hoang anh gia lai joint stock company - rns submit

This is a document comprising Listing Particulars in respect of up to 200,000,000 Global Depositary Receipts representing up to 200,000,000 Shares of par value VND 10,000 each in the Company. 16,216,250 unlisted GDRs were issued pursuant to a Deposit Agreement on 6 December 2010. Upon issuance of the GDRs, the Company issued a Preferential Allotment Letter constituting an undertaking to issue the New Shares on a date specified in the Preferential Allotment Letter. At such time, the Preferential Allotment Letter represented the Deposited Property. The New Shares were issued by the Company on 20 December 2010 and deposited as Deposited Shares in accordance with the Deposit Agreement. Upon such deposit, each GDR represented one underlying New Share. The GDRs are denominated in US Dollars.

Application has been made to the UK Listing Authority for the GDRs to be admitted to the Official List and application has been made to the London Stock Exchange to admit the GDRs to trading under the symbol "HAG" on the Professional Securities Market through its International Order Book. The Professional Securities Market is not a regulated market for the purposes of Directive 2004/39/EC (the Markets in Financial Instruments Directive). It is expected that admission to the Official List and to trading on the Professional Securities Market will become effective and that unconditional dealings in the GDRs through the International Order Book will commence on or about 23 March 2011. Application has been made for the admission of 200,000,000 GDRs to the Official List, comprising 24,324,375 GDRs that have been issued at the date of these Listing Particulars and up to 175,675,625 GDRs which may be issued from time to time in accordance with the terms of the Deposit Agreement. All of the Existing Shares were admitted to trading on the HoSE before the issuance of the New Shares. The New Shares were admitted to trading on the HoSE on 12 January 2011. The 8,108,125 Shares deposited in accordance with the terms of the Deposit Agreement pursuant to a bonus share issue on 26 January and which are represented by GDRs were admitted to trading on the HoSE on 28 February 2011. The Company applied for approval from the SSC for the issue of the New Shares which are represented by the GDRs and this approval was granted on 19 November 2010.

These Listing Particulars do not constitute, nor do they contain, and should not be construed as, an offer or invitation to subscribe for or purchase any securities in the Company.

The GDRs are of a specialist nature and should normally only be bought and traded by investors who are particularly knowledgeable in investment matters. Investing in the GDRs involves risks. See "Risk Factors" beginning on page 21 to read about factors that investors should consider before buying the GDRs.

The GDRs and the Shares represented by such GDRs have not been and will not be registered under the Securities Act or any state securities laws in the United States, but were issued and will be issued outside the United States in reliance on the exception from registration under the Securities Act provided by Regulation S. The GDRs may not be offered, sold, pledged or otherwise transferred to any person located in Vietnam, residents of Vietnam, or to, or for the account or benefit of such persons, except as permitted by applicable Vietnamese laws and regulations. The GDRs are not transferable except in accordance with the restrictions described under "Transfer Restrictions".

HOANG ANH GIA LAI JOINT STOCK COMPANY(established in the Socialist Republic of Vietnam as a joint stock company under the Law on Enterprises

No.60/2005/QH11 with Business Registration Certificate number 5900377720)

Listing of up to 200,000,000 Global Depositary ReceiptsRepresenting up to 200,000,000 Shares, par value VND 10,000 each

Elara Capital PLCSole Lead Manager and Bookrunner

Sacombank Securities Joint Stock CompanyFinancial Adviser

The date of these Listing Particulars is 18 March 2011

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The GDRs have initially been issued in global form. The GDRs issued in global form are and will be evidenced by a Master GDR in registered form. On 6 December 2010, the Master GDR was deposited with a common depositary for and registered in the name of BT Globenet Nominees Ltd. as nominee for Deutsche Bank AG, London Branch as common depositary for Euroclear and Clearstream, Luxembourg for onward delivery. Interests in the Master GDR will be exchangeable for, and GDRs may be issued in the form of, GDRs in definitive form, as set out in "Summary of Provisions relating to the GDRs while in Master Form" and "Transfer Restrictions". The GDRs have and will be issued pursuant to the Deposit Agreement, by and among the Company and the Depositary. A GDR represented by an individual definitive certificate will not be eligible for clearing and settlement through Euroclear or Clearstream, Luxembourg or for trading on the Professional Securities Market.

The Company accepts full responsibility for the information contained in these Listing Particulars and, having taken all reasonable care to ensure that such is the case, declares that the information contained in these Listing Particulars is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

This document comprises Listing Particulars for the purposes of the Listing Rules made by the Financial Services Authority. These Listing Particulars are being furnished by the Company in connection with the Listing. The information contained herein has been provided by the Group and other sources identified herein.

The distribution of these Listing Particulars in certain jurisdictions may be restricted by law. Persons into whose possession these Listing Particulars come are required by the Company to inform themselves about and to observe any such restrictions. For a description of restrictions on offers and sales of the GDRs and distribution of these Listing Particulars, see "Terms and Conditions of the Global Depositary Receipts" and "Transfer Restrictions". No person is authorised to give any information or to make any representation not contained in these Listing Particulars and any information or representation not so contained must not be relied upon as having been authorised on behalf of the Company. The delivery of these Listing Particulars at any time does not imply that the information contained in it is correct as at any time subsequent to its date.

The Depositary and the Sole Lead Manager and Bookrunner have not separately verified the information contained in these Listing Particulars. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by the Depositary or the Sole Lead Manager and Bookrunner as to the accuracy or completeness of the information contained in these Listing Particulars or any other information supplied in connection with the GDRs or the Shares and nothing contained herein is, or shall be relied upon as, a promise or representation by the Depositary or the Sole Lead Manager and Bookrunner as to the past or the future. Each person receiving these Listing Particulars acknowledges that such person has not relied on the Depositary or the Sole Lead Manager and Bookrunner in connection with its investigation of the accuracy of such information or any investment decision and each such person must rely on their own examination of the Company and the merits and risks involved in investing in the GDRs.

The Company applied for approval from the SSC for the issue of the New Shares and such approval was granted by the SSC on 19 November 2010. A copy of these Listing Particulars will be delivered to the SSC for record purposes only.

Shares evidenced by the GDRs may not be withdrawn by Holders of GDRs during the Lock-up Period (as defined elsewhere in this document). The GDRs will be fully transferable during the Lock-up Period but may not be withdrawn from the depositary facility. For risks in relation to the Lock-up Period, see "Risk Factors – Risks Associated with the GDRs and the Shares". After the expiry of the Lock-up Period, a Holder may request the Depositary to withdraw from the depositary facility the Shares represented thereby and transfer the funds raised from the sale of such Shares on the secondary market to the Holder. The Shares represented by the GDRs have been and will be registered in the name of the Depositary and the Depositary has issued and will issue the GDRs pursuant to the terms of the Deposit Agreement. Beneficial interests in the Master GDR are and will be shown on, and transfers thereof will be effected through, records maintained by Euroclear and Clearstream, Luxembourg and their direct and indirect participants. Beneficial interests in the GDRs represented by an individual definitive certificate will be entered into the register maintained by the Depositary and transfers or cancellations thereof shall be effected through the register via the Depositary or its agent in accordance with the terms of the Deposit Agreement.

NOTICE IN CONNECTION WITH THE UNITED STATES OF AMERICA

This document is not for publication or distribution directly or indirectly in or into any jurisdiction in which the same would be unlawful. This document is for information purposes only and does not constitute an offer or invitation to acquire or dispose of GDRs or Shares in the United States or any other jurisdiction.

The GDRs have not been and will not be registered under the Securities Act or any state securities laws in the United States and may not be offered, sold, resold or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the GDRs have been issued outside the United States in reliance on the exemptions from registration provided by Regulation S.

The GDRs have not been approved or disapproved by the SEC, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed on or endorsed the merits of the GDRs or the accuracy or adequacy of the information contained in this document. Any representation to the contrary is a criminal offence in the United States.

NOTICE TO PERSONS IN THE UNITED KINGDOM

These Listing Particulars are only being distributed to and are only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The GDRs are only available to, and any invitation, offer or agreement to

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subscribe, purchase or otherwise acquire such GDRs will be engaged in only with, relevant persons. Any persons who are not a relevant person should not act or rely on this document or any of its contents.

NOTICE TO PERSONS IN THE EUROPEAN ECONOMIC AREA

In any European Economic Area Member State that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.

These Listing Particulars have been prepared on the basis that any offer of GDRs in a Relevant Member State will be made pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of GDRs. Accordingly, any person making or intending to make any offer with the European Economic Area of GDRs which are the subject of the Listing may only do so in circumstances in which no obligation arises for the Company to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. TheCompany has not authorised, nor does it authorise, the making of any offer of GDRs in circumstances in which an obligation arises for the Company to publish or supplement a prospectus for such offer.

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any GDRs in connection with, the Listing will be deemed to have represented, warranted and agreed to the Company that:

(a) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and

(b) in the case of any GDRs acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the GDRs acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive or (ii) where GDRs have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those GDRs to it is not treated under the Prospectus Directive as having been made to such persons.

For the purposes of this representation, the expression an "offer" in relation to any GDRs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any GDRs to be offered so as to enable an investor to decide to purchase or subscribe for the GDRs, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State.

NOTICE TO PERSONS IN SINGAPORE

These Listing Particulars have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, these Listing Particulars and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the GDRs may not be circulated or distributed, nor may the GDRs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor specified in Section 274 of the Securities and Futures Act of Singapore (the "Securities and Futures Act"); (b) to a sophisticated investor, and in accordance with the conditions, specified in Section 275 of the Securities and Futures Act; or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.

SUMMARY .................................................................................................................................................................9

SUMMARY OF THE GDRS.....................................................................................................................................16

RISK FACTORS........................................................................................................................................................21

PRICE RANGE OF SHARES ...................................................................................................................................44

EXCHANGE RATES ................................................................................................................................................45

USE OF PROCEEDS AND DIVIDEND POLICY....................................................................................................46

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.....................................................................................................................................................48

MARKET AND INDUSTRY OVERVIEW ..............................................................................................................74

BUSINESS.................................................................................................................................................................80

VIETNAMESE REGULATORY LAW OVERVIEW ............................................................................................114

SUMMARIES OF THE MINING EXPLORATION SURVEYS............................................................................140

DIRECTORS AND MANAGEMENT ....................................................................................................................183

MAJOR SHAREHOLDERS....................................................................................................................................192

VIETNAMESE SECURITIES MARKET ...............................................................................................................194

DESCRIPTION OF THE SHARES.........................................................................................................................200

RELATED PARTY TRANSACTIONS ..................................................................................................................205

TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY RECEIPTS.....................................................210

SUMMARY OF PROVISIONS RELATING TO THE GDRS WHILE IN MASTER FORM ...............................229

INFORMATION RELATING TO THE DEPOSITARY ........................................................................................231

TRANSFER RESTRICTIONS ................................................................................................................................232

FOREIGN INVESTMENT AND EXCHANGE CONTROLS................................................................................234

VIETNAMESE REGULATORY APPROVALS AND FILINGS ..........................................................................238

TAXATION .............................................................................................................................................................239

ENFORCEABILITY OF CIVIL LIABILITIES ......................................................................................................245

GENERAL INFORMATION ..................................................................................................................................246

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN VIETNAMESE VAS AND IFRS........................261

DEFINITIONS........................................................................................................................................................ 271

INDEX TO FINANCIAL STATEMENTS............................................................................................................. 274

FINANCIAL STATEMENTS .................................................................................................................................F-1

UNITED NATIONS FRAMEWORK CLASSIFICATION FOR FOSSIL ENERGY AND MINERALS...........UN-1

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AVAILABLE INFORMATION

The Company will furnish the Depositary with copies of its annual audited financial statements in English prepared in conformity with VAS. In accordance with the terms of the Deposit Agreement, the Company will also furnish the Depositary with unaudited quarterly and (if produced) semi-annual interim financial information in English prepared in accordance with Vietnamese Securities Laws. The Company will also arrange for the prompt transmittal to the Depositary of sufficient copies in English of any notices, reports or communications that are made generally available by the Company to the holders of Shares or other deposit property, and upon receipt of any such notices, the Depositary has agreed to furnish such notices to Holders in accordance with the Terms and Conditions of the GDRs, including making copies of such notices available upon request at its specified office and the specified office of any of the Depositary's agents.

INVESTMENT IN VIETNAM

The GDRs may not be offered or sold directly or indirectly in Vietnam or to, or for the benefit of, any resident in Vietnam (which term as used in these Listing Particulars shall have the same meaning as that defined in the 2005 Ordinance on Foreign Exchange, which include (a) any corporation or other entity incorporated under the laws of Vietnam and operating in Vietnam (a "Vietnamese entity"), and (b) any Vietnamese citizen residing abroad for a period of less than 12 months or any Vietnamese entity's representative office established in any other country). Unless permitted under Vietnamese Securities Laws, no advertisement, invitation or document relating to the GDRs has or will be issued in Vietnam.

ENFORCEMENT OF FOREIGN JUDGMENTS IN VIETNAM AND SERVICE OF PROCESS

The Company is a joint stock company incorporated under the laws of Vietnam. All of the Company's directors and executive officers are residents of Vietnam. Further, a substantial portion of the assets of such persons and the Company are located in Vietnam. As a result, it may not be possible for investors to effect service of process upon the Company or such persons in jurisdictions outside Vietnam or to enforce judgments obtained against the Company or such persons outside Vietnam. Any judgment of a foreign court (such as a United States court) in respect of a commercial or civil matter may be recognised and enforced in Vietnam provided that (i) such judgment is not considered by a Vietnamese court as being ineffective or as being "contradictory to primary principles of the Vietnam law" pursuant to Article 356 of the 2004 Code on Civil Proceedings, and (ii) the question of whether such judgment is qualified to be recognised by a Vietnamese court for enforcement on a reciprocal basis will be decided by such Vietnamese court at its sole discretion. Further information on the enforceability of civil liabilities in Vietnam can be found at "Enforceability of Civil Liabilities".

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

References in these Listing Particulars to "Vietnam" are to the "Socialist Republic of Vietnam"; references to the "Government" are to the Government of Vietnam. Unless the context otherwise requires, references to the "Company" are to Hoang Anh Gia Lai Joint Stock Company, and references to the "Group" are to the Company and its subsidiaries and subsidiary undertakings. Certain other terms used in these Listing Particulars, including certain capitalised terms and other terms, are defined in "Definitions".

The Company prepares its consolidated financial statements in accordance with VAS, which differ in certain respects from generally accepted accounting principles in other countries. VAS differs in certain significant respects from IFRS. For a comparison of accounting principles in Vietnam and accounting principles under IFRS, see "Summary of Significant Differences between VAS and IFRS". The Company publishes its consolidated financial statements in Vietnamese dong.

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In these Listing Particulars, all references to "Vietnamese dong", "dong" and "VND" are to the legal currency of Vietnam and all references to "dollars", "USD", "US dollars", and "US$" are to the legal currency of the United States. Solely for the convenience of the reader, these Listing Particulars present translations of certain dong amounts into US dollars at specified rates. This should not be construed as a representation that those Vietnamese dong or US dollar amounts could have been, or could be, converted into US dollars or Vietnamese dong, as the case may be, at any particular rate, or at all. Except as otherwise stated in these Listing Particulars, all translations from Vietnamese dong to US dollars contained in these Listing Particulars have been based on the average inter-bank foreign exchange conversion rate for US Dollars over the six month period from July 2010 to December 2010 (inclusive). This was VND 19,383 per US$ 1.00.

In these Listing Particulars, where information has been presented in thousands or millions of units, amounts may have been rounded up or down. Accordingly, totals of columns or rows of numbers in tables may not be equal to the apparent total of the individual items and actual numbers may differ from those contained in these Listing Particulars due to rounding. The English names of the Vietnamese nationals, entities, departments, facilities, laws, regulations, certificates, titles and the like are translations of their Vietnamese names and are included for identification purposes only. In the event of any inconsistency, the Vietnamese name prevails.

Any information sourced from a third party has been accurately reproduced and, as far as the Company is aware and has been able to ascertain from information published by such third party, no facts have been omitted which render the reproduced information inaccurate or misleading. Where third party information has been used, the source of this information has been identified.

INDUSTRY AND MARKET DATA

Information regarding market position, growth rates and other industry data pertaining to the Company's business contained in these Listing Particulars consists of estimates based on data reports compiled by professional organisations and analysts, on data from other external sources and on the Company's knowledge of its markets. This data is subject to change and cannot be verified with complete certainty due to limits on the availability and reliability of the raw data and other limitations and uncertainties inherent in any statistical survey. In many cases, there is no readily available external information (whether from trade associations, government bodies or other organisations) to validate market-related analyses and estimates, so the Company relies on internally developed estimates. While the Company has compiled, extracted and reproduced market or other industry data from external sources, including third parties or industry or general publications, the Company accepts responsibility for accurately reproducing such data. However, the Company has not independently verified that data and does not make any representation regarding the accuracy of such data. Similarly, while the Company believes its internal estimates to be reasonable, such estimates have not been verified by any independent sources and the Company cannot assure potential investors as to their accuracy.

FORWARD-LOOKING STATEMENTS

These Listing Particulars contain forward-looking statements that involve risks and uncertainties. These statements relate to future estimates or events or the Group's future financial performance and include, but are not limited to, statements concerning:

● the Group's ability to implement its strategy, including anticipated benefits and risks;

● the Group's ability to develop and expand its business;

● the Group's capital expenditure plans, including estimates of future acquisition, and the Group's ability to satisfy its capital needs;

● the Group's future results;

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● the anticipated size or trends of the market segments in which the Group competes and the anticipated competition in those markets; and

● government regulation.

Furthermore, in some cases, investors can identify forward-looking statements by terminology such as "may", "will", "could", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue" and the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, investors should specifically consider various factors, including the risks outlined in the "Risk Factors" section. These factors may cause the Group's actual results to differ materially from any forward-looking statement. Except as required by law, the Group undertakes no obligation to update any forward-looking statements after the date of these Listing Particulars or to conform these statements to actual results or to changes in the Group's expectations.

The forward-looking statements contained in these Listing Particulars are based on the beliefs of management, as well as the assumptions made by and information currently available to management. Although the Group believes that the expectations reflected in such forward-looking statements are reasonable at this time, the Group cannot make any assurances that such expectations will prove to be correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. Important factors that could cause actual results to differ materially from the Group's expectations are contained in cautionary statements in these Listing Particulars, including, without limitation, in conjunction with the forward-looking statements included in these Listing Particulars and specifically under "Risk Factors". If any of these risks and uncertainties materialise, or if any of the Group's underlying assumptions prove to be incorrect, the Group's actual results of operations or financial condition could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent written and oral forward-looking statements attributable to the Group are expressly qualified in their entirety by reference to these cautionary statements.

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THE COMPANY

Hoang Anh Gia Lai Joint Stock CompanyNo 15 Truong Chinh Street

Phu Dong CommunePleiku City

Gia Lai Province

DEPOSITARY

Deutsche Bank Trust Company Americas60 Wall Street

New York, NY 10005

CUSTODIAN

Deutsche Bank AG, Ho Chi Minh City Branch

Saigon Centre, 65 Le Loi Boulevard

District 1, Ho Chi Minh City

SOLE LEAD MANAGER AND BOOKRUNNER

FINANCIAL ADVISER

Elara Capital PLC29 Marylebone Road

London NW1 5JX

Sacombank Securities Joint Stock Company

278 Nam Ky Khoi Nghia Street District 3, Ho Chi Minh City

LEGAL ADVISERS TO THE SOLE LEAD MANAGER AND BOOKRUNNER

As to US and English lawMayer Brown International LLP

201 BishopsgateLondon EC2M 3AF

As to Vietnamese lawMayer Brown JSM

12th FloorPacific Place Building83B Ly Thuong KietHoan Kiem District

Hanoi

LEGAL ADVISERS TO THE DEPOSITARY

Linklaters LLPOne Silk Street

London EC2Y 8HQ

INDEPENDENT STATUTORY AUDITORS TO THE COMPANY

Ernst & Young Vietnam LimitedSaigon Riverside Office Center

8th Floor2A-4A Ton Duc Thong Street

District 1Ho Chi Minh City

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SUMMARY

Information on the Group – Overview

Hoang Anh Gia Lai Joint Stock Company is currently the largest private sector company, by market capitalisation, listed on the HoSE. At 15 March 2011, its market capitalisation was approximately VND 21,962 billion.

The Group primarily operates in the following business sectors: real estate, rubber plantations, iron ore mining, hydropower and manufacturing. Although originally focused in the Gia Lai province of Vietnam, the Group has expanded its activities throughout Vietnam and into the neighbouring states of Laos and Cambodia. The Group exports its furniture products throughout Asia, Europe and the Americas.

Competitive Strengths

The Company believes that its success and future prospects and the success and future prospects of the Group of which it is the ultimate parent company are linked to the following competitive strengths:

● The Group is a large diversified group with strong financial performance.

● The Group leverages the intrinsic natural advantages of Vietnam and its key geo-political location.

● The Group has built a balanced portfolio of complementary businesses.

● The Group's activities have allowed it to build a strong brand within the Vietnamese market.

● The Company has sought to reward its shareholders through dividends and bonus share issues.

● The Group is efficiently run and has a competitive advantage over state-owned enterprises.

● The Group believes that the Government has consistently provided the policy framework conducive to the growth of private enterprises and foreign investment.

Business Strategy

The Group's current business strategy is to:

● Continue to expand its operations through sustainable growth.

● Consolidate its position as the leading private enterprise real estate development company in Vietnam while diversifying its business.

● Become one of the largest producers of natural rubber in Vietnam.

● Establish itself as a major mining presence in Southeast Asia.

● Make itself one of the leading private suppliers of hydropower in Vietnam.

● Consolidate its position and increase profitability in the manufacturing and granite production sectors.

Summary of Risk Factors

The Group's business, financial condition, the industries and markets in which it operates and the GDRs are subject to certain risks including, but not limited to the following risks.

Risks relating to the Group's business and the industries in which it operates

General risks relating to the Group's business

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● The Group's diversification strategy may not be successful.

● The Group's expansion and diversification is dependent upon its ability to obtain funding.

● Government regulations impose significant costs on the Group's operations, and future regulations could increase those costs or limit the Group's ability to produce and sell its products.

● The Group's business will be affected if the Group is not able to compete effectively.

● The Group may not purchase sufficient insurance to cover risks in its business operations.

● The Group may be unable to attract and retain a highly-skilled and experienced workforce and management.

● Relocation of incumbent residents and businesses on the Group's sites may cause delays and increase its costs.

● The Company's results of operations depend on those of its subsidiaries and affiliates.

● There may be conflicts between the interests of the real estate, rubber plantation, iron ore mining, hydropower and manufacturing divisions.

● Opposition from local communities and other parties.

● Shortages or increased costs of materials and skilled labour could increase costs and delay projects.

● The Group relies upon third party suppliers.

● The current global economic slowdown may negatively impact the Group.

● The Company's controlling Shareholder may be able to take actions that do not reflect the will or best interests of other Shareholders.

● Certain of the Group's existing projects are being developed without necessary government approvals, permits or licences and development and operation of certain projects are not fully in compliance with applicable laws and regulations.

● The Group has limited customers for its new business.

Real estate risks

● The Group's business is dependent on the Vietnamese real estate market.

● Demand for properties developed by the Group may fluctuate.

● Delay or failure by the Group in acquiring, developing and constructing its projects could have a material adverse effect on its real estate business.

● Property transfers and registration of land title in Vietnam is complex and subject to delays.

● Market values in an illiquid market may be difficult to ascertain.

● Uncertain property values may fluctuate.

● Purchasers of pre-sold properties may be entitled to remedies against the Group in certain circumstances.

● The Group may not be able to acquire land use rights at acceptable prices.

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Rubber risks

● Any significant downturn in the Chinese economy may decrease rubber exports.

● The Group's business may vary with fluctuations in the production costs and the prices for natural rubber.

● The Group's rubber plantation sites may not yield sufficient volume of rubber and are subject to natural disasters.

● Elimination of tax incentives could have a material adverse effect on the rubber plantation business.

● Due to a change in the Group's revenue recognition policy for pre-completion sale of its apartments, the Group's historical financial condition and results of operations may not be fully comparable to its future financial condition and results of operations.

Iron ore mining risks

● The Group operates in a competitive industry.

● The Group's mining operations are subject to operating risks that could result in decreased iron ore production which could, in turn, reduce its revenues.

● Disruptions to or increased costs of transport services may affect the Group's ability to deliver iron ore to customers.

● Reserve and resource estimates are uncertain.

● The Group's profitability depends upon its ability to successfully exploit existing reserves.

● The marketability and prices of iron ore may fluctuate.

● The Group is in the process of obtaining exploitation permits and other permits, licences and approvals in connection with several of its iron ore projects.

● The Group's operations may substantially impact the environment.

● The Group may not be able to export iron ore to overseas markets.

Hydropower risks

● Delay or failure by the Group in developing and completing its development projects may adversely affect the Group's power production levels.

● The Group's hydropower operations may be materially adversely affected by climate change.

● Increased demand for water in other sectors may affect the Group's operations.

● Plant and machinery supplies and failures may disrupt hydropower operations.

● The financial performance of the Group's hydropower operations may be adversely affected by changes to its off-take agreements with EVN.

● The Group's hydro projects may not be eligible for CERs under the CDM.

Manufacturing risks

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● The Group's furniture manufacturing business may be adversely affected by price and availability of raw materials.

● Demand for the Group's furniture products may fluctuate.

● Tariff changes on wood and furniture may have a material effect on the competition faced by the Group.

Risks relating to Vietnam

● The Group may not be able to enforce its rights effectively through legal proceedings in Vietnam.

● The Group's operations may be subject to environmental regulations.

● The Group's operations may be subject to economic, political and economic risks.

● The Vietnamese economy is subject to periods of high inflation.

● The Group is exposed to currency risks.

● Corporate disclosure, accounting and governance standards in Vietnam do not require the level of disclosure applicable in other non-emerging market jurisdictions.

● Any downgrade of Vietnam's sovereign debt rating by an international rating agency could have a negative impact on the Group's results of operations and financial condition.

● The tax status of the Group may change.

● The Group's ability to raise foreign capital may be constrained by Vietnamese law.

● The Group may not be able to grant mortgages over land.

Risks associated with the GDRs and the Shares

● The GDRs may not be a suitable investment for all investors.

● Future issuances and sales of GDRs and equity securities by the Company may affect the market price of the GDRs and the Shares.

● An active market for the GDRs may not develop.

● The trading price of emerging market securities are subject to substantial volatility.

● The market price of GDRs may decrease after they are admitted to trading and Holders will bear the risk of fluctuations in the price of the underlying Shares.

● Legal protections available to Holders may be limited.

● Fluctuations in the exchange rate between the Vietnamese dong and the US dollar could have a material adverse effect on the value of the GDRs and the Shares represented by such GDRs, independent of the Group's operating results.

● The Depositary's announcement obligations on purchase or disposal of Shares may result in substantial volatility in the trading price of the GDRs and/or the price of the Shares.

● Holders will not be able to withdraw any Deposited Property for a period of at least 12 months from the date of the deposit of Shares by the Company.

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● Shares purchased by the Depositary on behalf of depositors will also be subject to lock-up until expiry of the Lock-up Period.

● Holders may only withdraw Deposited Property by instructing the Depositary to sell Deposited Property in the local market.

● Holders will have no voting rights.

● Holders may be subject to taxation in Vietnam.

● Vietnamese laws contain provisions that limit the foreign ownership rights of non-Vietnamese persons, which could materially impact the price of the Shares and GDRs.

● Holders or Shareholders may not receive cash dividends on such Shares or GDRs.

● The Depositary may withhold acceptance of funds for deposit, refuse to purchase Shares, withhold delivery or registration of issuance or transfer of all or part of the Shares and/or GDRs or withhold adjustment of the Master GDR to reflect increases in Shares represented thereby.

● The Depositary may refuse to accept funds for the purchase of Shares on behalf of depositors and/or may refuse to purchase Shares on behalf of depositors.

● The Depositary may not be able to purchase Shares or a sufficient number of Shares.

● The Depositary may not be able to sell Deposited Property and/or any sale of Deposited Property may be at a price lower than that expected by Holders.

● The Depositary may refuse to sell Deposited Property or deliver the proceeds from any such sale.

● Fees, taxes, duties, charges, costs and expenses under the Deposit Agreement in connection with the purchase and/or sale of Shares by the Depositary will be borne by the Holder.

Summary of Financial Information

The following tables set forth selected consolidated financial information on the Group for each of the three years ended 31 December 2009, 2008 and 2007, and the nine month periods ended 30 September 2010 and 30 September 2009. This information is qualified in its entirety by reference to the Group's audited financial statements and the related notes thereto prepared in accordance with VAS and included elsewhere in these Listing Particulars. The Group's financial statements as of each of the years ended 31 December 2009, 2008 and 2007 were audited by Ernst & Young Vietnam Limited. The Company's financial statements for the nine month periods ended 30 September 2010 and 30 September 2009 are unaudited.

THE FINANCIAL INFORMATION OF THE GROUP INCLUDED IN THESE LISTING PARTICULARS HAS NOT BEEN PREPARED IN ACCORDANCE WITH IFRS AND THERE MAY BE MATERIAL DIFFERENCES IN THE FINANCIAL INFORMATION HAD IFRS BEEN APPLIED TO THE FINANCIAL INFORMATION. A DESCRIPTION OF THE SIGNIFICANT DIFFERENCES BETWEEN VAS AND IFRS IS INCLUDED IN THESE LISTING PARTICULARS UNDER "SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN VAS AND IFRS".

THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED 31 DECEMBER 2007, 31 DECEMBER 2008 AND 31 DECEMBER 2009 WERE EACH AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS IN VIETNAM.

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Summary consolidated income statement

Nine months ended 30

September 2010 (interim

unaudited)(VND '000)




Year ended 31 December 2009

(VND '000)


(VND '000)

Year ended 31 December

2007(VND '000)

Revenues from sale of goods and rendering of services

3,082,323,202 3,282,054,836 4,370,251,754 1,885,145,765 1,589,430,005

Profit before tax 2,217,055,024 1,252,037,707 1,743,504,324 1,006,158,258 869,714,218

Net profit after tax

1,674,695,062 936,821,173 1,286,898,686 765,342,778 622,343,873

Basic earnings per share (VND)

5,312 4,842 4,432 2,615 4,782

Summary consolidated balance sheet

30 September 2010 (interim


31 December 2009(VND '000)



Current assets 9,026,011,056 7,403,555,092 4,524,792,761 4,011,680,725

Non-current assets 6,780,337,063 4,792,656,182 4,346,767,572 2,323,140,479

Total assets 15,806,348,119 12,196,211,274 8,871,560,333 6,334,821,204

Current liabilities 4,620,961,324 4,294,842,290 2,535,177,690 1,776,243,032

Non-current liabilities

3,134,363,669 2,773,714,458 2,137,175,892 923,863,165

Owners' equity 7,182,183,364 4,711,500,209 3,747,497,350 3,402,401,066

Minority interest 868,839,762 416,154,317 451,709,401 232,313,941

Total liabilities, owners' equity and minority interest

15,806,348,119 12,196,211,274 8,871,560,333 6,334,821,204

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Summary consolidated cash flows








(VND '000)


(VND '000)


(VND '000)

Operating income before changes in working capital

1,352,151,407 1,425,108,251 1,914,581,017 783,962,011 535,941,258

Net cash from/(used in) operating activities

432,309,002 648,204,905 1,083,310,772 (539,274,898) (1,526,417,124)

Net cash used in investing activities

(1,194,485,041) (857,829,878) (1,672,919,602) (1,683,471,183) (399,405,134)

Net cash from financing activities

1,010,539,187 275,741,948 2,002,752,386 1,460,269,145 3,083,932,615

Net increase/(decrease) in cash

248,363,148 66,116,975 1,413,143,556 (762,476,936) 1,158,110,357

Cash at beginning of year/period

1,944,228,950 531,085,394 531,085,394 1,290,907,575 132,797,218

Impact of exchange rate fluctuation

- - - 2,654,755 -

Cash at end of year/period

2,192,592,098 597,202,369 1,944,228,950 531,085,394 1,290,907,575

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SUMMARY OF THE GDRS

The following is a general summary of the terms of the GDRs. This summary is derived from and should be read in conjunction with the Terms and Conditions of the Global Depositary Receipts that are set out in full elsewhere in these Listing Particulars, which shall prevail to the extent of any inconsistency with the terms set out in this section. Capitalised terms used herein and not otherwise defined have the respective meanings given to such terms in the Terms and Conditions of the Global Depositary Receipts or the Definitions section.

The Company ......................................... Hoang Anh Gia Lai Joint Stock Company incorporated in the Socialist Republic of Vietnam with limited liability.

The GDRs............................................... Each GDR represents one Share. The GDRs are currently evidenced by a single Master GDR in registered form. There are limitations on redeposits of Shares that have been withdrawn from the GDR deposit facilities and restrictions on deposits of Shares acquired in the open market. The GDRs and the Shares represented thereby are subject to restrictions on transfer. See "Terms and Conditions of the Global Depositary Receipts" and "Transfer Restrictions".

Closing Date........................................... On 6 December 2010

Book-Entry and Definitive Certificate Delivery ................................ On 6 December 2010, the Company delivered an undertaking

by way of a Preferential Allotment Letter to the Depositary to issue the New Shares on 20 December 2010. Upon receipt andconfirmation of the Preferential Allotment Letter by the Custodian, the Preferential Allotment Letter was deposited as Deposited Property and the Depositary executed and delivered the Master GDR evidencing the GDRs on the Closing Date and delivered such Master GDR to a common depositary for Euroclear and Clearstream, Luxembourg. On 20 December 2010, the Company issued the New Shares, which were deposited with the Custodian in accordance with the terms of the Deposit Agreement. Except as described in "Summary of Provisions relating to the GDRs while in Master Form", beneficial interests in the Master GDRs are and will be shown on, and transfers thereof will be effected only through, book-entry records maintained by Euroclear and Clearstream, Luxembourg and their direct and indirect participants and accountholders. Subject to certain conditions, definitive certificated GDRs will be delivered to any Holder having instructed, or deemed to have instructed, the Depositary to issue and deliver the same. See "Summary of Provisions Relating to the GDRs while in Global Form".

Issue of additional GDRs ....................... Under the terms of the Deposit Agreement, additional GDRs may be issued only in respect of (i) Shares issued as a dividend or free distribution in respect of the Deposited Shares pursuant to Condition 5, (ii) Shares subscribed or acquired by Holders from the Company through the exercise of rights distributed by the Company to such persons in respect of the Deposited Shares pursuant to Condition 7, (iii) securities issued by the Company to the Holders in respect of Deposited

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Shares as a result of any change in par value, subdivision, consolidation or other reclassification of Deposited Shares pursuant to Condition 10, and (iv) any other Shares in issue or purchased by the Depositary pursuant to Condition 1(B).

Deposit of funds for purchase of Shares to be represented by GDRs..... Subject to applicable laws and regulations, the Terms and

Conditions of the Global Depositary Receipts and receipt of such documents and information as the Depositary or the Custodian may deem necessary or appropriate, the Depositary will accept the deposit of funds from depositors to be applied towards the purchase of Shares in respect of which further GDRs are to be issued, with such additional Shares being deposited with the Depositary and forming Deposited Property.

Purchase of Shares by the Depositary on behalf of depositors......... Upon each occasion when funds for the purchase of Shares are

deposited with the Depositary pursuant to the Conditions, the Depositary will use reasonable endeavours, subject to all applicable laws and regulations, and providing it has been pre-funded, indemnified and/or secured to its satisfaction, to apply such funds for the purchase of such number of Shares specified by the depositor in the notice delivered pursuant to the Deposit Agreement at the then-prevailing market price. Following any such purchase of Shares, the Depositary will issue the corresponding number of GDRs and will make the appropriate entries in the Register to show such issue and either (i) make the appropriate entries on the Master GDR to reflect the increase in the number of GDRs evidenced by the Master GDR or (ii) issue a further Master GDR in respect of the new issue of GDRs (which further Master GDR may or may not have a temporary ISIN as appropriate in the circumstances) and shall notify the Clearing Systems (and/or the common depositary on their behalf) and the Company of such increase. The Depositary shall, if after accepting funds for the purchase of Shares it is unable using reasonable endeavours to purchase such number of Shares specified by the depositor in its notice, contact the depositor (or its broker-dealer acting as agent on its behalf) for further instructions.

Lock-up Period....................................... The Deposited Property may not be withdrawn at any time during the period of 12 months from 20 December 2010, being the date on which the Deposited Shares were deposited with the Custodian in accordance with the terms of the Deposit Agreement, or such other statutory period as may apply to the holding of the Shares by the Custodian pursuant to Vietnamese law and regulations relating to private placements in effect from time to time. In addition, any purchase of Shares by the Depositary on behalf of depositors in the secondary market at any time during the Lock-up Period will also be subject to lock-up until expiry of the Lock-up Period and Holders will not be able to withdraw such Deposited Property until expiry of the Lock-up Period.

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Withdrawal of Deposited Property......... Subject to expiry of the Lock-up Period, upon request by any Holder in accordance with the Conditions for withdrawal of Deposited Property (and upon compliance therewith, including the delivery of certifications and/or evidence satisfactory to the Depositary) the Depositary shall, subject to the requirements of law or of any government or governmental authority, body or commission, or any other reason, sell or procure the sale of (either by public or private sale and otherwise at its discretion, subject to Vietnamese law and regulations) the Deposited Property (other than the Deposited Property held in cash), and shall distribute the proceeds of such sale, less all fees, taxes, duties, charges, costs and expenses incurred or that may be incurred by or on behalf of the Depositary with respect to such sale, as a cash distribution to the person or persons specified in the order for withdrawal, save in certain circumstances as specified in the Terms and Conditions of the Global Depositary Receipts.

Fees in connection with purchase of Shares and/or sale of Deposited Property by the Depositary..................... The payment of any fees, taxes, duties, charges, costs and

expenses (including, without limitation, any taxes in connection with the purchase of Shares, any registration fees and any fees imposed by the London Stock Exchange or the HoSE (or such other stock exchange(s) in Vietnam where the Shares may be listed from time to time)) incurred or that may be incurred by or on behalf of the Depositary with respect to the acceptance of a deposit, the purchase of Shares or the issue of GDRs, as necessary, may be deducted by the Depositary in advance of any purchase of Shares from the funds deposited by such depositor with the Depositary. All fees, taxes, duties, charges, costs and expenses incurred or that may be incurred by or on behalf of the Depositary with respect to any sale of Shares by the Depositary in connection with a withdrawal of Deposited Property shall be deducted from the proceeds of such sale. In addition, in accordance with Vietnamese regulations the Depositary will appoint a Vietnamese broker to carry out any purchase of Shares and/or sale of Deposited Property. Any fees and commissions of such broker in connection with the purchase of Shares and/or the sale of Deposited Property will be borne by the relevant depositor of funds or the Holder, as the case may be. Pursuant to current restrictions imposed by Vietnamese law and regulations, the Depositary may only appoint one broker at any one time.

New Shares............................................. The New Shares were issued by the Company on 20 December 2010 and deposited as Deposited Shares in accordance with the Deposit Agreement. Upon such deposit, each GDR represented one underlying New Share. The Existing Shares were not initially deposited with the Depositary and represented by GDRs but such Shares may be deposited with the Depositary by Shareholders at a later date in accordance with the Conditions.

Dividends ............................................... Holders will be entitled to receive dividends, subject to the terms of the Deposit Agreement, to the same extent as the

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holders of Shares, less the fees, taxes, duties, charges, costs and expenses payable under such Deposit Agreement, including any Vietnamese tax applicable to such dividends. Cash dividends on the Shares, if any, will be paid in dong and, subject to any restrictions imposed by Vietnamese law, regulations or applicable permits, will be converted into US dollars by the Depositary in the manner provided in the Deposit Agreement and distributed to Holders. See "Taxation — Vietnamese Tax Considerations". The Company has not paid any dividends since 26 August 2010.

Taxation.................................................. For a discussion of certain tax considerations relevant to an investment in the GDRs, see "Taxation".

Voting Rights of Holders ....................... Holders will have no voting rights with respect to the Deposited Shares deposited with the Custodian pursuant to the terms of the Deposit Agreement. The Depositary will not exercise any voting rights in respect of the Deposited Shares unless it is required to do so by law. If so required, the Depositary will, at the direction of the Board of Directors (subject to the advice of legal counsel taken by the Depositary and the Company, at the expense of the Company) either vote as directed by the Board of Directors or give a proxy or power of attorney to vote the Deposited Shares in favour of a director of the Company or other person or vote in the same manner as those Shareholders designated by the Board of Directors. A valid corporate decision of the Company will bind the Depositary and the Holders notwithstanding these restrictions on voting rights. The Depositary shall in no circumstances exercise any discretion with respect to the voting of the Deposited Shares.

Restriction on Disposition ofSecurities ................................................ The GDRs, and the Shares represented by such GDRs, have

not been, and will not be, registered under the Securities Act. Offers and sales of the GDRs will be subject to certain restrictions described in "Transfer Restrictions".

Depositary for the GDRs........................ Deutsche Bank Trust Company Americas.

Governing Law....................................... The Deposit Agreement is governed by English law.

Listing and Trading Markets for the GDRs................................................ Application has been made for the GDRs to be listed on the

Official List and, with respect to GDRs in global form, admitted to trading on the Professional Securities Market.

A GDR represented by an individual definitive certificate will not be eligible for clearing and settlement through Euroclear or Clearstream, Luxembourg or for trading on the Professional Securities Market.

Listing and Trading Market forShares .................................................... The Existing Shares and the New Shares have been admitted

to listing on the HoSE. The approval from the SSC for the issuance of the New Shares was granted on 19 November

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2010 and the New Shares were admitted to trading on the HoSE on 12 January 2011. The 8,108,125 Shares deposited in accordance with the terms of the Deposit Agreement pursuant to a bonus share issue on 26 January and which are represented by GDRs were admitted to trading on the HoSE on 28 February 2011.

Dilution................................................... The issue of the New Shares which are represented by GDRs resulted in a 6.1 per cent. dilution in Shareholders' shareholdings.

Government Approvals .......................... Vietnamese regulations are silent as to what approval or permission a company issuing GDRs needs to obtain from any of the regulatory authorities in Vietnam. In the absence of specific provisions of the Vietnamese Securities Laws legislating for GDRs representing listed shares of companies incorporated in Vietnam, the Company has consulted with the SSC on a no-names basis and the SSC advised that no such approval was required. See "Vietnamese Regulatory Approvals and Filings — Approvals".

GDR Security Codes .............................. Master GDR ISIN: US4337181030

Master GDR Common Code: 056263730

Master GDR CUSIP: 433718103

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RISK FACTORS

Investing in the GDRs involves a high degree of risk. Any potential investor should pay particular attention to the fact that the Group operates in Vietnam, under a legal and regulatory environment, which, in some respects, may differ from that which prevails in other countries. Prospective investors should carefully consider the risks described below, in addition to the other information contained in these Listing Particulars, before making any investment decision relating to the GDRs or the Shares represented by the GDRs. The occurrence of any of the following events could have a material adverse effect on the Group's business, results of operations, financial condition and future prospects and cause the market price of the GDRs and the underlying Shares to fall significantly and/or its ability to pay dividends could be impaired. This section describes the material and principal risks specific to the Group and the markets it operates in. Additional risks not currently known to the Group or that the Group currently deems immaterial may also adversely affect the market price of the GDRs and the underlying Shares.

1. Risks Relating to the Group's business and the industries in which it operates

General risks relating to the Group's business

The Group's diversification strategy may not be successful

Historically, the Group's principal business has been within the real estate sector. In 2009, approximately 77 per cent. of the Group's revenues were generated by its real estate business. The Group aims to increase its turnover and profitability through further diversification into the rubber, iron ore, and hydropower industry sectors. In addition, it is expected that the Group's growth strategy will deliver a more balanced segmental revenue profile, enhanced margins, tax benefits and higher earnings per share growth. There can be no assurance that the Group will be able to achieve all or any of its objectives, and even if achieved, within the anticipated time frame and budget.

Although the Group has gained considerable project management experience from its real estate activities and has recruited managers with experience in the industries within which its new businesses operate, there can be no assurance that the Group's management will be able to successfully execute its strategy of expanding and diversifying into new areas of business which are substantially unrelated to its current principal business. As the Group continues to grow, it must continue to improve its technical and operational knowledge, optimise allocation of resources and implement an effective internal management system. The Group needs to continue to recruit and provide training for qualified personnel in order to support its expanding operations. Furthermore, the Group needs to manage relationships with a greater number of customers, suppliers, contractors, service providers, lenders, other third parties and relevant governmental authorities. The Group will also need to further strengthen its internal control and compliance functions to ensure that its is able to comply with its future legal and contractual obligations. There can be no assurance that the Group will not experience issues such as construction delays or operational difficulties at new locations or difficulties in expanding its existing businesses and operations. Similarly, there can be no assurance that the Group will be able to attract and hire competent personnel and implement its training programs to support its expanding businesses.

Until recently, substantially all of the Group's business operations were in Vietnam. While the Group intends to continue to concentrate its resources in Vietnam, it has expanded to Cambodia, Laos and Thailand. These countries may differ from Vietnam in terms of, among other factors, economic development, regulatory environment, business practices, quality of suppliers and contractors, pricing, availability of bank financing, mortgage financing and customer tastes and preferences. Accordingly, the Group's experience in Vietnam may not be applicable to other countries and it may be at a competitive disadvantage compared to other businesses with a more established presence in those countries. An unsuccessful expansion into these new countries may increase the Group's operating costs and impair its overall profitability and in turn materially and adversely affect its business, prospects, financial condition and results of operations.

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The Group's ability to diversify its operations could be limited by many factors beyond its control, including the Group's ability to raise sufficient financing, restrictions under the Group's existing or future debt agreements, competition from other companies, external contractors and engineers, and granting ofconsents and permits from relevant government departments. These risks are described in greater detail in this section. The Group's inability to complete its projects as planned may have a material adverse effect on the growth prospects of the Group or the results of the operations or financial condition of the Group.

