 -

Saphire Phu Huu (**) 172,941,641 160,158,691

Gia Phuoc Phu Huu (**) 122,287,602 86,308,339

Tri Minh Phu Huu (**) (“Mega Village”) 85,259,634 187,511,538

Khang Dien Long Truong 10,432,122 254,542,941

BCCI - An Lac Building - 390,559,972

Others 163,483,039 359,506,594

TOTAL 4,605,781,609 5,853,216,021

(**) Parts of these projects were pledged to obtain loans from banks (Note 20).


8.

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54 9. INTANGIBLE FIXED ASSETS

VND’000

ISO Certifi cateAccounting

softwareTotal

Cost:

Beginning and ending balances 331,745 1,455,004 1,786,749

In which:

Fully amortised 331,745 1,312,660 1,644,405

Accumulated amortisation:

Beginning balance 331,745 1,349,245 1,680,990

Amortisation for the year - 47,448 47,448

Ending balance 331,745 1,396,693 1,728,438

Net carrying amount:

Beginning balance - 105,759 105,759

Ending balance - 58,311 58,311

10. INVESTMENTS PROPERTIES

VND’000

Infrastructure

Cost:

Beginning balance 131,865,214

Sold, disposed (4,307,278)

Ending balance 127,557,936

Accumulated depreciation:


Depreciation for the year 3,074,075

Sold, disposed (4,193,085)

Ending balance (45,832,339)




The fair values of the investment property as at the balance sheet date had not yet been formally assessed and

determined, but the management believed that it was much higher than the property’s carrying values considering

that the investment property (an industrial park) has been almost fully rented out as at the balance sheet date.

B0

9-D

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11. CONSTRUCTION IN PROGRESS

VND’000


Le Minh Xuan Expansion Industrial Park 222,392,518 234,647,054

Small-scale industrial zone 48,379,548 -

Project 510 Kinh Duong Vuong - 205,032,743

Others 1,653,264 282,393

TOTAL 272,425,330 439,962,190

12. LONG-TERM INVESTMENTS

VND’000


Investments in associates (Note 12.1) 193,015,770 210,515,935

Investments in other entities (Note 12.2) 17,135,455 17,135,455

TOTAL 210,151,225 227,651,390

Provision for long-term investments (1,566,424) (1,079,891)

NET 208,584,801 226,571,499

12.1 Investments in associates


VND’000 % of

interest

% of voting

right

VND’000 % of

interest

% of voting

right

Espace Big C An Lac 162,177,983 11.46 20 171,242,021 11.46 20

Green Buildings Company

Limited

20,009,719 11.46 20 20,011,153 11.46 20

EB New City Company

Limited

5,965,307 11.46 20 14,400,000 11.46 20

Saigon Asia Investment

and Realty Corporation

4,862,761 28.66 50 4,862,761 28.66 50

TOTAL 193,015,770 210,515,935

12. LONG-TERM INVESTMENTS (CONTINUED)

12.1 Investments in associates (continued)

Espace Big C An Lac (“Big C”) is a limited liability company with two or more members established in accordance

with Investment License No. 2013/GP issued by the Ministry of Planning and Investment on 16 December 1997, as

amended. Big C’s registered offi ce is located at No. 1231 National Road 1A, Quarter 5, Binh Tri Dong Ward, Binh Tan

District, Ho Chi Minh City, Vietnam. Big C’s principal activity is to develop and operate supermarket chains with retail

and wholesale shops, warehouses and processing workshops. 20% of capital contribution in Big C were pledged to

obtain loans from banks (Note 20.2).

Green Buildings Company Limited (“GB”) is a limited liability company with two or more members established in

accordance with Investment Certifi cate No. 411022000448 dated 14 August 2010 issued by the Ho Chi Minh City

People’s Committee. GB’s registered offi ce is located at No. 1231 National Road 1A, Quarter 5, Binh Tri Dong Ward,

Binh Tan District, Ho Chi Minh City, Vietnam. GB’s principal activity is to develop an apartment project for sale named

Green Building in Ho Chi Minh City.