The Group may not be able to refinance its indebtedness as it matures

The Group maintains significant indebtedness to finance its project development activities. At 30 September 2010, the Group's total consolidated indebtedness, representing its current and non-current bank and other loans, was VND5,093,053 million, of which VND2,665,041 million was due within one year or on demand. The Group's short term capital needs are to finance its working capital requirements and are generally met using short-term loans secured by land use rights, plant, machinery and equipment and inventories. Other sources of short term liquidity include cash balances and receipts from operations. The Group's long-term capital needs include the financing of its current and future real estate projects, the development of its hydropower, iron ore and rubber plantations businesses and purchases of machinery and equipment. The Group believes that, because of its anticipated strong cash flows in the future, it will be able to repay its debts as they fall due. However, any material deterioration in the Group's cash position in the future, as a result of unforeseen events or matters beyond its control, will require it to use cash generated from operating activities or some other sources to repay its debt when it becomes due. There can be no assurance that the Group's business will generate sufficient cash flow from operations to repay its borrowings as they mature. Repaying borrowings with cash generated by operating activities will divert the Group's financial resources away from the development of its businesses.

The Group's operations may be restricted by the terms of the notes to be issued by the Company, which could limit the Group's ability to plan for or to react to market conditions

At the date of these Listing Particulars, the Company was in the process of offering senior notes to potential investors (the "Notes"). The Company is expecting to raise approximately US$ 200m from this offering. The Notes will be secured on a pledge of the shares held by the Company (and other Group companies) in its subsidiary guarantors (Hoang Anh Gia Lai Wooden Furniture Joint Stock Company, Hoang Anh Gia Lai Hydropower Joint Stock Company, Hoang Anh Construction and Development House Joint Stock Company, HAGL Mineral Joint Stock Company and HAGL Rubber Joint Stock Company.) and will be senior in right of payment to certain future subordinated indebtedness of the Company or the guarantors, but will be subordinated to certain existing indebtedness. The indenture governing the Notes will, among other things (and subject to certain important exceptions and qualifications), limit the Company's and the subsidiary guarantors' ability to:

● incur or guarantee additional indebtedness and issue disqualified or preferred stock;

● declare dividends on capital stock or purchase or redeem capital stock;

● make investments or other specified restricted payments;

● sell assets;

● create charges;

● enter into sale and leaseback transactions;

● engage in any business other than permitted business (broadly, any business that is the same as, or reasonably related, ancillary or complementary to, any of the businesses in which the Group is engaged on at the date of the indenture);

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● enter into agreements that restrict the subsidiaries' ability to pay dividends, transfer assets or make intercompany loans;

● enter into transactions with shareholders or affiliates; and

● effect a consolidation or merger.

Some of the Group's existing indebtedness contain negative covenants that restrict the operations of its businesses, its ability to incur additional loans and declare dividends and most of its indebtedness is secured by charges on its assets. See "Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital resources and expenditures" for details of the covenants which apply to this indebtedness.

The Group expects that future indebtedness will contain similar restrictive covenants and may create similar charges on its assets. The Group may lose part or all of the charged assets if the Group cannot repay or refinance such borrowings as they mature, which could materially and adversely affect its business, prospects, financial condition and results of operations. However, the Group believes that the current risk of losing part or all of such assets is remote as the Group anticipates receiving strong cashflows in the future, which will allow it to meet its payment obligations under the Notes. However, these covenants could limit the Group's ability to plan for or react to market conditions or to meet its capital needs. The Group's ability to comply with these covenants may be affected by events beyond its control, and it may have to curtail some of its operations and growth plans to maintain compliance. However, the Group does not currently anticipate having to take any such action to maintain compliance.

The Group's expansion and diversification is dependent upon its ability to obtain funding

The Group requires capital for, among other purposes, expanding its operations, making acquisitions, managing acquired assets, acquiring new equipment, maintaining the condition of its existing equipment and maintaining compliance with laws and regulations. For the years ending 31 December 2011, 2012 and 2013, the Group plans to incur capital expenditures of US$ 195.8m, US$ 215.3m and US$ 67.8m, respectively. These amounts are significantly greater than the Group's historical capital expenditures. To the extent that cash generated internally and cash available under the Group's existing credit facilities are not sufficient to fund its capital requirements, the Group will require additional debt or equity financing, which may not be available on favourable terms, or at all. Future debt financing, if available, may result in increased finance charges, increased financial leverage, decreased income available to fund further expansion and the imposition of restrictive covenants on the Group's businesses and operations. In addition, future debt financing may limit the Group's ability to withstand competitive pressures and render the Group's business more vulnerable to economic downturns. If the Group fails to generate or obtain sufficient additional capital in the future, it could be forced to reduce or delay capital expenditures, sell assets or restructure or refinance indebtedness.

Accordingly, the Group's planned and any proposed future expansions and projects may be materially and adversely affected if the Group is unable to obtain funding for such capital expenditures on satisfactory terms, on a timely basis or at all, including as a result of any of the Group's existing facilities becoming repayable before their due dates. In addition, there can be no assurance that the Group's planned or any proposed future expansions and projects will be completed on time or within budget, which may adversely affect the Group's cash flow.

The Group has not obtained certain approvals, permits and licences for the development and operation of several of its existing projects

The Group has not obtained certain approvals, permits and licences for the development and operation of several of its existing projects. These are set out below:

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● Planting activities have commenced at the Group's rubber plantation project at Chu Prong district, Gia Lai province, although the Group has not been issued with an investment certificate. However, the land area had already been allocated to the Group by the People's Committee of Gia Lai Province. The Group is currently seeking an investment certificate.

● The Group has commenced construction of its hydropower projects at Ba Thuoc 2 and Dakpsi 2B without construction permits. The Group believes that it does not need construction permits for these projects and has received verbal confirmation from the relevant governmental organisations that this is the case. However, it is seeking a formal waiver of the construction permit requirement. It has received such waivers in respect of its other hydropower plants in relation to which construction activities have commenced.

Pursuant to applicable laws and regulations, the Group may be subject to certain potential administrative liabilities and sanctions due to the lack of necessary approvals, such as fines (ranging from VND 10,000,000 to VND 15,000,000 for failure to obtain an investment certificate for a project), temporary or permanent suspension of construction or operations or compulsory termination of investment activities. The Group believes that the risk of such sanctions is remote.

In addition, the development and operation of some of the Group's projects are not in compliance with the applicable laws and regulations, which may cause a material adverse impact on its businesses. The Company's subsidiaries in Cambodia and Laos have historically not been in full compliance with the applicable labour laws and regulations due to their operations without necessary labour registration, social security registration and excessive non-Laotian employees. The Group has already initiated necessary actions to remedy such non-compliance and has not been fined, penalised or received any notice of suspension from the relevant authorities. However, the relevant governmental authorities may still have the power to impose administrative sanctions upon the Group based on certain of its prior non-compliances during the relevant statutory limitation period, within the specified timeframe even though such non-compliances are remedied in the future. In these circumstances, the Group may incur additional financial burdens to pay fines (which cannot be estimated) and it may not be able to maintain its project development schedule due to suspension of operations. However, the Group does not believe that the imposition of such sanctions is likely.

Government regulations impose significant costs on the Group's operations and future regulations could increase those costs or limit the Group's ability to produce and sell its products

The industries which the Group operates are subject to regulation by Vietnamese law with respect to matters such as limitations on land use, employee health and safety, land permits and licensing requirements, water pollution, protection of human health, plant life and wildlife, the discharge of materials into the environment, surface subsidence from underground mining, and reclamation and restoration of properties. In particular, certain statutory and regulatory permits and approvals may be required in order for the Group to carry out its activities and operations. In particular, most of the Group's hydropower, iron ore mining and rubber plantations projects are at an early stage of development. The Group is in varying stages of applying for and obtaining the necessary licences, approvals and permits with respect to each of these projects and in many instances are in direct discussions with the relevant governmental agencies, authorities and ministries to apply for and obtain these licences, approvals and permits. There can be no assurance that the relevant authorities will issue any such permits and approvals in the time frame anticipated, or at all.

Even if the Group obtains the required licences, permits and approvals, its operations may be subject to continued review and the governing regulations are subject to change. Further, the Group's contractors and other counterparties may also be required to obtain approvals, licences, registrations and permits with respect to the services they provide to the Group. There can be no assurance that such contractors or counterparties will have obtained and maintain the validity of such approvals, licences, registrations and permits.

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The possibility also exists that new legislation and/or regulations and orders may be adopted that may materially adversely affect the Group's operations and cost structure. New legislation or administrative regulations, including proposals related to the protection of environment that would further regulate and tax the industries the Group operates in, may also require the Group or its customers to change operations significantly or incur increased costs. These regulations, if enacted in the future, could have a material adverse effect on the Group's financial condition and results of operations.

The Group's business will be affected if the Group is not able to compete effectively

Competition in the industries that the Group operates in is based on many factors, including price, production capacity, quality and characteristics, and brand name. The Group's businesses compete principally in Asia and face competition from third parties, including from state-owned companies. The operations of state-owned companies may not be driven solely by profit and, as a result, may provide products at lower prices than those offered by the Group. The Group may be unable to compete effectively due to improvements in the quality of its competitors' products and/or a decrease in the quality of the Group's products. In addition, the Group may face competition from international businesses that possess greater expertise, resources and supporting infrastructure or from domestic businesses which have greater experience the business areas into which the Group is diversifying. Intensified competition may also result in an increase of the cost at which the Group can secure property, goods and services. Increased competition in the future, including from new competitors that may emerge, could have a material adverse effect on the Group's business, results of operations and financial condition.

The Group may not purchase sufficient insurance to cover risks in its business operations

In accordance with market practice, the Group has purchased insurances of varying amounts to cover a variety of risks. These include, but are not limited to, insurances covering its assets and business interruptions and where required by Vietnamese law and regulations. The Group may, however, be unable to or decide not to renew its insurance policies on the same terms, and may be subject to liability or other losses that cannot be insured against, or against which it may elect not to be insured because of high premium costs. The occurrence of a significant event leading to losses that are not fully covered by insurance could have a material adverse effect on the business, results of operations and financial condition of the Group.

The Group may be unable to attract and retain a highly-skilled and experienced workforce and management

The success of the Group's businesses is dependent on recruiting, retaining and developing highly-skilled, competent people at all levels of the organisation. Key employees, including members of the management teams, are fundamental to the Group's ability to obtain, generate and manage opportunities. The ability to maintain the Group's competitive position and to implement the Group's business strategy is dependent on the Group's management and the ability to attract and retain experienced and qualified members of management and other employees. If the Group's competitors offer, for instance, better compensation or working conditions, the Group could potentially lose some of its key employees. If the Group cannot attract, train and retain qualified employees, the Group may be unable to successfully manage its growth or otherwise compete effectively within its industries, which could adversely affect its business.

Relocation of incumbent residents and businesses on the Group's sites may cause delays and increase its costs

The relocation of incumbent residents and businesses from the sites to be acquired and developed by the Group can result in opposition from local communities and significant costs. In Vietnam, the Government typically clears the relevant sites, then allocates or leases such land to a project developer. However, a property developer may choose to clear the land itself and negotiate with the incumbent residents directly. The Government may not interfere with successfully negotiated clearances, but if the property developer is unable to complete the land clearance, it may request assistance from the Government. There can be no assurances that the relocation of incumbent residents or businesses at the site of the Group's projects will

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proceed smoothly, or that such negotiations will be successful at all. In addition, the amount of compensation to be paid by the Group may be significant. Even if relevant clearances are obtained, the Group's development projects may be subject to delays resulting from such relocations, which may, in turn, increase the Group's costs and adversely affect its business, financial condition and results of operations.

The Company's results of operations depend on those of its subsidiaries and affiliates

The Company has certain subsidiary companies and affiliates, which together comprise the Group. These subsidiaries and affiliates are each separate legal entities. As such, the Company only exercises control over these entities by the exercise of any rights it holds as a shareholder or capital-contributing member. There can be no assurance that these companies will be able to distribute any dividends to the Company.

From time to time, the Company may decide to establish loan facilities with its subsidiaries to enable those companies to implement certain projects in line with the Group's strategy. There can be no assurance that these projects will generate sufficient returns to enable these subsidiary companies to meet their payment obligations to the Company under the terms of the particular loan facilities.

There may be conflicts between the interests of the real estate, rubber plantation, iron ore mining, hydropower and manufacturing divisions

The Group is a conglomerate business with activities in the real estate, rubber plantation, iron ore mining, hydropower and manufacturing industries. The existence of these divisions could give rise to occasions when the interests of one division conflict with the interests of one or more of the other divisions. The outcome of such conflicts may result in operational or financial decisions or the implementation of new policies that may be adverse to one division as compared to others. Even though the Board of Directors will seek to resolve matters that come before it in a manner that it determines to be in the best interests of the Group after, amongst other things, giving fair consideration to the potentially divergent interests, one or more divisions may be less favourably positioned than if such divisions were operating as independent and stand-alone companies.

Opposition from local communities and other parties

The construction and operations of real estate, rubber plantation, iron ore mining, hydropower production, and furniture and granite manufacturing in a number of countries has faced opposition from the local communities where these sites are located and from special interest groups. The Group may face protests at certain of its sites, and a number of its properties may become damaged in the course of these protests, requiring expensive and time-consuming repairs and reclamations. Certain environmental organisations may also oppose the Group's activities, particularly those related to iron ore mining. Any delays and costs resulting from such oppositions may adversely affect the Group's business, financial condition, cash flows and results of operations.

Shortages or increased costs of materials and skilled labour could increase costs and delay projects

The Group's operations are subject to inventory risks related to anticipating consumer demand and supply risks related to the availability and cost of land suitable for construction, mining and hydropower, together with the availability and cost of materials and wage costs. Increased costs or shortages of skilled labour, timber, concrete, steel, glass, bricks or other building materials could cause increases in construction costs and construction delays. In particular, cement and steel, which are subject to domestic and international supply and demand, import and export tariffs and duties, domestic duties and various other factors beyond the Group's control, may fluctuate. Increases in product prices or delays in construction of properties, hydropower dams or mines may adversely affect the Group's business in these sectors. If the Group is unable to pass on any increase in its costs to customers, the Group's profit margins and operating results may be adversely affected.

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The Group relies upon third-party suppliers

In addition, the Group relies on third parties for the timely supply of raw materials, equipment and maintenance services. Although the Group actively manages these third-party relationships to ensure the continuity of supply, the timely delivery of such supplies and the delivery of supplies that are of the requisite specification, some events beyond the Group's control could result in the complete or partial failure of delivery of such supplies or in such supplies not being delivered on time or according to specifications. In addition, any such failure could result in an increase in overall operating expenses, adversely affecting the profit margins of the Group's projects and, in turn, its business and results of operations.

The current global economic slowdown may negatively impact the Group

The current global economic slowdown and financial crisis have had a negative impact on the Vietnamese economy, and in particular, the iron ore mining and real estate industries. For example, the slowdown in economic growth and reduced availability of credit have resulted in decreased demand for commercial and residential properties and prices, and the global recession has decreased global demand for iron ore. Although the Group is diversified across different industries, it is not possible to predict how long the current economic slowdown may last and to what extent it may impact the Group. If the current global financial crisis continues for an extended period of time, it may have a material adverse effect on the Group's business, financial condition, results of operations and growth prospects.

The Company's controlling Shareholder may be able to take actions that do not reflect the will or best interests of other Shareholders

As at the date of these Listing Particulars, Mr. Doan Nguyen Duc, the Chairman of the Board of Directors, owned 47.08 per cent. of the Shares. Therefore, Mr. Duc has the ability to influence matters affecting, or submitted to a vote of, the Shareholders. Shareholder resolutions in Vietnam require the assent of at least 65 per cent. of a company's shareholders. Therefore, Mr. Duc does not have the power to pass shareholder resolutions using the voting rights attached to his Shares. However, he does have the power to determine the outcome of actions requiring shareholder approval as he possesses sufficient shares to constitute a blocking minority at a Shareholders' Meeting. Such matters include: the approval of acquisitions or mergers, setting dividend rates, the election of Directors, amendments to the Charter, approval of financial statements, sanctions against Directors for breach of their duties to the Company and the dissolution of the Company. There is currently no arrangement in place between the Company and Mr. Duc regarding the manner in which he may exercise his voting rights and there can be no assurance that any blocking by Mr. Duc of resolutions proposed at a Shareholders' Meeting will reflect the will or best interests of other Shareholders.

In addition, in accordance with the provisions of the Charter, as Mr. Duc currently owns between 30 and 50 per cent. of the Shares, he is entitled to nominate three members of the Board of Directors and three members of the Board of Management. If elected to either the Board of Management or the Board of Directors, such Directors will be required to abide by their statutory directors' duties. However, there can be no assurance that the decisions taken by such Directors will not be influenced by Mr. Duc.

Furthermore, the trading price of the Shares could be adversely affected if Mr. Duc was to sell substantial numbers of his Shares or if potential new investors are disinclined to invest in the Company because they perceive disadvantages to a large shareholding being concentrated in the hands of a single Shareholder.

The Group has limited customers for its new business

The Group's hydropower, iron ore and rubber plantations businesses were recently launched. As a result, its has few existing customers at this time. The Group's hydropower revenues are expected to solely derive from the sale of electricity generated by hydropower plants, and its existing operational hydropower plant sell its power to EVN only. The Group's future power plants will also sell their power to EVN in Vietnam

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and to EDL in Laos only. The Group has only one iron ore customer, a Vietnamese steel producer, and it is currently in discussions with a small number of other potential customers for its iron ore. Loss of any one of the Group's limited customers in its new businesses or any decrease in its contracts will have a negative impact on their respective development and profitability. Without revenue from the Group's new businesses, its overall revenues may be subjected to significant fluctuation or declines and its business, prospects, financial condition and results of operations may be adversely affected.

Real estate risks

The Group's business is dependent on the Vietnamese real estate market

Real estate is the most important segment of the Group's activities and forms approximately 77 per cent. of the Group's revenues, with substantially all of its properties being based in Vietnam. As such, the Group's business, financial condition and results of operations are highly dependent on the Vietnamese real estate market, and the Group will continue to be heavily dependent on the performance of the Vietnamese real estate market in the future. Any significant downturn in the Vietnamese economy, and in particular, to the real estate market, including reduction in demand or downward movements in rental yields, could have a material adverse effect on the Group's business, financial condition and results of operations.

Demand for properties developed by the Group may fluctuate

The Group develops both residential and commercial space. The level of demand from potential purchasers or tenants of properties developed by the Group varies depending on a number of factors, including the availability and cost of land, materials or labour, general economic conditions, changes in the relative demand for property types and locations, interest rates and the availability and cost of credit. Similarly, there can be no assurance that the Group will be able to renew existing leases or re-let properties as existing leases expire. Local amenities, transport links and other supporting infrastructure near the Group's properties and projects and factors outside the Group's control may also affect the desirability and demand for residential and rental office space leased by the Group. Reduced property sales or occupancy rates could lead to a decline in the value of the Group's property assets and reduce the Group's rental income.

Delay or failure by the Group in acquiring, developing and constructing its projects could have a material adverse effect on its real estate business

The Group's ability to acquire and develop sites and construct residential and rental office space require substantial capital expenditure during the acquisition and construction phases, and it usually takes years before such projects become operational and begin generating rental income. These projects are also adversely affected by many factors beyond the Group's control, including relocating incumbent residents, adverse weather conditions, natural disasters, supplies of equipment and labour, competition from other companies for suitable properties, granting of consents and permits from the relevant government departments and performance of engineering and construction contractors, suppliers and consultants. Except for the Group's completed projects, all of the Group's development projects are subject to some or all of these risks. There can be no guarantees as to when the Group's development projects will be completed, or if they will be completed at all, and generate satisfactory returns. The Group's inability to complete its development projects as planned may have a material adverse effect on the growth prospects of the Group and its financial condition.

Property transfers and registration of land title in Vietnam is complex and subject to delays

The method of documentation of land transfers and registration of property title takes a significant amount of time, and property acquisition may be subject to a number of regulatory approvals and may take several years to complete. In addition, title to real property may suffer from other irregularities of title and the validity of property transfers may be challenged. While the Group will carry out due diligence before

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acquiring land in undertaking any project, all risks, onerous obligations and liabilities associated with land transfers may not be fully assessed or identified.

Market values in an illiquid market may be difficult to ascertain

Properties, including those which the Group has acquired, or may acquire in the future, can be relatively illiquid investments. This lack of liquidity may affect the Group's ability to vary its portfolio or dispose of or liquidate part of its portfolio in a timely fashion and at satisfactory prices in response to changes in economic, real estate market or other conditions. A decline in the value of the Group's property assets may limit or reduce the level of return on the Group's investment in the property.

Uncertain property values may fluctuate

There can be no assurance that the valuations of properties will reflect actual sale prices, even when any such sales occur shortly after the relevant valuation date. In addition, the value of the Group's property portfolio may fluctuate as a result of factors such as changes in regulatory requirements and applicable laws (including taxation and planning), political conditions, the condition of financial markets, interest and inflation fluctuations.

Purchasers of pre-sold properties may be entitled to remedies against the Group in certain circumstances

The Group sells a significant proportion of properties prior to completion. Any delay in the completion of these projects may result in purchasers terminating pre-sale agreements and claiming refunds of purchase monies, damages and/or compensation for late completion. There is no assurance that the Group will not experience delays in completion or delivery of future real estate projects.

There can be no assurance that the government of Vietnam will not implement restrictions of the pre-sale of properties. The Group partly finances its property developments and other operations from the proceeds of pre-sales and therefore any further restrictions may have a material adverse effect on the Group's business, financial condition and results of operations.

The Group may not be able to acquire land use rights at acceptable prices

Investment in an appropriately balanced land bank is essential for companies operating in the real estate sector. Acquiring land use rights at the right time, when local land prices are stable or rising, and investing in the most appropriate geographical locations, underpin a successful growth strategy.

Although the Group has acquired a large land bank at low cost, in the future the Group may face significant competition in identifying and acquiring suitable land from others, including competitors who may have greater resources at the relevant time, and new emerging entrants to the market. If competition or demand for land increases, the cost of acquiring land could rise and the availability of suitable land at acceptable prices may decline. A reduction in the Group's land bank or its quality may adversely affect the number and the ability to sell new properties the Group is able to build and this may have a material adverse effect on the Group's business, financial condition and results of operations.

Due to a change in the Group's revenue recognition policy for pre-completion sale of its apartments, the Group's historical financial condition and results of operations may not be fully comparable to its future financial condition and results of operations

Historically, the Group recognised revenues from the pre-completion sales of its apartments with reference to the stage of completion at any given balance sheet date. Other real estate companies may recognise revenues on the date of completion of a real estate project (which is deemed to occur upon receipt of the construction completion certificate). The Group believes that its historical policy effectively matched its revenues, costs and business operations. However, the Group will be changing its revenue recognition policy on a retrospective basis for pre-completion sale of apartments with effect from 1 January 2011 to be

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in line with IFRS, which effectively requires apartment revenue and costs to be recognised upon completion. Its 2010 audited financial statements will be prepared on the same basis as the historical financial information in these listing particulars.

Accordingly, the Group will have to recognise its revenue from sales of apartments later than it used to do under current revenue recognition policy for the sale of apartments. Furthermore, as the Group only has a few real estate projects that are scheduled to complete in 2011 and 2012, its revenue and net profit from sales of apartments in the next two years may decrease. It is also likely that the Group's quarter to quarter results will vary significantly depending on the amount of revenues it recognises from sales of apartments at the end of each financial quarter. As a result, the Group's future quarterly financial results are likely to fluctuate significantly.

VAS allows companies to apply new standards if it is impractical to do a full restatement of historic financial statements. The Group is implementing the new accounting policies retrospectively effective from 1 January 2011. The Group sought confirmation of this approach from the Ministry of Finance. Based on the Ministry of Finance's reply dated 18 February 2011, the Group decided not to restate its historical financial statements. If the Group were to restate its historical financial statements for the three years ended 31 December 2009 as if the new policy were in effect as of 1 January 2007, the Group's revenues, gross profit and profit before tax would have significantly decreased compared with the financial statements for these periods included in these Listing Particulars which applied the Group's previous revenue recognition policy.

The Group's financial statements for future periods (other than its 2010 audited financial statements) will not be fully comparable to those included in these Listing Particulars. The Group will not be providing comparative financials for previous periods on the same basis. Therefore, you may not be able to fully analyse the Group's future financial performance and trends using its historical financial information. In future quarterly periods, where comparable financials are not produced, the Group's financial results may be significantly lower than its historical quarterly periods. While full financial year results may improve compared to prior financial years, quarterly results will not be indicative of full year results.

Rubber plantation risks

Any significant downturn in the Chinese economy may decrease rubber exports

China is a very large importer of rubber-related products, and a significant proportion of the Group's sales are anticipated to be made in this market. As such, the Group's business, financial condition and results of operations are highly dependent on the Chinese market and economy. Any downturn in this economy, especially with respect to rubber-related industries, could have a material adverse effect on the Group's business, financial condition and results of operations.

The Group's business may vary with fluctuations in the production costs and the prices for natural rubber

As the majority of the Group's revenue is expected to derive from sales of natural rubber to external parties, the Group's business, results of operations and margin are substantially dependent on the market prices and the production costs of natural rubber. The domestic and international natural rubber markets may fluctuate in supply and demand and, consequently, prices may vary from year to year. These fluctuations in prices and production costs which affect the Group's results of operations and cashflows are subject to numerous factors beyond the Group's control, including but not limited to global economic trends and conditions, the supply of and demand for natural rubber, the price and availability of alternative sources of rubber such as synthetic rubber (the demand and price of which, as a by-product of the oil industry, depends on oil prices), costs of raw materials, labour and services related to rubber, currency exchange fluctuations, expectations for inflation, speculative activity, consumption patterns and global or regional political events.

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The Group's rubber plantation sites may not yield sufficient volume of rubber and are subject to natural disasters

Due to the nature of the cultivation cycle, the Group has not yet produced significant amounts of rubber on a commercial scale. Even though the Group has already achieved yields from fully matured rubber trees, the first commercial output from its plantations is not expected until 2012-13, and the level of the Group's rubber production is subject to operating conditions and events beyond its control that could disrupt operations and affect production at particular sites for varying lengths of time. These include adverse weather and natural disasters such as heavy rains and flooding, forest fires particularly during Vietnam's dry seasons, earthquakes, tsunamis and droughts. In addition, there can be no assurance that the sites the Group acquired for rubber planting are adequate to grow and harvest rubber plants. No assurance can be given that the Group will be able to produce sufficient volume of rubber at competitive costs.

Elimination of tax incentives could have a material adverse effect on the rubber plantation business

The Company has been able to secure significant tax advantages for its rubber production business, and Gia Lai province and Laos and Cambodia have exempted the Company from corporate income tax for the initial four to five year start-up period. There can be no assurance that these tax incentives will continue tobe maintained at the same level or at all, and the termination of such tax incentives or the provision of greater governmental incentives to other companies may make the Group less competitive.

Iron ore mining risks

The Group operates in a competitive industry

Competition in the iron ore industry is based on many factors, including price, production capacity, iron ore quality and characteristics, transportation capability and brand name. The Group's iron ore business competes principally with other iron ore producers in China, Brazil and Australia and faces competition from third parties, including state-owned industries in Vietnam. Some of these companies have greater financial and other resources than the Group and, as a result, may be in a better position to compete for future business opportunities. Many of the Group's competitors not only explore for and mine iron ore but also carry out refining and processing operations on a worldwide basis. The Group may be unable to compete effectively due to the improvements in the quality of iron ore sold by the Group's competitors, a decrease in the quality of the Group's iron ore, deterioration of iron ore reserve mining conditions or government-owned competitors selling iron ore at lower prices. Increased competition in the future could have a material adverse effect on the Group's business, results of operations and financial condition.

The Group's mining operations are subject to operating risks that could result in decreased iron ore production which could, in turn, reduce its revenues

The level of the Group's iron ore mining production is subject to operating conditions and events beyond its control that could disrupt operations and affect production at particular mines for varying lengths of time. These conditions and events include depletion of the Group's reserves, the Group's inability to acquire, maintain or renew necessary permits for mining or surface rights in a timely manner or at all, the unavailability of qualified mining labour in Vietnam, changes in governmental regulation of the mining industry including the imposition of additional taxes, fees or actions to suspend or revoke the Group's permits or changes in the manner of enforcement of existing regulations, adverse weather and natural disasters, increased or unexpected reclamation costs and interruptions due to transportation delays.

In addition, the Group's underground mining operations are affected by mining conditions such as unfavourable geological conditions, highly variable character of iron ore deposits, mine safety accidents, mining and processing equipment failures and unexpected maintenance problems, increased water entering mining areas and other operation risks associated with industrial or engineering activity such as mechanical breakdowns and the use of explosive materials.

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These conditions and events may increase the Group's cost of mining and delay or halt production at particular mines either permanently or for varying lengths of time. Furthermore, the realisation of some of these risks could result in damage to the Group's iron ore deposits or production facilities, personal injury or death, environmental damage to the Group's properties or the properties of others, delays in mining out iron ore or in the transportation of iron ore, which could lead to monetary losses and potential legal liability.

Disruptions to or increased costs of transport services may affect the Group's ability to deliver iron ore to customers

Iron ore depends upon a variety of transportation methods for its distribution, including seaborne freight, inland water transport, rail and trucking. Any disruption to or increase in the cost of these transport services, including as a result of fuel cost increases, interruptions that decrease the availability of these transport services or increases in demand for transport services from the Group's competitors or from other businesses, or any failure of these transport services to be expanded in a timely manner to support an expansion of the Group's operations, could have a material adverse effect on the Group's business, results of operations and financial condition.

Reserve and resource estimates are uncertain and the Group does not apply internationally recognised mining reporting standards

Estimates of iron ore reserve and mineral resource inherently include a degree of uncertainty and depend to some extent on geological assumptions, iron ore prices, cost assumptions, statistical inferences and drilling and other testing, which may ultimately prove to have been unreliable. These estimates may therefore require revision (either up or down) based on actual production experience. Furthermore, should the Group encounter mineralisation or formations different from those predicted by test drilling, sampling and similar examinations, iron ore reserves estimates may have to be adjusted and mining plans may have to be altered in a way that might affect the Group adversely. Consequently, no assurance can be given that the estimated iron ore reserves will be recovered or that they will be recovered at the rates estimated. If the Group's actual mineral reserves and resources are less than current estimates, the Group's prospects, value, business, results of operations and financial condition may be adversely affected.

Different reporting systems employ different assumptions and as a result, identical raw data can produce varying estimates. In addition, the Group's methodology for classifying and measuring deposits vary in certain material respects from the methodology and classification standards used by mining companies that follow the JORC Code standard. The Group does not apply the JORC Code standard to its exploration reports or to the reporting of its iron ore resources. For further information on the risks relating to the interpretation of the Group's reported iron ore resources, see "Business – Iron ore mining – Important notice regarding the mining reports".

The Group's profitability depends upon its ability to successfully exploit existing reserves

The Group's profitability depends substantially on its ability to mine iron ore reserves that can be mined at competitive costs and to meet the quality and quantities needed by its customers. Reserves may not be available when required or, if available, may not be capable of being mined at costs comparable to those characteristic of the Group's current plans. The Group may also not be able to accurately assess the geological characteristics of any reserves that it acquires, which may adversely affect the Group's profitability and financial condition if the Group's assessment proves incorrect. However, the Group will prepare all future mining exploration reports produced to internationally recognised standards. In addition, the quantity, quality, demand and price of the iron ore mined at these mining areas may not outweigh the costs related to the acquisition, development and mining of such reserves to make these projects profitable.

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The marketability and prices of iron ore may fluctuate

The iron ore industry is intensely competitive and market prices can fluctuate widely. The price of iron ore as a primary component of steel is closely linked to the performance of the global economy, and any worldwide economic downturn or in specific export markets may impact levels of demand. A decline in the market price of iron ore mined by the Group may render ore reserves containing relatively low grades of mineralisation uneconomic and may, in certain circumstances, lead to a restatement of reserves.

In addition, factors beyond the control of the Group may affect the marketability of mined and processed iron ore, including governmental regulations relating to price, royalties, allowable production and importing and exporting of iron ore, the effect of which cannot be predicted.

The Group is in the process of obtaining exploitation permits and other permits, licences and approvals in connection with several of its iron ore projects

It is unclear whether an investment certificate is required for the Group's Kbang iron ore mine project in Gia Lai Province. The Group has been operating its existing Kbang iron ore mine without an investment certificate and is not aware of precedents whereby investment certificates are required for similar mining projects in Gia Lai Province. The Group is in direct discussions with the governmental authorities of Gia Lai province to obtain official confirmation that an investment certificate is not required for the Kbang iron ore mine project.

To date, the Group has only been conducting exploration activities at its Thanh Hoa deposit in Vietnam pursuant to an approval-in-principle for exploration activities. In addition, the Group has also only been conducting exploration activities in the deposits in Laos and Cambodia. One of the Group's exploration concession agreements in Laos grant it a priority to submit a proposal for the exploitation and management of minerals in the concession area and its second exploration concession agreement includes a provision for the negotiation of an exploitation, production and processing agreement. In addition, the Group's iron ore projects in Laos are currently at a pre-operational stage. As a result, the Group has only been able to obtain prospecting and exploration licences for those projects.

Pursuant to local law, prior to commencing any mining activity in any deposit, the Group will need to secure exploitation rights and in some instances sign concession agreements. The Group would also need to obtain the necessary export licences and approvals in Vietnam (these are not required in Cambodia or Vietnam). Further details of the Group's applications is set out in "Business – Iron ore mining" and the legal procedures relating to these permits and licences are set out in "Vietnamese Regulatory Law Overview".

The Group is currently in the process of obtaining those required licences and approvals for exploitation and intends on obtaining all licences and approvals relating to exploitation activities once it has applied for and is granted concessions. Although the Group is confident of being able to do so, there can be no assurance that the Group will be able to obtain all necessary licences and approvals relating to exploration and/or exploitation activities in a timely manner or at all. Failure to do so could have a material adverse effect on the Group's business, prospects, financial condition and results of operations as it would be unable to commence exploitation activities at the relevant deposit(s).

The Group's operations may substantially impact the environment

The Group's mining operations involve hazardous materials and generation of hazardous waste. In addition, many of the locations that the Group owns or operates may have been used for iron ore mining and/or involved hazardous materials usage either before or after the Group was involved with those locations. The Group may be subject to claims for toxic torts, natural resources damages and other damages as well as the investigation and cleanup of soil, surface water, groundwater, and others. Such claims may arise out of current or former activities at sites that the Group owns or operates currently, as well as at contaminated sites that have been owned or operated by third parties.

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These and other impacts that the Group's operations may have on the environment, as well as exposure to hazardous substances or wastes associated with the Group's operations and environmental conditions at the Group's properties, could result in costs and liabilities that would materially and adversely affect the Group.

The Group may not be able to export iron ore to overseas markets

The Group has commenced operations at its Kbang mine in Gia Lai province, Vietnam and all the iron ore extracted from such mining area is currently stockpiled at the port city of Quy Nhon. The Ministry of Industry and Trade in Vietnam has issued circulars which stipulate that mineral companies must try to sell iron ore to Vietnamese companies rather than exporting it. In addition, complex regulations must be adhered to in order to export iron ore (see "Vietnamese Regulatory Law Overview"). There has also been speculation in the Vietnamese business press regarding a potential ban on iron ore exports. These considerations do not apply to the Group's deposits in Cambodia and Laos as those jurisdictions do not impose export quota on iron ore produced and refined in those countries.

Over the past two years, the cumulative effect of the above measures has contributed to a fall in the price at which iron ore can be sold to Vietnamese companies. Therefore, the Group may secure significantly better prices (approximately a third higher) for the iron ore it is able to export than if it sells the iron ore to Vietnamese companies (although the profit per tonne sold would be reduced by the 30 per cent. Vietnamese export taxes). See "Business – Iron ore mining – Customers" for details regarding the assumptions the Group has made regarding the prices at which it can export iron ore and the prices at which it can sell iron ore domestically. In March 2010, the Group entered into memoranda of understanding with Chinese purchasers for the export of iron ore. In various news publications, these memoranda were described as "contracts". However, contrary to such descriptions, these documents were in fact memoranda of understanding and fell away when the Group did not receive an export quota by the end of 2010. Once it has received the export quota, the Group plans to reopen negotiations with potential foreign purchasers (including the aforementioned Chinese purchasers) for the export of its iron ore. The Group intends to take this approach as it believes that demand for iron ore is greater outside of Vietnam than demand within Vietnam. The Group also intends to reopen negotiations with such potential foreign purchasers when its Cambodian and Laotian mining operations commence excavation and refining operations, as the Cambodian and Laotian governments do not impose export quota on iron ore produced and refined in those countries. However, the Group may not be able to secure such export contracts (whether or not it has previously received expressions of interest from purchasers) or, if they do secure such contracts, be able to perform its obligations under the contracts if it is unable to match its production output to contractual obligations to deliver specified amounts of iron ore to purchasers. Any failure to secure or perform these export contracts may affect the profitability of the Group's iron ore operations.

On page 83 of these Listing Particulars, the Group has set out the proportion of its total revenue which it expects to generate from each of its businesses. The percentage forecast in respect of its iron ore business is based on an assumption that it will export all the ore which it produces. Therefore, any failure to secure or perform the aforementioned iron ore export contracts may reduce the actual proportion of the Group's revenue derived from its iron ore operations compared to those proportions forecast on page 83.

Hydropower risks

Delay or failure by the Group in developing and completing its development projects may adversely affect the Group's power production levels

The Group has obtained approvals for setting up 14 hydropower projects with a total capacity of 342.5 MW, and these projects are expected to be in commission by 2014. The Group's ability to sustain and increase levels of power production in the long-term depends significantly upon its ability to develop these hydropower projects. The Group's ability to obtain resources required for this development could be limited by many factors beyond its control, including the Group's ability to raise sufficient financing, restrictions under the Group's debt arrangements, inability to acquire hydropower machinery and economic conditions in Vietnam. Additional factors include the success of the Group in gathering data, granting of consents and permits from relevant governmental entities, working with environmental groups, and

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working with contractors, suppliers and consultants. There can be no guarantee as to whether or when the Group's hydropower projects will be completed, or whether the resulting operations will achieve the anticipated power output. Any such failures or delays may have a material adverse effect on the Group's operations and financial performance.

The Group's hydropower operations may be materially adversely affected by climate change

The amount of hydropower the Group can generate will be dependent upon water velocity. If temperatures rise in Southeast Asia as a result of climate change, water availability may be affected as a result of higher rates of evaporation, increased melting of glaciers that feed river systems and changes to precipitation patterns. Any change in water availability may have an adverse effect on the Group's hydropower operations. There is no assurance that the Group's hydropower operations will be sufficiently flexible to adapt to any hydrological changes, including but not limited to increased or reduced river flows, extreme climate events such as floods and droughts, and changes to water quality.

Increased demand for water in other sectors may affect the Group's operations

Population and economic growth in Vietnam may lead to increased demands on water resources in other sectors, for example agriculture. Increased use of water resources for irrigation purposes may adversely affect the Group's hydropower operations. For example, in 2005, three months of drought and severe weather reduced power production at 11 of Vietnam's hydroelectric plants, comprising 40 per cent. of Vietnam's total generation capacity. This was partly due to the diversion of water resources to the country's agricultural sector.

Plant and machinery supplies and failures may disrupt hydropower operations

The success of the Group's operations and performance depends on, among other things, its ability to source sufficient amount of raw materials and key components at competitive prices from third-party suppliers. The failure of any of the Group's suppliers to deliver these raw materials or components could adversely affect the Group's production processes. In addition, any disruption in the operation of the Group's hydroelectric plant and machinery, for example due to technical problems, may lead to a loss of power generation at one or more of its dams. Prolonged disruption to a hydroelectric dam's power output may affect the Group's profitability or results of operations. This may, in turn, have a material adverse effect on the Group's business prospects, operations and financial performance.

The financial performance of the Group's hydropower operations may be adversely affected by changes to its off-take agreements with EVN

The execution of a satisfactory hydropower supply agreement is the basis on which the Group will undertake the development of hydropower required to be supplied under contract. Power generated by private sector producers in Vietnam, however, must be sold to EVN, the Vietnamese state-owned entity engaged in generation, transmission and distribution of electricity in the whole country. There can be no assurance that current off-take agreements with EVN will be renewed on terms that are commercially beneficial to the Group. If this agreement with the Group's only customer were modified or terminated or if EVN were to significantly reduce its purchase of hydropower from the Group, the Group's revenues and operating profits would be materially adversely affected due to the lack of alternate buyers. Even if an off-take agreement with EVN were to be extended, any renegotiations would likely reflect prevailing market conditions at the time of the renegotiation and could result in decreased price, volume or both. Consequently, the Group may not achieve the revenue or profit it expects to achieve from its off-take arrangements.

The Group's hydro projects may not be eligible for CERs under the CDM

The CDM was introduced by the Kyoto Protocol and allows and encourages agencies, state-owned enterprises and private companies to develop and implement projects that reduce greenhouse gas emissions

36

and, in return, receive credits in the form of CERs, which they can sell for economic benefit. During 2009, the Group received an advance on the sale of CERs of VND 19,757,828,000.

The Group's Daksrong 2A, Daksrong 3A, Daksrong 3B, Ba Thuoc 1 and Ba Thuoc 2 hydropower projects were evaluated by the CDM National Consultative and Executive Board and found to be eligible for the CDM.

The Group may decide to submit other hydropower projects under the CDM. However, each project must be evaluated separately, and there can be no assurance that any of the projects submitted will be deemed eligible under the CDM or subsequently receive CERs. Given the modest regulated price at which EVN purchases power from the Group, any failure to secure approval registration of a CER in respect of one or more hydropower project may have a material adverse effect on the profitability of the Group's hydropower operations. In addition, the number of CERs available under the CDM in Vietnam is not yet clear.

Manufacturing risks

The Group's furniture manufacturing business may be adversely affected by price and availability of raw materials

The Group's furniture manufacturing operations are reliant on the importation of timber and granite for use in its finished furniture and other products. Fluctuations in timber and granite import prices may result in the Group being unable to obtain such materials at commercially acceptable prices. Furthermore, there can be no assurance that the Group will be able to secure sufficient sources of timber or granite for its manufacturing or construction requirements. In addition, the timely delivery of such supplies and the delivery of supplies that are of requisite specification are beyond the control of the Group, and delays or failures of such deliveries may increase the overall operating expenses of the Group, adversely affecting its profit margins.

Demand for the Group's furniture products may fluctuate

The Group's manufacturing business has expanded during a period of considerable growth for the Vietnamese economy in particular and Asia generally. Any deterioration in the local Vietnamese economy or in economic conditions in the Group's export markets could have an impact on demand for the Group's furniture products, leading to downward pressure on prices.

Any such decline could have a material adverse effect on the Group's results of operations or financial condition of the Group.

Tariff changes on wood and furniture may have a material effect on the competition faced by the Group

As described in "Market and industry overview", the Vietnamese government has lowered or reduced import tariffs on furniture and export tariffs on timber. The combined effect of these changes may mean that furniture makers in countries such as China with lower manufacturing costs may be able to import wood from Vietnam and export furniture back into Vietnam for a lower price than the Group is able to sell its furniture goods in the domestic market. Although much of the Group's furniture output is used to furnish the Group's property developments, any increased competition as a result of changing tariffs may have a material adverse effect on the Group's profitability with regard to the sales of its furniture in the domestic and export markets.

2. Risks Relating to Vietnam

The Group may not be able to enforce its rights effectively through legal proceedings in Vietnam

Vietnam's law and regulations are in an early stage of development and are not well established. These laws and regulations may be vague, contradictory and subject to different interpretations. Furthermore, the

37

country's judicial system may not be objective. The administration of laws and regulations by Government agencies may be subject to considerable discretion. Therefore, there can be no assurance that the Group will be able to obtain effective enforcement of its rights through legal proceedings in Vietnam, nor is there any assurance that improvements to the legal system will be able to take place. These risks may also be present in other jurisdictions in which the Group operates.

The Group's operations may be subject to environmental regulations

The Group's operations will be subject to environmental regulation (including regular environmental impact assessments and permitting) in all the jurisdictions in which it operates. Such regulations cover a wide variety of matters, including, without limitation, prevention of waste, pollution and protection of the environment, labour regulations and worker safety. These regulations may become more onerous in the future and may adversely affect the Group's profitability and results of operations. In addition, any breach of environmental regulations may subject the Group to liability.

The Group's operations may be subject to economic, political and economic risks

Most of the Group's operations are conducted in Vietnam and all of its revenues are generated in Vietnam. Changes and developments in economic, regulatory, administrative or other policies of Vietnam, over which the Group has no control, could significantly affect the Group's business, prospects, financial conditions and results of operations. In particular, any changes in policies relating to expropriation, nationalisation and confiscation of assets, and changes in legislation relating to economic policy, taxation, securities regulations and foreign currency conversion.

In addition, the Group's business may also be subject to any additional Vietnamese regulation and other changes in international standards which may restrict the Group's businesses or increase the costs of compliance. This may have an adverse effect on the Group's business, financial condition and results of operations.

The Vietnamese economy is subject to periods of high inflation

Any future increases in the price of commodities on a global level may negatively affect Vietnam's economic growth and stability of other countries in Asia. There can be no assurance that such future increases will not lead to political, social and economic instability. High rates of inflation in Vietnam could increase the Group's costs, such as salaries, price of transportation, wages, raw materials or any other expenses, and could have an adverse effect on its profitability and on its financial condition. Further, the Group may not be able to adjust its costs or pass along its costs which have been fixed during periods of lower inflation to its customers.