EB New City Company Limited is a limited liability company with two or more members established in accordance

with Investment License No. 0313517445 issued by the Ministry of Planning and Investment on 2 November 2015, as

amended. EB New City’s registered offi ce is located at Lot A, City Land Residential, No. 99 Nguyen Thi Thap Street,

Tan Phu Ward, District 7, Vietnam. EB New City Company’s principal activity is to develop and operate supermarket

chains with retail and wholesale shops, warehouses and processing workshops.

Saigon Asia Investment and Realty Corporation (“Saigon Asia Real Estate”) is a joint stock company established in

accordance with Business Registration Certifi cate No. 4103007346 issued by the DPI of Ho Chi Minh City on 19 July

2007, as amended. Saigon Asia Real Estate’s registered offi ce is located at No. 196 Tran Hung Dao Street, Nguyen Cu

Trinh Ward, District 1, Ho Chi Minh City, Vietnam. Saigon Asia Real Estate’s principal activities are to invest and trade

real estate properties.


12.

LON

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93

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70 12. LONG-TERM INVESTMENTS (CONTINUED)

12.2 Investments in other entities


QuantityValue

(VND’000)Quantity

Value

(VND’000)

Investments in securities

Thu Duc Housing Development

Corporation (“TDH”)

19,354 1,312,145 15,300 1,312,145

Ho Chi Minh City Development Joint

Stock Bank (“HDB”)

12,331 123,310 12,331 123,310

Other long-term investments

CVH Spring Company Limited (“CVH”) 14,000,000 14,000,000

Others 1,700,000 1,700,000

TOTAL 17,135,455 17,135,455

Provision for long-term investments (1,566,424) (1,079,891)

NET 15,569,031 16,055,564

13. CAPITALIZED BORROWING COSTS

During the year, the Group capitalized borrowing costs amounting to VND’000 119,080,671 (for the year ended 31

December 2015: VND’000 198,076,527). These costs relate to borrowings obtained to fi nance the development and

construction of the Group’s property projects.

14. GOODWILL

The movements in goodwill during the year are as follows:

VND’000

Cost:

Beginning and ending balances 34,008,874

Accumulated amortisation:


Amortisation for the year 2,133,748





B0

9-D

N/H

N

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LID

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for t

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hen

ende

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ontin

ued)



15. TRADE PAYABLES AND ADVANCES FROM CUSTOMERS

15.1 Trade payables

VND’000


Short-term 80,103,089 48,948,085

Construction Corporation No. 1 29,999,851 -

Coteccons Construction Joint Stock Company 13,178,064 -

Others 36,925,174 48,948,085

Long-term 176,432 50,657,501

Trade payables to suppliers 176,432 50,657,501

TOTAL 80,279,521 99,605,586

15.2 Advances from customers

VND’000


Short-term 670,114,574 500,980,970

Advances received for transfer of land lots, houses (*) 598,092,521 500,980,970

Advance received for disposal of investment (**) 50,000,000 -

Advance received for transfer of land use right (***) 22,022,053 -

Long-term 80,629,339 82,010,966

Advances received for transfer of land lots, houses (*) 80,629,339 82,010,966

TOTAL 750,743,913 582,991,936

(*) This represents advances from customers who buy land lots and houses for which the Group has issued the

corresponding invoices.

(**) This represents advance received for disposal of investment in Green Building Company Limited in accordance

with decision 130/NQ.BCCI.HDQT.

(***) This represented advance received from Tan Thuan Industrial Promotion Company Limited for transfer of

land use right at Phong Phu 4 residential project in accordance with contract No 197/HDNT.TTCNQSDĐ/

PP4/2011 dated 07 July 2011.