The Group is exposed to currency risks

The Group anticipates that revenues and expenses as well as its assets and liabilities will be predominantly denominated in Vietnamese Dong, although revenues from the sale of its products will be denominated in US Dollars. As a result, the Group will be subject to the effects of exchange rate fluctuations, and the value of the Group's assets and the amount of income available for distribution will be affected by movements in currencies. The Group will report its results of operations and its financial condition in Vietnamese Dong. Shareholders may experience fluctuations in the market price of the GDRs as a result of movements in the exchange rate between the Vietnamese Dong and the US Dollar.

In addition, the Group has not engaged in hedging or other risk management activities to offset the risk of currency exchange rate fluctuations. The Group cannot predict in any meaningful way the effect of exchange rate fluctuations upon future results.

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Corporate disclosure, accounting and governance standards in Vietnam do not require the level of disclosure applicable in other non-emerging market jurisdictions

Most of the Company's operating subsidiaries are organised and existing in Vietnam and hold most of their assets in Vietnam. Accordingly, corporate actions by such companies, and the rights of the Company as their controlling shareholder, are subject to mandatory rules of Vietnamese corporate law. The Group complies fully with the corporate governance requirements set out in the Law on Enterprises, which are set out in more detail in "Vietnamese Regulatory Law Overview". It exceeds these standards by requiring that at least one third of members of the Board of Directors must be independent non-executive members.

Corporate governance standards in Vietnam and certain other jurisdictions where the Group has subsidiaries are not as developed as corporate governance standards in EEA countries or the United States and generally provide less protection for investors. In particular, corporate governance practices in Vietnam have suffered from deficiencies in the following areas: a lack of transparency and informational disclosure (both to the public and to shareholders), fewer requirements for boards to have independent directors, insufficient regulatory oversight and protection of shareholders' rights, the timing and extent of disclosure of beneficial ownership, conflicts of interest and related party transactions, restrictions on the conduct of shareholders' meetings, timing of notices of shareholders' meetings, financial reporting, level of board oversight, internal monitoring mechanisms and mandatory board committees. Furthermore, compared to certain other countries, there is a lower level of monitoring and regulation of the markets and the activities of investors in such markets and enforcement of existing regulations has been extremely limited.

As a result of the above-detailed deficiencies in Vietnamese corporate governance, the Company's management or significant Shareholders may be able to take actions against the interests of other Shareholders, which could potentially have an adverse effect on the Group's business, financial condition and results of operations. For example, minority shareholder rights afforded under Vietnamese law and regulations often require the minority shareholder to meet minimum shareholding requirements in order to exercise certain rights, such as derivative actions against a company's directors.

Any downgrade of Vietnam's sovereign debt rating by an international rating agency could have a negative impact on the Group's results of operations and financial condition

Any downgrade of Vietnam's credit rating for domestic and international debt by international rating agencies may adversely impact the Group's ability to raise additional financing and the interest rates and commercial terms on which such additional financing is available. This could have an adverse effect on the Group's ability to obtain financing to fund its growth on favourable terms or at all and, as a result, could have a material adverse effect on its results of operations, financial condition and prospects.

The tax status of the Group may change

Vietnam's tax laws have undergone major changes in recent years and continue to be supplemented and clarified. Any change in the Group's tax status or the taxation legislation of Vietnam may have a material adverse effect on the financial condition of the Group.

The Group's ability to raise foreign capital may be constrained by Vietnamese law

As a Vietnamese company, the Group is subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit the Group's financing sources for power projects under development or acquisitions and other strategic transactions. This could constrain its ability to obtain financing on competitive terms and refinance existing indebtedness. In addition, there can be no assurance that the Group will be granted the required approvals without onerous conditions, or at all. Any limitations on the Group's ability to raise foreign debt may have a material adverse impact on its business, financial condition, results of operations and prospects.

The Group may not be able to grant mortgages over land

39

Vietnam has no real concept of private land ownership but people and companies may be allocated exclusive rights to use land for specific purposes and can, subject to certain legal restrictions, mortgage these rights to banks. However, pursuant to the Land Law, companies exempted from land use fees or which pay no fees for land are prohibited from mortgaging such land. This may affect the Group's ability to use any such properties as collateral when agreeing debt finance facilities with Vietnamese banks. In addition, Vietnamese companies may not mortgage land use rights in favour of offshore lenders. Such restrictions on the Group's ability to mortgage its land use rights may restrict its ability raise finance from offshore financial institutions as it may not be able to use its land use rights as security. Any such restrictions on the Group's ability to raise foreign debt finance may have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3. Risks Associated with the GDRs and the Shares

The GDRs may not be a suitable investment for all investors

Each Holder must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

● have sufficient knowledge and experience to make a meaningful evaluation of the GDRs, and the merits and risks of investing in the GDRs;

● have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the GDRs and the impact such an investment will have on its own investment portfolio;

● have sufficient financial resources and liquidity to bear all of the risks of an investment in the GDRs;

● understand thoroughly the terms of the GDRs and be familiar with the behaviour of the relevant financial markets; and

● be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Future issuances and sales of GDRs and equity securities by the Company may affect the market price of the GDRs and the Shares

New issuances and sales, or the possibility of new issuances and sales, of a substantial number of Shares, or shares in the form of GDRs, onto public markets, could have an adverse effect on the trading price of the GDRs and/or the Shares or could affect the Company's ability to obtain further capital through an offering of equity securities. Subsequent equity offerings may also reduce the percentage ownership of the Company's existing Shareholders. Moreover, any newly issued preferred shares may have rights, preferences or privileges senior to those of the GDRs and/or the Shares.

An active market for the GDRs may not develop

The GDRs have not previously been listed and there has been no public market for the GDRs. Application has been made to admit the GDRs to listing on the Official List and to trading on the Professional Securities Market. There can be no assurance regarding the future development of a market for the GDRs, or as to the liquidity or sustainability of any such market, the ability of Holders to sell their GDRs or the price at which Holders may be able to sell their GDRs. If an active trading market were to develop, the GDRs could trade at prices that may be lower than the initial market value thereof, depending on many factors, including prevailing market interest rates, the Group's operating results and the market for similar securities.

40

The trading price of emerging market securities are subject to substantial volatility

The market for debt and equity securities in companies operating in emerging markets has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the GDRs. There can be no assurance that the markets for the GDRs, if any, will not be subject to similar disruptions. Any disruptions in these markets may have an adverse effect on the market price of the GDRs.

The market price of GDRs may decrease after they are admitted to trading, and Holders will bear the risk of fluctuations in the price of the underlying Shares

The market price of the GDRs is expected to be affected by the fluctuation in the market price of the underlying Shares. In addition, the offering price of the GDRs may not necessarily be indicative of the market price after the offering is complete or following the admission of the GDRs to trading. The prices at which the GDRs will trade will be determined by the marketplace and may be influenced by many factors including the trading price of the underlying Shares, the Group's financial results, the history of, and the prospects for, the Group and the industries in which it operates and plans to operate, an assessment of the Group's management, the success of its business strategy execution, the valuation of publicly traded companies that are engaged in business activities similar to the Group's, and any volatility in the securities market of Vietnam. Holders may be unable to resell their GDRs, and, as a result, they may lose all or part of their investment.

Legal protections available to Holders may be limited

The Company is established and operates in Vietnam as a joint stock company. Apart from some projects located in Laos, Cambodia and Thailand, substantially all of the Group's assets and business operations are located in Vietnam. The Group's operations are therefore principally governed by Vietnamese law and regulations. It may be difficult to enforce any judgments obtained from non-Vietnamese courts against the Group or the directors and officers of the Group residing in Vietnam. Vietnam has not signed or ratified treaties providing for the reciprocal recognition and enforcement of judgments of overseas courts in certain jurisdictions. The enforcement of judgments of courts in those jurisdictions may therefore be difficult or impossible.

Fluctuations in the exchange rate between the Vietnamese dong and the US dollar could have a material adverse effect on the value of the GDRs and the Shares represented by such GDRs, independent of the Group's operating results

The price of the GDRs will be quoted in US dollars. The Shares are quoted in Vietnamese dong on the HoSE. Any dividends in respect of the Shares will be paid in Vietnamese dong and, subject to any restrictions imposed by Vietnamese law, subsequently converted into US dollars in accordance with the terms of the Deposit Agreement for distribution to Holders. Any adverse movement in exchange rates during the time it takes to undertake such conversion may reduce the net dividend to investors. In addition, any adverse movement in exchange rates during a delay in repatriating outside Vietnam the proceeds from a sale of Shares (including Shares withdrawn from the GDR facility), for example, because of a delay in regulatory approvals that may be required for the sale of Shares may reduce the net proceeds received by Shareholders. See "Foreign Investment and Exchange Controls".

The exchange rate between the Vietnamese dong and the US dollar has changed substantially in the last two decades and could fluctuate substantially in the future. For historical movements, see "Exchange Rates".

The Depositary's announcement obligations on purchase or disposal of Shares may result in substantial volatility in the trading price of the GDRs and/or the price of the Shares

Under Vietnamese law, the Depositary will be treated as a large shareholder. As a large shareholder, the Depositary will be required to make announcements to the market of its intention to dispose of or purchase

41

Shares on behalf of Holders at least three business days in advance of any such disposal or purchase. Any such announcement is likely to result in substantial volatility in the prices at which GDRs and Shares will trade and therefore may adversely impact the potential return on any investment in the GDRs and/or the price of Shares purchased and/or sold by the Depositary on behalf of Holders from time to time.

Holders will not be able to withdraw any Deposited Property for a period of at least 12 months from the date of the deposit of Shares by the Company

Pursuant to Decree 01/2010/ND-CP of the Vietnamese government dated 4 January 2010, for a period of at least 12 months from the date of the deposit of Shares by the Company, the transfer of such Shares will be restricted. Therefore, Holders will not be able to withdraw any Deposited Property during this period. However, during this period, Holders may transfer GDRs on the Professional Securities Market through its International Order Book. There is no guarantee that the period of this restriction on disposal of Deposited Property will not subsequently be increased by the competent regulators in Vietnam. There can be no assurance that these restrictions will not have an impact on the price of the GDRs and/or the Shares represented by such GDRs.

Shares purchased by the Depositary on behalf of depositors will also be subject to lock-up until expiry of the Lock-up Period

Any Shares purchased by the Depositary on behalf of depositors in the secondary market at any time during the Lock-up Period will be subject to lock-up until the expiry of the Lock-up Period. Therefore Holders will not be able to withdraw such Deposited Property until expiry of the Lock-up Period.

Holders may only withdraw Deposited Property by instructing the Depositary to sell Deposited Property in the local market

Holders may only withdraw Deposited Property by instructing the Depositary to sell such Deposited Property on their behalf in the local market. The proceeds of any such sale, less the fees, taxes, duties, charges, costs and expenses payable under the Deposit Agreement, including any Vietnamese tax applicable to such sale, shall be payable by the Holder in accordance with the terms of the GDRs and the Deposit Agreement. Pursuant to Vietnamese regulatory restrictions preventing delivery of shares free of payment, Holders will not, in any circumstances, be entitled to receive Deposited Shares. The Company cannot be certain that these restrictions will not have an impact on the price of the GDRs and/or the Shares represented by such GDRs.

Holders will have no voting rights

Holders will have no voting rights with respect to the Shares underlying the GDRs. The Depositary will not exercise any voting rights in respect of the Shares underlying the GDRs unless it is required to do so by law. If so required, the Depositary will, at the direction of the Board of Directors (subject to the advice of legal counsel taken by the Depositary and the Company, at the expense of the Company), either vote as directed by the Board of Directors or give a proxy or power of attorney to vote the Deposited Shares in favour of a director of the Company or other person or vote in the same manner as those Shareholders designated by the Board of Directors. A valid corporate decision of the Company will bind the Depositary and the Holders notwithstanding these restrictions on voting rights. The Depositary shall, in no circumstances, exercise any discretion with respect to the voting of the Deposited Shares.

Holders may be subject to taxation in Vietnam

Vietnamese corporate income tax is payable on the transfer of securities by a foreign investor at a rate of 0.1 per cent. of the sale price of the securities. See "Taxation – Vietnamese Tax Considerations".

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Vietnamese laws contain provisions that limit the foreign ownership rights of non-Vietnamese persons, which could materially impact the price of the Shares and GDRs

Vietnamese law contains certain provisions that limit the ability of non-Vietnamese persons to own shares. Under decision 55/2009/QD-TTg of the Prime Minister, foreign investors are permitted to own up to 49 per cent. of the shares of any public company (including listed companies). In order to ensure compliance with this restriction, the Company has agreed to certain mechanisms in the Deposit Agreement that may result in the Depositary being required to sell Shares in the event that such threshold is breached.

Holders or Shareholders may not receive cash dividends on such Shares or GDRs

While the Company may pay dividends in the future, the majority of funds from the Company's operation cash flows will be retained and applied towards financing future capital expenditure and investment requirements. The amount and timing of the declaration and payment of any dividends will be at the discretion of the Board of Directors and will depend on, among other things, operational performance, financial results, financial situation and the prospects of the Company, as well as cash and liquidity requirements, market situation, legal restrictions, tax and such other factors as the Board of Directors may deem relevant at the time. As a result, capital appreciation, if any, realised through a resale of GDRs, may be your sole source of gain.

The Depositary may withhold acceptance of funds for deposit, refuse to purchase Shares, withhold delivery or registration of issuance or transfer of all or part of the Shares and/or GDRs or withhold adjustment of the Master GDR to reflect increases in Shares represented thereby

The Depositary or the Custodian may withhold acceptance of funds for deposit, refuse to purchase Shares, withhold delivery or registration of issuance or transfer of all or part of the Shares and/or GDRs or withhold adjustment of the Master GDR to reflect increases in Shares represented thereby until such items as may from time to time be required by the Depositary or the Custodian to be furnished are furnished or otherwise in accordance with the Terms and Conditions of the Global Depositary Receipts. In addition, the Depositary or the Custodian may withhold acceptance of funds for deposit and/or may refuse to apply such funds toward the purchase of Shares until any applicable formalities have been complied with. As a result, depositors of funds may never receive GDRs or such receipt may be delayed.

The Depositary may refuse to accept funds for the purchase of Shares on behalf of depositors and/or may refuse to purchase Shares on behalf of depositors

Under the terms of the Deposit Agreement the Depositary (i) will refuse to accept funds for the purchase of Shares on behalf of depositors in accordance with and in the circumstances referred to in the Terms and Conditions of the Global Depositary Receipts, if notified in writing by the Company that the Shares to be purchased would be required to be registered under the Securities Act, and (ii) may refuse to purchase Shares on behalf of depositors if such registration under the Securities Act is considered necessary or advisable by the Depositary, in good faith, at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the Deposit Agreement or for any other reason including, without limitation, to comply with US securities laws.

The Depositary may not be able to purchase Shares or a sufficient number of Shares

The Depositary may, under the Deposit Agreement, purchase such number of Shares as it determines in its sole discretion from the funds deposited by depositors at the then-prevailing market price in respect of the Shares. The Depositary may not be able to purchase any Shares, or a sufficient number of Shares, on behalf of depositors who have deposited funds and provided valid instructions to the Depositary in respect of such purchases. In such circumstances, the Depositary will contact the depositor (or its broker-dealer acting as agent on its behalf) for further instructions. Under no circumstances will the Depositary be required to pay the depositor interest on such funds deposited with the Depositary, and, if such funds are returned to the

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depositor, the depositor shall have no further claim in respect of such funds or against the Depositary. In addition, the Depositary may be able to purchase Shares only at a price higher than such depositor of funds may have expected to be paid in respect of such Shares. Such depositor of funds may receive fewer GDRs than expected and/or no GDRs, if the Depositary is unable to purchase sufficient number, of, or any Shares.

The Depositary may not be able to sell Deposited Property and/or any sale of Deposited Property may be at a price lower than that expected by Holders

The Depositary may not be able to sell Deposited Property and/or may not receive the price expected by a Holder for the sale of such Deposited Property. Holders may therefore not receive the amount of proceeds they expected to receive in connection with the sale of any Deposited Property and/or may not receive any proceeds at all.

The Depositary may refuse to sell Deposited Property or deliver the proceeds from any such sale

The Depositary may refuse to sell Deposited Property or deliver the proceeds from any such sale generally, or in one or more localities, if such refusal is deemed necessary or desirable by the Depositary, in good faith, at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the Deposit Agreement or for any other reason.

Fees, taxes, duties, charges, costs and expenses under the Deposit Agreement in connection with the purchase and/or sale of Shares by the Depositary will be borne by the Holder

The payment of any fees, taxes, duties, charges, costs and expenses, including, without limitation, any taxes in connection with the purchase of Shares, any registration fees, any fees imposed by the HoSE (or such other stock exchange(s) in Vietnam where the Shares may be listed from time to time) incurred or that may be incurred by or on behalf of the Depositary with respect to the acceptance of funds deposited by a depositor for the purchase of Shares, the purchase of Shares or the issue of GDRs, as necessary, may be deducted by the Depositary in advance of any purchase of Shares from such funds deposited by a depositor with the Depositary. In addition, all fees, taxes, duties, charges, costs and expenses incurred or that may be incurred by or on behalf of the Depositary with respect to any sale of Shares by the Depositary in connection with a withdrawal of Deposited Property shall be deducted from the proceeds of such sale. The amount of any such fees, taxes, duties, charges, costs and expenses may outweigh the advantages of a purchase of GDRs and/or a sale of such GDRs and/or Shares on a withdrawal, or any issue of GDRs. In addition, in accordance with Vietnamese regulations the Depositary will appoint one Vietnamese broker to carry out any purchase of Shares and/or sale of Deposited Property. Any fees and commissions of such broker in connection with the purchase of Shares and/or the sale of Deposited Property will be borne by the relevant depositor of funds or the Holder, as the case may be. Pursuant to current restrictions imposed by Vietnamese law and regulations, the Depositary may only appoint one broker at any one time. There is no guarantee that such appointed broker will execute transactions at the most competitive rates or in the most efficient manner.

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PRICE RANGE OF SHARES

The Shares are listed and traded on the HoSE. The price for Shares as quoted on the official list of the HoSE is expressed in Vietnamese dong. The Shares started trading on the HoSE on 22 December 2008 following the initial public offer of Shares and, as such, no data is available prior to that date.

The following table sets forth the reported high and low closing prices and trading volumes of the Shares on the HoSE during each of the months indicated:

Calendar periodHigh

(VND)Low

(VND)Trading volume(million shares)

December 2008 42,000.00 32,000.00 0.136January 2009 40,666.67 39,333.33 0.021February 2009 40,333.33 31,666.67 0.010March 2009 36,666.67 32,333.33 0.153April 2009 46,666.67 35,666.67 0.288May 2009 44,666.67 38,333.33 1.737June 2009 50,666.67 41,333.33 1.459July 2009 50,000.00 43,333.33 0.613August 2009 64,333.33 48,000.00 1.483September 2009 88,000.00 66,333.34 1.742October 2009 88,000.00 78,666.66 1.093November 2009 79,000.00 64,500.00 0.476December 2009 78,000.00 58,000.00 1.098January 2010 85,500.00 77,000.00 0.457February 2010 82,000.00 79,000.00 0.670March 2010 89,500.00 79,000.00 0.855April 2010 85,500.00 83,000.00 0.515May 2010 85,000.00 74,000.00 0.300June 2010 83,000.00 77,000.00 0.110July 2010 82,000.00 78,000.00 0.312August 2010 80,500.00 70,500.00 1.090September 2010 75,500.00 71,500.00 0.496October 2010 80,000.00 74,000.00 0.295November 2010 79,000.00 73,500.00 0.592December 2010 81,000.00 76,500.00 0.796January 2011 56,000.00 52,333.33 0.704February 2011 58,500.00 48,000.00 0.2271 – 15 March 2011 52,000.00 43,300.00 0.655

Notes:

On 15 March 2011 the closing price of the Existing Shares was VND 47,000 per Share.

Source: Bloomberg

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EXCHANGE RATES

The market exchange rate of the dong against the US dollar is partially determined by the forces of supply and demand in the foreign exchange market and partially controlled by the SBV. The SBV determines the daily interbank rate and commercial banks in Vietnam are permitted to trade dong for US Dollars within a range not exceeding more or less than three per cent. of the average rate in the inter-bank foreign exchange market, as published by the SBV. The SBV's US dollar/dong mid-point reference rate at 31 December 2007 was VND 16,114 = US$ 1.00, at 31 December 2008 was VND 16,977 = US$ 1.00, at 30 September 2009 was VND 17,746 = US$ 1.00, at 31 December 2009 was VND 17,941 = US$ 1.00, at 30 September 2010 was VND 19,300 and at 31 December 2010 was VND 18,392 = US$ 1.00.

Except as otherwise stated in these Listing Particulars, all translations from Vietnamese dong to US dollars contained in these Listing Particulars have been based on the average inter-bank foreign exchange conversion rate for US Dollars over the six month period from July 2010 to December 2010 (inclusive). This was VND 19,383 per US$ 1.00.

The following tables set forth the exchange rates of the dong against the US dollar for the periods indicated. No representation is made that the dong amounts actually represent such US dollar amounts or could have been or could be converted into US dollars at the rates indicated, any other rate or at all.

Exchange rate VND/US$ 1.00Year Period End(1) Average(2) High Low

2005 15,918 15,856 15,920 15,7692006 16,056 15,991 16,098 15,8972007 16,017 16,084 16,254 15,9782008 17,483 16,543 17,491 15,8102009 18,479 17,807 18,491 17,4602010 19,498 19,144 19,500 18,4402011 (to 7 March) 20,658 20,001 20,900 19,490

Source: Bloomberg

Note:

(1) "Period End" refers to the rate on the last day of the relevant year on which an exchange rate could be determined.

(2) Average for the year was determined as an average of month-end buying rates during the respective period.

The following table sets forth the high and low buying rates for the dong for each month the year preceding the date of these Listing Particulars.

Month Period End(1) Average(2) High Low

April 2010 18,958 19,077 19,095 19,000May 2010 18,980 19,003 19,025 18,965June 2010 19,070 18,989 19,065 18,965July 2010 19,080 19,083 19,098 19,060August 2010 19,490 19,258 19,490 19,060September 2010 19,490 19,480 19,500 19,450October 2010 19,498 19,489 19,500 19,450November 2010 19,499 19,495 19,499 19,490December 2010 19,498 19,497 19,499 19,490January 2011 19,498 19,497 19,499 19,490February 2011 20,878 20,315 20,900 19,4951 – 7 March 2011 20,865 20,862 20,873 20,835

Source: BloombergNote:(1) "Period End" refers to the rate on the last day of the relevant month on which an exchange rate could be determined.(2) Average for the month was determined as an average of the daily buying rate in that month.

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USE OF PROCEEDS AND DIVIDEND POLICY

Use of proceeds

The Group raised approximately US$ 60 million in connection with the issue of the 16,216,250 unlisted GDRs on 6 December 2010 (at US$ 3.70 per GDR issued). Expenses in connection with the issue of those GDRs will be approximately US$ 3.5 million. The net proceeds will therefore be approximately US$ 56.5 million.

The Group intends to use approximately US$ 28.5 million of the net proceeds for the construction of the Nam Kong 2 hydropower project in Phu Vong, Attapeu province, Laos. This hydropower plant has designed capacity of 80MW with total planned investment being about US$ 60 million. The balance of the total planned investment will be financed by bond issues and bank loans. Construction of this project will commence in December 2010.

The Group also intends to use approximately US$ 28.5 million of the net proceeds for the 10,000 hectare rubber plantation in Phu Vong, Attapeu province, Laos. The total planned investment in the project is estimated at US$ 50 million. The balance of the total planned investment will be financed by bond issues and bank loans.

The net proceeds were not used to fund bond redemption payments paid by the Company on 31 December 2010.

The Group's real estate business is expected to finance its growth from the sale of apartments currently under construction.

Dividends and dividend policy

During 2011 and 2012, the Group will need to invest much of its cash in capital projects relating to its diversified operations (i.e. rubber plantations, hydropower plants and iron ore mining), therefore limiting the amount of cash available to pay out dividends to Shareholders. If this cash position improves from 2013 onwards, the Group may increase the level of dividends payable to Shareholders. However, the Board of Management will retain their discretion to set the amount distributed to Shareholders as they see fit and, therefore, the amount of dividends payable. The value of the dividends distributed to Shareholders may not be in line with the level of profits generated by the Group.

The payment of dividends is regulated by the Law on Enterprises and the Charter. Under the Charter, the Board of Management may, subject to approval by Shareholders at a Shareholders' Meeting, announce and pay a dividend from the Company's retained profits. The Board of Management may also pay interim dividends if it considers the payment of such a dividend as in line with the Company's profit expectations for the remainder of the year. The Board of Management, subject to approval by Shareholders at a Shareholders' Meeting, sets the periodicity, rate and method of calculation of the relevant dividend payment.

In deciding payment of dividends, the Board of Management has to consider whether the Company has fulfilled its tax obligations and other financial obligations as required by law and whether it has made appropriate financial provisions. The Company may not pay dividends if such payment results in it being unable to settle financial obligations which may become due.

All dividends are paid to those Shareholders whose names appear on the register of Shareholders maintained by VSD on the record date fixed by the Company or VSD (acting on the authorisation of the Company) for the purposes of the dividend declaration. Shareholders' entitlements to dividend payments do not lapse. Dividends or other share-related payments in cash must be made in Dong and may be paid by cheque or bank transfer. However, dividends are usually paid directly into the securities accounts of those persons who are Shareholders at the relevant record date.

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There are no dividend restrictions for non-resident Shareholders. Payments to Holders of GDRs will be made via the Depositary.

Shares which are not fully paid are not eligible to receive a dividend.

Dividend payments are noncumulative.

The Board of Management may propose, and a Shareholders' Meeting may approve, the payment of dividends (in whole or in part) by means of non-cash assets such as Shares or bonds.

The Board of Management may propose, and a Shareholders' Meeting may approve, the right for Shareholders eligible to receive a dividend to elect to receive such a dividend in either Shares or in cash, or a combination of the two. Where Shareholders receive Shares as a result of a dividend payment, such Shares are recorded as fully paid. In addition, where dividends are paid in this manner, the price at which such a Share is deemed to have been purchased by the dividend recipient is the amount of the cash dividend per Share for that dividend issue.

During 2007, the Company declared and paid a cash dividend of VND 1,109 per Share, with a total distribution of VND 36,231,776,000.

In February 2008, the Company's Annual Shareholders' Meeting approved the payment of a share dividend at the ratio of 50 per cent., with the effect that each Shareholder owning two Shares would receive a share dividend of one Share. On 14 May 2008, the SSC issued Official Letter No. 879/UBCK-QLPH requiring the Company to adjust the ratio of the share dividend to match with the Company's balance of undistributed earnings. Accordingly, on 4 June 2008 the Company's Board of Management passed a resolution to adjust the ratio of stock dividend to 49.9 per cent., with the effect that each Shareholder owning 1,000 Shares would receive a share dividend of 499 Shares). During 2008, the Company distributed share dividends worth VND 598,581,130,000.

During 2009, the Company declared and paid a cash dividend of VND 1,500 per Share, with a total distribution of VND 269,721,752,000.

In August 2010, the Company paid a cash dividend of VND 1,000 per Share.

Details of the dividends paid out in 2007, 2008, 2009 and the first nine months of 2010, together with details of the dividends per Share in each of these periods, are set out in the table below.

Year

Weighted average number of Shares during the period

(adjusted for the effect of dilution)

Paid dividend(VND)

Dividend per share(VND)

2007 125,431,970 36,231,774,000 4,782

2008 267,783,507 598,582,252,000 3,923

2009 270,909,293 1,166,231,322,000 4,312

Nine months to 30 September 2010 291,670,980 292,008,407,000 998

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following review should be read in conjunction with the Group's consolidated financial statements that appear elsewhere in these Listing Particulars. The financial information as of and for the years ended 31 December 2007, 31 December 2008 and 31 December 2009 in this section have been extracted or derived without material adjustment from the Group's audited consolidated financial statements. The financial information as of and for the periods ended 30 September 2010 and 30 September 2009 in this section has been extracted or derived without material adjustment from the Group's unaudited interim consolidated financial statements. These results may not be indicative of the results of the Company or the Group for future financial periods.

Overview

The Group primarily operates in the following business sectors: real estate, rubber plantations, iron ore mining, hydropower and manufacturing. Although originally focused in the Gia Lai province of Vietnam, the Group has expanded its activities throughout Vietnam and into the neighbouring states of Laos and Cambodia. The Group exports its products throughout Asia, Europe and the Americas.

The Group's main source of revenues come from its real estate operations, which accounted for approximately 77 per cent. of the Group's revenue in 2009. However, over the last three years, the Group has invested heavily in diversifying its operations in the hydropower, rubber plantations and iron ore mining sectors. These industries often require initial investment in land, plant and machinery, and construction before revenue generating operations can commence. This ongoing investment has been made possible by strong profits from the Group's established real estate and manufacturing operations, along with long-term liquidity provided by bank loans and bond issues.

Recent developments and future prospects

On 7 March 2011, the Group published its preliminary consolidated financial statements. These financial statements have been included for information at pages F-1 to F-39 of these Listing Particulars. The financial statements disclose figures relating to the Group's 2010 financial year (1 January to 31 December). However, although the financial statements are entitled "quarter 4/2010", only the Group's consolidated income statement and notes 25 (Revenues), 26 (Costs of goods sold and services rendered), 27 (Expenses from financial activities) and 28 (Other income and expenses) to the financial statements disclose information relating specifically to the fourth quarter of 2010 (1 October to 31 December). Such quarterly figures, where included, appear together with comparative figures from the fourth quarter of 2009. The Group's consolidated balance sheet statement, consolidated cash flow statement and the notes to the financial statements other than notes 25, 26, 27 and 28 contain only figures from the full 2010 financial year and do not disclose figures relating specifically to the fourth quarter of 2010. These financial statements have not been audited, nor have they been reviewed by the Group's auditors. At the date of these Listing Particulars, the Group had not prepared nor published audited consolidated financial statements for the year ended 31 December 2010. The Company will publish such audited consolidated financial statements in accordance with its regulatory obligations.

At the date of these Listing Particulars, the Group was in the process of offering senior notes to potential investors (the "Notes"). The Company is expecting to raise US$ 200m from this offering. The coupon has yet to be decided. The notes are likely to have a term of five years. The proposed terms of the notes include options for the Company to redeem the Notes at specified prices. The Notes will be secured on a pledge of the shares of the subsidiary guarantors (Hoang Anh Gia Lai Wooden Furniture Joint Stock Company, Hoang Anh Gia Lai Hydropower Joint Stock Company, Hoang Anh Construction and Development House Joint Stock Company, HAGL Mineral Joint Stock Company and HAGL Rubber Joint Stock Company) owned by the Company and other Group companies and will be senior in right of payment to certain future subordinated indebtedness of the Company or the guarantors, but will be subordinated to certain existing indebtedness. The indenture governing the Notes will, among other things, limit the Group's ability to:

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● incur additional debt;

● issue preferred stock;

● create charges;

● enter into mergers or consolidations;

● sell or otherwise dispose of assets;

● enter into transactions with affiliates; and

● enter into new lines of business.

These covenants will be subject to a number of important exceptions and qualifications. The Group intends to use the net proceeds of this offering to finance the development of its hydropower and rubber plantations businesses and for working capital purposes. The Company has applied for approval in-principle for the listing and quotation of the notes on the official list of the Singapore Exchange Securities Trading Limited.

On 31 December 2010, the Board of Management approved a plan to issue bonus shares to Shareholders at a 2 to 1 ratio (one new share for every two existing shares) as approved by Shareholders on 18 August 2010. The Shares were issued on 26 January 2011. This issuance was funded 60 per cent. from the Group's retained earnings from 2009 and 40 per cent. from its share premium fund.

On 20 December 2010, the Company issued 2,783,750 Shares to Saigon Securities Inc. This issuance yielded proceeds of VND 200,430 million.

In October 2010, the Company disposed of its entire holding of treasury Shares with total proceeds of VND 40,254,700,000.

During 2010, the Company disposed of its 11.75 per cent. of its equity interest (23,500,000 shares) in Hoang Anh Construction and House Development Joint Stock Company ("HAH"), a subsidiary, for VND 1,167 billion and recognised a gain of VND 932 billion. This resulted in reduction of the Company's equity interest in HAH to 88.21 per cent. as at 24 August 2010.

On 8 October 2010 the Company raised VND 530 billion in proceeds from an issue of bonds. The bonds have a three year term. The coupon on the bonds during the first interest period (each interest period being one year) is 15.2 per cent. per annum, with such coupon payable on 8 October 2011. The coupon applicable to subsequent interest periods is based on the average deposit rates available to individualsinvesting in 12-month savings bonds from four commercial banks (Agribank, Vietinbank, IDV and Vietcombank) plus 4.2 per cent. The bonds are secured on 30,000,000 Shares held by Mr. Doan Nguyen Duc (the Chairman of the Board of Directors). The proceeds will be used to finance the working capital requirements of the Group and the Group's ongoing real estate, hydropower and rubber plantation projects.

The Company has redeemed the dong-denominated bonds due 30 September 2010 which were issued on 30 September 2008 and the dong-denominated bonds due 31 December 2010 which were issued on 31 December 2008.

Retrospective Change in Revenue Recognition for the Sale of Apartments

For all periods through 30 September 2010, the Group recognised revenue for the sale of apartments in the following manner. For apartments sold after completion of construction, the revenue and associated costs were recognised when the significant risks and rewards of ownership of the apartments passed to the buyers. For apartments sold before completion of construction where the Group had material obligations to complete the apartment project and where the buyers made payments in line with the progress of

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construction and effectively assume market risks and rewards, the revenue and associated costs were recognised as the related obligations were fulfilled by reference to the stage of completion at the balance sheet date. Cost of apartments sold before completion was determined based on actual land, land development and construction costs and estimated costs to complete the project.

With effect from 1 January 2011, the Group's management has decided to change its revenue recognition policy on a retrospective basis for pre-completion sales of apartments in line with relevant IFRS principles. Accordingly, revenue and associated costs from pre-completion sales of apartments will be recognised when all of the following criteria are effectively met:

● the Group has transferred to the buyer the significant risks and rewards of ownership of the apartment;

● the Group retains neither (x) continuing managerial involvement in the apartment usually associated with ownership nor (y) control over the apartment;

● the amount of revenue can be measured reliably;

● it is probable that the economic benefits associated with the transaction will flow to the buyer; and

● the costs incurred or to be incurred in respect of the transaction can be measured reliably.

For all periods in which the Group presents its financial statements in accordance with the new revenue recognition policy, there will be no double counting of revenues recognised in previous periods pursuant to its previous revenue recognition policy. This revenue recognition policy will not be used in the preparation of the Group's audited consolidated financial statements for the year ended 31 December 2010.

In general, under the new revenue recognition policy, revenues from pre-completion sales of apartments will not be recognised until the period in which the project is completed. This will generally result in a delay in recognition of revenues from such pre-completion sales in comparison to the Group's previous policy of recognising revenue on a percentage of completion basis. Application of the new policy may also cause the Group's revenues to fluctuate more widely from period to period in the future as a result of the staggered timing of completion of the Group's real estate projects.

Costs associated with revenue under the new policy will be recognised on effectively the same basis as the existing policy in proportion to the associated revenue. Accordingly, the new policy should not materially affect the Group's gross margins. In addition, the new policy does not affect the Group's cash flow.

The Group sought confirmation of this approach from the Ministry of Finance. Based on the Ministry of Finance's reply dated 18 February 2011, the Group decided to apply retrospectively the new policy effective from 1 January 2011.

The Group's financial statements for periods commencing on or after 1 January 2011 will not be fully comparable to those included in these Listing Particulars. The Group will not be providing comparative financials for previous periods on the same basis. Therefore, you may not be able to fully analyse the Group's financial performance and trends using its historical financial information. In future quarterly periods, where comparable financials are not produced, the Group's financial results may be significantly lower than any historical quarterly periods. While full financial year results may improve compared to prior financial years, quarterly results will not be indicative of full year results.

Profit estimate

The Company's management estimates that, on the bases set out below, the consolidated profit before tax of the Group for the year ended 31 December 2010 is likely to be VND 3,017 billion which includes gain from disposal of investments (before tax) of VND 1,072 billion and a gain from disposal of land amounting

51

to VND 251 billion before tax. Tax charges on this estimated profit are not expected to be abnormally high or low and the Group expects to have an effective tax rate of 25 per cent. The Directors have prepared the estimate of the Group's consolidated profit for the year ended 31 December 2010 on the basis of the unaudited consolidated financial statements of the Group for the nine months ended 30 September 2010, and of the management accounts of the Group for the remaining three months ended 31 December 2010. The estimate has been prepared on a basis consistent with the accounting policies adopted by the Group in respect of the preparation of the Group's consolidated financial statements for the year ended 31 December 2010. These accounting policies are summarised under "Significant accounting policies".

Significant accounting policies

Cash and cash equivalents

Cash comprises cash on hand, cash in banks and cash in transit.

Receivables

Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other debtors, along with the provision for doubtful debts.

The provision for doubtful debts represents the estimated loss due to nonpayment arising on receivables that were outstanding at the balance sheet date. Increases and decreases to the provision balance are recorded as general and administration expense in the consolidated income statement.

Inventories

Inventories are stated at the lower of cost incurred in bringing each product to its present location and condition, and net realisable value. Net realisable value represents the estimated selling price less anticipated cost of disposal and after making allowance for damaged, obsolete and slow-moving items.

The perpetual method is used to record inventories, which are valued as follows:

● raw and construction materials, tools and supplies and merchandise goods: actual cost on a weighted average basis.

● finished goods and work-in-process: cost of direct materials and labour plus attributable overheads based on the normal level of activities.

Apartments for sale under construction are carried at the lower of cost and net realisable value. Costs include all expenditures including borrowing costs, directly attributable to the development and construction of the apartments. Net realisable value represents current selling price less estimated cost to complete and estimated selling and marketing expenses.

Provision for obsolete inventories

An inventory provision is created for the estimated loss arising due to the impairment (through diminution, damage, obsolescence, etc) of raw materials, finished goods and other inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation.

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The costs of fixed assets consist of their purchase prices and any directly attributable costs of bringing the fixed assets to working condition for their intended use.

Expenditures for additions, improvements and renewals are capitalised and expenditures for maintenance and repairs are charged to the consolidated income statement when incurred.

When fixed assets are sold or retired, their cost and accumulated depreciation are removed from the consolidated balance sheet, and any gain or loss resulting from their disposal is included in the consolidated income statement.

Leased assets

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset.

A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.

Where the Group is the lessee

Assets held under finance leases are capitalised in the consolidated balance sheet at the inception of the lease at the fair value of the leased assets or, if lower, at the net present value of the minimum lease payments. The principal amount included in future lease payments under finance leases are recorded as a liability. The interest amounts included in lease payments are charged to the consolidated income statement over the lease term to achieve a constant rate of interest on the remaining balance of the finance lease liability.

Capitalised financial leased assets are depreciated using straight-line basis over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term of three years.

Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over the term of the lease.

Where the Group is the lessor

Assets subject to operating leases are included as the Group's fixed assets in the consolidated balance sheet. Lease income is recognised in the consolidated income statement on a straight-line basis over the lease term.

Intangible fixed assets

Intangible fixed assets are stated at cost less accumulated amortisation.

The cost of an intangible fixed assets comprised of its purchase price and any directly attributable costs of preparing the intangible fixed asset for its intended use.

Expenditures for additions and improvements are added to the carrying amount of the assets. and other expenditures are charged to the consolidated income statement as incurred.

When tangible fixed assets are sold or retired, their costs and accumulated amortisation are removed from the consolidated balance sheet, and any gain or loss resulting from their disposal is included in the consolidated income statement.

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Land use rights

Land use rights are recorded as intangible assets when the Group has the land use right certificates. The costs of land use rights comprise all directly attributable costs of bringing the land to the condition available for use.

Computer software

Computer software that is not an integral part of hardware is recorded as intangible asset and amortised over the term of benefits.

Depreciation and amortisation

Depreciation and amortisation of fixed assets are calculated on a straight-line basis over the estimated useful life of each asset as follows:

Machinery and equipment 5 - 12 years

Buildings and structures 10 - 50 years

Motor vehicles 8 - 20 years

Office equipment 8 - 10 years

Perennial trees 20 years

Land use rights 45 years

Computer software 5 years

Other assets 8 - 15 years

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Construction in progress

Construction in progress represents costs attributable directly to the construction of the Group's buildings, offices for lease, hydropower plants and rubber plantation which have not yet been completed as at the date of these consolidated financial statements.

Buildings and offices for lease: Costs include attributable costs related directly to the construction of the Group's buildings and offices for lease such as contractors' costs, survey and designing fees and other costs.

Rubber plantation costs: Costs include attributable costs related directly to the rubber plantation such as survey, land compensation, land clearance, rubber seeds, fertiliser, transportation of rubber seeds and other materials, workers’ wages, building roads and fences, fire prevention and security guards, anti-botanic drugs and other related costs.

Hydropower plants: Costs include attributable costs related directly to the construction of hydropower plants such as survey, land compensation, land clearance, machinery and equipment, construction costs, workers' wages and other related costs.

Mining costs: Costs include attributable costs related directly to the exploration of mining such as survey, licensing fees, workers’ wages, machinery and equipment and other related costs.

Borrowing costs

Borrowing costs are recorded as expense during the year in which they are incurred, except to the extent that they are capitalised as explained in the following paragraph.

Borrowing costs that are directly attributable to the acquisition, construction or production of a particular asset are capitalised as part of the cost of the asset. Capitalisation of borrowing costs is suspended during extended periods in which active development of the asset is interrupted unless such interruption is considered necessary. Capitalisation of borrowing costs is ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

Long-term 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 amount is paid or the period in which economic benefit is generated in relation to these expenses.

The following types of expenses are recorded as prepaid expenses:

● Prepaid rental;

● Prepaid insurance premium; and

● Tools and consumables with large value issued into production and that can be used for more than one year.

Business combinations and goodwill

Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of business combination.

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Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities. If the cost of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortisation. Goodwill is amortised over 10-year period on a straight-line basis.

When the Company acquires the minority interests of a subsidiary, the difference between the cost of acquisition and the carrying amount of the minority interest is reflected as goodwill in the consolidated balance sheet.

Where the acquisition of subsidiary is not considered as a business combination rather than an asset acquisition, the individual identifiable assets acquired and liabilities assumed are identified and recognised. The cost of the acquisition shall be allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event does not give rise to goodwill.

Where the business combinations involving entities or businesses under common control, the pooling of interest method is applied as follows:

● The assets and liabilities of the combining entities are reflected at their carrying amounts;

● No new goodwill is recognised as a result of the combination;

● The consolidated income statement reflects the results of the combining entities for the full year, irrespective of when the combination took place; and

● Comparatives are presented as if the entities had always been combined.

Disposal of investments in subsidiaries

If a parent loses control of a subsidiary, it:

● derecognises the assets (including any goodwill) and liabilities of the subsidiary at their carrying amounts at the date when control is lost;

● derecognises the carrying amount of any non-controlling interests in the former subsidiary at the date when control is lost;

● recognises:

● the fair value of the consideration received, if any, from the transaction, event or circumstances that resulted in the loss of control; and

● if the transaction that resulted in the loss of control involves a distribution of shares of the subsidiary to owners in their capacity as owners, that distribution:

● recognises any investment retained in the former subsidiary at its fair value at the date when control is lost; and

● recognises any resulting difference as a gain or loss in profit or loss attributable to the parent.

Where there is disposal of part of an ownership interest in a subsidiary without loss of control, a reduction of an interest in a subsidiary is accounted for in a manner consistent with the accounting policy applied for

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accounting for an increase in an interest in a subsidiary. As a result, gain or loss is recognised in the consolidated income statement upon disposal of an ownership interest in a subsidiary.

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 significant influence that are neither subsidiaries nor joint ventures. The Group generally deems they have significant influence if they have over 20 per cent. 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 and is amortised over a ten (10) year period. The consolidated income statement reflects the share of the post-acquisition results of operation of the associate.

The share of post-acquisition profit/(loss) of the associates is presented on face of the consolidated income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment.

The financial statements of the associates are prepared for the same reporting period as the parent company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

Land held for development, investments in securities and other investments

Land held for development which is presented as part of "Other long-term investments" is carried at the lower of cost and net realisable value. Costs include all expenditures including borrowing costs directly related to the acquisition, site clearance and land compensation. Net realisable value represents estimated current selling price less anticipated cost of disposal.

Investments in securities and other investments are stated at their acquisition cost. Provision is made for any decline in value of the marketable investments at the balance sheet date representing the excess of the acquisition cost over the market value at that date in accordance with the guidance under Circular 228/2009/TT-BTC issued by the Ministry of Finance on 7 December 2009. Increases and decreases to the provision balance are recorded as finance expenses in the consolidated income statement.

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.

Provision for severance allowance

The severance pay to employee is accrued at the end of each reporting period for all employees who have more than 12 months in service 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, the Law on Social Insurance and related implementing guidance. Commencing 1 January 2009, the average monthly salary used in this calculation will be revised at the end of each reporting period following the average monthly salary of the 6-month period up to the reporting date. Any changes to the accrued amount will be taken to the consolidated income statement.

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Earnings per share

Basic earnings per share amount is computed by dividing net profit for the period attributable to ordinary shareholders before any appropriation of bonus and welfare fund by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net profit after tax attributable to ordinary equity holders of the Group (after adjusting for interest on the convertible loans) by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

Treasury shares

The Company's own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss upon purchase, sale, issue or cancellation of the Company's own equity instruments.

Foreign currency transactions

The Company follows the guidance under VAS 10 "The Effects of Changes in Exchange Rates" ("VAS 10") in relation to foreign currency transactions as applied consistently in prior years.

Transactions in currencies other than the Company's reporting currency of VND are recorded at the inter-bank exchange rates ruling at the date of the transaction. At period-end, monetary assets and liabilities denominated in foreign currencies are revalued at exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the consolidated income statement.

The above guidance related to unrealised foreign exchange differences provided by VAS 10 is different from those stipulated in the Circular No. 201/2009/TT-BTC issued on 15 October 2009 by the Ministry of Finance providing guidance for the treatment of foreign exchange differences ("Circular 201") as follows:

Transaction VAS 10 Circular 201

Translation of short-term monetary assets and liabilities denominated in foreign currencies.

All unrealised foreign exchange differences are taken tothe income statement.

All unrealised foreign exchange differences are taken to the "Foreign exchange differences reserve" account in the equity section of the balance sheet and will be reversed on the following period.

Translation of long-term monetary liabilities denominated in foreign currencies at year-end.

All unrealised foreign exchange differences are taken to the income statement.

All unrealised foreign exchange gains are taken to the consolidated income statement.

All foreign exchange losses will be charged to the consolidated income statement. However, if the charging of all foreign exchange losses results in net loss before tax for the Group, part of the exchange losses can be deferred and allocated to the income statement within the subsequent five years. In any case,

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the total foreign exchange loss to be charged to the current year's income must be at least equivalent to the foreign exchange losses arising from the translation of the current portion of the long-term liabilities, while the remaining portion of the foreign exchange losses can be deferred in the balance sheet and allocated to the income statement within the subsequent five years.

The impact to the consolidated financial statements had the Group adopted the Circular 201 for the years beginning 1 January 2009 is not material to the consolidated financial statements taken as a whole.

Appropriation of net profit

Net profit after tax is available for appropriation to shareholders after approval by the shareholders at the Annual General Meeting, and after making appropriation to reserve funds in accordance with the Company's Charter and Vietnamese regulatory requirements.

Financial reserve fund

Financial reserve fund is appropriated from the Company's net profit as proposed by the Board of Management and subject to shareholders' approval at the Annual General Meeting. This fund is set aside to protect the Company's normal operations from business risks or losses, or to prepare for unforeseen losses or damages and force majeure, such as fire, economic and financial turmoil of the country or elsewhere etc.

Investment and development fund

Investment and development fund is appropriated from the Company's net profit as proposed by the Board of Management and subject to approval by shareholders at the Annual General Meeting. This fund is set aside for use in the Company's expansion of its operation or in-depth investments.

Bonus and welfare fund

Bonus and welfare fund is appropriated from the Company's net profit as proposed by the Board of Management and subject to shareholders' approval at the Annual General Meeting. This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and improvement of the employees' material and spiritual benefits.

During this period, the Company has reclassified and presented the balance of bonus and welfare fund as a liability in the consolidated balance sheet in accordance with the requirements of Circular No. 244/2009/TT-BTC dated 31 December 2009.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of apartments

For the historical financial information and financial statements in respect of periods ending before 1 January 2011

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For apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. For apartments sold before completion of construction where the Group has material obligations to complete the apartment project and where the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the revenue and associated costs are recognised as the related obligations are fulfilled by reference to the stage of completion at the balance sheet date. Cost of apartments sold before completion is determined based on actual land, land development construction costs and estimated costs to complete the project.

For financial statements in respect of periods beginning on or after 1 January 2011

See "Retrospective change in revenue recognition for the sale of apartments" for details of the retrospective change to this accounting policy.

Construction contracts

Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Rental income

Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms on ongoing leases.

Rendering of services

Revenue from rendering of services is recognised when the services are rendered and is stated net of discounts, allowances and non refundable taxes.

Interest

Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.

Taxation

Current tax

Current 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 by the balance sheet date.

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Deferred tax

Deferred tax is provided using the balance sheet liability method on temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount for financial reporting purpose.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

● where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

● in respect of taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carried forward of unused tax credit and unused tax losses, to the extent that it is probable that taxable profits will be available against which deductible temporary differences, carried forward of unused tax credit and unused tax losses, can be utilised, except :

● where the deferred tax asset arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

● in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Previously unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod 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 income statement, except when it relates to items recognised directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxable entity and the same taxation authority and the taxable entity intends to settle its current tax assets and liabilities on a net basis.

Taxes paid or payable representing the required two per cent. of progress payments received from buyers for sales of apartments before completion is deducted from the deferred tax liabilities at the interim consolidated balance sheet date.

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Business segments

The Group's business is divided into the following seven main segments for accounting purposes: real estate, production, trading and services, construction, hospitality, football club, power and plantations. The principal business segment is the real estate segment, which in 2009 contributed 77 per cent. of the Group's revenues. However, the Group anticipates that as business activities such as iron ore mining and rubber plantations begin to generate revenue, this percentage will decrease towards 25 per cent. of the Group's revenues.

Factors Affecting Results of Operations and Financial Condition

Real estate is the most important segment of the Group's activities and forms approximately 77 per cent. of the Group's revenues, with all of its properties being based in Vietnam. As such, the Group's business, financial condition and results of operations are highly dependent on the Vietnamese real estate market, and the Group will continue to be heavily dependent on the performance of the Vietnamese real estate market in the future. Any significant downturn in the Vietnamese economy and, in particular, to the real estate market, including reduction in demand or downward movements in rental yields, could have a material adverse effect on the Group's business, financial condition and results of operations.

The Group develops both residential and commercial space. The level of demand from potential purchasers or tenants of properties developed by the Group varies depending on a number of factors, including the availability and cost of land, materials or labour, general economic conditions, changes in the relative demand for property types and locations, interest rates and the availability and cost of credit. For example, the Group has found that when interest rates rise, potential customers may be unable to finance the purchase of apartments and may wish to deposit monies in deposit accounts in order to take advantage of higher savings rates. Similarly, there can be no assurance that the Group will be able to renew existing leases or re-let properties as existing leases expire. Local amenities, transport links and other supporting infrastructure near the Group's properties and projects and factors outside the Group's control also affect the desirability and demand for residential and rental office space leased by the Group. Reduced property sales or occupancy rates could lead to a decline in the value of the Group's property assets and reduce the Group's rental income.

The Group's ability to acquire and develop sites and construct residential and rental office space requires substantial capital expenditure during the acquisition and construction phases, and it usually takes years before such projects become operational and begin generating rental income. These projects are also adversely affected by many factors beyond the Group's control, including relocating incumbent residents, adverse weather conditions, natural disasters, supplies of equipment and labour, competition from other companies for suitable properties, granting of consents and permits from the relevant government departments, performance of engineering and construction contractors, suppliers and consultants. Except for the Group's completed projects, all of the Group's development projects are subject to some or all of these risks. There can be no guarantees as to when the Group's development projects will be completed, or if they will be completed at all, and generate satisfactory returns. The Group's inability to complete its development projects as planned may have a material adverse effect on the growth prospects of the Group and its financial condition.

The method of documentation of land transfers and registration of property title takes a significant amount of time and property acquisition may be subject to a number of regulatory approvals and may take several years to complete. In addition, title to real property may suffer from other irregularities of title and the validity of property transfers may be challenged. While the Group will carry out due diligence before acquiring land in undertaking any project, all risks, onerous obligations and liabilities associated with land transfers may not be fully assessed or identified.

Properties, including those which the Group has acquired, or may acquire in the future, can be relatively illiquid investments. This lack of liquidity may affect the Group's ability to vary its portfolio or dispose of or liquidate part of its portfolio in a timely fashion and at satisfactory prices in response to changes in

62

economic, real estate market or other conditions. A decline in the value of the Group's property assets may limit or reduce the level of return on the Group's investment in the property.

There can be no assurance that the valuations of properties will reflect actual sale prices, even when any such sales occur shortly after the relevant valuation date. In addition, the value of the Group's property portfolio may fluctuate as a result of factors such as changes in regulatory requirements and applicable laws (including taxation and planning), political conditions, the condition of financial markets, interest and inflation fluctuations.

Investment in an appropriately balanced land bank is essential for companies operating in the real estate sector. Acquiring land use rights at the right time, when local land prices are stable or rising, and investing in the most appropriate geographical locations, underpin a successful growth strategy.

Although the Group has acquired a large land bank at low cost, in the future the Group may face significant competition in identifying and acquiring suitable land from others, including competitors who may have greater resources at the relevant time, and new emerging entrants to the market. If competition or demand for land increases, the cost of acquiring land could rise and the availability of suitable land at acceptable prices may decline. A reduction in the Group's land bank or its quality may adversely affect the number and the ability to sell new properties the Group is able to build and this may have a material adverse effect on the Group's business, financial condition and results of operations.

Pre-sales constitute an important source of the Group's operating cash inflow during its project development process. The Group is permitted under Vietnamese law to pre-sell properties before they are completed, provided certain conditions are satisfied and such proceeds from pre-sales are used to develop the projects pre-sold. The Government prohibits the pre-sale of uncompleted properties unless the foundation work on a development has been completed in full. The amount and timing of cash inflows from pre-sales are affected by a number of factors, including the timing of such payments and other restrictions on pre-sales imposed by the Government, market demand for properties that are pre-sold and the number of properties the Group has available for pre-sales.

In addition, in the event of a failure or delay in the delivery of the Group's pre-sold properties to purchasers, the Group may be liable for potential losses that purchasers may suffer as a result. Failure to complete a property development on time may be attributed to factors such as the time taken and the costs involved in completing construction, which are in turn adversely affected by factors such as delays in obtaining the requisite licences, permits or approvals from government agencies or authorities, shortages of labour, adverse weather conditions, natural disasters, labour disputes, disputes with contractors, accidents and changes in government priorities and policies. If the delay in delivery extends beyond the contractually specified period, purchasers may also be entitled to terminate the pre-sale agreements and claim refunds of monies paid, damages and compensation for late delivery.

Results for the nine months ended 30 September 2010 compared to the nine months ended 30 September 2009

Sales of goods and rendering of services

The Group's revenues from the sales of goods and rendering of services for the nine months ended 30 September 2010 was VND 3,082,323,202,000 compared to VND 3,282,054,836,000 for the same period in 2009. This represents a decrease of six per cent. This decrease was primarily due to a decrease in the Group's revenue from sale of apartments during the period. The Group also decided to commence pre-sales of its newer real estate projects in 2011 thereby reducing the number of real estate projects available for pre-sale in 2010

63

Financial activities

The Group's income from financial activities was VND 1,081,593,159,000 in the first nine months of 2010, compared to VND 40,469,896,000 in the same period of 2009. This was an increase of 2,572.59 per cent. This substantial increase in income from financial activities during the first three quarters of 2010 compared to the same period of 2009 was partly attributable to the gains made on disposal of an equity interest in HAH and the disposal of the Quy Nhon resort which realised gains of VND 890,419,500,000 and VND 99,212,030,000, respectively. These gains were partly offset by the loss of VND 1,806,402,000 realised during this period by the Company on the disposal of its entire equity interest in Hoang Anh Mang Yang Rubber Plantation JSC to the General Rubber Corporation of Vietnam.

Expenses from financial activities declined from VND 160,160,010,000 in the first nine months of 2009 to VND 140,839,869,000 in the same period of 2010. This reduction of costs in this area represented a fall of 12.1 per cent. This was largely attributable to a 13.07 per cent. fall in interest expenses (from VND 155,146,614,000 in the first three quarters of 2009 to VND 134,874,147,000 in the same period of 2010). This fall in interest expenses was as a result of decrease in interest rates and decrease in short term loans for working capital, together with the reduction of its outstanding indebtedness as a result of the Group's repayment of VND 550 billion straight bonds issued on 30 September 2008 during the nine months ended 30 September 2010.

Operating expenses

The Group's selling expenses during the first nine months of 2010 were VND 91,041,758,000 compared to VND 88,266,842,000 in the same period of 2009. This increase was primarily due to an increase in the number of transactions sourced through agents and an increase in the commissions paid to agents. The Group's general and administration expenses also rose over this period. These expenses were VND 135,834,239,000 in the period from January to September 2010, compared to VND 116,006,352,000 over the same period in 2009. This increase was primarily due to an increase in employee salaries and expansion of the Group's work force.

Profit before tax

Profit before tax rose from VND 1,252,037,707,000 in the first nine months of 2009 by 77.1 per cent. to VND 2,217,055,024,000 in the first nine months of 2010.

Current and deferred corporate income tax expense

Corporate income tax (current and deferred) rose from VND 315,216,534,000 in the first three quarters of 2009 to VND 542,359,962,000 in the same period in 2010. This increase of 72 per cent was mainly due to an increase in profit before tax.


Net profit after tax rose from VND 936,821,173,000 in the first three quarters of 2009 to VND 1,674,695,062,000 in the first three quarters in 2010. This represents a growth rate of 78.76 per cent.

Basic earnings per share

Basic earnings per share rose from VND 4,842 per share in the first three quarters of 2009 to VND 5,312 per share in the first three quarters in 2010. This represents an increase of 9.71 per cent.

64

Results for the financial years ended 31 December 2007, 31 December 2008 and 31 December 2009

Sales of goods and rendering of services

The Group's revenues from the sale of goods and rendering of services for the year ended 31 December 2009 was VND 4,370,251,754,000 compared to VND 1,885,145,765,000 in the year ended 31 December 2008 and VND 1,589,430,005,000 in the year ended 31 December 2007. This represented a growth rate of 131.8 per cent from 2008 to 2009, which was mainly attributable to the growth in revenues from the sales of apartments, which rose from VND 1,230,883,934,000 in 2008 to VND 3,373,859,483,000 in 2009. For example, the Group sold apartments in the Hoang Anh River View and Phu Hoang Anh projects following an aggressive adjustment of the sale prices offered to customers, which boosted demand. In addition, from 2008 to 2009, the Group sold all 996 units of the Hoang Anh Golden House apartments on a wholesale basis.

However, revenue from construction contracts trebled over this period from VND 106,054,942,000 in 2008 to VND 319,242,570,000 in 2009. This increase was primarily due to the completion of the SEA Games athletes' village the Group constructed for the government of Laos. This construction contract commenced in the second quarter of 2008, but the majority of the construction and payment for work was completed in 2009.

Sales of goods and revenue from services saw steady growth over this period. This increase was primarily because the Group commenced selling its wooden furniture to Vietnamese domestic market in 2009. Prior to 2009, the Group exported virtually all of the wooden furniture it produced, aside from the wooden furniture the Group used in its real estate projects. The growth rate of 18.6 per cent. from 2007 to 2008 was due to an increase in revenues from the sale of apartments, revenue from construction contracts and revenue from services, partially offset by a decrease in revenue from sales of goods.

The Group's costs of goods sold and services rendered in the year ended 31 December 2009 was VND 2,358,546,997,000 compared to VND 990,631,593,000 in the year ended 31 December 2008 and VND 991,085,747,000 in the year ended 31 December 2007. This represented a growth rate of 138.1 per cent. from 2008 to 2009 and a negative growth rate of -0.05 per cent. from 2007 to 2008. The growth from 2008 and 2009 corresponds with the similar growth rate in revenues, with the costs of selling apartments rising from VND 485,217,698,000 in 2008 to VND 1,681,180,646,000 in 2009. This increase was primarily due to the sales of certain high-end properties including New Saigon, Hoang Anh River View, Phu Hoang Anh and An Tien Golden House, whose construction were more costly than the real estate projects developed in prior periods as a result of the higher land costs and the use of more expensive construction materials for those projects.

The cost of construction contracts rose from VND 62,906,502,000 in 2008 to VND 171,498,379,000 in 2009. This increase was primarily due to the completion of the SEA Games athletes' village for the government of Laos as a substantial amount of the construction was completed in 2009 even though the project commenced in 2008.

The Group's gross profit from sales of goods and rendering of services in the year ended 31 December 2009 was VND 2,006,761,724,000 compared to VND 890,112,814,000 in the year ended 31 December 2008 and VND 596,945,311,000 in the year ended 31 December 2007. This represented a growth rate of 125.5 per cent. from 2008 to 2009 and a growth rate of 49.1 per cent. from 2007 to 2008. Gross profit increased from 2008 to 2009 mainly due to an increase in real estate revenue.

Financial activities

The Group's income from financial activities during the year ended 31 December 2009 was VND 199,381,768,000 compared to VND 438,618,705,000 in the year ended 31 December 2008 and VND 409,345,618,000 in the year ended 31 December 2007. This represented a negative growth rate of -54.5 per cent. from 2008 to 2009 and a growth rate of 7.1 per cent. from 2007 to 2008. The strong income

65

performance in 2008 was largely attributable to the Group's disposal of its investment in Giai Viet Joint Stock Company to Mr. Lam Ba Tong (a Shareholder in the Company) for VND 509 billion, thereby realising a gain of approximately VND 400 billion. In 2009, the Group disposed of its interest in Thanh Da Investment Construction and Real Estate Joint Stock Company for VND 262 billion, thereby realising a gain of VND 103 billion.

Income from trust investments was VND16,769 million in 2009, compared to nil in 2008. This income was attributable to the return to the Group of an advance it made to a third-party company to acquire land on its behalf. As the acquisition was not completed, the third-party company returned the advance the Group made to them plus interest.

The Group's expenses from financial activities during the year ended 31 December 2009 amounted to VND 213,430,505,000 compared to VND 95,797,943,000 in the year ended 31 December 2008 and VND 52,557,974,000 in the year ended 31 December 2007. This represents a growth rate of 122.8 per cent. from 2008 to 2009. This increase was primarily due to a substantial increase in interest expense on bank loans and foreign exchange losses. The growth rate of 82.3 per cent. from 2007 to 2008 was primarily due to an increase in interest expenses on loans and foreign exchange losses. Of these expenses, 97 per cent., 92 per cent. and 95 per cent. related to interest expenses in 2009, 2008 and 2007, respectively.

Operating expenses

The Group's selling expenses during the year ended 31 December 2009 were VND 108,523,436,000 compared to VND 75,252,461,000 during the year ended 31 December 2008 and VND 39,150,114,000 during the year ended 31 December 2007. This represents a growth rate of 44.2 per cent. from 2008 to 2009 and a growth rate of 92.2 per cent. from 2007 to 2008. These increases were primarily due to increased sale of apartments.

The Group's general and administration expenses during the year ended 31 December 2009 were VND 162,416,224,000 compared to VND 125,208,964,000 during the year ended 31 December 2008 and VND 50,017,835,000 during the year ended 31 December 2007. This represents a growth rate of 29.7 per cent. from 2008 to 2009 and a growth rate of 150.3 per cent. from 2007 to 2008. This increase was primarily due to increase in total number of employees and increases in salaries as the Group continued to expand its real estate and rubber plantation businesses during the period.

Profit before tax

Current and deferred corporate income tax expense

The Company paid corporate income tax at the rate of 25 per cent. of taxable profits during the year ended 31 December 2009 and at a rate of 28 per cent. during the years ended 31 December 2008 and 31 December 2007.


The Group's net profit after tax during the year ended 31 December 2009 was VND 1,286,898,686,000 compared to VND 765,342,778,000 in the year ended 31 December 2008 and VND 622,343,873,000 during the year ended 31 December 2007. This represents a growth rate of 68.1 per cent. from 2008 to 2009 and a growth rate of 23 per cent. from 2007 to 2008.

Basic earnings per share

The Group's basic earnings per Share in respect of the year ended 31 December 2009 were VND 4,432 per Share compared to VND 2,615 per Share in respect of the year ended 31 December 2008 (adjusted in the 2009 financial statements from 3,923 per Share to take account of the issue of bonus Shares in November 2009) and VND 4,782 per Share in respect of the year ended 31 December 2007 (as adjusted in the 2008

66

financial statements to take account of the share dividend issued by the Company in 2008). This represents a growth rate of 69.5 per cent. from 2008 to 2009 and a negative growth rate of 17.96 per cent. from 2007 to 2008.

Financial condition, liquidity and capital resources

At 31 December 2009, the Group's total assets were VND 12,196,211,274,000, compared to VND 8,871,560,333,000 at 31 December 2008 and VND 6,334,821,204,000 at 31 December 2007. This represents an increase from 31 December 2008 to 31 December 2009 of 37.5 per cent. and an increase of 40 per cent. from 31 December 2007 to 31 December 2008. The Group saw significant rise in its current assets throughout this period due to an increase in the number of real estate projects under construction which had not yet been sold.

At 31 December 2009, the Group's total liabilities (current and non-current) were VND 7,068,556,748,000, compared to VND 4,672,353,582,000 at 31 December 2008 and VND 2,700,106,197,000 at 31 December 2007. This represents an increase from 31 December 2008 to 31 December 2009 of 51.3 per cent. and an increase of 73 per cent. from 31 December 2007 to 31 December 2008.

At 31 December 2009, owners' equity was VND 4,711,500,209,000, compared to VND 3,747,497,350,000 at 31 December 2008 and VND 3,402,401,066,000 at 31 December 2007. This represents an increase from 31 December 2008 to 31 December 2009 of 25.7 per cent. and an increase of 10.1 per cent. from 31 December 2007 to 31 December 2008.

At 31 December 2009, minority interest was VND 416,154,317,000, compared to VND 451,709,401,000 at 31 December 2008 and VND 232,313,941,000 at 31 December 2007. This represents a decrease from 31 December 2008 to 31 December 2009 of 7.9 per cent. and an increase of 94.4 per cent. from 31 December 2007 to 31 December 2008.

The Group operates in a number of capital-intensive industries. The Group has historically financed its capital expenditures through a combination of internal funds, cash generated from its sales, services rendered, pre-sale proceeds, loan facilities from commercial banks in Vietnam, and proceeds from issuance of debt and equity securities, such as the Company's initial public offering on the HoSE in December 2008 and issuance of convertible and non-convertible bonds in 2008, 2009 and 2010. The Group's short-term liquidity is used in order to finance its working capital requirements and the short-term loans are secured by the Group's land-use rights, plant, machinery and equipment, Shares, the Company's shares in its subsidiaries and inventories. Sources of short-term liquidity include cash balances and receipts from operations. The Group's long-term liquidity requirements include the financing of the Group's current and future real estate, hydropower, iron ore mining and rubber plantation projects and purchases of machinery and equipment.

The bonds issued by the Company and other Group companies are secured on various Group assets and the personal assets. The three-year bonds issued by the Company on 8 October 2010 (and which raised VND 530,000,000) were secured on 30,000,000 Shares held by Mr. Doan Nguyen Duc. The four tranches of non-convertible bonds issued by the Company in September 2008 and December 2008 (with an initial combined par value of VND 1,000 billion) which have yet to be redeemed (which, at the date of these Listing Particulars have an outstanding par value of VND 250 billion) are secured on land-use rights and future revenues from the Hoang Anh Riverview real estate project and the land-use rights of the Kinh Te real estate project. The bonds issued by Phu Hoang Anh Joint Stock Company on 22 May 2009 and 31 December 2009 were secured on the land use rights in respect of Slot 9, Nguyen Huu Tho street, Phuoc Kieng Ward, Nha Be district, Ho Chi Minh City and future revenues from this land. The long-term loans are secured against the same asset classes that form the security for the Group's short-term loans. Potential sources of funding for long-term liquidity requirements include new loans or bond issuance. The Group intends to continue to finance its future investments by means of both debt and equity, on a broadly equal split between those two sources. The Group is currently in negotiations regarding the potential issue of notes by the Company. See "Recent Developments". The Group holds its cash and cash equivalents primarily in Vietnamese Dong.

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Cash flows

The following table sets forth certain information relating to the Group's cash flows for the three years ended 31 December 2007, 2008 and 2009 and has been extracted without material adjustment from the Group's financial statements in respect of those financial years. The Group's cash flows during the six months ended 30 September 2010 has also been included in the table below and have been extracted without material adjustment from the Group's unaudited interim accounts in respect of that period.


September 2010(VND '000)


September 2009(VND '000)


(VND '000)


(VND '000)


(VND '000)

Cash flows from operating activitiesNet profit before tax 2,217,055,024 1,252,037,707 1,743,504,324 1,006,158,258 869,714,218Adjustments for:Depreciation and amortisation

47,135,516 83,434,215 159,105,686 108,998,192 24,067,305

Provisions (534,902) 311,063 963,447 600,000 246,996Unrealised foreign exchange losses/(gain)

(8,944,344) - - 2,082,336 (142,792)

Profits from investing activities

(1,037,434,034) (65,821,348) (196,435,954) (422,377,729) (407,745,427)

Interest expense 134,874,147 155,146,614 207,443,514 88,500,954 49,800,958

Operating income before changes in working capital

1,352,151,407 1,425,108,251 1,914,581,017 783,962,011 535,941,258

Increase in receivables (757,328,318) (442,601,568) (339,054,195) (520,253,236) (857,271,213)(Decrease)/increase in inventories

132,225,270 (127,560,090) (168,204,732) (482,062,946) (1,538,647,042)

Increase in payables 151,018,721 136,918,274 37,845,131 150,486,873 714,704,785Decrease/(increase) in prepaid expenses (40,480,788) (4,990,635) 66,934,106 (96,993,404) (281,086,632)Interest paid (151,233,185) (142,711,329) (189,041,621) (195,474,116) (41,362,653)Corporate income tax paid

(184,946,066) (190,446,376) (212,869,539) (149,057,733) (49,793,125)

Other cash outflows from operating activities (69,098,039) (5,511,622) (26,879,395) (29,882,347) (8,902,502)

Net cash from/(used in) operating activities 432,309,002 648,204,905 1,083,310,772 (539,274,898) (1,526,417,124)

Cash flows from investing activitiesPurchases and construction of fixed assets

(1,753,762,395) (421,392,567) (1,357,528,506) (1,056,650,067) (146,782,646)

Proceeds from disposals of fixed assets and other long-term assets

10,487,244 29,124,481 32,965,491 127,905,319 -

Payments for investments in other entities (1,022,761,398) (481,855,591) (568,353,883) (778,089,748) (397,475,300)Proceeds from disposal of investments in other entities

1,493,593,598 - 134,000,000 - -

Interest and dividends received

77,957,910 16,293,799 85,997,296 23,363,313 144,852,812

Net cash used in investing activities

(1,194,485,041) (857,829,878) (1,672,919,602) (1,683,471,183) (399,405,134)

Cash flows from financing activities

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Capital contribution and issuance of shares

- 248,393,276248,393,276 - 2,594,120,729

Capital redemption - (30,091,699) (30,091,699) (327,979,971) (221,650,000)Borrowings received 3,521,253,776 2,343,731,369 4,720,800,925 2,695,583,825 1,410,818,219Borrowings repaid (2,218,706,182) (2,016,569,246) (2,577,048,046) (1,061,691,238) (663,124,559)Dividends paid (292,008,407) (269,721,752) (359,302,070) (1,122) (36,231,774)Capital contribution of minority

- - - 154,357,651 -

Net cash from financing activities

1,010,539,187 275,741,948 2,002,752,386 1,460,269,145 3,083,932,615

Net increase/(decrease) in cash

248,363,148 66,116,975 1,413,143,556 (762,476,936) 1,158,110,357

Cash at beginning of year/period

1,944,228,950 531,085,394 531,085,394 1,290,907,575 132,797,218

Impact of exchange rate fluctuation

- - - 2,654,755 -

Cash at end of year/period

2,192,592,098 597,202,369 1,944,228,950 531,085,394 1,290,907,575

Capital resources and expenditures

The following table shows the Group's consolidated borrowings and capitalisation at 31 December 2007, 2008 and 2009 and at 30 September 2010.

Borrowings 30 September 2010 (interim


31 December 2009

(VND '000)

31 December 2008

(VND '000)

31 December 2007

(VND '000)

Short-term loans and borrowings

2,665,041,407 2,991,797,773 1,203,108,474 649,474,370

Long-term loans and borrowings

2,428,011,123 2,248,707,163 1,893,643,583 813,385,100

Total debt 5,093,052,530 5,240,504,936 3,096,752,057 1,462,859,470Owners' equity and minority interest

Share capital 2,925,206,970 2,704,654,580 1,798,145,010 1,199,563,880Share premium 2,384,349,746 1,223,971,061 1,840,361,593 1,559,596,453Consolidation reserve

(392,133,835) (399,237,919) (280,765,140) -

Treasury shares (30,091,699) (30,091,699) (327,979,971) -Foreign exchange differences

22,395,463 20,463,787 2,734,772 80,017


8,622,737 8,622,737 8,622,737 8,622,737


183,975,934 82,528,069 22,528,069 22,528,069

Undistributed earnings

2,079,858,048 1,084,004,248 665,280,804 598,663,334


50,823,180 16,585,345 18,569,476 13,346,576

Minority interest 868,839,762 416,154,317 451,709,401 232,313,941

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Total owners' equity and minority interest

8,051,023,126 5,111,069,181 4,199,206,751 3,634,715,007

The increase in short-term borrowings during the period from 1 January 2009 to 31 December 2009 was partly due to the issue of zero per cent. coupon convertible bonds in October 2009 to raise a total of VND 1,450,000,000,000. The increase during this year was partially offset by a reduction over the year in the amount repayable to banks and other entities and individuals. The amount of short-term borrowings fell during the period from 1 January 2010 to 30 September 2010 due to the conversion by bond holders of the above-mentioned convertible bonds into Shares. The conversion also led to an increase of VND 220,552,390,000 in share capital and an increase of VND 1,214,447,610,000 in the share premium account during this same period.

In the interim period to 30 September 2010, although short-term loans payable to individuals and non-bank entities fell from VND 57,000,000 to nil, the value of short-term loans payable to banks increased from VND 842,197,137,000 to VND 1,113,114,431,000. The increase in short-term loans payable to banks is attributable to an increase in the utilisation of existing short-term loan facilities with six banks.

Long-term loans and borrowings of the Group have increased from VND 813,385,100,000 at 31 December 2007 to VND 2,428,011,123,000 at 30 September 2010. Much of this is attributable to bonds issued by the Company and its subsidiaries. The terms of the bonds issued by the Group over the period from 1 January 2007 to the date of these Listing Particulars are summarised below:

● On 8 October 2010, the Company issued three-year bonds, raising VND 530 billion in proceeds. The coupon on the bonds during the first interest period (each interest period being one year) is 15.2 per cent. per annum, with such coupon payable on 8 October 2011. The coupon applicable to subsequent interest periods is based on the average deposit rates available to individuals investing in 12-month savings bonds from four commercial banks (Agribank, Vietinbank, IDV and Vietcombank) plus 4.2 per cent. The bonds are secured by (i) a pledge of 30,000,000 Shares held by Mr. Doan Nguyen Duc, the value of which was agreed to be VND2,267,640 million as of the date of the pledge agreement, and (ii) other assets, which are any assets of Mr. Doan Nguyen Duc and/or the Company used to supplement the value of secured assets pursuant to the pledge agreement. The value of the secured assets will be re-evaluated by BIDV Gia Lai Branch every 12 months from the date of the bond issuance or at certain times determined by BIDV Gia Lai Branch before the Company has fulfilled its obligations in respect of the bonds. Mr. Doan Nguyen Duc and the Company undertook to maintain the value of the secured assets at not less than a secured amount ("Secured Amount") at any time before the principal and interests on the bonds have been paid in full. The Secured Amount is determined as the minimum value of the pledged shares, and must not be less than 143 per cent. of the total par value of the bonds which have not been redeemed at any time. The proceeds will be used to finance the working capital requirements of the Group and the Group's ongoing real estate, hydropower and rubber plantation projects.

● On 30 September 2008, the Company issued VND 550 billion of non-convertible bonds at a par value of VND one billion per unit. The bonds were redeemed in September 2010 The coupon on these bonds was equivalent to 20.5 per cent. per annum in the first interest period. This coupon was paid on 30 March 2009. Thereafter, the coupon amounted to 150 per cent. of the base rateannounced by the SBV minus a margin of 0.5 per cent. per annum.

● On 30 September 2008, the Company issued VND 100 billion of non-convertible bonds at a par value of VND one billion per unit. The bonds are redeemable at par value by 30 September 2011. The bonds bear a coupon of 21 per cent. per annum during the first interest payment period (which ended on 30 March 2009). Thereafter, the coupon increased to a per annum rate of 150 per cent. of the SBV's base rate in respect of the following periods. The coupon is payable on 30 March and 30 September annually.

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● In December 2008, the Company issued VND 100 billion of non-convertible bonds at a par value of VND one billion per unit. The bonds were redeemed at par value by the Company on 31 December 2010. The bonds bear a coupon of 12.25 per cent. per annum in the first interest payment period and, in the following periods, a floating rate equivalent to 150 per cent. of the base rate announced by the SBV, less a 0.5 per cent. margin. The coupon is payable on 30 June and 31 December annually.

● In December 2008, the Company issued VND 250 billion of non-convertible bonds at a par value of VND one billion per unit. The bonds are redeemable at par value by 31 December 2011. The bonds bear a coupon of 12.75 per cent. per annum in the first interest payment period and, in the following periods, a floating rate equivalent to 150 per cent. of the base rate announced by the SBV. The coupon is payable on 30 June and 31 December annually.

● On 19 August 2010, the Company placed 1.1 million convertible bonds with Northbrooks Investments (Mauritius) Pte Ltd, an affiliate of Temasek Holdings Pte Ltd, the Singapore government's sovereign fund, for a total of VND 1.1 trillion. The bonds are convertible into Shares at a conversion price of VND 67,375 within one year of the issue date. If converted, 16.32 million Shares will be added to the total number of the Company's issued Shares, and those Shares would have represented approximately 5.29 per cent. of the Company's total number of issued Shares at the time of the placement. The bonds have a zero per cent. coupon over the first year. However, if the bonds are not converted within this time period, the coupon will be determined by the average interest rates applicable to the interest rates paid on deposits by ACB, Sacombank, Techcombank and Eximbank, within a margin of three per cent. per annum payable on maturity.

● On 22 May 2009, Phu Hoang Anh Joint Stock Company, a Group company, issued VND 200 billion of non-convertible bonds to Housing Development Commercial Joint Stock Bank. The bonds were issued at a par value of VND one billion per unit and are redeemable at par value by 22 May 2012. The bonds bear a coupon of 11 per cent. per annum in the first interest payment period and, in the following periods, a floating rate equivalent to the average 12-month term deposit rate of the bond holder, plus 3.5 per cent. The coupon is payable on a semi-annual basis.

● On 31 December 2009, Phu Hoang Anh Joint Stock Company issued VND 250 billion of non-convertible bonds to Housing Development Commercial Joint Stock Bank. The bonds were issued at a par value of VND one billion per unit and are redeemable at par value by 31 December 2012 or at the time of repurchase by the issuer. The issuer has the right to repurchase these bonds from two years after the issuance date until maturity. The bonds bear a coupon of 12 per cent. per annum in the first interest payment period and, thereafter, a floating rate equivalent to the average 12 month term deposit rate of the bond older, plus 3.5 per cent., provided that such a rate is not less than 12 per cent. per annum. The coupon is payable on a semi-annual basis. The bonds are secured by (i) the land use rights in respect of a 37,623.5 sq.m. land at Lot 9, Nguyen Huu Tho Street, Phuoc Kien Commune, Nha Be District, Ho Chi Minh City and assets to be formed on this land, and (ii) a bank guarantee provided by HDBank.

The Group's long-term borrowings attributable to long-term bank loans also increased over the period from 1 January 2007 to 30 September 2010. These loans bear interest at floating rates and have common terms ranging from 36 to 72 months. At 30 September 2010, the interest rate on the Group's Vietnamese bank loans ranged from 16.5 per cent. to 18.0 per cent. per annum. On the dates indicated, the Group had liabilities under long-term bank loans from the following banks for the amounts indicated:

Bank At 30 September 2010

(VND '000)

At 31 December 2009

(VND '000)

At 31 December 2008

(VND '000)

At 31 December 2007

(VND '000)

BIDV 1,077,805,384 660,671,767 406,136,111 343,048,769Vietcombank 468,485,914 387,845,616 125,582,609 126,637,174Sacombank 297,501,202 174,880,238 45,000,000 45,000,000

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Agribank 100,000,000 100,000,000 100,000,000 100,000,000VietinBank 29,500,000 35,500,000 41,500,000 44,500,000HDB - 139,353,178 216,385,678 0

As borrowers under these Vietnamese bank loans, Group companies party to loan agreements have agreed, among other things, not to take the following actions without obtaining the relevant lender's prior consent:

● creating encumbrances on their properties or assets that have been pledged or mortgaged under such respective credit agreements;

● making amendments to their constitutional documents in a way that may adversely affect their ability to repay their loans;

● altering the nature or scope of their business operations in any material respect;

● making major changes to their corporate structures, such as entering into joint ventures, mergers and acquisitions or reorganisations;

● making other changes to the company's status, such as by liquidation or dissolution;

● transferring part or all of the liabilities under the loans to a third party;

● prepaying the loans;

● selling or disposing of the properties or assets that have been pledged or mortgaged under such respective credit agreements;

● transferring of a substantial equity interest in the borrower; and

● incurring other indebtedness or granting guarantees to third parties that would adversely affect their ability to repay their loans.

The Vietnamese bank loan agreements contain certain customary events of default, such as failure to pay the amount payable on the due date, unauthorised use of loan proceeds, failure to obtain the lender’s approval for an act that requires the latter's approval, material breach of the terms of the loan agreement and acceleration of repayment obligations under other loan or financing documents. The lenders are entitled to terminate their respective agreements and/or demand immediate repayment of the loans and any accrued interest upon the occurrence of an event of default.

Further details of the loan agreements which Group companies were a party to at 31 December 2009 can be found in note 24 to the Group's audited consolidated financial statements for the year ended 31 December 2009, which are appended to these Listing Particulars.

The Group's available unused bank facilities as of 30 September 2010 amounted to approximately VND 2,274 billion.

The Group's forecast capital expenditures for each of its business segment in respect of 2011 and 2012 are summarised in the table below. Capital expenditure in respect of the Group's real estate segment will depend on the cash flows generated by that segment's results of operations.

At 30 September 2010, the Group had contractual commitments for the construction work for its apartments and hydropower plants as follows:

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Apartments Contracted Amount (VND million)

Recognised Amount (VND million)

Remaining Commitment (VND million)

Golden House 329,542 69,470 260,071Phu Hoang Anh 1,180,203 202,631 977,572Hoang Anh Riverview 117,174 97,058 20,116Tay Nguyen Plaza 21,069 18,980 2,090

Hydropower plantsBa Thuoc 1 20,378 4,298 16,079Ba Thuoc 2 363,921 181,941 181,980Dak Srong 2A 308,641 200,548 108,093Total 2,340,925,842 774,925,096 1,566,001

During 2009, the Group's capital expenditures amounted to US$43.2m. In the nine months to 30 September 2010, the capital expenditures amounted to US$71.8m. For the years ending 31 December 2011, 2012 and 2013, the Group expects to incur capital expenditures of approximately US$ 195.8 million, US$ 215.3 million and US$ 67.8 million, respectively, primarily in connection with the development of its hydropower, rubber plantations and iron ore businesses.

The Group is currently contesting a preliminary finding of a team from the State Audit of Vietnam in connection with the tax filing of one of its real estate subsidiaries. The State Audit examination is part of its review of the performance of the local tax administration agency. The State Audit recommended that the subsidiary pays a temporary income tax advance related to the progress payments received from the buyers in addition to the required two per cent. advance tax on progress payments received from the buyers in accordance with Circular No. 130/2008/TT-BTC dated 26 December 2008 issued by the Ministry of Finance. The Group's existing treatment is to accrue adequately the deferred income tax on the profits earned from the pre-completion sales of apartments during the construction period and to declare and pay income tax in full upon delivery of apartments to the buyers. The Group believes that this matter will be ultimately resolved in favour of the subsidiary.

Financial risk management

The Group has applied some policies for financial risk management. The Group produces detailed projection of loans and debts and matches the timings stipulated by its loan repayment schedule with that of the Group's cash inflows.

The Group endeavours to keep debts at a safe and stable level. The Group aims to keep its ratio of debt over owners' equity to below 45:55.

The Group has foreign currency exposures arising from any sales or purchases made in foreign currencies other than Vietnamese Dong. The Group conducts its business substantially in Vietnamese Dong. Most of the sales of real estate are denominated in U.S. dollars with actual collection received in Vietnamese Dong (using the exchange rate prevailing at the payment date). Most of the transactions with foreign related parties and certain foreign contractors are also denominated in U.S. dollars. From 1 January 2007 to 30 September 2010, the value of Vietnamese Dong depreciated by approximately 19 per cent. against the U.S. dollar. Although many countries' economies has recovered at different degrees from the financial crisis which took place since 2008, the quantitative easing policy adopted by many of these countries, in particular the United States, may result in volatility of the value of their currencies in the future. The Group has not entered into hedge derivatives to eliminate its foreign currency exposures.

Recent Accounting Pronouncements

Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments. On 6 November 2009, the

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Ministry of Finance issued Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments. The adoption of the circular will require further disclosures and have impact on the presentation of certain financial instruments in the financial statements. The circular became effective on 21 December 2009 and will be applied to financial statements from 2011 onwards. The Group's management is currently assessing the impact of adopting the circular on the Group's future financial statements.

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MARKET AND INDUSTRY OVERVIEW

Real estate

The Vietnam real estate market is in an early stage of development, reflective of its low levels of urbanisation and low GDP per capita compared to other economies of Southeast Asia. Based on the most recent data available from the General Statistics Office of Vietnam, in 2008 approximately 72 per cent. of the population, or 60.4 million people, lived outside of urban areas. Economic growth is the main driver of the property sector in Vietnam, as increasing government and private sector investment, consumer wealth and tourism drive demand for additional and improved office space, retail space and residences. In addition, household wealth is benefiting from large inward remittances from Vietnamese expatriates. This increase in personal wealth is creating an emerging middle class that is driving urbanisation. This urbanisation is, in turn, driving greater demand for higher-quality housing.

Vietnam enjoys a relatively stable political environment, with the government pursuing strategies of economic liberalisation, increased regulatory transparency and encouragement of foreign direct investment. As a result, foreign direct investment into Vietnam has increased significantly in recent years, translating into the emergence of foreign property developers in the local property market. According to data from the General Statistics Office of Vietnam, real estate and renting activities, as a percentage of total foreign direct investment, grew from 1.7 per cent. in 2004 to 5.8 per cent. in 2008.

From 2000 to the end of 2008, Vietnamese real estate prices increased rapidly. This was due to a number of factors, including urbanisation, interest from foreign companies looking to establish enterprises in Vietnam, supply shortfalls and increased speculation from investors. Increased real estate speculation in particular led to growing fears that the market has entered a bubble during this period. Subsequently, however, the Vietnamese real estate market, along with real estate markets in other countries, experienced a downward trend.

The real estate market's recovery has been affected by high inflation, regulatory restrictions on bank lending, high interest rates on real estate loans and rising prices in construction materials.

In September 2010, it was reported that during 2009 rental rates fell by over 10 per cent. in Hanoi, Ho Chi Minh City and Da Nang City. In addition, vacancy rates were reported as running at roughly 30 per cent. (Source: Business Monitor)

However, there are strong regional differences in the Vietnamese property market. For example, real estate prices in Hanoi rose by 30 per cent. on average in the first and second quarters of 2010, with certain districts seeing price rises of more than 40 per cent.

The property market in Vietnam is affected by complex systems for the transfer and registration of property title. A property acquisition may take several years to complete and requires a number of regulatory approvals before being considered finalised. These regulatory systems are gradually being improved. As the two largest economic centres and most populous cities of Vietnam, Hanoi and Ho Chi Minh City represent the two most significant real estate markets of Vietnam.

Additional information on current regulations relating to property development and real estate ownership is set out in the section headed "Regulation — Vietnamese Land Law", "Regulation — Vietnamese Laws on Residential Housing" and "Regulation — Vietnamese Laws on Real Estate Business" in these Listing Particulars.

Additional information on the property development process in Vietnam is set out in "Vietnamese Regulatory Law Overview" below.

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Rubber

Natural rubber forms some 42 per cent. of the world's total rubber production with the remainder being produced synthetically from oil. Southeast Asia is the world's main source of natural rubber, accounting for around 90 per cent. of the world's output. The three largest producing countries (Indonesia, Malaysia and Thailand) together account for around 73 per cent. of all natural rubber production.

Natural rubber has a long history in Vietnam, with the first plantation being founded in 1897 under French colonial rule. With the end of the Vietnam War, the Vietnamese government set out to once again establish Vietnam as a major exporter of natural rubber.

The industry was reinvigorated by a US$ 32 million loan from the World Bank in 1996 to bring rubber latex processing technology up to international standards. Rubber tree plantations are primarily located in the tropical south of the country. Vietnam's output of natural rubber is currently growing at a rate of 15 per cent. per year as additional hectares are planted and young trees reach maturity and are put into rubber latex production. In 2009, 55,000 hectares in Vietnam were newly planted with rubber trees.

In 2009, the total world production of natural rubber was 8.904 million tonnes, with Vietnam producing some 711,000 tonnes. Vietnam's natural rubber production saw an average growth rate of 11 per cent. year-on-year between 2005 to 2009. Vietnam is now the world's fifth largest producer of natural rubber. In 2009, Vietnam tapped rubber from about 419,000 hectares of rubber plantations. Total Vietnamese rubber production is expected to grow dramatically in the years ahead with government plans to increase production to one million tonnes by 2015 and 1.2 million tonnes by 2020.

During 2009, Vietnam ranked third in the world in terms of rubber exports, after Thailand and Indonesia. However, Malaysia, which suffered from a sharp drop in natural rubber exports in 2009 (based on national estimates as at September 2010), is anticipated to move back into third place during 2010. During 2009, Vietnam exported some 731,000 tonnes of rubber (including exports from previous years' stock) with a total value of US$ 1.2 billion.

The expansion in Vietnam's rubber industry has been largely fuelled by China's industrial expansion over the last two decades. Vietnam's natural rubber exports to China have been increasing steadily since 1995 and increasing at a greater rate since 2005. China is currently the biggest importer of natural rubber from Vietnam. However, in 2010, China's natural rubber imports fell by 22.1 per cent. in the second quarter and by 9.9 per cent. in the third quarter, despite continued growth in domestic consumption of natural rubber (albeit at a substantially reduced rate). It has been suggested that this negative quarterly growth was due to the utilisation of domestic stocks of natural rubber, which fell from 250,000 tonnes at the end of 2008 to 190,000 tonnes at the end of 2009.