16. STATUTORY OBLIGATIONS

VND’000


Corporate income tax 134,897,032 67,088,792

Value-added tax 42,732,913 28,054,274

Personal income tax 1,314,934 10,030,419

Others 99,007 388,605

TOTAL 179,043,886 105,562,090

17. ACCRUED EXPENSES

VND’000


Short-term 50,391,260 50,044,620

Project development costs 26,961,072 18,598,917

Interest expense 10,181,899 28,131,269

Others 13,248,289 3,314,434

Long-term 88,832,160 106,699,017

Project development costs 88,832,160 106,699,017

TOTAL 139,223,420 156,743,637

18. UNEARNED REVENUES

VND’000


Short-term 8,045,738 2,600,794

Advances received for land leases of Le Minh Xuan Industrial Park 7,611,496 2,453,136

Others 434,242 147,658

Long-term 210,189,314 208,197,968

Advances received for land leases of Le Minh Xuan Industrial Park 210,189,314 208,197,968

TOTAL 218,235,052 210,798,762

19. OTHER PAYABLES

VND’000


Short-term 74,976,265 88,846,528

Maintenance fund 41,171,703 17,724,088

Dividend payables 2,811,837 38,158,302

Deposits received 4,990,252 3,700,340

Others 26,002,473 29,263,798

Long-term 101,197,965 118,060,269

Land compensation payables (*) 76,115,857 99,342,790

Deposits received 17,698,314 2,843,610

Others 7,383,794 15,873,869

TOTAL 176,174,230 206,906,797

(*) This represents land compensation payable 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.



20. LOANS AND DEBTS

VND’000


Short-term 194,351,572 218,819,525

Short-term loans from a bank (Note 20.1) 88,807,947 10,855,529

Current portion of long-term loans 105,543,625 207,963,996

Long-term 1,699,929,119 2,699,216,325

Long-term loans from banks (Note 20.2) 1,227,243,664 1,798,324,410

Loans from other entities - 891,915

Bonds (Note 20.3) 472,685,455 900,000,000

TOTAL 1,894,280,691 2,918,035,850

20.1 Short-term loans from a bank

Details of the short-term loans from banks are as follows:

BankEnding balance

(VND’000)

Principal

repayment

term

Purpose

Interest

rate

(% p.a.)

Description

of collateral

Orient Commercial Joint Stock Bank – District 4 Branch

Loan agreement No.

19/2016/HDTD-DN

dated 17 August

2016

28,000,000 17 August

2017

To fi nance

Lucasta project

9.1% Land use right from lot

256 to 260 of Lucasta

project at Phu Huu Ward,

District 9, HCMC

20. LOANS AND DEBTS (CONTINUED)

20.1 Short-term loans from a bank (continued)

Details of the short-term loans from banks are as follows: (continued)

Bank

Ending

balance

(VND’000)

Principal

repayment

term

Purpose

Interest

rate

(% p.a.)

Description

of collateral


Loan agreement No.

20/2016/HDTD-DN dated

31 August 2016

35,085,400 31 August

2017

To fi nance

Mega Village

project

9,1 Land use right at of

Mega Village project at

Phu Huu Ward, District

9, HCMC

Loan agreement No.

13/2016/HDTDHM date 27

July 2016

25,722,547 27 July 2017 To fi nance

working capital

Savings

deposit

interest with

term of 6

months plus

2.3% per

annum

Unsecured

88,807,947

20.2 Long-term loans from banks

Details of long-term loans from banks are as follows:

Bank

Ending

balance

(VND’000)

Principal

repayment

term

Purpose

Interest

rate

(% p.a.)

Description

of collateral

Vietnam Bank for Industry and Trade - Ho Chi Minh Branch

Loan Agreement No.

16.2680021/HDTDA/

NHCT900-GIAPHUOC

dated 11 May 2016

70,888,205 47 months To fi nance Gia

Phuoc Phu Huu

project

9.5 Land use rights of

29,562 square meters,

and future and associ-

ated buildings of Gia

Phuoc Phu Huu project

Loan Agreement No.


17 September 2016

175,711,453 42 months To fi nance Lucasta

project

9 Land use rights of

122,674 square meters

of Lucasta project




20.2 Long-term loans from banks (continued)

Details of long-term loans from banks are as follows:

BankEnding balance

(VND’000)

Principal

repayment

term

Purpose

Interest

rate

(% p.a.)

Description

of collateral

Vietnam Bank for Industry and Trade - Ho Chi Minh Branch

Loan Agreement

No. 16.321.000101

dated 22 September 2016

77,509,434 52 months To pay for

100,000 m2

land rental fee

at Quarter 5,

Binh Tri Dong B

Ward, Binh Tan

District

9.5 20% of capital

contribution in Espace

Big C An Lac; Land use

rights of 172,032 m2

and associated assets

at Binh Hung Ward,

Binh Chanh District

belonging to Binh

Hung 11A Residential

project

Loan Agreement

No. 16.321.000102

dated 22 September 2016

70,228,786 42 months To fi nance

Phong Phu

4 Residential

project


140,319 m2 and

associated assets at

Phong Phu Ward,

Binh Chanh District

belonging to Phong

Phu 4 Residential

project

Vietnam Bank for Industry and Trade - Branch 1

Loan Agreement

No. 121/2015 - HDTDDA/

NHCT902-NHAPHO-DANCU

dated 12 August 2015


Thanh Phuc

Phu Huu project

9 All right of assets

generating from

44,725 square metres

of Nha Pho Phu Huu

project

Loan Agreement

No. 122/2015 - HDTDDA /

NHCT902-NHAPHO-CAOOC

dated 12 August 2015


Thanh Phuc

Building project

9 Land use right of


and associated build-

ings of Nha Pho

Building project

Loan Agreement

No. 71/2016- HDTDDA /

NHCT902-THAPMUOI dated

31 March 2016


Thap Muoi

Phuoc Long B

residential of

project

9.5 Land use right of

30,468 square metres

and future associated

buildings of Thap

Muoi Phuoc Long B

project

Loan Agreement

No. 16.2680019/HDTDDA/

NHCT900-BINHTRUNG

dated 11 May 2016

184,449,614 47 months To fi nance Binh

Trung - Binh

Trung Dong

residential

project



and future buildings

of Binh Trung - Binh

Trung Dong project


20.2 Long-term loans from banks (continued)

Details of long-term loans from banks are as follows: (continued)

BankEnding balance

(VND’000)

Principal

repayment

term

Purpose

Interest

rate

(% p.a.)

Description

of collateral

Vietnam Export Import Commercial Joint Stock Bank – Ho Chi Minh Branch

Loan Agreement No. 2000

- LDS - 201422711 dated

29 December 14


Saphire Phu

Huu project

10 Land use rights of 24,120

square metres and

associated buildings of

Saphire Phu Huu project

Asia Commercial Bank - Hoa Hung Branch

Loan Agreement No. TAT.

DN.794.160316 dated 4

April 2016

30,000,000 36 months To fi nance land

acquisition

at The Venica

project - Phase 2

9.5 Associated building

and future assets on the

land lots in accordance

with Loan Agreement

No. TAT.DN.794.160316

dated 4 April 2016


Loan Agreement No.


1 July 2015 and Appendix

No. 06-01/SĐBS - HDTD

177,891,54048 months To fi nance

Hamlet 2 Tan

Tao Residential

project and

11A Residential

project

9.5 Land use right of 18,392

square meters No.

T00013/1aQSDD/4028/

UB, 00230/2aQSDD/2580/

UB and 7,647 meters No.

CT01135 and associated

assets at belonging to

158 An Duong Vuong

project

TOTAL 1,332,787,289

In which

Current portion 105,543,625

Long-term 1,227,243,664


20.