At present, Vietnam's largest rubber company is the state-owned Vietnam General Rubber Corporation, popularly known as GERUCO, which holds 22 subsidiary rubber companies. In 2007, GERUCO processed around 320,000 tonnes of rubber, with SVR 3L accounting for 40 per cent. and latex for 25 per cent.

As a commodity, rubber prices are subject to fluctuations in the world market price. For more details on the factors that affect the price of natural rubber, see "Risk Factors". The average farm-gate price in North, Central and South Malaysia per 100 kg of dry rubber content at 18 September 2010 was US$ 2,975.8 per tonne. (Rubber statistics source: ANRPC)

Iron ore

Iron, the fourth most common element in the Earth's crust, is found combined with oxygen to form iron oxide minerals such as magnetite and hematite. Although iron mineralisations are very common, they are seldom rich enough to make mining viable. Therefore, generally only economically viable mineralisations are referred to as iron ore deposits. Of all the iron ore mined, most consists of hematite. The iron ore mined

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and to be mined by the Group is mostly magnetite. As its name suggests, magnetite is ferrimagnetic, which makes it relatively easy to separate from waste rock during processing.

The iron ore market is the second largest commodity market by value. Annual worldwide production stands at approximately 2,300 million tonnes. Approximately 98 per cent. of the iron ore mined worldwide is used to make steel. The remaining two per cent. is used in the manufacture of cement, heavy-medium materials, pigments, ballast, agricultural products, or specialty chemicals. As a result, demand for iron ore is tied directly to the production of raw steel and the availability of high-quality iron scrap.

Countries such as China, Brazil and Australia are currently the world's largest producers of iron ore. However, Vietnam also has vast iron ore deposits and is ranked in the top thirty iron ore producing countries globally (source: Financial Times).

Since the 1960s, representatives of the world's largest mining companies held negotiations to set prices for contracts with the big steel producers. Traditionally, the first deal between a miner and a major steelmaker set a "benchmark" which was followed by the rest of the industry. However, during 2009, this pricing system was challenged after China, the world's largest importer of the commodity, refused to accept a "benchmark" deal between the miners and Japan, opting instead to buy in the spot market. A move away from the annual benchmark prices could lead to more volatile prices for steel and other goods and have an impact on the profitability of iron ore mining companies.

As with most other industries, iron ore mining was adversely affected by the global recession. Mining in general was particularly badly hit, as a direct result of the reduction in demand for steel due to the crippling slowdown in the real estate, construction and automobile markets. However, despite global demand for iron ore general falling, demand from China has remained strong as the country's transition to a fully-industrialised economy keeps its demand for steel high. Vietnam's proximity to China gives the Vietnamese iron ore producers an advantage because transportation costs make up a substantial proportion of the final price of each unit of iron ore, as the actual production costs can be relatively low.

To date, according to the VSA, there have been almost 200 iron ore mines discovered in Vietnam with deposits estimated at 1.2 billion tonnes. Indeed, the largest mine in Southeast Asia, the Thach Khe iron mine which has an estimated reserve of 544 million tonnes, is located in Vietnam. Furthermore, Vietnam now has nine major steel plants that import about three million tonnes of pig iron, the main raw material to be used to make steel, annually. The thriving nature of the Vietnamese steel industry was underlined by the fact that Vietnam exported 4.19 million tonnes of steel in the first four months of 2010, a threefold increase on the same period in 2009.

VSC is Vietnam's largest steel company. VSC, alongside its joint venture partners, has a comprehensive range of businesses, both within and outside the steel industry. It is currently state-owned, but is in the process of becoming privatised (though the Government will retain a stake). The Government has indicated, however, that it will retain the majority of the shares once the VSC is privatised. The total capacity of VSC has been estimated to be approximately five million tonnes per annum.

The Vietnamese steel market has been under-developed in terms of both quality and quantity. Vietnam has a steel-producing capacity of 2.6 million tonnes and currently imports 2.2 million tonnes of steel, demonstrating the need for increased domestic steel production. Indeed, evidence suggests that domestic supplies can only currently satisfy 30 per cent. of current demand.

As the domestic appetite for iron ore continues to grow in the coming years, along with the demand from neighbouring China, market conditions suggest a significant increase in iron ore production within Vietnam. The potential in the iron ore industry of Vietnam has not gone unnoticed by international investors and a number of foreign investors, including some of the world's largest steel companies, have invested in Vietnam in recent years. A selection of recent foreign investments into Vietnam include the following:

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● Kobe steel agreeing to construct a US$1 billion iron-making plant in Vietnam.

● Nippon steel agreeing to construct a new plant in Southern Vietnam producing steel pipe and steel sheet piles due to start operating in May 2011.

● The Taiwanese-backed Guang Lian Steel Vietnam Limited Company building the largest steel mill in Vietnam where capacity will eventually be seven million tonnes per year.

● Tata Steel, signing a joint venture agreement with the VSC together with Vietnam Cement Industries Corporation for a 4.6 million tonne per annum integrated steel plant. The investment licence for this project has not yet been granted. (Source: Vietnam Business News)

● Posco constructing a US$500 million cold-rolling steel mill in Vietnam. Posco has announced that it will invest US$200 million more in the plant in order to more than treble the capacity by 2014.

Hydropower

Vietnam is suited to hydropower production with its dense river network and high tropical rainfalls. Approximately 2,400 rivers in Vietnam are longer than 10 kilometres and Vietnam has an annual average rainfall of 2,000mm (with certain regions having an average of 5,000mm per year). However, until recently, less than a quarter of Vietnam's hydropower potential has been exploited.

Hydropower plants currently supply nearly 40 per cent. of Vietnam's electricity, and lower operating costs mean that hydro electricity is generally cheaper to produce than that produced by coal, gas or oil-fired plants. The total power generation capacity in Vietnam as of 2009 was about 18,000 MW, of which some 38 per cent. or 6,800 MW, was provided by hydropower. EVN, the state utility and the sole distributor of power to all consumers, estimates that the hydropower in Vietnam could potentially generate about 31,000 MW.

Vietnam has recently experienced difficulties in meeting its energy needs and is actively seeking to expandits generating capacity. According to Vietnam Investment Review, over the past five years, Vietnam's annual average electricity consumption has grown by 15 to 16 per cent., while electricity production has risen by 13 per cent. The country's power requirement for 2010 was projected to be 99 billion kWh, while supply is likely to be about 85 billion kWh, indicating a 14 per cent. shortfall. Transmission loss is currently estimated at about 10 per cent. Future economic growth in Vietnam could widen this power deficit.

In order to meet this shortfall, the hydropower sector in Vietnam is undergoing a significant expansion. The Government's Sixth Power Development Plan, which covers the period of 2006 to 2020, has committed to increase Vietnam's power capacity to 60,000 MW, by 2015 and total power generation to 257 billion kWh.

All power generated from private sector producers must currently be sold to EVN, the state utilities regulator. The price at which electricity is sold to EVN depends upon the generating capacity of the relevant hydropower plant.

Where the relevant hydropower plant has a capacity of greater than or equal to 30 MW, the price at which that plant's electricity will be sold to EVN may be negotiated pursuant to Decision 2014/QD-BCN. Factors that may be taken into account when negotiating the price are: whether the plant is financed by debt or equity finance, the ease with which the relevant hydropower plant may be connected to the Vietnamese national grid, and the amount of water flow the hydropower plant experiences. Depending on the outcome of the negotiations, the price may be fixed at between VND 550 to VND 800 per kWh for a contract term of between five to 20 years.

Where the relevant hydropower plant has a capacity of less than 30 MW, the price at which that plant's electricity will be sold to EVN may be negotiated on one of two bases. The price may negotiated under

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Decision 2014/QD-BCN, taking into account the factors set out above. Alternatively, the parties may negotiate under Decision 18/2008/QD-BCT. Under this negotiation framework, the parties agree on various prices at which the plant's electricity will be sold to EVN. The particular price at which the electricity will vary depending upon:

● whether the electricity is sold during the rainy season (1 July to 31 October) or the dry season (1 November to 30 June); and

● the time of day at which the electricity is sold (i.e. peak, normal or off-peak hours).

The prices agreed to in respect of the above time factors vary from about VND 452 per kWh to VND 795 per kWh. The prices agreed on the basis of this negotiation framework may be renegotiated on an annual basis, with prices generally rising by eight per cent. year-on-year.

The Group believes that there is some scope for an increase in the prices at which EVN purchases electricity as the Ministry of Commerce has indicated that these prices ought to be pegged to the prices at which electricity is sold to end-users. Any such change may be implemented during 2011.

Granite and furniture manufacturing

The global granite industry is well-established. Its high density and strength mean it is widely used as a construction material, particularly for flooring tiles in public commercial buildings and monuments. Over recent years it has also been used extensively in major projects such as office buildings, airports and commercial centres. Granite also serves many purposes for home furnishings, acting as a popular choice for kitchen surfaces and backsplashes, building stones, paving stones and bathroom tiles.

The global granite industry has developed much over the last few decades, shifting from a high-margin, low-volume business to a low-margin, high-volume business. In part, this has been due to improving technologies. Diamond wires are increasingly used in quarries to increase production efficiency, and allow for larger blocks to be processed.

For much of the twentieth century, the global granite industry was heavily dominated by western industries, particularly Britain and the United States. In recent years, the United States granite industry has entered a state of decline, faced with increasing regulation and heavily hit by the troubles in the real estate market.

In recent years Asia has developed as both a market and competitor. Asia now represents the dominant player in the granite-quarrying market when measured by the number of companies. The growth of China has provided impetus for the expansion of the granite market, creating demand in the growth of its cities and skyscraper construction projects. It is estimated that China accounts for 17 to 20 per cent. of the world's granite production.

Vietnam itself has an established tradition of processing natural stones, with a strong stone-producing craftsmanship sector. This had tended to be largely for the domestic market, although in the second half of the twentieth century the market opened up to European and American customers. Today more than half the stone industry is export-led.

The stone-producing market represents a significant sector of Vietnam's economy. Calculations suggest that between 250,000 and 400,000 people, particularly in the country's northern and central regions, work in the Vietnamese stone industry. The workforce is considered to be highly skilled and well-paid; whereas the statutory minimum wage for rural Vietnam is US$ 58, the average wage of workers in the natural stone industry is between US$ 160 and US$ 250 a month.

The Government has added two new granite areas in the central province of Khanh Hoa for the purpose of national planning on exploring, tapping and using minerals for construction until 2020 (Source: Financial Times).

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The Vietnam furniture industry is export-led with 65 per cent. of total production being sold abroad. Key export markets include the United States, Europe and Japan.

There are approximately 1,500 medium-to-large furniture manufacturers in Vietnam, with about 250 of these being foreign direct-invested companies. The Vietnamese furniture-making industry employs approximately 17,000 people.

In previous years, the Government imposed tariffs of over 10 per cent. on imports of furniture. However, since the beginning of 2009, these tariffs have been reduced to 0 to 3 per cent. In addition, export tariffs of 10 per cent. on timber exports have been lifted.

According to the Vietnam Wood and Forest Products Association, in the first five months of 2010, Vietnamese wooden furniture export revenue reached US$ 1.4 billion, an increase of 35 per cent. over the same period in 2009. The increase has been explained by higher demand from key export markets, such as the United States.

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BUSINESS

Overview

Hoang Anh Gia Lai Joint Stock Company (Vietnamese: Công ty Cổ phần Hoàng Anh Gia Lai) is currently the largest private sector company, by market capitalisation, listed on the HoSE. At 15 March 2011, the Company's market capitalisation was approximately VND 21,962 billion (US$ 1.13 billion).

The Group primarily operates in the following business sectors: real estate, rubber plantations, iron ore mining, hydropower and manufacturing. Although originally focused in the Gia Lai province of Vietnam, the Group has expanded its activities throughout Vietnam and into the neighbouring states of Laos and Cambodia. The Group exports its furniture products throughout Asia, Europe and the Americas.

History

In 1993, the Company was established as a private company under the name Hoang Anh Private Enterprise. It originally specialised in the manufacture of furniture. The Company began its operations at this time with a factory making outdoor and indoor furniture in the Gia Lai province of the central highlands of Vietnam.

The Company continued to expand its operations over the next decade and in 2002 it established a granite processing factory, while building a second wooden furniture factory, both in Gia Lai province. During 2002, the Group also established Hoang Anh Gia Lai Football Club.

During the course of 2004, the Group diversified into the hotel and resort sector, opening resorts at Quy Nhon in 2004, a coastal city in Binh Dinh province in central Vietnam, and at Da Lat, the capital of Lâm Đồng province in the central highlands of Vietnam in 2005. The Company continued to expand its hotels business in 2006 with the opening of the HAGL Hotel at Pleiku City in Gia Lai province and in 2007 with the opening of the HAGL Plaza Hotel in Da Nang, a coastal resort and port in central Vietnam.

On 1 June 2006, the Company changed its name to Hoang Anh Gia Lai Joint Stock Company and was re-established as a joint stock company. The year 2006 also saw the Group entering the real estate market with the completion of the Le Van Luong luxury apartment complex in Ho Chi Minh City.

The Group's real estate business expanded further during the course of 2007 as construction commenced on a second development of luxury apartments as well as an office building, both in Ho Chi Minh City. In 2007, Hoang Anh Quy Nhon Joint Stock Company and Hoang Anh Saigon Joint Stock Company merged with the Company. During this period, HAGL Plaza Hotel and the HA Safomec office building were opened. Also in 2007, the Group's football club signed a strategic co-operation agreement with Arsenal Football Club and opened the HAGL Arsenal JMG Football Academy in Pleiku City.

The Group undertook further projects in 2008, including construction of the high-end Hoang Anh Dak Lak apartments in Dak Lak province and the Hoang Anh Riverview apartments in Ho Chi Minh City and completed and handed over apartments in Ho Chi Minh City and Pleiku City. More recently the Group was awarded a US$ 19 million contract by the government of Laos to build the athletes' village for the SEA Games. This was handed over in 2009.

In 2007, the Group expanded its activities into the hydropower sector with the construction of the Daksrong 2 and 2A hydropower projects in Gia Lai province. On 26 October 2010, the Daksrong 2 hydropower plant was connected to the Vietnamese national grid. Daksrong 2A is expected to be completed in March 2011. Combined, these two projects are anticipated to have a maximum generating output of 42MW. Hydropower has continued to be a major focus of the Group's operations and the Group has applied for permission to set up a total of 14 hydropower plants with a total capacity of 342.5 MW.

Also during this period, the Group further diversified its activities by commencing planting operations in the rubber plantation business with a grant of 5,000 hectares of land from the government of Laos.

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Subsequent to this, in 2008 the Group signed a project development contract with the government of Laos for the construction of the SEA Games athletes' village and received an investment licence from the Laos Ministry of Planning and Development to develop a 10,000 hectare rubber plantation at Attapeu, Laos. The Group has also built up large areas of land for rubber plantation in Vietnam including 8,000 hectares of land in Gia Lai province and a further 3,000 hectares in Dak Lak province, also in the central highlands of Vietnam. More recently, the Group has expanded its rubber plantation business into Cambodia and received 12,000 hectares for rubber cultivation from the Cambodian government.

On 22 December 2008, the Shares were officially listed on the HoSE.

In 2009, the Group's real estate segment completed and delivered the New Saigon apartments in Ho Chi Minh City and commenced the construction of new projects in Ho Chi Minh City and in Da Nang.

During 2009, the Group's diversification strategy continued, with the commencement of the construction of further hydropower plants: Ba Thuoc 1 and Ba Thuoc 2 in Thanh Hoa province, with an anticipated capacity of 140 MW; the Daksrong 3B project in Gia Lai province with an anticipated capacity of 19.5 MW; and the Dakpsi 2B project in Kon Tom province, with an anticipated 14 MW capacity. The Laos government also granted licences to the Group to construct two hydropower projects on the Nam Kong river, with an anticipated combined capacity of 100 MW.

Also in 2009 the Group received further land allotments for rubber plantations for the Dak Lak province in Vietnam and the Cambodian government. The Group also began to diversify into iron ore mining during 2009, when it received a licence from the Laos government to survey and exploit an iron ore deposit with estimated reserves of 20 million tonnes and a further licence from Thanh Hoa province in Vietnam to survey three iron ore deposits.

During 2009, these diversification activities were partly financed by an issue of convertible bonds, which raised approximately VND 1,450 billion (US$ 80 million).

In 2010, the Group commenced iron ore mining operations in Gia Lai province and set up five iron ore refining lines, with a total capacity of 500,000 tonnes per annum at an investment of US$ 3.5 million.

Competitive Strengths

The Company believes that its success and future prospects and the success and future prospects of the Group of which it is the ultimate parent company are linked to the following competitive strengths:

The Group is a large diversified group with strong financial performance

The Company's market capitalisation is (at 15 March 2011) VND 21,962 billion (US$ 1.13 billion), one of the largest for a listed private company in Vietnam. From the beginning of 2007 to the end of 2009, the Group's revenue grew by a compound average growth rate of 96 per cent. and profit after tax from US$ 5 million in 2006 to US$ 71 million in 2009, while over the same period its assets have grown eight-fold.

The Group believes that its strategy of diversification will allow it to exploit a wide variety of different opportunities within the Vietnamese and global economy while realising advantages from the significant synergies within its different business groups.

The Group leverages the intrinsic natural advantages of Vietnam and its key geo-political location

The Group's businesses in real estate, manufacturing, mining, rubber and hydropower all capitalise on the natural resources of Vietnam and its strategic location in Southeast Asia.

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The Vietnamese economy has grown at an annual average rate of seven per cent. since 2000 according to 2008 and managed to achieve 5.3 per cent. real growth in GDP in 2009, despite the global economic crisis and poor economic performance of countries in the ASEAN region.

Vietnam is well located geopolitically, bordering China, one of world's biggest and fastest growing markets and close to the "tiger" economies of Southeast Asia. Vietnam and its neighbours, Laos and Cambodia, are rich in natural forest, mineral and water resources. Vietnam also has high levels of literacy (approximately 90 per cent.), with a productive workforce and low labour costs compared to certain other ASEAN countries. Vietnam's membership of the WTO and ASEAN facilitates trade with other members of these bodies.

The Group has built a balanced portfolio of complementary businesses

The Group has diversified its activities from its core businesses across a wide variety of activities. While the Group believes that this strategy will ultimately limit its exposure to any single segment of the Vietnamese economy it is at the same time able to capitalise on significant synergies between different areas of activity. Accordingly, its experience of project management and construction has proved invaluable in its development of hydropower facilities, while its real estate business has been able to derive competitive advantages through access to the Group's furniture making activities. More recently, through an innovative financing structure, the Group has been able to secure land for rubber production in Laos in return for funding construction of the SEA Games athletes' village.

The Group's activities have allowed it to build a strong brand within the Vietnamese market

The Group's track record in its core business of real estate development and status as one of Vietnam's largest private companies listed on the HoSE (by market capitalisation) has given the Group a strong brand both domestically and on a wider international stage. Further awareness of the Group's brand has been created by its foray into football and sport through Hoang Anh Gia Lai football club and the club's partnership with Arsenal Football Club. The Company was also a sponsor of the athletes' village for the SEA Games.

The Company has sought to reward its shareholders through dividends and bonus share issues

In November 2009, the Company issued bonus Shares to Shareholders, issuing one bonus Share for every two Shares held by Shareholders. In the third quarter of 2010, the Company announced that it was proposing another bonus share issue, with one bonus Share issued for every two Shares held by Shareholders. The timing of this bonus share issue is to be confirmed by the Company.

In 2009, the Company paid out a dividend of 15 per cent. of the par value of the Shares (VND 1,500 per Share) to Shareholders. In August 2010, the Company paid out a dividend of 10 per cent. of the par value of the Shares (VND 1,000 per Share) to Shareholders.

In March 2010, a Shareholders' Meeting approved a resolution to issue bonus Shares in the ratio 2:1 (a Shareholder owning two Shares will receive one new Share). The record date for this bonus Share issue was 21 January 2011. As the bonus Share issuance was made after the New Shares were deposited with the Depositary, investors will receive the benefit of this bonus issue.

The Group is efficiently run and has a competitive advantage over state-owned enterprises

Within the business sectors it operates in, the Group often competes against state-owned enterprises. The Group's management believes that the Group manages its resources more productively that these state-owned enterprises. Group management also believes that this, together with the Group's lean organisation structure, enables the Group to be internationally competitive. For example, the Group's natural rubber business competes against a number of state-owned plantations. The Group's developmental natural rubber

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plantations have achieved yields of up to 2.5 tonnes of natural rubber per hectare against the national average of 1.7 tonnes per hectare.

The policies of the Government

The Group believes that the Government has consistently provided the policy framework conducive to the growth of private enterprises and foreign investment. Further, the Group believes that the Government deploys effective monetary and fiscal policies to aid growth as well as to check inflation and the impact of currency fluctuations.

Business Strategy

Continue to expand its operations through sustainable growth

The Company has continued to grow significantly both in terms of balance sheet and profitability over the past few years with a profit before tax of VND 870 million in 2007 rising to VND 1,744 million in 2009, and with a balance sheet which has grown eight-fold during the same period. The Group intends to expand in size by some 50 per cent. over the next two years, through continued diversification into relatively new areas while consolidating its traditional core businesses.

Consolidate its position as the leading private enterprise real estate development company in Vietnam while diversifying its business

The Group will continue to take advantage of its inherent strengths in the real estate sector to consolidate its position as the leading private enterprise real estate development company in Vietnam (by reference to the size of the Group's land bank and the number of apartments it builds per annum), while at the same time reducing its overall dependency on the real estate sector by further diversification of it activities. The Group intends to use funds from the real estate sector and related construction, furniture manufacture and granite production businesses to further its investment in other expanding areas of the Vietnamese economy. Accordingly, whilst in 2009, the Group's real estate segment accounted for 77 per cent. of the Group's revenues, it is intended that this will reduce through a process of diversification to around 45 per cent. in coming years. The below table shows the actual and projected revenue breakdown among the Group's business segments.

Business segment

2007(%)

2008(%)

2009(%)

2010(%)

2011(%)

2012(%)

2013 (%)

2014 (%)

2015 (%)

2016 (%)

2017 (%)

2018 (%)

2019 (%)

Rubber - - - - - 1 1 5 9 16 20 27 28

Mining - - - - 39 49 32 31 28 25 22 14 13

Real estate 50 65 77 75 52 42 55 44 44 42 42 43 44

Hydropower - - - 1 3 3 8 15 14 13 12 12 11

Manufacturing and services

50 35 23 24 6 5 4 5 5 4 4 4 4

The above revenue projections assume that:

● the Group will be able to sell its refined iron ore to export markets at US$ 155 per tonne;

● the Group will be able to refine its iron ore at 81 per cent. of installed capacity in 2011 and 87 per cent. thereafter;

● the Group will be able to plant a further 21,073 hectares of rubber plantations during 2011 and 2012;

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● the Group's rubber plantations will yield one tonne of latex per hectare in 2011, 1.3 tonnes of latex per hectare in 2012 and 2.5 tonnes of latex per hectare thereafter;

● the Group will be able to sell its rubber output at an average selling price of US$3,000 per tonne from 2011 onwards;

● the revenue from the sale of units in respect of each of the Group's developments will be generated in tranches over a period of three to four years;

● the Group receives the tax advantages in respect of its rubber, iron ore mining and hydropower operations as referred to below;

● the average price at which the Group will sell its electricity generated from its hydropower plants will rise by five per cent. year on year;

● the Group's hydropower plants will become operational on schedule; and

● once operational, each of the Group's hydropower plants will be utilised at 57.9 per cent. of their designed capacity.

If any of these assumptions are in fact incorrect, the actual percentage of the Group's revenues generated from each of its businesses may vary from those set out above. For example, the Group may secure significantly better prices for the refined iron ore it is able to export than if it sells the refined iron ore to Vietnamese companies. If it is unable to secure or perform contracts to export refined iron ore, the proportions of the Group's revenues generated from its iron ore operations will be lower than those proportions set out in the table above.

To date, substantially all of the Group's revenues have been generated in Vietnam. The Group anticipates that this will change as the Group's mining, hydropower and rubber operations in Cambodia and Laos begin to generate revenues.

The Group anticipates being able to take advantage of certain tax advantages as a result of establishing rubber, iron ore mining and hydropower projects in certain locations. For example, Gia Lai province currently grants a four-year tax exemption in respect of profits made from certain such projects established in the province. Certain other provinces of Vietnam, Laos and Cambodia offer similar tax advantages.

Become one of the largest producers of natural rubber in Vietnam

The Group intends to plant approximately 51,000 hectares of rubber plantation in the Central Highlands of Vietnam, Laos and Cambodia over the next few years, which would make the Group the second biggest producer of natural rubber in Vietnam. The largest producer of natural rubber in Vietnam is Vietnam General Rubber Corporation (GERUCO), the state-owned rubber producer.

Establish itself as a major mining presence in Southeast Asia

The Group intends to mine and process approximately 60 million tonnes of iron ore over a period of more than 20 years in the Central Highlands of Vietnam, Laos and Cambodia. The Group believes that it can achieve high profit margins from these operations. The iron ore deposits are all located within a 200km radius of Gia Lai province, which is the location of the Group's headquarters. The Group believes that this proximity will enable its management to effectively manage the mining activities it undertakes at the deposits. The Group intends to extract the ore at its deposits using open-cast mining methods.

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Make itself one of the leading private suppliers of hydropower in Vietnam

The Group has already commenced construction on two significant hydropower production facilities in Gia Lai province and has plans to build a total of 14 facilities generating a total of 342.5 MW.

Consolidate its position and increase profitability in the manufacturing and granite production sectors

The Group owns five granite quarries in Gia Lai province. The Group has a large source of timber sources located in the southern region of Laos, with approximately 300,000 cubic metres of wood. These provide raw materials for the Group's granite and furniture manufacturing factories at a lower cost than it would otherwise have to pay if it purchased these raw materials on the open market. In addition, these granite and furniture factories provide the Group with relatively low cost materials for its construction business. The Group's current aim is to generate annual revenue growth of 15 per cent. in its granite and furniture manufacturing operations.

The Group restructuring

During the second quarter of 2010, the Group completed a group restructuring programme. As part of its strategy of diversification, the Group was reorganised along its key business areas. Prior to the restructuring, many of the companies that made up the Group were directly owned by the Company. Most of these companies are now owned by five key operating companies. Each of these operating companies owns the Group companies relating to one of the Group's business segments. Therefore, Hoang Anh Gia Lai Minerals Joint Stock Company now manages and owns the Group's iron ore mining companies, Hoang Anh Gia Lai Rubber Plantation Joint Stock Company manages and owns the Group's rubber companies, Hoang Anh Gia Lai Hydropower Joint Stock Company manages and owns the Group's hydropower companies, Hoang Anh Housing Construction and Development Joint Stock Company manages and owns the Group's construction and development companies and Hoang Anh Gia Lai Furniture Joint Stock Company manages and owns the Group's manufacturing companies. Each of these five operating companies also manages operations it owns in its own right. The Company also owns four auxiliary operating companies.

The Group intends to offer shares in four of the five main Group operating companies. These offerings will be made in three tranches. The first tranche will be a placing of shares with strategic investors. The secondand third tranches will comprise public offerings of shares in the operating companies. The Company aims to reduce its shareholding in each of the four operating companies to 70 per cent. by the end of the third tranche of offerings. The table below indicates the expected timetable for each of these offers.

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Hoang Anh Gia Lai Rubber Plantation Joint Stock Company

Hoang Anh Gia Lai Minerals Joint Stock Company

Hoang Anh Housing Construction and Development Joint Stock Company

Hoang Anh Gia Lai Hydropower Joint Stock Company

Percentage of subsidiary's shares held by the Company at the date of the Listing Particulars

99 per cent. 83.70 per cent. 88.25 per cent. 98.8 per cent.

Initial placing with strategic investors

First half of 2013 First half of 2011 July 2010 First half of 2012

First public offer 2014 2012 First quarter of 2011

2013

Second public offer 2014 2013 Second quarter of 2011

2013

Total estimated proceeds from placing/offerings (VND billion)

6,003 1,370 1,825 3,757

As part of this strategy, in July 2010, Hoang Anh Housing Construction and Development Joint Stock Company placed 23,500,000 of its shares (which constituted 11.75 per cent. of its share capital) with strategic investors. This placement raised proceeds of VND 1,167 billion.

The Group's management intends to invest the proceeds from these offerings in the Group's projects in order to drive growth in these operating areas and therefore believe that the offerings will deliver a net benefit to Shareholders. Therefore, although the Company will hold only 70 per cent. of the shares in each of the four subsidiaries, the Group anticipates that this would be matched with equivalent revenue growth as a result of the employment of the capital raised.

Business Segments

The Group's business operates primarily in the real estate, rubber plantation, mining, hydropower and manufacturing sectors.

Real Estate

Real estate forms the most important segment of the Group's activities and accounted for 77 per cent. of the Group's revenues in the year ended 31 December 2009.

The Group's real estate operations commenced in 2005 with the successful development of the Le Van Luong high end apartments in Ho Chi Minh City, which was completed in December 2006. The project was significant in establishing the Group as a reputable and reliable developer of high-quality real estate in Vietnam. In 2008, a further milestone took place in the Group's real estate development business when it signed a US$ 19 million contract with the Laos Government to build the SEA Games athletes' village.

The Group's strategy is to use its expertise gained in the emerging Vietnam real estate market to target mid-range residential developments with an aggressive average price of US$ 1,000 per square metre. The Group believes that it can keep its costs comparatively low by using its captive supplies of furniture and granite tiles and using Group companies to carry out construction work.

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Completed projects

The Group has completed developments of both residential and rental office space in a total amount of 55,396 square metres in a variety of locations across Vietnam, most significantly in Ho Chi Minh City, Pleiku City and Da Nang City.

The Group currently has a portfolio of six completed projects with an aggregate site area of 438,805 square metres, consisting of 2,734 apartments and office space for lease. These are summarised in the table below.

Location Area (square metres)

Apartments Schedule

Land Gross floor Net Floor Start CompleteDistrict 7, Ho Chi Minh City

8,148 63,955 52,858 450 Apr 2005 Dec 2006

Pleiku City, Gia Lai province

1,356 21,824 14,639 157 Feb 2006 April 2008

District 7, Ho Chi Minh City

8,525 80,526 63,869 463 Aug 2006 Dec 2008

Quy Nhon City 10,800 84,706 58,635 560 2006 2008Nha Be District, Ho Chi Minh City

25,567 176,685 139,012 1,104 Jan 2007 Oct 2009

Office, District 10, Ho Chi Minh City

1,000 8,359 6,200 2006 2007

Total 55,396 436,055 335,213 2,734

The total net asset value of the Group's real estate projects is estimated at US$ 1.53 billion. In 2009, the Group's real estate operations formed 77 per cent. of the Group's total revenues.

Projects under development

HAGL — Quy Nhon Apartment Buildings

HAGL— Quy Nhon Apartment Buildings is a large-scale residential project located at Dam Sinh Thai —Dong Da Lake residential area, Hai Cang ward, Quy Nhon City, Binh Dinh province. It occupies a total site area of approximately 10,800m2 and is designed to include five blocks of apartment buildings, offering 560 apartments in total. Block A of this project was completed in 2008 and the total gross floor area and net floor area of Block A are approximately 14,851m2 and 12,006m2, respectively. At September 2010, 50 per cent. of Block A was sold. Block C of this project is under construction. The total gross floor area and net floor area of Block C are 14,851m2 and 12,125m2, respectively. At 30 September 2010, 12.8 per cent. of Block C was pre-sold.

Details of this project at 8 November 2010 were as follows:

Planned construction period ............................................................................................. Q2 2008 to Q1 2011

Total planned gross floor area (m2) (excluding basement area) ............................................................74,255

Total planned net floor area (m2) (excluding basement area) ................................................................24,131

Phu Hoang Anh Apartment Project (Phase I)

Phu Hoang Anh Apartment Project is a large-scale residential and commercial project located at Plot 12, Dragon City, Nguyen Huu Tho Street, Phuoc Kien commune, Nha Be district, Ho Chi Minh City. The Group is developing Phu Hoang Anh apartments in two phases. Phase I occupies a total site area of approximately 24,111m2 and is designed to offer 802 apartments and some commercial units. 98.5 per cent.

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of the apartments have been pre-sold. This project is developed Phu Hoang Anh Joint Stock Company, in which the Company owns a 82.9 per cent. interest.

Details of this project at 30 September 2010 were as follows:

Planned construction period ............................................................................................. Q2 2008 to Q1 2011

Total planned gross floor area (m2) (excluding basement area) .......................................................... 134,840

Total planned net floor area (m2) (excluding basement area)................................................................ 97,640

Tay Nguyen Plaza

Tay Nguyen Plaza is a residential and commercial project located at 11D, South of Can Tho river, Cai Rang district, Can Tho province with an aggregate site area of approximately 5,631m2. The project is designed to offer 309 apartments and some commercial units. This project is being jointly developed by Hoang Anh Me Kong Corporation, a Group company, and Long Thinh Company Limited, an independent third party. At 30 September 2010, 72.9 per cent. of the apartments had been pre-sold.


Planned construction period ........................................................................................................2008 to 2011



An Tien Golden House

An Tien Golden House is a residential and commercial project located at Le Van Luong Street, Nha Be district, Ho Chi Minh City. It occupies a total site area of approximately 39,574m2. The project primarily consists of 996 residential units and some offering units. The Group is applying for the land use rights certificate for this project. All the apartments of this project have been pre-sold. This project is developed by An Tien Co., Ltd., in which the Company owns a 66.2 per cent. interest.


Planned construction period ........................................................................................... Q3 2009 to Q2 2012

Total planned gross floor area (m2) .....................................................................................................198,145

Total planned net floor area (m2) .........................................................................................................141,782

Bau Thac Gian Complex Project

Bau Thac Gian Complex Project is a residential and commercial project located at 72 Ham Nghi Street, Thac Gian ward, Thanh Khe district, Da Nang City, which is being developed by the Company. It occupies a total site area of approximately 5,510m2. This project primarily consists of 456 apartments and three floor commercial space. At 30 September 2010, 16.9 per cent. of the apartments were pre-sold.


Planned construction period .................................................................................................. 2010 to Q4 2012

Total planned gross floor area (m2) (excluding basement area) ...........................................................65,514

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HAGL — BIDV Apartment Building Project

HAGL— BIDV Apartment Building Project is a residential and commercial project and located at 33 Nguyen Cong Tru St, Tu An ward, Buon Ma Thuot City, Dak Lak province. It occupies a total site area of approximately 8,900m2 and is designed to offer three blocks of apartments and retail units. This project is developed by Hoang Anh Dak Lak Joint Stock Company, in which the Company owns a 62.4 per cent. interest. At 30 September 2010, 16.9 per cent. of the apartments were pre-sold.


Planned construction period ..................................................................................................Q3 2007 to 2011


Total planned gross floor area (m2) (excluding basement and roof area) ..............................................40,306

Projects to be launched

Phu Hoang Anh Apartment Project (Phase II)

Phase II of Phu Hoang Anh Apartment Project occupies a total site area of approximately 30,567m2 and is designed to have 648 apartments and some commercial units. This project will be developed Phu Hoang Anh Joint Stock Company in two phases. The first phase will develop a land of 24,111m2 and the second phase will develop 6,456m2.



Total planned gross floor area (m2) (excluding basement area) ..........................................................118,194


Hoang Phuc Plaza

Hoang Phuc Plaza is a large-scale residential and commercial project located at No. 116 Ly Chieu Hoang Street Ward 10, District 6, Ho Chi Minh City. It occupies a total site area of approximately 18,486m2. It is designed to have 896 apartments and a commercial centre. The Group has completed the land clearance process and is applying for the land use rights certificate for this project. This project will be developed by Hoang Phuc Investment Construction and Housing Development Joint Stock Company, in which the Company has a 44.9 per cent. interest.




Total planned net floor area (m2) (excluding basement area) ..............................................................190,088

Hoang Anh Hoc Mon Project

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Hoang Anh Hoc Mon Project is a residential project located at Thoi Tam Thon commune, Hoc Mon district, Ho Chi Minh City. It occupies a total site area of approximately 24,687m2 and is designed to include apartments and a kindergarten. The Group has completed the land clearance process and is procuring the final approval from the local people's committee to replace the expired in-principle approval on the allocation of the land. This project will be developed by Minh Thanh Trading and Housing Development Co., Ltd., in which the Company owns a 43.6 per cent. interest.



Total planned gross floor area (m2) (excluding basement area and kindergarten) ..............................127,529

Total planned net floor area (m2) (excluding basement area and kindergarten) ...................................107,240

Hoang Phuc Tower

Hoang Phuc Tower is a residential and commercial project located at 50 Phan Van Khoe Street Ward 2, District 6, Ho Chi Minh City. It occupies a total site area of approximately 4,080m2 and is designed to offer apartments and commercial units. The Group has not yet received the land use rights certificate for this project. This project will be developed by Hoang Phuc Investment Construction and Housing Development Joint Stock Company, in which the Company owns a 44.9 per cent. interest.





Hoang Anh Phuc Bao Minh Project

Hoang Anh Phuc Bao Minh Project is a residential project located at 46/47 Luong Minh Nguyet Street, Tan Phu district, Ho Chi Minh City. It occupies a total site area of approximately 8,318m2. Based on the Group's project plans, it is designed to offer 598 apartments. The Group has not yet received the land use rights certificate for this project. This project is developed by Phuc Bao Minh Trading Construction Services Corporation, in which the Company owns a 86.5 per cent. interest.





Anh Hung Nup Complex

Anh Hung Nup Complex is a residential and commercial project located at Anh Hung Nup Street, Pleiku City, Gia Lai province. It occupies a total site area of approximately 3,758m2 and is designed to have 508 apartments and offering some commercial space. The Group has not yet received the land use rights certificate for this project.

Details of this project as of 30 September 2010 are as follows:

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Total planned gross floor area (m2) .......................................................................................................71,037

Total planned net floor area (m2) ...........................................................................................................48,628

Phu Dong

Phu Dong is a residential project located at Phu Dong Street, Phu Dong ward, Pleiku City, Gia Lai province. It occupies a total site area of approximately 6,993m2 and is designed to offer 452 apartments.





Do Xuan Hop Street Project

Do Xuan Hop Street Project is a residential project located at Do Xuan Hop Street, Phuoc Long B Ward, District 9, Ho Chi Minh City. It occupies a total site area of approximately 81,988m2 and is designed to offer 4,823 apartments and some commercial units. The Group has completed the land clearance process and is applying for the land use rights certificate for this project as the Group has received the land allocation decision. This project is owned by Minh Tuan Trading and Service Company Limited, in which the Company has a 62.8 per cent. interest.





2/9 Complex Project

2/9 Complex Project is a large-scale residential and commercial project located at 2⁄9 Street, Binh Hien ward, Hai Chau district, Da Nang City and it occupies a total site area of approximately 43,487m2. This project is designed to include apartments and commercial units. The Group is currently applying for the land use rights certificate for this project. This project is owned by the Company.

Details of this project at 3 November 2010 are as follows:




Tan Phong Riverside Apartment

Tan Phong Riverside Apartment is a residential and commercial project located at Nguyen Van Linh Street, Tan Phong ward, District 7, Ho Chi Minh City. It occupies a total site area of approximately 28,127m2 and

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is designed to have high-rise residential buildings and some commercial units. This project is developed by HA Housing JSC and Tan Thuan Company Limited. The Group is currently in the process of obtaining the land use rights certificate for this project.




Total planned net floor area (m2) (excluding basement area)...............................................................157,792

Nguyen Van Linh Office Project

Nguyen Van Linh Office Project is a commercial project located at 1 Nguyen Van Linh Street, Nam Duong ward, Hai Chau district, Da Nang City. It occupies a total site area of approximately 3,285m2 and is designed to include a office building and commercial units. The Group has obtained the land use rights certificate for this project. This project is developed by the Company.





Kinh Te Office Project

Kinh Te Office Project is a commercial project located at Nguyen Huu Tho Street, Tan Hung ward, District 7, Ho Chi Minh City. It occupies a total site area of approximately 15,720m2 and is designed to include commercial spaces and offices for lease. The Group has not obtained the land use rights certificate for this project. This project will be developed by HA Housing JSC.

Details of this project at 10 November 2010 are as follows:




HAGL — Bangkok

HAGL— Bangkok is a residential project located at Ratchadapisek Soi 36, Ratchadapisek Road, Chankasem Chatuchak District, Bangkok, Thailand. This residential project occupies a total site area of approximately 5,043m2 and is designed to offer 140 apartments. This project is developed by HAGL Bangkok Co., Ltd., in which the Company holds a 47 per cent. interest.

Details of this project at 8 December 2010 were as follows:



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Phan Lang

Phan Lang is a residential project located at Thanh Khe District, Da Nang City. It occupies a total site area of approximately 3.448m2. This project will be developed by the Company.

Details of this project at 30 September 2010 are as follows:

Planned construction period ............................................................................................................2013-2015

Total planned gross floor area (m2) .......................................................................................................24.133

Total planned net floor area (m2) ...........................................................................................................19.307

Hiep Binh Phuoc Urban Area

Hiep Binh Phuoc Urban Area is a residential project located at Hiep Binh Phuoc ward, Thu Duc district, Ho Chi Minh City. It occupies a total site area of approximately 352,008m2 and is designed to offer apartments and villas and townhouses. This project will be developed by Dong Nam Housing Business and Investment Corporation, in which the Company has a 88.12 per cent. interest. The Group has compensated some of the existing land occupants in respect of relocations.



Total planned gross floor area (m2) .....................................................................................................460,000


Hoang Anh No Trang Long Apartment Project

Hoang Anh No Trang Long Apartment Project is a residential and commercial project located at 279 No Trang Long Street, Binh Thanh district, Ho Chi Minh City. It occupies a total site area of approximately 3,202m2 and is designed to offer 256 apartments and a two floor commercial centre. This project has been granted the approval-in-principle by the local people's committee and will be developed by Hoang Anh Me Kong Corporation and Huu Nghi Industry and Trading Joint Stock Corporation, an independent third-party company. The land use rights are currently owned by Huu Nghi Industry and Trading Joint Stock Corporation and apartments developed will be shared between both parties. The Group may consider acquiring the land use rights from Huu Nghi Industry and Trading Joint Stock Corporation in the future.





Hoang Anh Incomex Project

Hoang Anh Incomex Project is a residential and commercial project located at Tran Xuan Soan Street, Tan Kieng ward, District 7, Ho Chi Minh City. It occupies a total site area of approximately 12,679m2 and is designed to offer 396 apartments and some commercial units with a total gross floor area of 24,300m2. This

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project was originally developed by Saigon General Export and Import Investment Group, an independent third party. A transfer agreement and a delegation contract was entered into on 10 July 2007 and 13 May 2010, respectively between Saigon General Export and Import Investment Group and Hoang Anh Incomex Investment Construction & Housing Development Co., Ltd., a Group company, pursuant to which the latter would acquire a 80 per cent. interest in this project. Hoang Anh Incomex Investment Construction & Housing Development Co., Ltd. will be responsible for the development of this project including performing site clearance, preparing design documents and applying for requisite permits and approvals.



Total planned gross floor area (m2) (excluding basement areas) ...........................................................94,293

Total planned net floor area (m2) (excluding basement areas) ..............................................................69,080

Thanh Binh

Thanh Binh is a residential project located at Kenh Te Bridge, District 7, Ho Chi Minh City. It occupies a total site area of approximately 17,797m2 and is designed to offer approximately 1,000 apartments. This project is developed by Thanh Binh Investment and Construction Co., Ltd., an independent third-party, and an in-principle agreement has been reached relating to HA Housing JSC's acquisition of the project.

Details of this project as of 30 September 2010 are as follows:

Planned construction period .........................................................................................................2011 to 2014

Total planned gross floor area (m2) ......................................................................................................127,128


Rubber plantations

In recent years, the Group has diversified into the cultivation and production of natural rubber. Since 2007, the Group has diversified its businesses into the cultivation and production of natural rubber. The Group plans to plant 45,063 hectares of rubber trees in Vietnam, Laos and Cambodia by the end of 2012. At 31 December 2010, the Group had planted approximately 24,000 hectares of rubber trees which will partially be ready for harvest as early as 2012. The Group intends to continue to clear the remaining land of approximately 29,400 hectares for seeding and plantation within the next two years.

Until recently, most of the rubber plantations in Vietnam were state-owned enterprises, but increasingly, newer plantations are being set up by private enterprises like the Group. Neighbouring Laos and Cambodia have also identified areas that are suitable for rubber cultivation and are offering these to Vietnamese entrepreneurs for development.

The central highlands area of Vietnam, including the Gia Lai province, is well suited for rubber cultivation. The Group's existing strong presence in this area gives it a natural advantage. In addition, rubber producing areas in Laos (Attapu) and Cambodia (Ratanakiri) are within 200 kilometres of the Company's headquarters, enabling the Group's management to better access and control the Group's rubber production operations.

The Group's operations benefit from good proximity to major export markets. China is the world's largest importer of natural rubber and imported about 1.59 million tonnes in 2009. India and Malaysia are other large importers of natural rubber, importing 0.16 million tonnes and 0.74 million tonnes in 2009,

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respectively. However, Vietnam's own rubber requirements are increasing, with consumption of natural rubber rising from 47,000 tonnes in 2003 to 120,000 tonnes in 2009.

Operations

The Group entered the rubber production sector by establishing development rubber farms adjacent to its furniture factory in Gia Lai, where mature rubber trees have yielded rubber already.

Based on its experience with these development farms, in 2007 the Group commenced rubber planting on a much larger scale in Gia Lai province. The Group has subsequently acquired some 51,000 hectares of lands in Vietnam, Laos and Cambodia for rubber cultivation.