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21. OWNERS’ EQUITY (CONTINUED)

21.2 Capital transactions with owners and distribution of dividends

VND’000

Current year Previous year

Contributed share capital

Beginning balance 1,800,000,000 750,000,000

Increase 539,998,920 1,050,000,000

Ending balance 2,339,998,920 1,800,000,000

Dividends

Dividend declared 126,000,000 100,800,000

Dividend paid 126,000,000 100,784,572

21.3 Share capital - ordinary shares


Number of shares Number of shares

Authorized shares 233,999,892 180,000,000

Issued and paid-up shares

Ordinary shares 233,999,892 180,000,000

Shares in circulation

Ordinary shares 233,999,892 180,000,000

22. REVENUE

22.1 Revenue from sale of goods and rendering of services

VND’000


Gross revenue 3,938,432,166 1,051,919,567

Of which:

Sale of residential land properties 3,826,410,669 987,938,151

Rendering of services 57,187,987 4,741,323

Outright sale of industrial plots and related infrastructure (*) 42,273,537 -

Operating lease - land lots and related infrastructure 12,559,973 52,670,534

Others - 6,569,559

Less

Sale returns (6,789,172) (1,979,159)

Net revenue 3,931,642,994 1,049,940,408

Of which:

Sale of residential land properties 3,819,621,497 985,958,992

Rendering of services 57,187,987 4,741,323

Outright sale of industrial plots and related infrastructure 42,273,537 -

Operating lease - land lots and related infrastructure 12,559,973 52,670,534

Others - 6,569,559

(*) Revenue from industrial plots and related infrastructure has been outright recognized as described at Note 3.15.

When this revenue is recognized on a straight-line basis over the lease terms, revenue and net profi t will

decrease by VND’000 37,779,996 and VND’000 26,356,939 respectively.

22.2 Finance income

VND’000


Interest income 16,466,769 14,752,584

Dividends 29,161 -

Revaluation surplus of investment at acquisition-date fair value - 34,770,414

Gains on disposal of investments- 29,822,369

Others - 10,438

TOTAL 16,495,930 79,355,805



23. COSTS OF GOODS SOLD AND SERVICES RENDERED

VND’000


Cost of residential land properties sold 2,691,976,661 688,703,122

Cost of services rendered 243,181,747 779,132

Cost of industrial plots and related infrastructure for outright sale 11,943,562 -

Cost of operating lease - land lots and related infrastructure 4,867,970 22,563,384

Others - 248,193

TOTAL 2,951,969,940 712,293,831

24. FINANCE EXPENSES

VND’000


Discount for early payment 100,998,191 50,446,727

Loan interests 8,648,089 8,513,956

Others 1,001,544 189,204

TOTAL 110,647,824 59,149,887

25. OTHER INCOME AND EXPENSES

VND’000


Other income 13,804,653 98,911,387

Penalty on breach of contract 4,679,219 -

Income from management service 4,259,049 2,791,618

Negative goodwill from acquisition - 92,749,882

Others 4,866,385 3,369,887

Other expenses (36,818,962) (16,099,085)

Expenses for management service (15,288,323) (4,263,859)

Penalty on breach of contract (12,300,664) (7,477,019)

Tax penalty (6,669,352) (2,419,231)

Others (2,560,623) (1,938,976)

NET (23,014,309) 82,812,302

26. CORPORATE INCOME TAX

The statutory corporate income tax (“CIT”) rate applicable to the Group is 20% of taxable profi ts.

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 fi nancial

statements could be changed at a later date upon fi nal determination by the tax authorities.