The Group currently relies upon local farmers in Cambodia, Laos and Vietnam to plant its rubber trees and it pays them on a daily basis based on their performance. The Group requires the surviving rate of its rubber trees to be no less than 98 per cent. from the first year to the fifth year and no less than 90 per cent. thereafter. However, there is no penalty provided under such arrangement in the event that performance targets are not met. Currently, each farmer is responsible for approximately two hectares of rubber trees on average. The Group intends to enter into cooperation agreements with local farmers in Vietnam, Cambodia and Laos with respect to the current arrangement. The Group purchase pre-nurtured seedlings from third party suppliers in Vietnam. After site preparation including clearing existing land, ploughing soil and drilling holes, the farmers put basal fertilisers into the holes and plant the young seedlings according to the Group's design plots. They schedule the fertilisation and maintenance of rubber trees based on the specifications of the seedlings and actual external conditions. For the year ended December 31, 2007, 2008, 2009 and 2010, the Group planted 348 hectares, 4,023 hectares, 7,593 hectares and 12,027 hectares of rubber trees, respectively.

The production costs relating to the Group's rubber plantation business primarily consist of acquisition and clearance cost of lands, plantations, seedlings, fertilisers and employee wages. The Group usually incurs a greater cost of production during the first year of plantation operations primarily due to significant expenses relating to acquisition cost of land, clearance cost and plantations. From the second year, a project's cost of production primarily relates to caring expenses.

Production

Because of the natural rubber cultivation cycle, the Group has not yet produced significant amounts of rubber on a commercial scale. Rubber trees must grow for approximately six years before they can be tapped for rubber. However, although the first commercial output from its plantations is expected from the end of 2012, the Group has already achieved high yields of some 2.5 tonnes per hectare per annum from the fully matured rubber trees in its development farms. It was able to achieve this through proper control of the fertilisation process and ensuring that high quality fertiliser is used. In comparison, in 2009, the average annual yield for one hectare of tapped rubber plantation in Vietnam was approximately 1.7 tonnes, with the average in Cambodia being approximately one tonne per hectare. The Group has used its own nurseries to grow saplings for its commercial plantations.

The Group has been able to secure significant tax advantages for its rubber production business and Gia Lai province and Laos and Cambodia have exempted the Group from corporate income tax for the initial four to five year start-up period.

Below is a table showing the rubber tree plantations owned by the Group, together with the approximate size of the areas they cover.

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Location Planned total area to be planted

(hectares)

Planted up to 31 December 2009

(hectares)

Planted during 2010

(hectares)

To be planted during 2011 and

2012(hectares)

Gia Lai province 8,163 3,463 2,000 2,700Dak Lak province 5,000 - 1,200 3,800Laos 16,700 8,500 7,000 1,400Cambodia 15,000 - 1,827 13,173Total 45,063 11,963 12,027 21,073

The Group will harvest latex rubber from its rubber plantations. The Group will subsequently process this latex rubber into Styrene-Butadiene-Rubber (SVR) and, to a lesser extent, ribbed smoked sheets of rubber (RSS), for sale. The Group plans to start construction of a production facility for the purposes of this processing during 2012.

Future development

The Group's strategy is to become a major competitor in the rubber production sector. Assuming a yield of 2.5 tonnes per hectare, the total area indicated in the table above would yield 127,500 tonnes of rubber when fully mature.

Iron ore mining

The Group is in various stages of developing and considering iron ore projects with respect to three deposits in Vietnam, one deposit in Laos and one deposit in Cambodia. At 30 September 2010, these five deposits had an aggregate deposit size of approximately 60.8 million tonnes of iron ore measured in accordance with classification guidelines set forth by Decision No. 06/2006/QD-BTNMT published by the Ministry of National Resources and Environment of Vietnam on 7 June 2006. See "Important notice regarding the mining reports" for further information on the nature of these deposit sizes. The Group's iron ore refineries currently have an aggregate capacity of 250,000 tonnes per annum and it is in the process of implementing upgrades to increase its refining capacity to approximately 864,000 tonnes per annum in 2011. The Group commenced mining at the Kbang Mines in March 2010 and it extracted and refined approximately 240,000 tonnes of iron ore from this deposit in 2010.

The Group intends to export its refined iron ore primarily to China once it obtains necessary approvals or permits for exports in Vietnam, Cambodia and Laos. The Group expects to obtain the relevant approval and permit in the second quarter of 2011. See "Risk Factors" for further information. Before the Group obtains the necessary approval or permit for exports, it may sell its iron ore within Vietnam. The Group has entered into a one-year supply contract with a Vietnamese steel producer for 80,000 tonnes of iron ore.

Currently, the Group has access to the following mines or deposits in Vietnam:

● Kbang mines in villages of Dong and Loku, Kbang district, Gia Lai province (the "Kbang Mines");

● Thanh Hoa deposit in Luong Noi village, Ba Thuoc district, Thanh Hoa province (the "Thanh Hoa Deposit"); and

● Mo Rai deposit in Mo Rai village, Sa Thay district, Kon Tum province (the "Mo Rai Deposit").

In Laos, the Group has access to:

● the Tang Ta Lang deposit in Tang Ta Lang village, Dak Chung district, Se Kong province (the "Tang Ta Lang Deposit"); and

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● the Pa Non deposit in Ka Lum district, Se Kong province (the "Pa Non Deposit") which has undergone preliminary exploration.

In Cambodia, the Group has access to the Kachak deposit in Lum Choak village, Ouyadav district Rattanakiri province (the "Kachak Deposit").

The following map shows the location of the deposits located in Vietnam, Cambodia and Laos (except for the Pa Non Deposit, which have not been fully researched.

Management

The Group's mining operations are managed principally by a number of senior managers, each of whom has relevant geological or mining experience and qualifications. Details of these senior managers are set out in "Directors and Management – Management Structure - Mining management".

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Operations

The Group's iron ore mines allow for the use of open-pit mining methods with primary overburden stripping and iron ore being handled by hydraulic excavators and trucks. The typical open-pit mining process begins with land clearing, which is referred to as the "clear and grub" process. Top soil is then stripped from the area to be mined and overburden is removed by heavy excavators. Iron ore is then loaded by excavators into reardump haul trucks and deposited near the Group's refineries, which are mostly located near the deposit sites. Mining operations are conducted through an eight-hour shift, seven days a week, 350 days a year.

All refining activities are conducted by Group employees. The Group employs mining contractors to undertake overburden removal and transportation, iron ore extraction and transportation. These contracts have fixed prices for each bank cubic metre of overburden stripping and each bank cubic metre of iron ore extracted depending on the type of ore. The contract price includes the cost of fuel, personnel and machinery. Fuel price changes up to a certain level are reflected in the fixed prices of these contracts. The Group believes that there are sufficient alternatives to its existing mining contractors which are able to meet its expanding iron ore business in the future.

Outsourcing to reliable contractors permits the Group to focus on the refining process, marketing, mine planning, production, supervision and exploration activities. Contract mining also reduces the risk and uncertainty of iron ore production costs by shifting the responsibility for providing substantially all of the equipment, materials, supplies and labour needed to conduct mining operations from the Group to its contractors. The current cost of extraction, refining and transportation to sea ports is approximately US$ 24 per tonne, not including a 30 per cent. resource tax levied on the sale price of iron ore.

Export

In Vietnam, raw minerals are restricted from export. Iron ores that have been processed to meet certain quality standards may be exported pursuant to applicable Vietnamese law, subject to the allocation of export quota in practice. Generally, export quota are normally allocated to exporters by reference to the past performance of such exporters and is reviewed annually by the relevant authorities. Exporters that fail to demonstrate the abilities to export sufficient amount of the particular products to which the relevant export quota relates may be subject to reduction of quota or even denied the grant of a quota. There is no specific Vietnamese regulation on quota applicable to iron ore exports and allocation of export quota for iron ore is normally considered and granted on a case-by-case basis. Such export quota requirement, however, does not apply to intermediary trading of iron ore extracted from other countries that is transported into Vietnam. The Group is currently in the process of applying for the export quota for 2011 to the Ministry of Industry and Trade while building its stockpile of refined iron ore in the port city of Quy Nhon. The Group plans to commence exporting its iron ore once it receives the export quota. Although the Government has a policy of limiting the export of refined iron ore, the Government still provides quota on a case-by-case basis. As the Government is currently seeking to reduce its trade deficit, the Group is confident that it will receive the quota applied for. However, see "Risk Factors" for a discussion of the risks relating to the non-grant of such export quota.

Similar to Vietnam, Cambodia only allows exports of mineral resources that have been processed except that no quota is required. Laos does not require iron ore to be processed before export and no quota is required. Therefore, the Group plans to commence the export of iron ore from Cambodia and Laos once it has commenced operations in those countries after receiving the exploitation permits.

Logistics and transport

The Group relies on trucks for inland transportation and sea vessels for overseas transportation. The Group currently employs contract trucking companies to haul its refined iron ore from its refineries at the Kbang Mines to its stockpile at Quy Nhon port in Vietnam. As the Group commences its mining operations in other deposits in Vietnam, Cambodia and Laos, it intends to transport refined iron ore from those mines by truck to Da Nang port and Le Mon port in Vietnam. Quy Nhon port and Da Nang port are both on the east

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coast of Vietnam and Le Mon port is in the north of Vietnam. The Group intends to hire independent shipping companies to transport its refined iron ore to its overseas customers in the future. The Group will commence the export of its refined iron ore once it obtains the necessary export approval and receives export quota in Vietnam. After it commences its operations in Cambodia and Laos, the Group intends to transport its refined iron ores to Da Nang port and Quy Nhon port, respectively, for export.

Currently, the cost of transporting iron ore from the Kbang mine to Quy Nhon port is approximately US$ 8 per tonne.

Equipment

The major equipment used for the Group's mining and refinery of iron ore includes rotating drills, draglines, ore crushers, classifying tanks, magnetic sift device, spiral sift and power generators. The Group's refineries were all imported from a single Chinese manufacturer at a unit price of approximately US$ 1 million per line and the Chinese manufacturer also provides the Group with daily maintenance and on-site supervision. The Group's employees work closely with the engineers dispatched by the Chinese manufacturer at the Group's production facilities in Chu Prong district, Gia Lai province to learn how to operate and maintain these refineries. It normally takes around 20 days for the manufacturer to ship the refineries after the Group places an order and two months after delivery for installation and adjustment. The Group's technical team is responsible for overseeing the installation of the refineries to ensure that the interaction between the various individual components of the entire process is optimised.

The Group conducts repair and maintenance on its refineries on a regular basis in accordance with both the equipment manufacturers' recommended schedules and procedures and needs from its actual operating activities.

The Group has invested US$ 3.5 million in installing five manufacturing and refining lines in Vietnam with a total capacity of 250,000 tonnes per annum. Two of these manufacturing and refining lines are located in Chu Prong district, Gia Lai province and three manufacturing lines are located in Kbang district, Gia Lai province, 10km from the Kbang Mines.

The Group plans to add four further production lines (with a combined capacity of 200,000 tonnes per annum) near the Mo Rai Deposit during the first half of 2011, together with a further two lines by the end of 2012. By the end of 2012, the Group also intends to install four production lines with a combined refining capacity of 200,000 tonnes per annum at its Tang Ta Lang Deposit and to add eight further lines by the end of 2013. The Group also plans to install eight production lines at the Kachak Deposit, with a combined refining capacity of 400,000 tonnes per annum, once it has received the exploitation permit.

The Group's refined iron ore normally achieves an iron oxide purity ranging from 62 per cent. to 65 per cent. which the Directors believe is comparable to the quality standards of major export markets such China and Australia.

The Group also has a cast iron refining factory, located in the Phu Hoa commune, ChuPah District, Gia Lai province. This has a capacity of 42,500 tonnes per year and commenced operations in November 2008. However, the operation of this factory is currently suspended. At the date of these Listing Particulars, the Company does not have any plans to reopen the factory. However, the Group may decide to reopen the factory when the cast iron market permits the factory's output to be sold at a higher price than is presently the case. In addition, once the Group's iron ore mines begin to exhaust their deposits and ores with lower iron content are excavated, the Group may require the ability to process such lower grades of iron ores into cast iron.

Suppliers

Electricity and water are the most important raw materials the Group consumes in its mining and refining activities. The majority of its equipment at its production facilities is powered by electricity. All of the

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electricity used at the Group's production facilities at the Kbang Mines and Chu Prong district is sourced from EVN, the national operator of power grid. The Group has not encountered any shortage of power supply by EVN, which caused any suspension of its mining operations. The Group intends to rely on the national operators of state grids in Cambodia and Laos to source electricity to meet its demand for power in its future mining operations.

The water used for washing impurities during the refining process at the Kbang Mines is supplied by the Government pursuant to the Group's water usage licence that was granted by the Department of Natural Resources for a term of five years commencing in 2010. The Group's production lines are equipped with a water recycling system to reduce water consumption as well as control discharge of waste water. Water evaporated through the process is replenished by injecting fresh water.

Other ancillary raw materials used in the Group's iron ore and refining operations include fuel and lubricants, which are all procured from various independent vendors.

Customers

The Group has been in discussions with several potential iron ore customers from other countries such as China and Japan. The Group intends to sell all of its refined iron ore to overseas markets, particularly to China, because market demand for iron ore in Vietnam is smaller than in overseas markets. However, it has been unable to do so to date as it has not yet received an export quota from the Government. See "Risk Factors". The Group intends to reopen discussions with potential customers in countries such as China and Japan if and when it receives such quotas (or when mining activities commence at its Cambodia and Laotian deposits, as those jurisdictions do not impose quota on the export of refined iron ore). The Directors intend to sell the majority of its iron ore produced in Vietnam to overseas purchasers once it receives such quota. The Group is confident that it will receive such quota. Where the Group is unable to secure export contracts, it will sell its refined iron ore to domestic customers.

The revenue projections in these Listing Particulars relating to the Group's iron ore business assume that the Group is able to sell its refined iron ore to export markets at US$155 per tonne. Where the iron ore is exported from Vietnam, this selling price will be reduced by taxes of US$46.5 per tonne and selling expenses estimated to be US$6.2 per tonne. However, as such taxes will not be incurred if the Group is unable to secure export contracts and sells its iron ore domestically, the Group expects to receive approximately US$100 per tonne net of selling expenses in respect of ore sold domestically. Therefore, any inability of the Group to sell its iron ore abroad may lead to less revenue being generated from its iron ore business than it currently anticipates. However, the Group believes that profitability per tonne sold will not be materially reduced where it sells refined iron ore domestically, due to the lower selling price being mostly offset by the absence of export taxes. Notwithstanding this, the Group is confident that it will receive the export quota applied for and thereafter be able to secure export contracts for its refined iron ore.

In January 2011, the Group entered into a one-year supply contract with a Vietnamese steel producer for 80,000 tonnes of iron ore at VND 2,000,000 per tonne. The Group may also consider entering into tolling arrangements to produce steel to enable it to sell steel directly to end-use customers.

Permits and licences

See "Risk Factors" for risks associated with the Group's applications for exploration and exploitation permits and licences.

Kbang Mines

In 2008, the Group took over the exploitation right over an area of six hectares within the Kbang Mines for the remaining duration of such exploitation licence over this area. This exploration right was originally issued in September 2007 for a term of three years and expired in 2010. The Group is currently in the process of renewing this exploitation licence. In 2010, the Group obtained a further exploitation licence

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over 35 hectares within the Kbang Mines area for a term of three years. The Group intends to renew this exploitation licence when it expires.

Thanh Hoa Deposit

The Group has received the approval-in-principle from Thanh Hoa People's Committee to conduct its exploration activities at the Thanh Hoa Deposit, which have been completed. The Group is currently applying for the exploitation permit for a term of three years which it anticipates obtaining during the second quarter of 2011. The Group expects to commence operations in Thanh Hoa during 2012.

Mo Rai Deposit

The Group is currently applying for the exploitation licence for a term of three years and it expects to commence mining activities at the Mo Rai Deposit during the first half of 2011.

Tang Ta Lang Deposit

The Group has completed its exploration activities at this deposit under the exploration permit which was granted by the Laos government. The Group is currently negotiating a concession agreement and applying for the exploitation and processing permit from the Ministry of Mines and Energy of Laos and other governmental approvals associated with mining activities for the Tang Ta Lang Deposit. The Group expects to receive these in the first quarter of 2011.

Kachak Deposit

The Group has completed its exploration activities at this deposit and is applying for the exploitation licence which it expects to receive during the first quarter of 2011.

Mining reports

See "Summaries of the Mining Exploration Surveys" for the summaries of the exploration reports which the Group has commissioned.

Hydropower

Since 2008, the Group has increasingly focused its efforts on developing a significant presence in Vietnam's hydropower sector. To date, the Group has obtained approvals for setting up 14 hydropower projects with a total capacity of 342.5 MW.

The Group's hydropower projects

The Group has obtained approvals to set up 14 hydropower projects with a total capacity of 342.5 MW. These projects are at different stages of development but are all expected to be in commission by 2014. When complete, the total generation capacity is expected to be 1.7 billion kWh.

The Group believes that it has significant competitive advantages in the hydropower sector.

● With its first projects near to commissioning, as detailed below, the Group believes that it has gained valuable experience in the hydropower sector.

● Through its real estate development and other operations, the Group has experienced project management teams, who are capable of working at multiple sites simultaneously.

● Pricing models in the hydropower sector present an opportunity to realise high margins. The revenue from the sale of power to EVN is at present US$ 0.04 per kWh, subject to adjustments.

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● Carbon credits may add a further upside as hydropower projects based on natural run of the river are a green technology. The Group's Daksrong 2A, Daksrong 3A, Daksrong 3B, Ba Thuoc 1 and Ba Thuoc 2 hydropower projects have been registered for CERs under the CDM. The Group estimates that these CERs may be worth US$ 20,000 per MW of capacity per year.

The below hydropower projects have been completed or are nearing completion:

Daksrong 2 Hydropower Project - Construction of the Daksrong 2 project commenced in January 2008 and was completed on 26 October 2010 when it was connected to the Vietnamese national grid. The project is located on the Song Ba River running through the Ya Ma and Yang Nam communes in Kong Chro District, Gia Lai province and has a potential generating capacity of 24MW. The project is operated by Hoang Anh Hydropower Joint Stock Company, which is a 98.8 per cent.–owned subsidiary of the Company. The project represents a total capital investment of VND 450 billion.

Daksrong 2A Hydropower Project - Construction of the Daksrong 2A project commenced in February 2009 and is expected to be completed in March 2011. The project has a capacity of 18MW, and is also located on the Song Ba River. The operator is also Hoang Anh Hydropower Joint Stock Company. The project represents a total capital investment of VND 276.73 billion.

In addition to the Daksrong 2 and Daksrong 2A hydropower projects, the Group intends to add a further 113 MW of generating capacity in 2011 with completion of the Ba Thuoc 2 plant in Thanh Hoa province with a capacity of 80MW, Daksrong 3A with a capacity of 13.5 MW and Daksrong 3B with a capacity of 19.5 MW. The construction of these projects is currently in progress.

The Group's 14 hydropower projects under development are summarised below.

Project Location Designed Capacity

(MW)

Investment capital

(VND billion)

Commencement of construction

Anticipated year of completion

Ba Thuoc 1 Ba Thuoc Dist, Thanh Hoa province

60 990 2011 2012

Ba Thuoc 2 Ba Thuoc Dist, Thanh Hoa province

80 1,320 2010 2011

Daksrong 2 Kong Chro Dist, Gia Lai province

24 460 2009 2010 (completed)

Daksrong 2A Kong Chro Dist, Gia Lai province

18 305 2009 2011

Daksrong 3A Krong Pa Dist, Gia Lai province

13.5 222.75 2011 2012

Daksrong 3B Krong Pa Dist, Gia Lai province

19.5 321.75 2010 2011

Ia Drang 4 Chu Prong Dist, Gia Lai province

9 148.5 2012 2013

Ia Krel 1 Duc Co Dist, Gia Lai province

7.5 123.75 2012 2014

Dak Lo 1 Kon Plong Dist, Kon Tum province

6 99 2011 2013

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Project Location Designed Capacity

(MW)

Investment capital

(VND billion)

Commencement of construction

Anticipated year of completion


6 99 2011 2013


10 165 2011 2013

Dakpsi 2B Tu Mo Rong Dist, Kon Tum province

14 231 2011 2012

Buon Don Buon Don Dist, Dak Lak province

64 1,056 2011 2012

Buon Bra Ea Kar Dist, Dak Lak province

11 165 2011 2012

Total 342.5 5,706.75

Prospective projects

Dakpsi 2C Hydropower Project. This project, which has a designed capacity of 12 MW, is located in Ngok Yeu and Tu Mo Rong Communes, Tu Mo Rong District, Kon Tum Province and will be developed by Hoang Anh— Ban Me Joint Stock Company, in which the Company holds a 51 per cent. equity interest. The Group has received from the local people's committee an approval-in-principle in respect of this project and are in the process of preparing submissions to the Ministry of Industry and Trade for final project approval.

Nam Kong 2 and Nam Kong 3 Projects. The Nam Kong 2 project which has a designed capacity of 66 MW and Nam Kong 3 project which has a designed capacity of 45 MW are both located along the Nam Kong river in Attapeu Province, Laos and will be developed by a Group company to be established. In August 2009 and January 2010, the Group received exclusive grants (for 18 months each) from the central government of Laos that allowed it to conduct feasibility studies with respect to the two projects. In addition, the government of Laos agreed that it would assist the Group to procure the power purchase agreements with the Laos state electricity operator. The Group has initiated the process to apply for the in-principle approval for these projects.

Operations

The Group engages third-party contractors and subcontractors to construct its power plants, although it uses its in-house construction team to prepare construction budgets and from time to time supervise and assess the performance of the third-party contractors. The Group usually chooses its independent contractors through a tender and bidding process with reference to various factors such as bidders' qualifications and complexity of the underlying projects. In order to have a better cost control of its projects, the Group usually divides the construction of its projects into certain portions which is assigned to more than one contractor depending on their capacities and fees. The Directors believe that such an arrangement has enabled the Group's hydropower projects to achieve lower development costs compared with the projects developed by a single contractor.

The Group has entered into the definitive power purchase agreement with EVN, the state-owned operator of national electricity grid in Vietnam, with respect to the electricity generated by Daksrong 2. The Group has also entered into "in-principle" agreements with EVN to acquire all the power generated by its additional hydropower plants in Vietnam. A number of factors are taken into consideration when tariffs are

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set by EVN for the Group's electricity such as the total investment in each hydropower plant, the distance between the power plants and the national grid and the operating hours of the power plants.

Pursuant to the definitive off-take agreements with EVN, the Group currently sells its electricity at a unit price of US$0.04 per kWh, subject to adjustments. Such arrangement is made primarily because the actual output capacity of the Group's power plants may fluctuate along with the volume of hydro resources. In general, the Group's power plants can generate and supply more electricity due to increased water flow in rainy seasons while less electricity will be generated and supplied in dry seasons. In addition, there is no minimum supply and purchase commitment made in the off-take agreements with EVN.

Manufacturing - Furniture and Granite

Overview

Prior to diversification, the production and sale of wooden furniture was the Group's core business. Taking advantage of access to quality materials, the Group has established itself as a manufacturer of high end interior and outdoor furniture. In addition to its furniture manufacture business, the Group owns five granite quarries in Gia Lai province that provide material for its granite factories at low cost.

Furniture and granite production continues to be a key part of the Group's plans for growth and is complementary to its construction and tourism businesses.

Operations

Production - Furniture

The Group's wood processing facilities are as follows:

● Binh Chieu Industrial Zone, Ho Chi Minh City - The factory has 700 workers and 10,000 square metres workshop. Annually, the factory produces 400, 40 feet containers, mainly for export.

● Phu Tai Industrial Zone, Binh Dinh province - The factory has 800 workers and a 20,000 square metre workshop. Annually, the factory produces 450 containers, mainly for export.

● Tra Ba, Pleiku City - The factory has 1,200 workers and a 50,000 square metre workshop with capacity of 40 feet, 600 containers wholly for export.

● Ham Rong, Pleiku City - The factory employs in the region of 1,300 workers, 60,000 square metres workshop. Annually, the factory produces 700 containers for the domestic market.

Under an arrangement with the government of Laos, the Group has recently secured an extensive source of timber for its manufacturing activities. Under this arrangement, the Laos government allows the Group to harvest timber from plantations in southern Laos (near Kon Tum province) and the revenues are used to repay the US$ 15,000,000 loan which the government borrowed from the Company to finance the construction of the SEA Games athletes' village.

In addition, when the trees the Group's rubber trees are cut down to be replaced with new saplings (typically after 20 years of rubber harvesting) the Group will be able to use these trees as a source of timber in its wood manufacturing operations.

By securing this supply of timber, the Group has been able to reduce the cost of the timber it uses in its construction activities, thus lowering production costs and enabling the generation of greater profits in the future.

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The Group's current aim is to generate annual revenue growth of 15 per cent. in its granite and furniture manufacturing operations.

Production - Granite

The Group's granite processing factory is at Ham Rong, Pleiku City. The factory employs some 300 workers and has 20,000 square metres of workshop space. It is able to process approximately 400,000 square metres of all kinds of granite annually. The factory is completely self-sufficient in raw materials that are supplied by the Group's five stone quarries in the Gia Lai province. These quarries have combined total reserves of more than one million cubic metres.

Products

The Group's wood processing facilities manufacture a wide variety of wooden furniture products for both indoor and outdoor use from a variety of wood types.

The Group's granite processing factory produces granite tiles. These tiles are used in the Group's construction projects.

Other

The Group also operates within certain other sectors. However, these operations are not central to the Group's strategy and do not generate a significant proportion of the Group's revenues. Certain of these non-core Group operations are summarised below.

Hoang Anh Gia Lai Football Club

Since 2002, the Group has sponsored and, through Hoang Anh Gia Lai Sport Joint Stock Company, owned Hoang Anh Gia Lai football club. The club competes in the Vietnamese V-League, which is the top professional football league in Vietnam. The club's home stadium is Pleiku Stadium, which is state-owned. The club has won a variety of honours, including the V-League title in 2003 and 2004.

In 2007, the Group entered into a technical and marketing strategic partnership with Arsenal Football Club. This agreement established the Hoang Anh Gia Lai – Arsenal JMG Academy in Pleiku, Gia Lai province. In addition, Arsenal agreed to provide the club with commercial support and rights to utilise certain Arsenal intellectual property rights in its operations.

HAGL hospital

HAGL Hospital Joint Stock Company is currently constructing a 200 bed hospital in Pleiku City, Gia Lai province. The hospital will be jointly managed with the Ho Chi Minh City Medicine and Pharmacy University. The Group expects that the construction of the hospital will be completed during the second quarter of 2011 and that it will be become operational during the third quarter of 2011.

Hotels and tourism

In September 2010, as part of the Group's current strategic focus on its five key business activities, the Group's management announced that it would no longer invest in its operations within the hotels and tourism sector and would begin a gradual withdrawal process from the sector. This was due to low returns from several hotel projects. It is the Group's intention to transfer certain of these projects to other operators and focus on its core business segments. For example, in January 2010, the Group disposed of the Quy Nhon resort to a third party. The Group is also in the process of selling its Da Lat resort to a third party. The Group is currently seeking suitable partners to which it can transfer its two remaining hotel projects in Da Nang and Pleiku.

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Subsidiaries and Associates

The Company is the ultimate parent company of 47 subsidiary and associate companies.

Below is a table of the Company's subsidiary and associate companies correct at the date of these Listing Particulars. Group companies highlighted in bold text are subsidiaries of the Company. All subsidiaries and associates are subsidiaries of the first company shown above them in the table in bold text, except for those companies shown in italicised text that are subsidiaries of the first company shown above them not in italicised text.

Holding by parent company (per cent.)

Name of Group company Business activity and location of Group company

83.7 Hoang Anh Gia Lai Minerals Joint Stock Company

55 Toan Cao Industrial Mineral Co Ltd Pa Non iron deposit, Klum Dist, Xekong, Laos

79.1 Gia Lai Mineral Joint Stock Company Iron mines, Kbang district, Gia Lai province, Vietnam

100 Mineral Processing One Member Co Ltd Iron ore processing plant in Gia Lai province, Vietnam

85 Hoang Anh Quang Ngai Mineral Joint Stock Company

Iron deposit in Quang Ngai province, Vietnam

100 Hoang Anh Xekong Mineral Joint Stock Company

Iron deposit in Dak Chung, Sekong, Laos

100 Hoang Anh Thanh Hoa Mineral One Member Co Ltd

Iron deposit in Thanh Hoa province, Vietnam

100 Hoang Anh Kon Tum Mineral One Member Co Ltd

Iron deposit in Kon Tum province, Vietnam

100 Hoang Anh Rattanakiri Co Ltd Kachak iron deposit in Rattanakiri, Cambodia

99 Hoang Anh Gia Lai Rubber Plantation Joint Stock Company

Rubber projects in Gia Lai province, Vietnam

66.64 Hoang Anh Quang Minh Rubber Joint Stock Company

Rubber projects in Laos

100 Quang Minh Rubber Co Rubber projects in Attepeu & Xekong, Laos68.6 Hoang Anh Dak Lak Joint Stock

CompanyRubber projects in Dak Lak province, Vietnam

50 Dai Lam Construction and Trade Company Limited

Rubber projects in Dak Lak province, Vietnam

100 Dak Lak Tan Dai Thang Joint Stock Company

Rubber projects in Dak Lak province, Vietnam

100 Ban Me Rubber Joint Stock Company Rubber projects in Dak Lak province, Vietnam

99.8 Gia Lai Industrial Plantation Joint Stock Company

Rubber project in Gia Lai, Vietnam

100 Hoang Anh Attapeu Agriculture Development Co Ltd

Rubber project in Attepeu, Laos

100 Hoang Anh Oyadao Rubber Company Rubber project in Rattanakiri, Cambodia100 Hoang Anh Phu Vong Rubber Company Rubber project in Phu Vong, Laos

99.35 Hoang Anh Gia Lai Hydropower Joint Stock Company

Hydropower projects in Gia Lai province, Vietnam

51 Hoang Anh Ban Me Joint Stock Hydropower projects in Dak Lak province,

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Company Vietnam65.6 Hoang Anh DakBla Hydro Power Joint

Stock CompanyHydropower projects in Kon Tum province, Vietnam

78 Hoang Anh Thanh Hoa Hydro Power Joint Stock Company

Hydropower projects in Thanh Hoa province, Vietnam

80 V&H Corporation Co Ltd Hydropower projects in Laos95 Hoang Anh Tona Hydro Power Joint

Stock CompanyHydropower projects in Gia Lai province, Vietnam

88.21 Hoang Anh Housing Construction and Development Joint Stock Company

Several real estate projects in Vietnam

47 HAGL Bangkok Co Ltd High class apartment blocks in Bangkok, Thailand

51 HA Real Estate Management Services Joint Stock Company

Department projects in Ho Chi Minh City, Vietnam

75 An Tien Co Ltd Golden House project, Ho Chi Minh City, Vietnam

51 Hoang Anh Mekong Joint Stock Company

No Trang Long apartments, Tay Ngyuen Plaza projects, Ho Chi Minh City, Vietnam

97 Minh Thanh Co Ltd Apartments, Hoc Mon District, Ho Chi Minh City

51 Hoang Viet Investment Joint Stock Company


55 Hoang Anh Far East Co Ltd Real estate and management services. Department projects in Ho Chi Minh City, Vietnam

80 HA Housing Construction & Development Co

Hoang Anh Incomex apartments, Ho Chi Minh City

51 Hoang Phuc Housing Joint Stock Company

Phu Dinh, Phan Van khoe apartment projects, Ho Chi Minh City

89 Hoang Nguyen Investment Construction & Housing Joint Stock Company


80 Minh Tuan Trading Service Co Ltd Villa complex, High class apartments, Ho Chi Minh City, Vietnam

94 Phu Hoang Anh Joint Stock Company Phu Hoang Anh apartment projects, Ho Chi Minh City, Vietnam

98 PhucBaoMinh Trading Construction Services

Phuc Bao Minh project, Ho Chi Minh City, Vietnam

100 Hoang Anh Gia Lai Vientiane Co Ltd Hotel – Department projects, Vientiane, Laos

94.07 Hoang Anh Gia Lai Furniture Joint Stock Company

Furniture factories in Gia Lai, Quy Nhon, Saigon, Vietnam

100 Furniture Materials One Member Co Ltd

46.2 HAGL Hospital Joint Stock Company HAGL Hospital project in Gia Lai province, Vietnam

63.34 Hoang Anh Gia Lai Sport Joint Stock Company

HAGL football club & HAGL Arsenal football academy, Gia Lai province, Vietnam

51.85 Central HAGL Joint Stock Company Da Nang, Vietnam72.2 HAGL Road Construction Joint Stock

CompanySite clearance, road and house building. Gia Lai province, Vietnam

99.8 An Phu Construction Joint Stock Company

Construction services company, Vietnam

99.9 Dong Nam Investment and Real Estate Real estate activities, Vietnam

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Joint Stock Company

Note: Voting power same as ownership percentage

Competition

The Group faces both local and in some cases international competition in each of the markets in which it is active. These vary enormously from segment to segment, both in terms of intensity and characteristics.

In recent years, a large number of property developers have begun to undertake property development and investment projects in Hanoi, Ho Chi Minh City and other areas in Vietnam. These include overseas property developers and local developers, some of whom may have greater financial and other capital resources and/or greater name recognition than the Group. Intensified competition between property developers in Vietnam may result in oversupply of properties, price competition, a slowdown in the approval process for new property developments by the relevant Government authorities, increased cost of land acquisition and a shortage of suitable land. Furthermore, the Group's property development operations face competition from both international and local operators with respect to factors such as location, facilities and supporting infrastructure, service and price. The table below compares the Group's historic performance with the historic performances of a comparator group comprising other large real estate companies listed on the HoSE.

Denomination BCI TDH SJS HAGLNumber of Shares

million 54.20 37.88 100.00 292.00

State ownership

per cent. 27.90 38.61 51.00 0.00

Current Market Price

VND 35,500 31,500 58,500 80,000

Market Cap VND billion 1,924 1,193 5,850 23,360Owner's Equity VND billion 1,189 1,248 1,769 4,711Debt VND billion 482 155 500 5,241Cash 181 98 708 1,944EV VND billion 2,225 1,250 5,642 26,657Net Sales FY 2009

VND billion 441 481 1,114 4,365

Gross ProfitFY 2009

VND billion 256 265 709 2,007

Operating Profit FY 2009

VND billion 231 307 877 1,722

Profit After Tax FY 2009

VND billion 207 299 705 1,287

EPS FY 2009 VND 3,822 6,308 8,667 4,432

Gross Profit margin %

per cent. 58.05 54.99 63.64 45.98

Operating Profit margin %

per cent. 52.24 63.86 78.71 39.45

Net profit Margin %

per cent. 46.92 62.12 63.30 29.48

PAT/Owners' Equity %

per cent. 17.41 23.97 39.86 27.32

Debt/Equity N/A 0.41 0.12 0.28 1.11EV/Sales N/A 5.04 2.60 5.06 6.11Ev/Operating N/A 9.65 4.07 6.43 15.48

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ProfitPE(x) on FY 2009 earnings per share

N/A 9.29 4.99 6.75 18.05

Price/Book N/A 1.62 0.96 3.31 4.96

Notes:

"BCI" denotes Binh Chanh Construction Investment Shareholding Company, "TDH" denotes Thu Duc Housing Development Corporation and "SJS" denotes Song Da Urban & Industrial Zone Investment and Development Joint Stock Company.

All information on comparator companies sourced from information in the public domain.

The timber processing activities of the Group in the local market, and especially in the market of southern Vietnamese provinces, compete with a number of medium-sized wood processing companies. In terms of the export market, the biggest competitors of the Group are Chinese manufacturers and some locallarge-scale companies.

In comparison to the foregoing, rubber tree plantation, construction, hydropower, and iron ore exploitation and processing are less competitive due to industry characteristics, market factors such as supply and demand, and the high capital expenditures required to operate in those sectors acting as a barrier to entry. However, there is no assurance that the competitiveness of these operations will not increase in the near future.

Employees and Labour Relations

The table below shows the number of employees employed by the Group at the end of each of the last three financial years of the Group.

Date Number of employees31 December 2007 7,09831 December 2008 7,29131 December 2009 8,745

At 30 September 2010, being the last practicable date before publication of these Listing Particulars on which such information was available, the Group employed approximately 8,345 employees.

The following is a summary of the Group's employees at 30 September 2010.

Number of employees Percentage of employees

Qualification

Postgraduate degree 14 0.17

Bachelor's degree 569 6.82

Intermediate degree 793 9.50

Skilled and unskilled workers 6,969 83.51

Total 8,345 100

Contract length

Long term (Term of employment greater than one year)

6,968 83.50

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Short term (Term of employment less than one year)

1,377 16.50

Total 8,345 100

Gender

Male 3,772 45.20

Female 4,573 54.80

Business segment

Real estate 404 4.84

Mining 531 6.36

Rubber 685 8.21

Hydropower 367 4.4

Manufacturing 5,035 60.34

Hotels and resorts 611 7.31

Sports 306 3.67

Others 406 4.87

Country

Vietnam 7,964 95.44

Laos 328 3.93

Cambodia 53 0.63

Total 8,345 100

At 30 June 2010, the Group had 1,377 temporary employees, being employees on short-term contracts with a contractual term of less than one year.

Employers are required under Vietnamese law to make a fifteen per cent. contribution towards their employees' social insurance and a two per cent. contribution towards their employees' health insurance. The Company complies with both these requirements. The Company also operates a bonus policy in order to further incentivise its employees. Many employees of the Company are members of a trade union and the Company's management believes that it has an excellent relationship with its employees.

The Group ensures that all employees receive adequate training to enhance their skills. Training is conducted by internal and external providers in accordance with the Group's annual training plan.

As part of the Labour Safety System implemented by the Group's Labour Safety Committee, the Group issues rules on health and safety and conducts frequent checks at project sites to check that these are followed.

In December 2009, the Company issued 1,000,000 Shares to employees. This issuance was funded from the Company's bonus and welfare fund. The Shares issued to employees are subject to a five year lock-up period. Therefore, the relevant employees may not be transfer or otherwise dispose of the Shares issued to them until December 2014.

Environmental Matters

The Company is subject to Vietnamese environmental protection laws and regulations, which include regulations on air pollution, noise emissions and water and waste discharge. Each property developed by

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the Company must undergo an environmental assessment and an environmental impact study report must be submitted to the relevant regulatory authorities before any approval is granted for work and the development may commence. Upon the completion of each property, the relevant regulatory authorities will inspect the site to ensure that the applicable environmental standards have been complied with.

Further details of environmental regulations applicable to each of the Group's business segments are in "Vietnamese Regulatory Law Overview".

Intellectual Property Rights

The Company is currently in the process of having the trademark and logo for "HAGL" transferred to it. The Company has entered into a licence agreement with the current holders of the trademark "HAGL" and its logos in the Group's various businesses and products.

Information Technology

On 3 December 2008, the Company entered into an Enterprise Agreement with CMC Corporation, Microsoft's authorised dealer in Vietnam in order to standardise the Group's information technology. Under the agreement, the Group was granted licensing rights for Microsoft Windows and Microsoft Office Professional 2007 for 250 users, as well as updates of any new version of Microsoft Office launched by Microsoft within the next three years. Group employees will also be granted with the right to use Microsoft Office Professional 2007 at home. Microsoft Vietnam and CMC Corporation will provide support, consultation and training for the Group's employees on infrastructure optimisation, operation management and secure information sharing.

The Group is currently in the process of implementing the installation of enterprise resource planning software provided by Oracle.

The Group believes that through this strategic information technology investment, it has affirmed its commitment to continuous quality improvement for its products and services.

Internal Controls and Risk Management

The Group produces a budget on an annual basis and has financial controls in place to ensure that it is adhered to. As part of this budget preparation process, the Group determines demand for its products or services and plans accordingly.

The Group has in place control procedures for each business process, including in relation to procurement, sales, project management, human resources and financial reporting. The Group is preparing to roll outSAP software in order to improve these internal controls.

The Group has in place an approvals process whereby contractual commitments by the Group are required to be approved by a member of management according to the size of the transaction or project.

Risk management is handled by several key divisions of the Group, namely, its financial control and internal audit divisions.

These divisions carefully monitor the Vietnamese market in order to react in a timely and appropriate manner.

The Company believes that risks have to be managed at the outset and, as a result, any project that the Group undertakes should be profitable, even in difficult economic conditions. The Company performs thorough due diligence and analysis in respect of the investment projects it undertakes, and prepares feasibility studies and financial models in order to evaluate potential projects. The Company considers the legal, environmental and reputational risks it may face as part of its evaluation process.

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The Group's approach to risk management focuses on management of risks associated with business operations and financial activities. To that end, an internal audit division has been established to ensure that the Group achieves its business targets, performs effectively and efficiently, produces accurate financial reports and complies with applicable laws and the internal rules and procedures of the Group. If the Company's application to list its GDRs on the Official List is successful, the internal audit division will be responsible for the ensuring the Company's compliance with its continuing obligations in respect of such listing. If its application for admission to trading is successful, the division would also be responsible for ensuring the Company's compliance with any continuing obligations in respect of admission to trading on the Professional Securities Market. However, the Directors acknowledge that they will retain full responsibility for compliance with such obligations.

The Group's internal audit division is an independent unit, not subject to control by any other section of the Group and reports directly to the Board of Directors. The division is staffed with ten employees and some of these employees are certified public auditors. The division produces auditing plans for the approval of the Board of Directors which consists of:

● verifying the accuracy and sources of the figures reported in the financial statements of each of the Group companies;

● auditing the financial reports of each of the Group companies' financial reports on a semi-annual basis;

● auditing business processes such as the management of lease revenues, the control of property maintenance costs, recruitment and training and investment management. The audit process consists of the following steps: risk identification, description, quantification, classification, reporting, handling, monitoring and review of the whole risk management process;

● producing reports to the Board of Directors detailing its assessment of the performance of the internal control activity, and accordingly determining and highlighting any matters that have come to its attention that it considers might have a significant effect on the members of the Group; and

● providing recommendations and action plans to control and minimise any adverse effects arising from such identified risks.

Insurance

The Company maintains insurance policies through certain local insurance brokers covering all risks, business interruption and public liability insurance for all properties that fall within its investment portfolio, including properties that are under development.

Certain types of risks, however, are not covered by such insurance policies, including loss resulting from war, nuclear disaster, the destruction of property by order of any public authority and acts of terrorism.

Corporate Social Responsibility

As part of its commitment to corporate and social responsibility, the Company regularly engages in social and charitable initiatives. The Group builds roads, bridges, schools, polyclinics and organises medical examination and treatment, as well as providing scholarships to deserving students.

Examples of the Group's social and charitable initiatives in Vietnam during 2009 include:

● The construction of two school buildings for Le Anh Xuan Primary School at District 7, Ho Chi Minh City (at a cost of VND 10 billion) and at Tan Dong Secondary School at Go Cong District, Tien Giang Province (at a cost of VND 5 billion). As a result, 3,000 children were able to receive schooling.

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● The donation of VND 1 billion each to the Fund for the Poor in key provinces such as Long An, Quang Ngai; VND 1 billion to the Fund for the Poor in Ba Thuoc district, Thanh Hoa province; and VND 100 million each to the six poorest communes of Ba Thuoc district.

● The provision of VND 1 billion towards the construction of Memorials for Martyrs in Phu Quoc prison in Kien Giang.

● The donation of VND 1 billion to the victims of storm No. 9 in Kon Tum.

● The participation in the "Thuy's Dreams" programme to help cancer patients.

The Group also engages in social and charitable initiatives in Laos and in 2009 such initiatives included the following:

● The provision of financial support amounting to US$ 19 million to the Laos government, of which US$ 4 million was non-refundable support and US$ 15 million was an interest-free loan to build the SEA Games athletes' village and help Laos to successfully organise the SEA Games.

● The provision of financial support amounting to US$ 1.2 million to Attapeu province to enable the construction of a bridge across Xesu River, linking the Xaysetha and Phouvong districts.

● The provision of financial support amounting to US$ 600,000 to enable the installation of power lines to several villages in Xaysetha District.

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VIETNAMESE REGULATORY LAW OVERVIEW

Set out below is a summary of certain material provisions under Vietnamese law and regulations in effect as at the date of these Listing Particulars that the Company may be subject to. This summary does not purport to be a complete review of all laws and regulations of Vietnam that are applicable to the Company.

Overview

Vietnam's legal system is based on the Constitution of Vietnam and comprises the National Assembly's laws, governmental decrees, ministerial circulars and local regulations. Decided court cases do not constitute binding precedents, although they may be used for the purpose of judicial reference and guidance.

Vietnam's judicial system is made up of the Supreme People's Court, the local people's court, military courts and other special courts as may be established by the National Assembly. The people's courts employ a two-tier appellate system. A party may appeal against a judgment or orders of a local people court to the people's court at the next higher level. Judgments or orders of the courts of first instance that come into effect and judgments or orders of the courts of second instance are binding.

Vietnamese Laws on Enterprises and Investment

In 1999, the Law on Enterprises was first introduced in order to create a modern legal regime for the establishment and operation of private enterprises. A principal change introduced under the Law on Enterprises was to allow the establishment of companies upon registration, rather than by discretionary licensing. On 29 November 2005, the National Assembly passed the new Law on Enterprises and the Law on Investment. These two laws aim to simplify administrative procedures and provide more equal treatment to local and foreign businesses. The laws together with their implementing regulations enable foreign investors to invest in any sector of the Vietnamese economy except certain prohibited sectors (for example, projects that are detrimental to national security, morals or are harmful to public health) subject to caps in specific circumstances as described below. In certain sectors (for example, broadcasting and television, transportation, education and training, and hospitals and clinics), investments are subject to specific entry conditions. These conditions must, however, be consistent with the market entry commitments that Vietnam has made in international treaties. Accordingly, the investment options open to foreign investors in Vietnam have expanded following Vietnam's WTO accession and its resulting WTO commitments, especially those contained in the Schedule of Specific Commitments in Services.