26.1 CIT expense

VND’000


Current tax expense 159,695,216 48,573,267

Adjustment for under (over) accrual of tax from prior years 709,011 (1,248,110)

Deferred tax expense 16,837,673 1,492,591

TOTAL 177,241,900 48,817,748

Reconciliation between CIT expense and the accounting profi t multiplied by CIT rate is presented below:

VND’000


Accounting profi t before tax 582,597,952 317,261,161

At CIT rate of 20% (2015: 22%) applicable to companies in the Group 116,519,590 69,797,455

Adjustments:

Non-deductible expenses 5,158,809 3,441,083

Loss in subsidiaries 5,185,539 11,549,652

Share of profi t in associate (2,144,927) (3,280,175)

Consolidation adjustments 55,730,230 (22,268,425)

Tax losses carried forward (3,916,352) (9,275,351)

Adjustment for under (over) accrual of tax from prior year 709,011 (1,248,110)

Others - 101,619

CIT expense 177,241,900 48,817,748

26.2 Current tax

The current CIT payable is based on taxable profi t for the current year. The taxable profi t of the Group for the year

diff ers from the profi t 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 consolidated balance

sheet date.



26. CORPORATE INCOME TAX (CONTINUED)

26.3 Deferred tax

The following are the deferred tax assets and liabilities recognized by the Group, and the movements thereon,

during the current and previous year:

VND’000

Consolidated

balance sheet

Consolidated

income statement

Ending balanceBeginning

balanceCurrent year Previous year

Deferred tax assets

Unrealised profi t 902,170 1,461,344 (559,174) 1,461,344

Accrued expenses 1,917,999 1,109,032 808,967 (542,922)

Interest expenses 2,658,152 - 2,658,152 (2,293,123)

Accrued interest income (1,055,656) - (1,055,656) -

Provision for severance allowance 269,140 - 269,140 (3,094)

Provision for doubtful debts 400,000 - 400,000 -

Tax loss carried forward132,481 - 132,481 -

Increase due to acquisition of subsidiaries - 1,367,490 (1,367,490) -

TOTAL 5,224,286 3,937,866 1,286,420 (1,377,795)

Deferred tax liabilities

Tax loss carried forward 4,681,381 6,502,982 (1,821,601) 6,502,982

Provision for severance allowance 115,486 341,044 (225,558) 249,311

Accrued expenses - 70,269 (70,269) 35,969

Interest expense (3,282,770) - (3,282,770) (12,295,790)

Accrued interest income (4,716,438) (337,016) (4,379,422) (337,016)

Profi t from sale of land properties but not yet

taxable

(42,984,274) (43,590,357) 606,083 5,804,967

Increase due to acquisition of subsidiaries (37,851,766) (28,901,210) (8,950,556) (75,219)

TOTAL (84,038,381) (65,914,288) (18,124,093) (114,796)

Net deferred income tax expense (16,837,673) (1,492,591)

27. TRANSACTIONS WITH RELATED PARTIES

Transactions with other related parties

Remuneration to members of the Board of Directors and management

VND’000


Salaries and bonus 6,989,767 9,445,625

Amounts due from and due to related parties at the balance sheet date were as follows:

VND’000

Related party Relationship Transaction Ending balance Beginning balance

Short-term trade receivable

Ms Truong My Linh Related partySale of residential

land properties1,276,763 1,276,763

28. EARNINGS PER SHARE

The following refl ects the income and share data used in the basic and diluted earnings per share computations:

VND’000

Current yearPrevious year

(Adjusted)

Net profi t after tax attributable to ordinary equity holders of the Company 371,774,722 253,357,528

Less bonus and welfare fund (*) (440,249) (14,310,409)

Net profi t attributable to ordinary equity holders of the Company 371,334,473 239,047,119

Weighted average number of ordinary shares (**) 233,999,892 233,999,892

Earnings per share

- Basic 1.59 1.02

- Diluted 1.59 1.02

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting

date and the date of completion of these consolidated fi nancial statements.



28. EARNINGS PER SHARE (CONTINUED)

(*) Profi t used to compute earnings per share for the year 2015 as presented in the consolidated fi nancial

statements for the year 2015 was restated to refl ect the actual allocation to bonus and welfare fund from

2015 retained earnings following the resolution of the shareholders meeting dated 12 April 2016.