Minority shareholder rights

Under the Law on Enterprises, shareholders of a joint stock company, including minority shareholders, have the right to vote at a general meeting of shareholders. A shareholders' resolution on most of the matters subject to a decision of shareholders will be passed by a vote of such shareholders representing at least 65 per cent. of the voting shares present in person or by proxy at a general meeting. With respect to key matters such as resolutions relating to the classes and number of shares of each class to be offered for sale, amendments to the charter, the restructuring and/or dissolution of the company, investments in or sales of assets equal to or exceeding 50 per cent. of the total value of the assets of the company, a proposal to pass such resolutions will require the approval of shareholders representing at least 75 per cent. of the voting shares held by those present in person or by proxy at a general meeting. In order to pass a written resolution, the approval of shareholders representing at least 75 per cent. of the total voting shares of the company will be required. There is however one exception with respect to the voting thresholds in light of Resolution No. 71/2006/QH11 of the National Assembly dated 29 November 2006 ("Resolution 71") that was passed pursuant to Vietnam's accession to the WTO. Resolution 71 provides that a shareholders' resolution on all matters subject to a decision of shareholders may be passed by a vote of such shareholders representing at least 51 per cent. of the voting shares present in person or by proxy at a general meeting. This exception may be applied to joint stock companies that (i) have shareholders coming from a WTO member country, (ii) are undertaking business activities contained in the Schedule of Specific

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Commitments in Services and (iii) contain an enabling provision in their charter. This exception does not apply to the Company.

The election of members of the board of management and of the board of supervisors require a vote by way of cumulative voting, whereby each shareholder shall be entitled to cast votes equal to the product of the total number of shares such shareholder holds and the number of members to be elected to the board of management or, as the case may be, the board of supervisors. Each shareholder will be entitled to vote for one or more candidates.

Minority shareholders may gather into a group holding more than 10 per cent. of the total outstanding shares of the company in question for a consecutive period of at least six months so as to be entitled to (i) collectively nominate candidates to the board of management and/or the board of supervisors; (ii) review and make a copy or extract of the list of shareholders entitled to attend and vote at a shareholders' meeting; (iii) request the convening of a shareholders' meeting in circumstances prescribed by law or the charter; and (iv) where appropriate, to request the board of supervisors to investigate a particular issue relating to the management and/or the administration of the operations of such company.

A shareholder voting against the re-organisation of a company (such as division, separation, consolidation or merger) or against a change in the rights and obligations of shareholders stipulated in the company's charter may demand that the company in question redeem its shares at the market price or at a price determined in accordance with the provisions prescribed in the company's charter.

Corporate governance

The Law on Enterprises does not require mandatory board committees such as audit, remuneration or nomination committees. The Law on Enterprises also does not define "non-executive director", nor clearly set out the role of non-executive directors in listed companies.

However, the Economic Court can overturn a decision of the general meeting of shareholders. Since joint stock companies are responsible for the costs of any lawsuits against its directors, shareholders are effectively unable to sue directors. Derivative actions are now available to shareholders of Vietnamese companies as these actions have just been introduced in Vietnam pursuant to Decree No. 102/2010/ND-CP ("Decree 102") of the Government dated 1 October 2010 (which came into force on 15 November 2010). Pursuant to Decree 102, any shareholder or a group of shareholders holding one per cent. or more of the shares of company for a minimum period of six consecutive months will be entitled to take legal action against a director or the chief executive officer if he or she is in breach of a statutory duty under Vietnamese law or the company's charter.

Pursuant to the Law on Enterprises, a joint stock company (a "JSC") is an enterprise in which the charter capital is divided into shares. Shareholders may be organisations or individuals. There must be a minimum of three shareholders. The shareholders are liable for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise. A JSC may issue securities (including bonds) to raise capital.

A JSC may issue the following types of shares:

(i) Ordinary shares: Each ordinary share carries one vote. An ordinary share cannot be converted into a voting preference share, but a voting preference share may be converted into an ordinary share.

(ii) Voting preference shares: Voting preference shares carry more than one vote. The number of votes for each share is stipulated in the company charter. Only organisations authorised by the Government and founding shareholders may hold voting preference shares.

(iii) Dividend preference shares: A dividend preference share receives a higher dividend rate than that paid for an ordinary share or at an annual fixed rate.

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(iv) Redeemable preference shares: The owner of a redeemable preference share may request that the shares be redeemed at any time in accordance with the conditions stipulated in the redeemable preference share certificate.

(v) Other types of preference shares: A JSC may issue other types of preference shares with rights set out in the charter of the company.

The Law on Enterprises and implementing legal instruments establish the corporate governance framework applying to JSCs, including in relation to: management structures and internal decision-making processes; remuneration of corporate managers (consisting of members of the board of directors and the general director) and members of the supervisory board; the duties and liabilities of corporate managers and members of the supervisory board; and information disclosure requirements.

Management structure and internal decision-making process

The organisational and management structure of a JSC is as follows:

General shareholders' meeting

Rights and duties of the general shareholders' meeting

A general shareholders' meeting comprises all shareholders entitled to vote and is the highest decision-making authority of a JSC.

A general shareholders' meeting has the following rights and duties:

(i) To approve the strategic direction of the company;

(ii) To make decisions on the classes of shares and total number of shares of each class which may be offered for sale; to make decisions on the rate of annual dividend for each class of shares, unless otherwise provided for in the charter of the company;

(iii) To elect, remove or discharge members of the board of directors and members of the supervisory board;

(iv) To make investment decisions or decisions on sale of assets valued at 50 or more per cent. of the total value of assets recorded in the most recent financial statement of the company unless otherwise provided for in the charter of the company;

(v) To make decisions on amendments and additions to the charter of the company, except for adjusting the charter capital as a result of sale of new shares within the number of shares which may be offered as stated in the charter of the company;

(vi) To approve annual financial statements;

(vii) To make decisions on the redemption of more than 10 per cent. of the total number of the issued shares in each class;

(viii) To consider and deal with breaches by the board of directors and the supervisory board which cause damage to the company and its shareholders;

(ix) To make decisions regarding the re-organisation and dissolution of the company; and

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(x) Other rights and duties stipulated in the Law on Enterprises and the charter of the company.

Convening the general shareholders' meeting

A general shareholders' meeting must be held at least once per year and may also be held on an ad hoc basis. The location of a meeting of the general shareholders' meeting must be within the territory of Vietnam.

A general shareholders' meeting must hold an annual meeting within four months from the end of the company's financial year. At the request of the company's board of directors, the licensing authority may extend that time limit, but such extended time limit may not exceed six months as from the end of the company's financial year.

The general shareholders' meeting may debate and pass resolutions in respect of the following matters:

(i) The company's annual financial statements;

(ii) Reports of the board of directors;

(iii) Reports of the supervisory board regarding the management of the company by the board of directors, the director or general director;

(iv) Amount of dividend payable on each class of share; and

(v) Other matters within its authority.

The board of directors of a JSC must convene an ad hoc meeting of the general shareholders' meeting in the following cases:

(i) If it considers it necessary to do so in the interests of the company;

(ii) The number of the remaining members of the board of directors is less than the number of members required by law;

(iii) Upon request by a shareholder or a group of shareholders holding more than 10 per cent. of the total ordinary shares for a consecutive period of six months or more (or those holding a smaller percentage as stipulated in the charter of the company);

(iv) Upon demand by the supervisory board;

(v) In other cases stipulated by law and the charter of the company.

If the charter of the company does not stipulate a time limit, then the board of directors must convene a general shareholders' meeting within a time limit of 30 days as from the date on which the number of remaining members of the board of directors is as stipulated in paragraph (ii) above or from the date of receipt of the request set out in paragraphs (iii) and (iv) above.

If the board of directors fails to convene a general shareholders' meeting, the chairman of the board of directors must be responsible before the law and must compensate the company for any damage arising to it.

Where the board of directors fails to convene a meeting of the general shareholders' meeting in accordance with the statutory provisions set out in the immediate preceding paragraph, then within the following 30 days, the supervisory board shall convene the general shareholders' meeting in accordance with the Law on Enterprises.

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If the supervisory board fails to convene a meeting in the situation described above, then the head of the supervisory board is liable to pay compensation for any damage arising to the company.

Where the supervisory board fails to convene a meeting in the circumstances above, a shareholder or group of shareholders holding more than 10 per cent. of the total ordinary shares for a consecutive period of six months or more (or those holding a smaller percentage as stipulated in the charter of the company) shall have the right to replace the board of directors and the supervisory board in convening the general shareholders' meeting in accordance with provisions of the Law on Enterprises. In these circumstances, the shareholder or group of shareholders convening the general shareholders' meeting may request the licensing authority to supervise the convening and conduct of the meeting if they consider it necessary.

The convenor must prepare a list of shareholders entitled to attend the general shareholders' meeting, provide information and deal with complaints relating to the list of shareholders, prepare the agenda of the meeting, prepare documents, determine the time and venue of the meeting, and send an invitation to the meeting to each shareholder entitled to attend the meeting in accordance with the provisions of the Law on Enterprises.

The expenses for convening and conducting a meeting of the general shareholders' meeting as described above must be reimbursed by the company.

Rights to attend, conditions for conducting and passing resolutions of the general shareholders' meeting

Shareholders being individuals or authorised representatives of shareholders that are organisations may attend the general shareholders' meeting in person or authorise another person in writing to do so.

The general shareholders' meeting is deemed to be quorate where the number of attending shareholders represents at least 65 per cent. of the voting shares. The specific percentage must be stipulated in the charter of the company.

Where the first meeting is inquorate, the meeting may be convened for a second time within 30 days of the intended opening of the first meeting. The general shareholders' meeting that is convened for a second time shall be conducted where the number of attending shareholders represents at least 51 per cent. of the voting shares. The specific percentage must be stipulated in the charter of the company.

Where a meeting convened for a second time is inquorate, it may be convened for a third time within 20 days from the date of the intended opening of the second meeting. In this case, the general shareholders' meeting shall be deemed quorate irrespective of the number of attending shareholders and irrespective of the percentage of shares with voting rights held by the shareholders attending the meeting.

Voting thresholds for shareholder resolutions proposed at shareholders' meetings are set at 65 per cent. for basic matters and 75 per cent. for certain specified matters.

The proceedings of the general shareholders' meeting must be recorded in the minute book of the company. Minutes must be prepared in Vietnamese and may also be prepared in a foreign language.

The minutes of the general shareholders' meeting must be sent to all shareholders within 15 days the date of the meeting.

Within 90 days from the date the minutes of the general shareholders' meeting are received, shareholders, members of the board of directors, the general director and the supervisory board have the right to request a court or an arbitrator to consider and cancel a resolution of the general shareholders' meeting in the following cases:

(i) The order and procedures for convening the general shareholders' meeting did not comply with the Law on Enterprises and the charter of the company;

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(ii) The order and procedures for issuing a resolution and the content of the resolution breach the law or the charter of the company.

Board of directors

The board of directors comprises 3 to 11 people appointed by the general shareholders' meeting.

The term of the board of directors is five years, and the term of office of the members of the board of directors may not exceed five years. Members of the board of directors may be re-elected for an unlimited number of terms. A member of the board of directors need not also be a shareholder of the company. The chairman of the board of directors is appointed by the general shareholders' meeting or the board of directors and may act as the director or general director of the company, unless otherwise stipulated in the company charter.

Rights and duties of the board of directors

(i) To make decisions on medium-term development strategies and plans and on annual business plans of the company;

(ii) To recommend the classes of shares and total number of shares of each class that may be offered;

(iii) To make decisions on offering new shares within the number of shares of each class that may be offered for sale and to make decisions on raising additional funds in other forms;

(iv) To make decisions on the price of shares and bonds of the company offered for sale;

(v) To make decisions on redemption of more than 10 per cent. of the total number of the issued shares of each class within each period of 12 months;

(vi) To make decisions on investment plans and investment projects within the authority and limits stipulated in the Law on Enterprises and the charter of the company;

(vii) To make decisions on solutions for market expansion, marketing and technology and to approve contracts for purchase, sale, borrowing, lending and other contracts valued at 50 per cent. or more of the total value of assets recorded in the most recent financial statements of the company, or a smaller percentage as stipulated in the charter of the company, except for contracts and transactions that fall under the authority of the general shareholders' meeting;

(viii) To appoint, dismiss or remove, and to sign contracts or to terminate contracts with, the director or the general director and other key managers of the company as stipulated in the charter of the company; to make decisions on salaries and other benefits of such managers; to appoint an authorised representative to exercise ownership rights of shares or of capital contributed to other companies, and to make decisions on the level of remuneration and other benefits of such persons;

(ix) To supervise and direct the director or general director and other management personnel in their work of conducting the daily business of the company;

(x) To make decisions regarding the organisational structure and internal management rules of the company and to make decisions on the establishment of subsidiary companies, the establishment of branches and representative offices, and capital contributions to or purchase of shares of other enterprises;

(xi) To approve the agenda and contents of documents for general shareholders' meetings and to convene the general shareholders' meeting or obtain written opinions in order for the general shareholders' meeting to pass resolutions;

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(xii) To submit annual financial reports to the general shareholders' meeting;

(xiii) To recommend the dividend rates to be paid to shareholders and to make decisions on the procedures for the payment of dividends;

(xiv) To recommend the re-organisation or dissolution of the company; and

(xv) Other rights and duties stipulated in the Law on Enterprises and the charter of the company.

Rights and duties of the chairman of the board of directors

The chairman of the board of directors has the following rights and duties:

(i) To prepare the working plans of the board of directors;

(ii) To prepare, or organise the preparation of, agendas for meetings of the board of directors and to convene and preside over meetings of the board of directors;

(iii) To organise for resolutions of the board of directors to be passed;

(iv) To monitor the implementation of resolutions of the board of directors;

(v) To chair general shareholders' meetings; and

(vi) Other rights and duties stipulated in the Law on Enterprises and the charter of the company.

Where the chairman of the board of directors is absent, he shall authorise in writing another member to exercise the rights and perform the duties of the chairman of the board of directors in accordance with the principles stipulated in the charter of the company.

Where no one is authorised, or where the chairman of the board of directors is unable, to perform his duties, then a majority of the remaining members may select one of them to hold temporarily the position of the chairman of the board of directors.

Criteria for members of the board of directors

Members of the board of directors must satisfy the following criteria:

(i) Have full capacity for civil acts and not belong to the category of persons prohibited from managing an enterprise pursuant to the Law on Enterprises; and

(ii) Be an individual shareholder who owns at least five per cent. of the total number of ordinary shares or be another person with professional expertise and experience in business management or in the business domain that is the main activity of the company or satisfy other criteria and conditions as stipulated in the charter of the company.

Convening the board of directors' meeting

If the board of directors elects the chairman, then the initial meeting of the term of the board of directors in order to elect the chairman and to pass other resolutions within its authority must be conducted within seven working days from the date of completion of the election of the board of directors for that term. This meeting shall be convened by the member who gains the highest number of votes. If two or more members gain the same highest number of votes, the elected members shall elect by a majority vote a person amongst themselves to convene the meeting.

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Meetings of the board of directors may be held on a regular basis, or extraordinary meetings may be held. The board of directors may meet at the head office of the company or at some other location.

The chairman may convene a regular meeting of the board of directors at any time considered necessary, but there must be at least one meeting every three months.

The chairman of the board of directors must convene a meeting of the board of directors when one of the following circumstances occurs:

(i) On the request of the supervisory board;

(ii) On the request of the director or general director or on the request of at least five other management personnel;

(iii) On the request of at least two members of the board of directors; or

(iv) In other circumstances stipulated in the charter of the company.

The request must be made in writing and must specify the objective and issues that need to be discussed and the resolutions to be tabled to the meeting.

The chairman must convene a meeting of the board of directors within 15 days from the date of receipt of a request set out in the preceding paragraph. If the chairman fails to convene a meeting of the board of directors pursuant to a request, the chairman shall be liable for damage caused to the company; the person making the request shall have the right to replace the board of directors in convening a meeting of the board of directors.

The chairman of the board of directors or the convenor of the meeting of the board of directors must send a notice of invitation to attend the meeting at the latest five working days prior to the date of meeting unless otherwise provided for in the charter of the company. The notice of invitation must specify the specific time and location of the meeting, the agenda and issues to be discussed, and resolutions. The notice must enclose documents to be used at the meeting and voting forms for the members. The notice of invitation may be sent by post, fax, electronic mail or other means.

The chairman of the board of directors or the convenor must also send the notice of invitation to attend the meeting, together with the associated documents, to all the members of the supervisory board, the director or general director in the same manner as to the members of the board of directors.

The members of the supervisory board and the director or general director who are not also members of the board of directors shall have the right to attend meetings of the board of directors and to discuss issues, but not to vote.

A meeting of the board of directors shall be deemed quorate where there are three-quarters or more of the total members in attendance. Where a meeting does not take place because it is deemed inquorate, the meeting may be convened for a second time within 15 days from the date on which the first meeting was intended to be opened. A meeting of the board of directors that is convened for a second time shall be deemed to be quorate where there are over 50 per cent. of the total members in attendance. Members not attending a meeting shall have the right to vote by sending a vote in writing. Such votes must be enclosed in a sealed envelope and delivered to the chairman of the board of directors at least one hour prior to the opening of the meeting and may only be opened in the presence of all the people attending the meeting.

A resolution of the board of directors shall only be passed when it is approved by the majority of the attending members; in the case of a tied vote, the chairman has a casting vote.

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A member may authorise another person to attend a meeting on his behalf if the majority of members of the board of directors agree.

Minutes of board of directors' meeting

All meetings of the board of directors should be recorded in the minute book. Minutes should be prepared in Vietnamese and may be also be in a foreign language (which shall have equal legal validity with the Vietnamese version) and should include the main contents required by the Law on Enterprises.

General director/director

The general director is the principal executive officer of the company and is responsible for the day-to-day operations of the company. In the vast majority of cases, the general director is also the legal representative of the company with the power to bind the company in dealings with third parties. Either the general director or the chairman of the board of directors may be the company's legal representative.

The general director is appointed by the board of directors. The term of the general director may not exceed five years, and there are no limits on the number of terms that the general director may serve.

Criteria for the general director

The general director must satisfy the following criteria:

(i) Have full capacity for civil acts and not belong to the category of persons prohibited from managing an enterprise pursuant to the Law on Enterprises;

(ii) Be an individual shareholder who owns at least 10 per cent. of the total number of ordinary shares or be another person with professional expertise and experience in business management or in the business domain that is the main activity of the company or satisfy other criterion and conditionsas stipulated in the charter of the company; and

(iii) Must not concurrently be the general director of another enterprise.

Powers and duties of the general director

The general director has the following powers and duties:

(i) To make decisions on all issues relating to the day-to-day business operation of the company not requiring resolutions of the board of directors;

(ii) To organise the implementation of resolutions of the board of directors;

(iii) To organise the implementation of business plans and investment plans of the company;

(iv) To make recommendations with respect to the organisational structure and internal management rules of the company;

(v) To appoint, remove and dismiss management personnel in the company, except for those under the scope of authority of the board of directors;

(vi) To make decisions on salary and allowances (if any) for employees of the company, including managers who may be appointed by the general director;

(vii) To recruit employees;

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(viii) To make recommendations on methods of paying dividends; and

(ix) Other powers and duties in accordance with provisions of the law, the charter of the company and resolutions of the board of directors.

The general director must manage the day-to-day business operations of the company strictly in accordance with provisions of the law, the charter of the company, employment contracts signed with the company and the resolutions of the board of directors. The general director is liable to compensate the company for any failure to do so.

Supervisory board

A supervisory board must be established if there are more than 11 individual shareholders or if one corporate shareholder holds more than 50 per cent. of the shares of a JSC.

A supervisory board shall have from three to five members unless otherwise provided for in the charter of the company; the term of the supervisory board shall not be more than five years; and members of the supervisory board may be reappointed with an unlimited number of terms.

The members of the supervisory board must elect one of themselves to be the head of the supervisory board. The rights and duties of the head of the supervisory board must be stipulated in the charter of the company. More than half of the members of the supervisory board must permanently reside in Vietnam, and at least one member from them must be an accountant or an auditor.

Upon the expiration of the term of the supervisory board, if the new supervisory board has not been elected, the supervisory board whose term has expired shall continue its rights and obligations until the new supervisory board is elected and takes over the duties.

Criteria and conditions for members of the supervisory board

Members of the supervisory board must meet the following criteria and conditions:

(i) Being at least of 21 years of age, with a full capacity of civil acts and not falling within the scope of subjects not permitted to establish and manage companies in accordance with the Law on Enterprises; and

(ii) Not being wife or husband, father, adoptive father, mother, adoptive mother, children, adopted children or siblings of any member of the board of directors, the general director of other managers.

Members of the supervisory board may not hold managerial positions of the company. Members of the supervisory board need not be a shareholder or the employee of the company.

Rights and duties of the supervisory board

The supervisory board shall have the following powers and duties:

(i) To supervise the board of directors, the general director in the management and administration of the company and be responsible to the general shareholders' meeting for the performance of its assigned duties;

(ii) To inspect the legality and accuracy in the management and administration of business activities, the organisation of statistics and accounting work, and the preparation of financial statements;

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(iii) To evaluate reports on the business, semi-annual or annual financial statements, and reports on the evaluation of the management of the board of directors;

(iv) To submit reports on the evaluation of the business reports, semi-annual or annual financial statements of the company, and reports on the evaluation of the management of the board of directors to the general shareholders' meeting at the annual meetings;

(v) To review books of accounts and other documents of the company, the management and administration of the activities of the company at any time deemed necessary or pursuant to a resolution of the general shareholders' meeting or as requested by a shareholder or group of shareholders holding more than 10 per cent. of the total ordinary shares for a consecutive period of six months or more (or those holding a smaller percentage as stipulated in the charter of the company);

(vi) Upon a request by a shareholder or a group of shareholders holding more than 10 per cent. of the total ordinary shares for a consecutive period of six months or more (or those holding a smaller percentage as stipulated in the charter of the company), the supervisory board shall carry out an inspection within a period of seven working days from the date of receipt of the request. The supervisory board must submit a report on results of the inspection of the issues required to be inspected to the board of directors and the requesting shareholder or the group of shareholders within a period of 15 days from the date of completion of the inspection;

(vii) To recommend to the board of directors or the general shareholders' meeting the changes and improvements of the organisational structure, management and administration of the business operations of the company;

(viii) Upon discovery of a breach by a member of the board of directors, to give immediate written notice to the board of directors and to request the person in breach to cease the breach and take measures to remedy any consequences;

(ix) To exercise other rights and perform other duties as stipulated by the Law on Enterprises, the charter of the company and resolutions of the general shareholders' meeting; and

(x) The supervisory board may use an independent consultant to perform the assigned duties. The supervisory board may consult the board of directors prior to submission of reports, conclusions and recommendations to the general shareholders' meeting.

The supervisory board's rights to access information

The invitation notices to a meeting and associated documents must be sent to members of the supervisory board at the same time and in the same manner as for members of the board of directors.

Reports of the general director for submission to the board of directors or other documents issued by the company must be sent to members of the supervisory board at the same time and in the same manner as for members of the board of directors.

Members of the supervisory board shall have the right to access files and documents of the company retained in its head office, branches and other locations and the right to access locations where managers and employees of the company work.

The board of directors, members of the board of directors, the general director and other managers must provide in full, accurately and on time all information and documents relating to the management, administration and business operation of the company upon demand by the supervisory board.

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Remuneration and salary of managers of the company and members of supervisory board

Remuneration and salary of managers of the company

A company is entitled to pay remuneration, salary to members of the board of directors, the general director and other managers based on the company's results.

Unless otherwise provided for in the charter of the company, the remuneration of members of the board of directors and the general director is governed in accordance with the following provisions:

(i) Members of the board of directors are entitled to remuneration for undertaking work. Such remuneration is calculated on the basis of the working days that are necessary to fulfil the obligations of the members of the board of directors and the daily rate of remuneration. The board of directors shall estimate the remuneration for each member on the principle of agreement. The total amount of remuneration for the board of directors shall be decided by the general shareholders' meeting at the annual meeting;

(ii) Members of the board of directors shall be entitled to reimbursement of meals, accommodation, travel and other reasonable expenses they have spent in order to fulfil their duties; and

(iii) The general director shall be entitled to salary and bonus. The salary of the general director is decided by the board of directors.

The remuneration of members of the board of directors and the salary of the director or general director and other managers are included in the business expenses of the company in accordance with the law on corporate income tax and are reported to the general shareholders' meeting at the annual meeting.

Remuneration and other benefits for members of the supervisory board

Unless provided for in the charter of the company, the remuneration and other benefits payable to members of the supervisory board shall be implemented in accordance with the following provisions:

(i) Members of the supervisory board shall be paid remuneration according to their work and shall be entitled to other benefits as decided by the general shareholders' meeting. The general shareholders' meeting shall decide on the total remuneration and annual operating budget of the supervisory board based on the estimated number of working days, quantity and nature of work, and average daily rate of remuneration of members;

(ii) Members of the supervisory board are reimbursed for expenses for meals, accommodation, travel and the use of independent consultancy services at reasonable rates. The total amount of such remuneration and expenses may not exceed the total annual operating budget of the supervisory board approved by the general shareholders' meeting, except where otherwise decided by the general shareholders' meeting; and

(iii) Remuneration and operating costs of the supervisory board shall be included in business expenses in accordance with provisions of the law on corporate income tax and other relevant legislation.

Duties and liabilities of corporate managers and members of supervisory board

Corporate managers of the company shall have the following duties and liabilities:

(i) Corporate managers must declare to the company the nature and extent of any proposed investment transaction in any corporate. Corporate managers must also declare to the company the nature and extent of any of their related persons' proposed investment transaction having a value of, jointly or severally, exceeding 35 per cent. of equity capital of each investee company.

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Such declarations must be made within seven working days from the date of entering the transaction or arrangement. Any amendment shall be declared to the company within seven working days from the date of amendment. The declaration may (but need not) be made at a shareholders' meeting or by way of notice in writing to the company.

(ii) A corporate manager must act in accordance with the applicable laws, the company's charter and resolutions taken in accordance with the charter and must only exercise his powers for their proper purposes.

(iii) The Law on Enterprises requires corporate managers to use reasonable care, skill and diligence in carrying out their tasks. In addition, a corporate manager must act in the company's and the shareholders' best interests.

(iv) A corporate manager must be loyal to the interests of the company and shareholders of the company; and must not use information, secrets, and business opportunities of the company; must not abuse his or her position and powers and assets of the company for his or her own personal benefits or for the benefit of other organisations or individuals.

Members of supervisory board of the company shall have the following duties and liabilities:

(i) To comply with the law, the charter of the company, resolutions of the general shareholders' meeting and professional ethics in the exercise of delegated rights and duties.

(ii) To exercise delegated rights and perform delegated duties honestly, diligently and to the best of their ability in the maximum lawful interest of the company and shareholders of the company.

(iii) To be loyal to the interests of the company and of shareholders of the company and not to use information, secrets or business opportunities of the company, or to abuse his or her position and powers and assets of the company, for their personal benefit or for the benefit of other organisations or individuals.

In the case of a breach of the obligations set out in any of the paragraphs above that results in a loss to the company or other persons, members of the supervisory board must bear personal or joint responsibility for compensating for such damage. All income and other benefits that a member of the supervisory board gains directly or indirectly from a breach of the obligations set out in paragraphs above shall belong to the company.

Where it is discovered that a member of the supervisory board breaches an obligation during the exercise of his rights and duties, the board of directors must notify the supervisory board in writing, requesting the person in breach to cease the breach and take measures to remedy any consequences.

Pursuant to Decree No. 102/2010/ND-CP of the Government dated 1 October 2010 (which came into force on 15 November 2010), any shareholder or a group of shareholders holding one per cent. or more of the shares of company for a minimum period of six consecutive months will be entitled to taking legal action against a director or the chief executive officer if he or she is in breach of a statutory duty under Vietnamese law or the company's charter.

Disclosure

The Law on Enterprises requires members of the board of directors, members of supervisory board, the general director or other management personnel to disclose certain transactions within seven business days. This includes details of their ownership interests in other companies, and details of ownership by related persons in companies where the related person holds more than 35 per cent. of charter capital.

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If they carry out business activities of the company in their own names or in the name of others, they must disclose the nature and scope of the transaction to the board of directors and supervisory board. They may only proceed if the majority of the board of directors approves. All income derived will belong to the joint stock company in the event of any failure to disclose or failure to obtain approval.

The JSC must publicise its information, including submitting its financial reports that have been approved by its general shareholders' meeting to the relevant Government authorities in accordance with the laws on accounting. The company also has to summarise its annual financial reports and make them available to all shareholders.

All other individuals and organisations are entitled to view and copy the joint stock company's annual financial reports filed at the relevant business registration authority.

Conflicts of interest and related party transactions

The Law on Enterprises introduced provisions governing related party transactions and conflicts of interest that require shareholder approval for transactions involving an amount that is greater than 50 per cent. of the value of a company's assets. However, the related implementing regulations have not been issued, and the details of these provisions, including details relating to the approval and disclosure of related-party transactions and conflicts of interest matters, are not yet available.

Insider trading

The Law on Securities provides for certain basic rules prohibiting trades of securities of a company made on the basis of material non-public information that would impact the price of a company's shares. The Law on Securities defines "inside information" as "information about a public company or public fund which has not yet been disclosed and which, if disclosed, could have a major impact on the price of the securities of such public company". What constitutes a "major impact" has not been determined by statute, adjudicated or otherwise defined, and no criminal sanctions related to insider trading have been prescribed by law.

Vietnamese Securities Law

The Government plays its role of regulating the securities market via the SSC, which was officially established in November 1996. The SSC is responsible for the organisation, development and supervision of the country's securities markets. Before February 2004, the SSC had operated as an organ reporting directly to the Prime Minister. On 19 February 2004, the Prime Minister decided to hand over the task of managing the SSC to the Ministry of Finance.

Type of securities

Vietnamese law recognises the following types of securities: shares, bonds, fund certificates (which are issued by securities investment funds), options, warrants, future contracts, group of securities and securities indices.

Offers of securities

Private offers

Public companies (including listed companies) are permitted to make private placements of shares. The Law on Enterprises governs the manner in which shares are issued by joint stock companies. However, such public companies are still bound by the reporting requirements set out in the Law on Securities for transactions where a shareholder would become a majority shareholder (namely, where such shareholder holds, directly or indirectly, at least five per cent. or more of voting stock of an issuer) or the transaction involves more than one per cent. or more of the shareholding.

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Public offering

The offering of securities by mass media or to 100 or more "non-professional" investors or to an unspecified number of investors falls within the framework of public offering under the Law on Securities of Vietnam.

A public offer of securities in Vietnam must be registered with the SSC, with the exception of the following: (i) an offer of bonds of the Government; (ii) an offer of an international financial institution's bonds approved by the Government; (iii) a public offer of shares by a State-owned enterprise during the process of conversion to a shareholding company (equitisation); and (iv) the sale of securities pursuant to a decision of a court or the sale of securities by the manager or receiver of assets in insolvency.

After completion of the public offering, the issuer is required to report to the SSC on the result of the offering. Registration of securities requires the submission of a dossier of registration. A dossier for registration of stocks needs to include (amongst other things) a prospectus and decision of the shareholders' general assembly adopting the issuance plan, whereas a dossier for registration of bonds needs to include (amongst other things) a prospectus and decision of the board of management, the Council of Members or the company's owner adopting the issuance plan. The securities of a public company must be centrally registered and deposited at the VSD.

Financial reporting requirements

Listed companies are required to file an annual report in the prescribed form with the SSC and the HoSE within 90 days following the end of each fiscal year. The annual report must include a balance sheet, income statement, cash flow statement and notes to the financial statements, along with an auditor's letter. In addition, the annual report must include a statement from the board of management and management's discussion and analysis.

Listed companies are also required to file quarterly and semi-annual reports with the HoSE within 20 days following the end of the relevant financial period. The financial statements contained in quarterly and semi-annual reports are not required to be audited or reviewed and are only required to contain a balance sheet and an income statement.

Disclosure by major shareholders

Any investor that becomes a major shareholder of a public company owning directly or indirectly five per cent. or more of the voting shares of the company must report such stock ownership to the public company, the SSC and the stock exchange where the shares of such public company are listed. This must be done within seven days from the date of becoming a major shareholder. Such report is required by law to include: the name and address of the major shareholder (organisations are required to include details of the business lines of the organisation) and the number and percentage of stocks owned by the major shareholder compared to the total number of outstanding stocks.

Any change in shareholding of a major shareholder that amounts to more than one per cent. of shares in any single class in circulation must also be reported to the public company, the SSC and the stock exchange where the shares of such public company are listed within seven days from the date of such change.

The reporting requirements are also applicable to any group of affiliated persons owning five per cent. or more of the voting shares in a public company.

Acquisition of securities by public offer

There are limited circumstances where a public offer may be triggered. Primarily a public offer is triggered when an offer is made to purchase voting shares in a particular public company in which the proposed

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purchase would result in the acquiror owning at least 25 per cent., 51 per cent., 65 per cent. or 75 per cent. or more of the entire issued share capital of the target company.

Foreign ownership limits

Under Decision 55/2009/QD-TTg of the Prime Minister, foreign investors are allowed to own up to 49 per cent. of the shares of any public company (including listed companies) and up to 49 per cent. of the listed fund certificates of any securities investment fund. One notable exception is the banking sector, where foreign investors may not hold more than a total of 30 per cent. of the shares of any bank and no single investor may hold more than 15 per cent. (or 20 per cent. with the Prime Minister's approval) of the shares of any bank.

Bonds

Enterprises may issue bonds (convertible or non-convertible) if they meet the following conditions:

● being shareholding companies, State-owned companies undergoing the transformation into limited liability companies or shareholding companies, or foreign invested enterprises;

● having operated for at least one year from the date it officially commenced operations;

● having the audited financial statements of the year preceding the year of issuance;

● generating profits from their production and business activities in the year preceding the year of issuance; and

● having a bond issuance plan approved by a competent body.

A plan on the issuance of convertible bonds must be adopted by the shareholders' general meeting of the issuer, whilst a plan on issuance of non-convertible bonds is subject to approval of the management board, members' council or representatives of equity owners of the issuer. The general director of the issuer is responsible for organising the implementation of the adopted plan. With respect to bonds to raise capital for State-owned credit institutions and bonds of State-owned enterprises, the issuance plans are subject to approval of the Ministry of Finance.

Listing on foreign stock exchanges

Organisations are permitted to list securities on foreign stock exchanges as long as they comply with certain provisions, including (but not limited to) the following:

● the issuer shall not be engaged in a business line that is not open in Vietnam to foreign parties;

● the decision to seek a foreign listing shall have been approved by its board of management, members' council, the company's owner or the representative of the capital owner (as the case may be);

● the issuer shall satisfy the conditions for listing on the foreign stock exchange for which a co-operation agreement exists with either the SSC, HoSE or HNX; and

● a copy of the dossier submitted to the foreign stock exchange shall be concurrently submitted to the SSC.

In addition, the issue of corporate bonds for offering in the international market is subject to approval of the SBV. Upon request of the issuer, the SBV will confirm if the bond value falls under the foreign debt limit as annually approved by the Prime Minister and then register the bond terms and conditions.

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Vietnamese Land Law

Overview of the land system in Vietnam

The Constitution of Vietnam provides that all land belongs to the people of Vietnam and is administered by the State for long-term use by the people. Although private freehold ownership is not permitted, persons may have legal rights to use land in Vietnam and are regarded as "land users". Land use rights were codified in the 1987 Land Law and further defined in the 1993 Land Law, which also provided for certain transfer rights. The current regime of land management and use, including the rights and obligations of land users, is set forth in the Land Law.

The Government determines, amongst other things, the following matters in relation to land: the land use period, land allocation and lease of land, land withdrawal, the purpose of the use of particular land, land evaluation, land use fees, land rental rates, land tax, and the rights and obligations of land users. Land use rights are determined by reference to the category of land use (agricultural, non-agricultural that includes residential and industrial land, and unused land) and the type of land user. There are four ways by which land use rights may be acquired:

● allocation by the Government;

● lease from the Government;

● lease from an authorised lessor; and

● taking transfer of land use rights (in the form of exchange, assignment, inheritance, gift, donation or capital contribution).

An enterprise may elect to pay land use rights fees for the entire land allocation period (in the event of land allocation) or, alternatively, elect to pay land rental in annual instalments (in the event of a land lease). The method of payment will affect the rights (in particular the land use rights) of the enterprise over the leased or allocated land. Enterprises who elect to pay the land use fees not using Government funds or prepay land rental in full will have such rights as being able to mortgage the land use rights of the land and the buildings thereon, to use the land use rights for the provision of guarantees and to make capital contributions in the form of the land use rights. In comparison, an enterprise that elects to pay the land use fees using Government funds or to pay land rental by annual instalments can only use the assets on the land to make capital contribution or exercise collateral rights.

All legitimate land users are entitled to obtain land use right certificates in their name. Similarly, all legitimate owners of property or buildings constructed on land are entitled to obtain certificates of property ownership. These certificates constitute conclusive evidence of the rights of land users and property owners. They also provide the basis for users to exercise their rights, such as to transfer, mortgage, or dispose of their land use rights or properties.

Under the Land Law, foreign organisations, foreign individuals and overseas Vietnamese investing in Vietnam are not required to pay compensation and provide assistance for the resettlement of residents. However, if these have been paid in advance, it will be deducted from the relevant rental. Land reclamation by the Government is quite limited for economic development and can be conducted in certain special cases, such as in industrial zones, high-technology zones, economic zones and large projects and for 100 per cent. foreign-owned companies that cannot locate in industrial zones. The Government will take charge of site clearance and provide compensation to displaced land users when expropriating land for use by foreign organisations, foreign individuals and overseas Vietnamese investing in Vietnam.

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Vietnamese Laws on Residential Housing

On 29 November 2005, the National Assembly adopted the Law on Residential Housing with effect from 1 July 2006. The stated policy aim of the Law on Residential Housing is to strongly encourage organisations and individuals from all sectors of the economy to participate in housing development. It does so by providing a comprehensive legal framework for housing development and construction in Vietnam.

Expanded eligibility for house ownership

Eligibility for house ownership was expanded by the Law on Residential Housing and should result in increased demand for housing. Vietnamese nationals can purchase houses at any location in Vietnam, regardless of their registered place of business or registered place of residence.

Foreigners entitled to purchase houses in Vietnam include those falling into the following categories:

● individuals who have direct investments in Vietnam;

● persons who have made significant contributions to Vietnam;

● persons working in socioeconomic sectors with a university degree or higher education degree or possessing knowledge or skills that are in high demand in Vietnam;

● persons married to Vietnamese citizens; and

● foreign invested companies operating in Vietnam and that require residential housing for its staff.

All overseas Vietnamese residing in Vietnam with a visa of at least six months can own either one house or one apartment. In practice, the exercise of the right to home ownership by overseas Vietnamese has proven difficult.

Vietnamese law on real estate business

The Law on Real Estate Business was adopted on 29 June 2006 with effect from 1 January 2007 and aimed to strengthen the real estate industry and encourage property development in Vietnam. This law provides a legal framework for real estate businesses, such as property development, sale and lease of real estate, transfer of land, etc., and property support services, including real estate brokerage, appraisals and apartment management services.

The Law on Real Estate Business has laid the much needed groundwork for the regulation of the real estate industry in Vietnam. However, like many laws in Vietnam, it has left many issues unclear. In October 2007, the Government introduced Decree 153/2007/ND-CP with the goal of alleviating some of this confusion. This decree provided detailed regulations and guidelines on a number of topics, including the types of real estate available for trading, the legal capital requirements, rules on advance payment prior to sale, financial prerequisites that investors in real estate projects have to satisfy and training of real estate professionals, such as brokers, valuers, and managers and trading floor operators.

Scope of real estate businesses and services

The Law on Real Estate Business still retains the dual treatment of Vietnamese nationals and foreigners with regard to real estate business. Vietnamese organisations and individuals are permitted to conduct all types of business available under the Law on Real Estate Business, including:

● to invest in the construction of houses and buildings for sale, lease out or grant hire purchase;

● to purchase houses and buildings for sale, lease out or grant hire purchase;

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● to lease houses and buildings for subletting;

● to invest in upgrading leased land and invest in infrastructure works on the leased land in order to lease out land with completed infrastructure; and

● to take assignment of land use rights and invest in infrastructure works in order to assign or lease out, or lease land use rights of land with infrastructure for subletting.

A foreign invested enterprise, on the other hand, is only allowed to engage in the activities described in the first and fourth subparagraphs above, namely, to develop houses and buildings for sale or lease and to construct infrastructure for leasing out, together with the land on which it is constructed. Foreign investors are required to develop property rather than to purchase developed property for the purpose of carrying out real estate business in Vietnam.

In terms of real estate support services, both Vietnamese and foreigners are equally allowed to provide real estate services, including brokerage services, valuation services, trading floor services, consultancy services, auctioning services, advertising services and management services.

Real estate available for trading

All types of real estate, such as civil works, industrial works, road traffic works, irrigation works and technical infrastructure works, are available for trading. However, civil servants' residences, headquarters of Government bodies, national defence and security works, and recognised historical and cultural sites or scenic sites owned by the Government are not available for trading. Land use rights are also tradable in accordance with the Land Law.

It is required by law in the interests of transparency in the real estate market that individuals and institutions dealing with real estate must sell houses or construction works through real estate transaction centres. However, this rule is not yet fully followed in practice, because few real estate transaction centres have been officially set up.

Sale of apartments

Under Vietnamese law, potential buyers of real estate projects include the following:

● Local Vietnamese individuals and organisations; and

● Overseas Vietnamese who satisfy legal requirements under the laws to purchase apartments/ houses in Vietnam.

From 1 January 2009, foreign individuals and companies are also allowed to purchase apartments from residential projects in Vietnam. The categories of foreigners allowed to purchase apartments in Vietnam are as follows:

● foreigners who have direct investments in Vietnam or hold a management position in a company operating in Vietnam;

● foreigners who have made a contribution to Vietnam recognised by the President or the Prime Minister of Vietnam;

● foreigners who have university degrees or a higher education level and are currently working in socioeconomic fields and those who have special knowledge required by Vietnam;

● foreigners married to Vietnamese citizens; and

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● companies with foreign invested capital operating in Vietnam that are not real estate trading companies and have a demand for residential accommodation for its employees.

Foreign individuals are permitted to own apartments for a maximum term of 50 years, and foreign companies are permitted to own apartments for the term recorded in their respective investment certificate.

Lease of residential houses by foreigners

Currently, not every foreign individual or foreign entity entering Vietnam is entitled to lease residential houses or apartments. According to Article 131 of the Law on Residential Housing, only the following are eligible to lease residential houses in Vietnam:

● Foreign organisations and individuals who are allowed to enter Vietnam for a period of at least three consecutive months; and

● Vietnamese residing overseas who currently reside in Vietnam and have a need to lease a residential house.

● "Residential houses" for lease to the above persons must be private houses or apartments with house ownership certificates. Also, the houses or apartments must not be subject to any ownership dispute. The "residential houses" must be safe to live in and have access to water, electricity and other essential utilities. The contract for lease of residential houses is required to be notarised by a notary public or certified by the people's committee of the district where the land is located. However, notarisation or certification is not required if the lease contract is for a period of less than six months or if the lessor is a company having a registered house leasing business. In case the lease contract is for more than six months, the lessor must submit a copy of the lease contract to the people's committee where the residential house is located.

Vietnamese laws and regulations relating to minerals

The Mineral Law of Vietnam passed by the National Assembly on 20 March 1996 and amended on 14 June 2005 (the "Mineral Law") governs mineral activities in Vietnam (prospecting, exploration, mining and processing of minerals). The Government and relevant ministerial authorities have also issued various regulations implementing the Mineral Law. According to the Mineral Law, all minerals are owned by the Socialist Republic of Vietnam on behalf of the entire people. Any enterprise planning to engage in the mineral activities must apply for and obtain licences for mineral activities before commencing the relevant activities. Rights to explore, mine and process minerals may be transferred subject to certain conditions as specified by law.

Mineral prospecting

Mineral prospecting means studying geological documents relating to mineral resources and conducting field surveys in order to discern prospective areas for mineral exploration.

A licence for mineral prospecting may be issued with the term of not more than 12 months, subject to extensions of not more than 12 months in the aggregate. A mineral prospecting licence may not be transferred to any person.

Mineral exploration

Mineral exploration means activities conducted for the purpose of searching for, discovering and evaluating reserves and quality of minerals and the technical conditions for mining at a given site, including technological specimen collection and testing and preparation of mineral mining feasibility studies.

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The initial term of a licence for mineral exploration may not exceed 24 months but may be extended for an additional 24 months. Where necessary, a mineral exploration licence may be reissued. Mineral exploration licences may be transferred subject to certain conditions.

A holder of a mineral exploration licence has priority over other persons in applying for a mineral mining permit with respect to relevant area of exploration.

Mineral mining

Mineral mining means construction of mines, excavation, production and other activities directly related to retrieving minerals.

A mineral mining licence is issued to persons permitted to explore for minerals in respect of a specific area, provided that such persons fulfil all obligations stipulated in the mineral exploration licence and comply with all the applicable laws and regulations.

Where a person permitted to explore for minerals fails to submit an application for a mineral mining licence in respect of the relevant area within six months of the expiry of the mineral exploration licence, a new exploration licence or a mineral mining licence for such area may be issued to another person.

The initial term of a mineral mining licence is be determined based on the relevant mineral mining feasibility study for each project but in any event may not exceed 30 years, although the term may be extended for an additional 20 years. A mineral mining licence may be transferred, subject to certain conditions.

Mineral processing

Mineral processing means classification, beneficiation of minerals or other activities conducted in order to increase the value of minerals exploited.

Person wishing to conduct mineral processing activities must apply for a mineral processing licence, except processing of minerals retrieved under a mineral mining licence.

The initial term of a processing licence is determined based on a case-by-case basis but in any event may not exceed 30 years, although the term may be extended for an additional 20 years. A processing licence may be transferred, subject to certain conditions.