Profi t used to compute earnings per share for the year 2016 was adjusted for the provisional allocation to

bonus and welfare fund from 2016 profi t following the plan as approved in the resolution of the shareholders

meeting dated 12 April 2016.

(**) The weighted average number of ordinary shares for the year ended 31 December 2015 was adjusted

to refl ect the additional issuance of 53,999,920 bonus shares from share premium in accordance with

the resolution of the shareholders meeting dated 12 April 2016 and was approved by the Planning and

Investment Department of Ho Chi Minh City through the issuance of the 15th amended Business Registration

Certifi cate dated 25 November 2015, in accordance to VAS No. 30.

29. COMMITMENTS

Capital commitments

As the balance sheet date, the Group has a commitment of VND’000 783,794,040 (31 December 2015: VND’000

637,327) principally related to the development of infrastructure of Le Minh Xuan Industrial Park.

Lease commitments

The Group leases offi ce premises under an operating lease arrangement. Future minimum lease payables at the

balance sheet date were as follows:

VND’000


Less than 1 year 41,719,037 12,535,555

From 1 to 5 years 5,321,552 23,857,332

More than 5 years 21,404,960 2,046,898

TOTAL 68,445,549 38,439,785

30. CORRESPONDING FIGURES

According to Tax Assessment Minutes dated 14 December 2016 and Tax Penalty Decision No. 2490/QD-TCT dated 19

December 2016 issued by the Department of Taxation of Ho Chi Minh City to Binh Chanh Construction Investment

Joint Stock Company, the Group’s subsidiary, the Company’s management decided to retrospectively adjust the

understatements of the CIT for the fi nancial years from 2009 to 2015 aggregating to VND’000 13,688,456 as described

below:

• Increasing in deferred tax assets by VND’000 1,367,490 and increasing in statutory obligations by VND’000

13,688,456 and decreasing in non-controlling interests by VND’000 5,259,821 and decreasing in undistributed

earnings by VND’000 7,061,145 as at 31 December 2015;

• Decreasing in other income by VND’000 7,061,145 for the year ended 31 December 2015.

The net impact of these restatements is presented as follows:

VND’000

As previously

statedRestatements Restated amount

For the year ended 31 December 2015

Other income 105,972,532 (7,061,145) 98,911,387

As at 31 December 2015

Deferred tax assets 2,570,376 1,367,490 3,937,866

Statutory obligations 91,873,634 13,688,456 105,562,090

Non-controlling interests 921,215,774 (5,259,821) 915,955,953

Undistributed earnings 269,299,402 (7,061,145) 262,238,257

31. EVENTS AFTER THE BALANCE SHEET DATE

There is no matter or circumstance that has arisen since the consolidated balance sheet date that requires adjustment

or disclosure in the consolidated fi nancial statements of the Group.or disclosure in the consolidated fi nancial statements of the Group.




23 March 2017

The fi nancial statements of Khang Dien House Trading and Investment Joint Stock Company as at 31 December

2016 was audited by Ernst & Young Vietnam Limited Company and disclosed at: www.khangdien.com.vn


In order to contribute to environmental protection, Khang Dien’s 2016 Annual Report is printed in limited numbers and used environmentally friendly paper. Therefore, please transfer to those interested if you don’t need to use the report. In addition, Khang Dien’s 2016 Annual Report is also available in electronic version at:www.khangdien.com.vn

KHANG DIEN HOUSE TRADING AND INVESTMENT JSCRoom 801, 8th Floor, Centec Tower72-74 Nguyen Thi Minh Khai Street, Ward 6, District 3, HCM CityT | (84.8) 3820 8858 F | (84.8) 3820 8859E | info@ khangdien.com.vn W | www.khangdien.com.vn

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