Mineral exports

Export of minerals in the form of crude raw materials or ore concentrate is restricted. The Ministry of Industry and Trade has issued Circular No. 08/2008/TT-BCT, dated 18 June 2008, providing guidelines for export of minerals (not including coal). In general, minerals processed to meet certain quality standards and not on the list for domestic deep processing may be exported. However, as a matter of practice, mineral export may be strictly controlled and an exporter may need to obtain approval and quota from the Prime Minister. Such approval and quota may be given on a case-by-case basis.

Only enterprises are allowed to export minerals and an exporter must satisfy at least one of the following conditions, namely (i) holding a valid mining licence, (ii) holding a valid mineral processing licence and having contracts for purchasing of minerals for processing, signed with mining licence holders; (iii) having contracts for purchase of minerals for export, or entrusted export contracts, signed with mining or processing licence holders; or (iv) having valid documents on purchase (or auction of) minerals which are confiscated and liquidated by the competent authority. In the case of importing minerals for processing and export purposes, the export enterprises must have all valid documents evidencing that the exported minerals are legally originated from imported minerals.

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However, on 17 November 2010, the National Assembly passed Mineral Law No. 60/2010/QH12, which will take effect from 1 July 2011. Notable changes provided in the new Mineral Law include the abolition of the requirement for mineral prospecting and mineral processing licences.

Environmental protection

The Mineral Law provides that any person permitted to conduct mineral activities must use appropriate technology and equipment and comply with other provisions of the Law on the Protection of the Environment, dated 29 November 2005, in order to minimise any adverse impacts on environmental elements and rehabilitate the environment, ecology and land after the termination of each phase of, or the entirety of, a mineral project. The Mineral Law does not provide detail on the enforcement of such duties, but the Group may be exposed to administrative sanction and potentially civil liability.

Persons permitted to conduct mineral activities must bear all costs and expenses related to the protection and rehabilitation of the environment, ecology and land. Costs and expenses related to the protection and rehabilitation of the environment, ecology and land must be determined in the environmental impact assessment report, mineral mining or processing feasibility study, or mineral exploration proposal. A deposit must be placed as security for the rehabilitation of the environment, ecology and land. The Mineral Law does not provide for the size of the deposit.

Vietnamese law relating to electricity sector

Vietnam's Electricity Law, which came into effect on 1 July 2005 (the "Electricity Law"), is the first law to govern activity in the Vietnam's electricity sector. The Electricity Law was passed in accordance with Vietnam's Strategy for Electricity Development approved on 5 October 2004 by the Prime Minister under Decision No. 176/2004/QD-TTg (the "Strategy"), which set ambitious targets for electricity output up to the year 2020. The Electricity Law aims to stimulate development and diversify forms of investment in the electricity sector, encourage economical use of electricity, protect the country's electricity infrastructure and develop a competitive electricity market.

Restructuring of the electricity industry in Vietnam

The Strategy recognises the need to establish a competitive electricity market in order to address the challenges of sustainable development of the sector, lack of investment capital and the need to improve business performance in each area of the power sector.

The Government's policy is to diversify ownership of electricity generation capacity and encourage all sectors of the economy to participate in the electricity market. The Government shall only retain its monopoly at the stages of transmission, construction and operation of large hydro electricity plants.

The Strategy also established a framework for developing the market in stages. Subsequently, the Electricity Law was adopted and came into effect in July 2005. This law put into place a framework for developing the power sector under market-driven principles. Among other features, this law prescribes the rights and obligations of participants in the electricity sector.

The regulatory responsibilities outlined in the Electricity Law led to the creation of ERAV in October 2005.

Reporting to the Ministry of Industry, ERAV was created in order to facilitate market-oriented reforms of the power sector by devising a roadmap for sector development. ERAV also regulates activities in the electricity sector and power market. ERAV's responsibilities include national power planning and monitoring, tariff setting, licensing, monitoring and arbitration.

ERAV describes three key phases of development in its sector roadmap approved in January 2006, and the establishment of a formal power market in Vietnam is covered under Article 18 of the Electricity Law. Phase one of the road map involves the establishment of a competitive power generation market (from

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2005 to 2014); phase two involves the creation of a competitive power wholesale market (from 2015 to 2022); and phase three would involve the development of a competitive power retail market (from 2023).

Electricity licences

The Electricity Law addresses the application, issuance and amendment of electricity licences for electricity activities. The Ministry of Industry and Trade will issue licences for electricity wholesalers and retailers and for entities involved in electricity generation, transmission and distribution activities connected to the national electricity network. The provincial people's committees will issue licences for organisations and entities operating electricity activities on a smaller scale within the provinces in accordance with guidance from the Ministry of Industry and Trade. The issuance of an electricity licence will be subject to the following conditions:

● the feasibility of the project or planned electricity activities;

● the submission of a complete application file; and

● professional management capability appropriate to the electricity activities.

Electricity price

Consistent with the Strategy, the Electricity Law sets forth the following policy aims on electricity pricing:

● to encourage all economic sectors to invest in electricity development at a reasonable profit, to economise on energy resources, to use new environmentally friendly forms of energy and recycled energy, and to contribute to socioeconomic development;

● to encourage the economical and efficient use of electricity;

● to implement and then gradually reduce and eliminate a reasonable price cross-subsidy regime between different groups of customers; and

● to ensure the right of entities purchasing and selling electricity on the electricity market to make their own decisions on the price of purchase and sale of electricity within the electricity tariff stipulated in the state regulations.

The establishment of and adjustments to the electricity tariff will be based on various factors, such as the pricing policy mentioned above, the country's socioeconomic conditions and the people's income in each period, the relation between electricity supply and demand, the cost of electricity production and trading, the right of electricity entities to a reasonable profit, and the level of development of the electricity market.

Decree No. 105/2005/ND-CP of the Government, dated 17 August 2005, implementing the Electricity Law provides that the electricity retail tariffs will be prepared by the Minister of Industry and Trade and approved by the Prime Minister. The electricity generation and wholesale prices will be agreed upon by and between the parties to the relevant power purchase contract, provided that such prices must not exceed the threshold set by the competent authority.

So long as the competitive electricity market has not been established, if the seller and purchaser of electricity to a power purchase contract fail to reach an agreement for the electricity generation/wholesale price, upon request of the relevant parties or the Prime Minister, the Ministry of Industry and Trade coordinating with the Ministry of Finance will carry out negotiations on such price. If the negotiations fail to determine the price, the Ministry of Industry and Trade will have the power to set a temporary price for the power purchase contract until the seller and purchaser reach an agreement on the price.

Other Applicable Laws and Regulations

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The Group's operations may also be subject to the following laws and regulations.

The Labour Code

The Labour Code of Vietnam was enacted by the National Assembly on 23 June 1994 and amended in 2002, 2006 and 2007 (together with its implementing regulations, the "Labour Code").

Many businesses have viewed the Labour Code as being favourable toward employees. Foreign employers have also encountered difficulties when attempting to ensure that their activities comply with the local laws and regulations on labour and employment.

Labour contracts

A labour contract must, with the exception of contracts with a term of less than three months, be in writing and signed directly between an employee and the authorised legal representative of a company. Any labour contract must be made on a standard form issued by the Ministry of Labour, War Invalids and Social Affairs and must include the work to be carried out, working hours and length of break, wage, working place, length of contract term, health and safety provisions, and social insurance. The standard form also contains a provision that entitles the employer to specify further employment terms and conditions.

The contents of a labour contract must be in compliance with the laws of Vietnam and the collective labour agreement of the relevant company.

A labour contract may provide for a fixed term of 12 to 36 months or a non-fixed term or seasonal or temporary work with a term of less than 12 months.

Expatriate employees

The Labour Code regulates foreign employees working in Vietnam. It is specifically required that employers obtain work permits for foreign employees working in Vietnam for three months or more from the provincial Department of Labour, War Invalids and Social Affairs prior to the signing of any labour contracts with foreign employees. Employers are also required under the Labour Code to devise training programs to facilitate the employment of locals rather than foreigners.

The following foreigners working in Vietnam are exempt from the work permit requirement:

● foreign employees entering Vietnam to work for less than three months and to resolve emergency situations for which no Vietnamese or foreigners in Vietnam are qualified;

● members of the board of management of shareholding companies; and

● foreign lawyers certified to practice in Vietnam.

The Vietnamese Labor Code allows foreign invested projects to denominate and pay wages to Vietnamese employees in Vietnamese Dong. Salaries for foreigners may be denominated and paid in foreign currencies.

Vietnamese environmental regulations

The Law on the Protection of the Environment provides a general legal framework for protection of the environment in Vietnam and imposes administrative penalties for breaches of its provisions. This law aims to limit adverse impacts on the environment, control environmental degradation and pollution, control environmental hazards and exploitation, encourage the proper use of natural resources, and protect biological diversity.

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Under the Law on the Protection of the Environment, business entities and organisations have the following duties with respect to environmental protection:

● to comply with the law and regulations on protection of environment;

● to take environmental protection measures as stipulated in an approved environmental impact assessment report or a registered environmental protection undertaking and to comply with environmental standards;

● to prevent, reduce and eliminate adverse impact on the environment caused by the activities of such business entities or organisations;

● to remedy for environmental pollution caused by the activities of such business entities or organisations;

● to comply with the regime of environmental reporting in accordance with the provisions of the law on protection of the environment;

● to comply with the regime for checks and inspection of environmental protection; and

● to pay environment tax and environmental protection fees.

Depending on nature and scale of each project, either of the following is required:

● An environmental impact assessment report ("EIAR"); or

● An environmental protection undertaking ("EPU").

An EIAR is submitted to the competent authority for evaluation and approval, whereas an EPU is filed with the local government or executive board of the industrial zones for registration. After approval of the EIAR or registration of the EPU has been secured from relevant authorities, the competent authorities may from time to time conduct regular inspections to ensure compliance with the relevant environment standards.

The Law on Protection of Environment is enforced at both the national and local levels. Both national and local government can require a business entity to desist from, and to eliminate the effects of, certain actions.

Companies that breach the environmental protection laws and regulations may receive a warning, be asked to pay damages or a fine (up to VND 500 million), or be subject to such other remedies as specified by Decree No. 117/2009/ND-CP of the Government, dated 31 December 2009.

Vietnamese fire safety laws and regulations

Prior to the commencement of most commercial construction works (for example, of guest houses and hotels), a developer must submit a fire safety proposal for the building to the fire department. The fire safety proposal must include, among other things, an application specifying the characteristics, scale and nature of the proposed building, the investment certificate or an approval from the people's committee as to the location of the building, and the drawings and explanation of the fire safety features in the building. Approval of the fire department will be one of the conditions for the competent authority to approve the design of the building and grant the construction licence, only upon which construction works can commence. Upon completion of construction, the completed building must be subject to further fire prevention and fighting tests before the building can be put into operation. Upon satisfaction of these tests, the fire department will issue a certificate of acceptance of fire safety for the building to the developer. Such certificate will be one of the conditions required before the building can be put into operation.

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Under Vietnamese laws on fire prevention and fighting, failure to install fire prevention and fighting equipment (such as an automatic alarm system, fire extinguishers and the like) may not result in the suspension of a building's operation but may result in a penalty in the amount of up to VND 10 million.

Moreover, it is required by law that buildings having more than seven floors must obtain the certificate confirming the satisfaction of all conditions and requirements of the regulations on fire prevention and fighting before the building is put into operation. This certificate differs from that issued upon completion of the fire prevention and fighting test. The application dossier for the issuance of the certificate on satisfying all conditions and requirements includes an application form, a copy of the certificate of acceptance of fire safety for the building, a list of fire prevention and fighting equipment, the decision to form a fire prevention and fighting team with a list of people trained about fire prevention and fighting, and a fire prevention and fighting plan.

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SUMMARIES OF THE MINING EXPLORATION REPORTS

The Group has received mining exploration reports on the iron ore deposits to which the Group has exploration rights. The reports were authored by mining experts at the request of the Company, in accordance with Vietnamese law (as set out in "Vietnamese Regulatory Law Overview"). The reports were not prepared for the purposes of inclusion in these Listing Particulars. The full English translations of the reports may be inspected without charge on weekdays at the offices of Elara Capital PLC, 29 Marylebone Road, London NW1 5JX.

Set out below are summaries of key information from each such exploration report in relation to each of the areas where the Group has undertaken exploration activities. The information summarised below was extracted from the translated reports without material adjustment. The reports were translated into English by Sacombank Securities Joint Stock Company and the Group and the full English-language reports on display at the above address are direct and accurate translations of the original reports.

IMPORTANT NOTICE REGARDING THE MINING EXPLORATION REPORTS

The information on the Group's iron ore deposit estimates presented in these Listing Particulars are based on estimates of such deposits in which the Group has interests. Such estimates were prepared by organisations affiliated with the Ministry of Natural Resources and Environment of Vietnam in accordance with classification guidelines set forth by Decision No. 06/2006/QD-BTNMT published by the Ministry of National Resources and Environment of Vietnam on 7 June 2006. Further, the reports cite classifications used under the United Nations Framework for the Classification of Energy and Mineral Resources. These classifications are cited in the summaries. Investors should note, however, that different reporting systems employ different assumptions, and as a result, identical raw data can produce varying estimates. In addition, the Group's methodologies for classifying and measuring deposits vary in certain respects from those of internationally recognised reserve reporting systems, such as those published by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy and the Australasian Institute of Geoscientists and Minerals Council of Australia ("JORC Code"). The reports have not been prepared by or approved by a "Competent Person" (as that term is defined in the JORC Code).

Future mining exploration reports commissioned by the Group will be prepared in accordance with internationally recognised standards.

Although certain of the mining reports refer to the resource estimates using classifications set out by the United Nations Framework Classification for Energy and Mineral Resources, the estimates of reserves in the summaries of the reports may not necessarily constitute "Mineral Resources" or "Ore Reserves" as those terms are defined under the JORC Code. Any use of the words "ore", "reserves" or similar terms in the mining report summaries should not be read as implying that the mineralisations described in the mining reports constitute "Mineral Resources" or "Ore Reserves" or that they necessarily imply any level of technical feasibility or economic viability of the orebodies. Further, as the mining reports were not prepared under the JORC Code or to other internationally recognised standards, the Group is unable to provide any assurance that any mineralisations within the survey areas fall within the categories of "Measured", "Indicated" or "Inferred" Mineral Resources (as such terms are defined in the JORC Code) or that any ore reserves within the survey areas are either "Probable Ore Reserves" or "Proved Ore Reserves" (as those terms are defined in the JORC Code) and any reference in the summaries to "resources", "reserves" "ore", "deposits" or any similar terms or to the citation of any classification given under the United Nations Framework for the Classification of Energy and Mineral Resources should not be interpreted as providing any such assurance.

For ease of reference, the United Nations Framework Classification for Energy and Mineral Resources (2009 version) is set out as an appendix to these Listing Particulars and can be found from page UN-1 onwards.

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Mineral resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. Under the JORC Code, figures are often presented to the second significant figure. The full mining reports, which do not follow the JORC Code's approach, do not round to a significant figure. However, the following mining summaries have been amended to round to the third significant figure.

Estimates of reserves are largely dependent on the interpretation of data obtained from drilling, testing and production and may prove to be incorrect over time. In addition, estimates of reserves that may be developed and produced in the future are frequently based upon volumetric calculations and by analogy to similar types of deposits, rather than upon actual production history. Subsequent evaluation of the same deposits based upon production history may result in revisions to the estimated resources. There can be no assurance that the resources presented in these Listing Particulars will be recovered at the levels presented.

In particular, and without prejudice to the generality of the foregoing, the mining reports do not in all cases provide sufficient details regarding the following criteria, each of which would be required under the JORC Code:

Sampling techniques and data:

● Drill sample recovery;

● Logging;

● Sub-sampling techniques and sample preparation;

● Quality of assay data and laboratory tests;

● Verification of sampling and assaying;

● Orientation of data in relation to geological structure; and

● Audits or reviews of sampling techniques and data.

Reporting of exploration results:

● Mineral tenement and land tenure status;

● Data aggregation methods; and

● Relationship between mineralisation widths and intercept lengths.

Estimation and reporting of mineral resources:

● Database integrity;

● Geological interpretation;

● Estimation and modelling techniques;

● Moisture content of estimates; and

● Basis of assumptions of bulk density.

Notwithstanding the foregoing discussion, it should be noted that the mining report in relation to the Pa Non Deposit differs substantially from the other mining reports. The report was written on the basis of a

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25-day preliminary exploration survey that has been carried out at the survey site. Therefore only initial primary data is available for this site. Further, and more detailed, exploration work will be required to provide the Group with a greater understanding of any mineralisations within the survey area.

The Group spent approximately VND10.15 billion on the mining explorations summarised below.

Kbang Mines

Introduction and review

Geology Subdivision No. 506, Mid-Central Geological Division, Department of Geology and Minerals of Vietnam, prepared a report on the iron ore deposits within the Kbang Mines survey area. The organisation's business address is No 613. Nguyen Thai Học Street, Quy Nhon City, Binh Dinh province, Vietnam. In accordance with Decision No 126 QD/DCKS-TCCB dated 29 April 2003, the organisation is mandated and qualified to undertake mineral exploration surveys. The organisation holds no material interest in the Company. The report was dated 20 May 2008.

The survey area covered 41.6 hectares and is located in the Lo Ku ward and the Dong ward of Kbang district, Gia Lai province. The following diagram and table indicates the coordinates of the survey area, using the VN2000 coordinate system.

Point X(m) Y(m)1 15 61.562 5 06.2152 15 62.230 5 06.0483 15 62.292 5 06.2384 15 62.137 5 06.2785 15 62.153 5 06.3016 15 62.259 5 06.2807 15 62.352 5 06.2838 15 62.456 5 06.1709 15 62.483 5 06.15810 15 62.578 5 06.09511 15 62.656 5 06.02312 15 62.720 5 06.13013 15 62.638 5 06.18214 15 62.557 5 06.22615 15 62.518 5 06.19716 15 62.438 5 06.331

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17 15 62.115 5 06.43018 15 62.124 5 06.47819 15 61.946 5 06.72120 15 61.960 5 06.82521 15 61.941 5 06.86522 15 62.049 5 06.92223 15 61.761 5 06.993

The survey area is located in a hilly area, with the elevation varying from 0.5km to 0.73km above sea level. The area experiences a rainy season from May to October each year. The rainfall in the area varies from 799mm to 1,990mm per year, averaging 1,220mm per year. The humidity during the rainy season is approximately 80 per cent. The area is mainly covered by young forests.

The survey area is served by the road network, with routes to An Khe (25km) and Dak Po (20km). The latter route is currently being improved.

The key geological research carried out in the Central Highlands and Gia Lai province is set out below:

● 1921-1927: Jacob Saurin carried out pre-Cambrian research at Kon Tum.

● 1939-1940: Fromaget and Hoffel produced a 1:500,000 scale geological map of Central Vietnam.

● 1952: Fromaget produced a 1:200,000 scale geological map of Indochina.

● 1974: Tran Kim Thach produced a 1:500,000 scale geological map of southern Central Vietnam.

● 1980: the Geological Federation V produced a 1:500,000 scale geological map of Central Vietnam.

● 1982: Nguyen Xuan Bao and Tran Duc Luong produced a 1:500,000 scale geological map of southern Central Vietnam.

● 1985: Nguyen Van Trang produced a 1:200,000 scale geological map of Hue to Quang Ngai.

General geology and stratification

The Kannac formation occupies most of the survey area and is penetrated by the rocks of Konkbang complex and Pleimanko complex concordantly with the schistosity plane. The rocks are strongly crumpled, folded, granitised and migmatised. Based on the petrographic characteristics, geologic structure and mode of occurrence, in the survey area this formation can be divided into two sub-formations as follows:

The lower sub-formation is found in the northeast corner of the survey area and contains quartz, biotite, plagiogneiss biotite and gneiss biotite. These rocks are of gneissoid–schistose structure, have a lepidoblastic granular texture and strike in sub-latitudinal direction with dip angle of 30 to 40 degrees

The upper sub-formation covers the remainder of the survey area and contains gneiss biotite, quartz feldspar biotite, skarn calcite wollastonite. The rocks are of schistose and gneissoid structure, lepidoblastic granular texture, striking mainly in sub-latitudinal direction with dip angle 30 to 40 degrees. The rocks of this sub-formation are penetrated or intercalated concordantly with the schistocity planes by the magmatic rocks of the Konkbang and Pleimanko complexes, causing contact metasomatism. They are also transected by striking faults trending from the northwest to the southeast, causing strong crumpling and crushing.

The survey area also contained two incidences of magma intrusion: the Konkbang and Pleimanko complexes and other dikes.

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Within the survey area the Konkbang complex is explosed as a small body concordantly penetrating the Kannac formation. The complex is comprised of pyroxene gabbro, gabbrodiorite-granite and hornblende diorite. The rocks are of massif structures and have a lepidoblastic granular texture.

In the survey area, the Pleimanko complex is in the form of lenses and small bodies penetrating concordantly in the rocks of Kannac formation. The rocks of Pleimanko complex and Kannac formation are strongly metamorphosed, with the Pleimanko complex being comprised of leucocratic pegmatite garnet granite of alaskite composition. The granite has a medium to coarse granular structure.

In addition, the survey area has complex tectonics. There are four tectonic faults trending from the northwest to the southeast. This means that the rocks within the survey area may be affected by weathering and crumpling.

The survey area contains three main deposits of compacted iron ore. These are referred to as ore deposits 1a, 1b and 1c. In addition, there is a further deposit of rolled ore.

Exploration methods

Geological and geodetic

Remote sensing techniques and digital elevation modelling were used in order to create a more accurate geological map (at a 1:10,000 scale). This was then used to determine the geological traverses. These traverses were 0.2km long. The traverse lines were arranged along the orebodies, the strike direction of rock formations or the extending direction of the anomalies discovered.

Geological field mapping and sampling was carried out at a 1:10,000 scale. Its purpose was to clarify the stratification of the survey area, to ascertain the resources present and to collect samples. The traverses were spaced along the orebody at 50m to 100m intervals and survey points were spaced along the traverses at 50m to 100m intervals. At each survey point, the exploration team made notes of the topography, ore characteristics, mode of occurrence and the relationship with the country rocks. Samples were also collected for analysis.

Geophysical

An aeromagnetic survey was carried out in order to determine magnetic abnormalities. In addition, ground magnetic work was carried out at 100m by 10m grid spacings. These regular grid spacings were chosen in order to discover the abnormalities. Where magnetic abnormalities were located, the grid spacings reduced to 50m by 10m or less and further induced polarisation testing (detailed below) was carried out. A total of 4,500 survey points were measured. The ground magnetic work was carried out using Russian MMII-203 and M27M equipment. The magnetic field at each abnormality was calculated using the following formula:

Where:

Tqs = value shown on the machine at measurement points on the traverse; and

Tkt = the control value on machine (taken daily).

(T)b = the adjustment for difference in magnetic value at check points and normal points.

Induced polarisation profiling was carried out along the lines with high magnetic anomalies at 150 survey points. Induced polarisation tests with a dipole-dipole configuration were carried out selectively on some traverses which crossed sloped topography (1,500 survey points). Induced polarisation soundings were

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taken on selected traverses (25 survey points). Induced polarisation tests were carried out using the Chinese-made DWJ-2 induced polarisation instrument.

Trenching and drilling works

Trenches were dug for the purposes of checking geophysical abnormalities, determining geological boundaries and to understand the position of the ore. 0.53km3 of trenches were dug during the survey.

Boreholes were dug to determine geological boundaries, understand the depth and features of the ore and to collect samples for analysis. 0.25km3 of boreholes were dug during the survey.

Borehole drilling was used to determine the existence and scale of ore. The boreholes were also used to collect samples. The diameter of the drillbit used varied according to the depth of the borehole. At depths between 0m to 15m, 130mm drillbits were used, at 15m to 30m, 110mm drill bits and at depths of over 30m, 91mm drillbits. Two deep boreholes were dug at depths of 90m, both of which encountered ore.

Sampling

Various sample types were collected for chemical analysis.

Exploration results

In each of the ore deposits, the depth of the ore ranged from 0.7m to 3.5m, averaging 1.56m. The iron ore has a medium density.

Ore deposit 1a

Ore deposit 1a is distributed towards the northern section of the survey area. It is approximately 0.3km in length. Within this orebody, four trenches were excavated and one borehole was drilled, of which two trenches encountered ore. The borehole encountered ore at a depth of between 13.3m to 13.9m. The ore body dips in a southwesterly direction at a gentle dip angle. The observation of the ore exposed by the trenching works, the core samples from boreholes, as well as magnetite iron ore boulders on the surface indicate that the ore is strongly crushed, the ores are found in rhomboid, cuboid and parallelepiped forms at sizes of between one to five cubic decimetres. The weathered ore has been subjected to limonitisation, hematitisation or argillisation. The ore is of euhedral granular texture and has a compact structure.

The deposit is surrounded by weathered gneiss biotite, calciphir, gabrodiorite and black horblendite. It is estimated that deposit contains 48 per cent. iron. Therefore, of a total estimated orebody of 0.92 million tonnes, it is estimated that the total iron content would amount to 0.476 million tonnes.

Ore deposit 1b

Ore deposit 1b is distributed towards the south-southeast of orebody 1a. It is approximately 0.2km in length at an average depth of 15m. Within this orebody, seven trenches were excavated, of which six encountered ore. The orebody lies concordantly with the country rock, with dip angle of 70 degrees. One trench encountered a thin interburden layer of weathered schist.

The primary iron ore is weakly weathered. Some magnetite ore (15 to 20 per cent.) has transformed into limonite, however, in comparison with orebody 1a the ore here is less fractured and weathered. The ore is strong compressed with thin schistocity. The ore is of euhedral and anheudral texture and has a massif structure.

Therefore, of a total estimated orebody of 1.48 million tonnes, at an estimated 48 per cent. iron content level, the deposit would contain 0.71 million tonnes of iron. The main country rock is biotite gneiss, completely weathered, of red brown, yellowish brown colour.

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Ore deposit 1c

Ore deposit 1c is distributed to the south of orebody 1b. It is approximately 0.15km in length, at an average depth of 0.05km. The lower part of the ore is semi-weathered. The main country rock is crystalline rock in the form of biotite gneiss. The rock is fully weathered, friable and loose. Within the orebody, 11 trenches were excavated and one borehole was drilled, of which seven trenches and the borehole encountered ore.

It is estimated that deposit contains 48.4 per cent. iron. Therefore, of a total estimated orebody of 5.34 million tonnes, there would be iron content of 2.56 million tonnes.

Rolled ore deposit

Rolled ore consists of angular massive ore fragments cemented by iron hydroxide and results from weathering and erosion of orebodies, itabirites and carbonates. In addition to ore deposits 1a, 1b and 1c, there is a deposit of rolled ore in the survey area. This rolled ore deposit has a depth ranging between 0.7m to 3.5m, averaging 1.56m. It is estimated that the rolled ore deposit contains 2.57 million tonnes of iron ore. The average iron content is 55.2 per cent, giving an estimated iron content amount of 1.34 million tonnes.

Resource calculations

The average iron ore content across the three ore deposits was estimated to be 48.4 per cent. Therefore, the amount of ore in the survey area is estimated to amount to 9.17 million tonnes, with an iron content of 4.44 million tonnes. Once refined, and allowing for 10 per cent. loss during excavation, processing and refining, this would produce 6.15 million tonnes of 65 per cent. refined iron ore.

The resource was categorised by the report at level 334a in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 334a resources are classified as "Reconnaissance Mineral Resources".

Conclusions and opinions

As the geologic structure within the survey area is complicated and the rocks are crumpled and folded, the report recommends that once the mining activities commence, attention must be paid to the strike directions and dip angles of the orebodies in order to ensure that the deposits could be excavated on a cost-effective basis.

Thanh Hoa Deposit


Hoang Anh Quang Ngai Mineral Joint Stock Company (under the supervision of the Department of Natural Resources and Environment of Thanh Hoa province, Vietnam) prepared the report on the iron ore deposits in Ba Thuoc district, Thanh Hoa province. Its business address is 100 Le Loi Street, Chanh Lo ward, Quang Ngai City, Quang Ngai province, Vietnam and Mr. Vu Duc Sach (the chief report writer) holds a bachelor's degree in Engineering (majoring in Geological Exploration) from the Mining and Geological University, Vietnam. Hoang Anh Quang Ngai Mineral Joint Stock Company is a Group company, but otherwise has no material interest in the Company. Mr Sach does not have any material interest in the Company. The report was dated 20 April 2010.

The survey area is located in Luong Noi commune, Thanh Hoa province, 18km to the southeast of Canh Nang.

The survey area is mountainous, with the highest elevation in the area being 0.63km above sea level. In general the topography of the study area is mainly of karstic, erosional and denudational forms. There are many limestone cliffs, which have been eroded in places, forming many deep ravines on the slopes. There

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is no river within the survey area. There is a small stream running along the valley with some minor tributaries. This stream is generally dry, apart from during the rainy season.

The rainy season generally runs from May to October. The mean temperature during the rainy season is 25 degrees Celsius, with a maximum temperature of 39 degrees Celsius. The mean rainfall in the area during this period is 1,000mm. In June and July the area is prone to flash floods caused by high levels of precipitation.

The dry season lasts from November to April. In this season there are usually northeasterly winds, which bring dry and cool weather. The mean temperature during this season is 15 degrees Celsius, with a minimum temperature of six degrees Celsius. The dry season is marked by low levels of rainfall, averaging 100mm.

The survey area is served by paved roads that link to the national road network. Therefore, ore can be transported by means of road haulage (in particular, the roads are suitable for 15 tonne trucks). There are also some nearby rivers which are used for marine transportation. However, these are generally only navigable during the rainy season.

The electricity grid within the survey area is not well-developed and some remote areas are not connected to the grid at all. In addition, there is little water available for industrial purposes and some areas are not connected to the telecommunication network.

Because the survey area is located near the centre of Dien Lu Commune, the network of public services (such as postal and telecommunications services) is relatively well developed. There is also engineering support in the area.

The following exploration activities had previously been undertaken within Thanh Hoa province. These were large-scale regional surveys.

● 1983 - 1:50,000 scale geological mapping of Bai Thuong Ngoc Lac, Thanh Hoa by Nguyen Van Huong, Geology Group 408.

● 1984 - 1:50,000 scale geological mapping of the southwest of Thuong Xuan and Thanh Hoa by Phan Van Ai, Geology Group 407.

● 1983 – 1989 - 1:50,000 scale geological mapping of Cam Thuy and Thanh Hoa by Pham Xuan Anh, Northern Geological Mapping Division, Department of Geology and Minerals of Vietnam.

● 1992 - 1:50,000 scale geological mapping of Ban Quan Hoa to Thanh Hoa by Le Van Chi, Northern Geological Mapping Division, Department of Geology and Minerals of Vietnam.

● 2003 - 1:50,000 scale geological mapping of Muong Lat by Dinh Cong Hung, Northern Geological Mapping Division, Department of Geology and Minerals of Vietnam.


The Nam Pia formation is distributed across a narrow area in the Thung Bai, Luong Noi, BaThuoc district. The composition includes clay shale interspersed with limestone, black clay shale and sandstone. The clay shales include fossils from the early Devonian period. The total thickness of the formation is 0.15km

The Bac Son formation is mainly distributed in the northwest and southwest regions of the survey area and in some non-continuous bands. The formation comprises silica and dolomite limestone, which contains many fossils from the Permian period. The thickness of the formation is 0.05km.

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The Quaternary period formation within the survey area is mainly found underneath the streams within the survey area. This formation is comprised of pebbles, grit, sand, clay. The thickness of the formation ranges between 0m to 5m. The rolled iron ore resources (see below) are found within this formation.

There are a number of magma intrusions within the survey area. However, the intrusion which relates to an iron ore deposit within the survey area is the Nui Chua formation which is distributed along the Am River, from Muong Lat (which is to the south of Cam Thuy) to Bai Thuong, Ngoc Lac. This formation comprises gabbro-diorite, gabbro-diaba, gabbro-pegmatite and olivine gabbro.

There are two tectonic fault lines within the survey area. One trends from the northwest to the southeast. This fault line is the main fault line in the area and separates Mesozoic era and Paleozoic era formations, which are formed by organic process and magmatic activity which operated strongly and played an essential role for the creation of the ore in the area. This tectonic activity also played a role in the creation of the magnetite and hematite mineralisations in the survey area.

The second fault line trends from the northeast to the southwest of the survey area. This fault system is distributed along the streams in the area and cuts almost perpendicularly across the orebody in the Lang Dam area. The fault has led to the creation of quartz in the area.

Exploration methods

The following table summarises the works undertaken during the survey process.

Works Unit QuantityGeodetic survey line 25Ground magnetism survey line 45Resistivity surveys line 20Trenching works tunnel 94Drilling works hole 20Geological field mapping and sampling (1:2,000 scale) km2 25Hydro-geological survey points per

100m225

Iron ore sampling sample 64Analysis of iron ore (7 elements) sample 39Mineralography analysis sample 8Density analysis sample 39

Geodetic and geological

In order to carry out the geodetic field mapping at a 1:2,000 scale, traverses with a total length of 12km were laid on the survey area and measurements were taken at 100 survey points. For certain areas, grid spacings were 50m by 20m. In other areas, the grid spacings were at 100m by 50m.

The geological field mapping was carried out by covering traverses arranged in lines perpendicular to the orebodies, with a maximum of 50m between the traverses. The spacings were reduced where ore was discovered. The traverses were laid using tape measures and GPS at 20m intervals. At each survey point, the geologists noted the rock types present and the characteristics of the ore including the colouring, mode of occurrence, texture, structure and weathering. There were 200 to 250 survey points per km2.

Geophysical

The geophysical survey was carried out as follows. At Lang Dam, two surveys were undertaken. Survey TT1 covered 18 parallel traverses, with 50m spacings between each traverse and measurements taken every

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10m. 347 measurements were taken. Survey TT2 covered seven traverses, with 50m spacings between each traverse, and measurements taken every 10m, 127 measurements were taken on this geophysical survey.

At Lang Don, one geophysical survey used 10 traverses with 50m spacings between each traverse, and measurements taken every 10m. 125 measurements were taken on this geophysical survey.

At Lang Tran, one geophysical survey used six traverses with 50m spacings between each traverse, and measurements taken every 10m. 146 measurements were taken on this geophysical survey.

These geophysical surveys utilised magnetometers, resistivity equipment and induced polarisation sounding measurements. The magnetometer was used to determine the magnetic variations within the survey area. At Lang Dam, 27 measurements were taken, at Lang Don, seven measurements were taken and at Lang Tran 11 measurements were taken.

After obtaining the final results from the magnetometer, the dipole-dipole configuration was used during induced polarisation tests to ascertain magnetic anomalies at greater depths. 19 such measurements were taken at Lang Dam, four measurements were taken at Lang Tran and three at Lang Don.

Based on the processed results from the two previous methods, the geologists conducted a survey to examine the depth and thickness of the orebody by means of induced polarisation sounding measurements. At Lang Dam, 13 such measurements were taken.

Hydro-geological

A hydro-geological survey was undertaken in order to determine the size and characteristics of surface water distribution networks and their potential impact upon mining operations, groundwater levels and to determine the chemical composition of the surface water and groundwater within the survey area. The survey was conducted along traverses over an area of 0.71km2. Observations were taken at 25 points per 0.1km2.Two water samples were taken for chemical analysis and one sample was taken for bacteriological analysis.

Drilling and trenching

Drilling and trenching works were undertaken to test the results of the geophysical survey.

At Lang Dam, 13 boreholes were drilled at a total depth of 0.15km. Ore was found at each borehole. 68 trenches were dug in the area, with the volume of those works totalling 0.67km3. 83.8 per cent. of these trenches encountered ore.

At Lang Tran, 19 trenches were dug, displacing 0.18km3. 73.6 per cent. of these trenches encountered ore. One borehole was dug in this area, at a depth of 19m. This borehole encountered ore.

At Lang Don, seven trenches were dug, with an aggregate volume of 84m3. All of these trenches encountered ore. One borehole was dug in this area, at a depth of 15m. This borehole encountered ore.

Sampling

Samples were analysed in order to determine composition of the ore and to determine the percentage of iron and other minerals in the ore, the chemicals present and the density. Depending on the type of analysis undertaken, samples of different weights and sizes were taken. A total of 64 samples were taken. 39 samples were analysed for the presence of seven chemical elements: iron, sulphur, lead, phosphorous, zinc, arsenic and copper. This was necessary to ensure that the level of chemicals present within the ore were within industry parameters. Eight lithological samples were analysed to determine the percentage of minerals present in the ore. In addition, 39 samples were used to check the density of the ore. The samples were analysed at he Group's laboratories.

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Exploration results

The surveyors concentrated on three specific areas within the survey area as a whole. The first was Lang Dam, the second Lang Tran and the third Lang Don.

Lang Dam

In Lang Dam, magnetite iron ore was found in iron ore deposits which were between 4.2m and 11.4m thick, averaging 8.2m, and between 0.05km to 0.18km in length. These deposits of iron ore were distributed over an area of 30km2. The composition of magnetite ore was mainly metallic dark grey and brown grey, with small amounts of disseminated pyrite in the ore. The iron content of the ore varied from 54 per cent. to 64 per cent. with the average iron content at 57.8 per cent. This area was estimated to contain 0.495 million tonnes of ore.

Also in Lang Dam, there were hematite iron ore deposits which were between 4m and 9m thick and 0.05km to 0.18km in length. These deposits of iron ore were distributed over an area of 19.9km2. The composition of magnetite ore is mainly metallic dark grey and brown grey, with small amounts of disseminated pyrite within the ore. The ores were sandwiched between limestone and dark grey clay. The iron content of the ore varied from 54 per cent. to 59.8 per cent. with the average iron content at 57.1 per cent. This area was estimated to contain 0.238 million tonnes of ore.

The ore bodies in Lang Dam were categorised by the report at level 121 in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 121 reserves are classified as "probable mineral reserves".

Lang Tran

The ore deposit at Lang Tran was identified from the ground magnetic survey (with 146 survey points) and induced polarisation testing along four traverses. Trenches and boreholes were dug to verify the boundaries and dimensions of the orebody. The orebody trends from east to west and is 8m and 15m in width, 0.05km to 0.18km in length and 4m to 9m in thickness. This deposit of magnetite iron ore is distributed over an area of 6.3km2. The iron content of the ore varied from 59.8 per cent. to 63.2 per cent., with the average iron content at 54.5 per cent. This area was estimated to contain 0.07 million tonnes of ore.

The ore bodies in Lang Tran were categorised by the report at level 122 in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 122 reserves are classified as "probable mineral reserves".

Lang Don

In Lang Don, there were magnetite iron ore deposits of between 7m to 10.4m in thickness, over an area of 9.38km2. The ground magnetic survey identified four ore anomalies. These anomalies were verified by means of induced polarisation testing together with trenching and drilling works.

The first orebody covers a 1.29km2 area, with a thickness of seven metres, a density of 2.98g/cm3 and an estimated 0.014 million tonnes of magnetite ore. The iron content of the orebody was estimated to be 53.1 per cent.

The second orebody covers a 2.45km2 area, with a thickness of 10.4m, a density of 2.98g/cm3 and an estimated 0.04 million tonnes of magnetite ore. The iron content of the orebody was estimated to be 55.92 per cent.

The third orebody covers a 0.76km2 area, with a thickness 7.5m, a density of 2.98g/cm3 and an estimated 0.009 million tonnes of magnetite ore. The iron content of the orebody was estimated to be 52.9 per cent.

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The fourth orebody is 0.41km long, 38m wide, with thickness 8.3m and is evenly distributed on the surface. There are some iron ore veins where the ore is crushed and intermingled with the country rock. There are also ore outcrops occurring on the surface with observed length of 12m to 15m and thickness of approximately three to five metres. The main ore mineral is hematite with a low magnetic field. The iron content of the ore is estimated to be 54.8 per cent.

The average iron content in Lang Don's ore was 54.2 per cent and the area was estimated to contain a total of 0.27 million tonnes of ore. The ore bodies in Lang Don were categorised by the report at level 122 in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 122 reserves are classified as "probable mineral reserves".

The hydro-geological survey undertaken indicated that within the survey area there are a few shallow ravines and erosion channels. There are erosion channels which are perpendicular or nearly perpendicular to the slope, on the east and south sides of the survey area. The channels do not have water flowing through them on a consistent basis, but rather act as a drainage channels for rainwater. To the south of the survey area, about 0.7km away from the excavation area, there is a small stream of water flowing constantly. The water is pure, colourless and tasteless during the dry season. However, other surface water within the survey area is often contaminated and unhygienic.

The hydro-geological survey also indicated that there was water within the Quaternary period formation, but that the formation was permeable and had good drainage. As the Quaternary period formation is lower than the mining excavation area, this should not affect mining activities to a material extent.

The geological and hydro-geological surveys indicated that the excavation areas which contain limestone and sandstone are fractured throughout. However, the extent of the fracturing is lessened at greater depths. The groundwater is replenished by rainwater infiltrating through fractures, pores and karst cavities. This groundwater is discharged into streams and ravines within the area.

Proposed mining techniques

Overall, the survey area's ore structure is generally stable; and it should be usable by the province's steel mills. The ore deposits in the area can be excavated by means of open-cast mining methods.

Overall, the report concluded that favourable mining conditions were present in the survey area, provided that appropriate technological processes were followed during the mining operations.


The ore resources are calculated based on within the parameters set out in Decision 56/2000/QD-BCN dated 22 September 2000 by the Department of Industry. These criteria state that resources may be recognised where:

● the ore's iron content is not less than 23 per cent.;

● the silicon oxide content does not exceed 10 per cent.;

● the phosphorous content does not exceed 0.25 per cent.;

● the amount of each of sulphur, lead, zinc, arsenic and copper does not exceed 0.1 per cent.; and

● the minimum thickness of the block is one metre.

The reserve parameters were calculated using the following formula:

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Where:

● Q = total iron volume (m3);

● Qi = iron content in block (m3);

● Si = area of block (m2);

● Ctb = average iron content in the ore;

● Dtb = average weight of ore;

● Mitb = average thickness of block, which can be calculated by using the following formula:

Where:

● m1, m2, mn = the thickness of ore at datapoints 1, 2, n; and

● n = the number of exploration works undertaken in the calculation of the reserve;

Where:

● Dtb = average weight of the ore (tonne/m3);

● D1, D2, Dn = weight of sample n (tonne/m3); and

● n = number of samples.

When determining the horizontal boundaries of the orebody, an extrapolation method was used whereby the boundary passes halfway between the data points which indicated mineralisations meeting the above criteria and those datapoints which did not observe such mineralisations. The vertical boundaries of the ore are calculated on an interpolation basis when a datapoint indicates that mineralisations are present which meets the above parameters.

The depth of the orebodies were determined by the following criteria. In the case of boreholes, if the borehole had a depth of less than 15m and the samples collected at the bottom of such boreholes contained ore then the boundary would be defined by the depth of such borehole. If the borehole failed to discover ore, the boundary is determined to be a straight line between the two closest boreholes which discovered ore. However in the case of trenching works, if the trenches were less than five metres in depth and the trench reached ore, then the resource boundary is deemed to be located at a depth which is twice the depth of the trench. If a trench failed to discover ore, then the ore boundary is determined to be a straight line between the two closest trenches which discovered ore.

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The lowest content of iron in the area's ore was 23 per cent. The highest content of silicon oxide was 10 per cent. and the highest levels of phosphorous were 0.25 per cent. Sulphur, lead, zinc, arsenic and copper were present in trace quantities, with each element comprising up to 0.1 per cent. of the ore.

The survey area's ore deposits (1.86 million tonnes) were found to have an average iron content of 57.7 per cent., with total iron content of 1.07 million tonnes. Once refined, and allowing for 10 per cent. loss during excavation, processing and refining, this would produce 1.48 million tonnes of 65 per cent. refined iron ore.


The report recommended that the People's Committee of Thanh Hoa province should grant a mining licence for the excavation of iron ore in the area. It was further recommended that this licence be granted on an expedited basis in order that the Group could commence pre-excavation activities.

Mo Rai Deposit


The Geological Drilling and Excavation Subdivision of the Mid-Central Geological Division, Department of Geology and Minerals of Vietnam, prepared a report on the iron ore deposits within the Mo Rai survey area. The organisation's business address is No 613. Nguyen Thai Học Street, Quy Nhon City, Binh Dinh province, Vietnam. In accordance with Decision No 126 QD/DCKS-TCCB dated 29 April 2003, the organisation is mandated and qualified to undertake mineral exploration surveys. The organisation holds no material interest in the Company. The report was dated 10 May 2010.

The survey area covered 37.98 hectares and is located approximately 80km west-northwest of Kon Tum City, close to the border between Vietnam and Cambodia. The following table indicates the coordinates of the survey area, using the VN2000 coordinate system (3o, 107o 30’).

Point X(m) Y(m)1 1557889 04869982 1557596 04867723 1557134 04881034 1557413 04881035 1557523 0487762

The survey area does not contain any rivers or large streams, although the Sa Thay river runs beside the survey area. The entire survey area is currently forested. The topography of the area is relatively flat, with a relief of 5m to 10m. The region's rainy season runs from June to August.

There are no centres of population within the survey area. However, in nearby Sa Thay district and Mo Rai ward there is a population density of 10 persons to each square kilometre. There are no railways or waterways in the area. Therefore, all mining-related traffic will travel by road.

In 1944, E Saurin produced a geological map of the region (to a 1:500,000 scale). From 1975 to 1978, Tran Duc Luong and Nguyen Xuan Bao carried out a survey of southern Vietnam. From 1986 to 1993, Nguyen Can (1986-1988), Pham Huy Long (1988-1990) and Tran Tinh (1990-1993) produced geology and mineral maps at a 1:200,000 scale in respect of the Kon Tum – Buon Me Thuot area.


The survey area's stratigraphic formation is made up of two sub-formations, dating from the Cambrian and Silurian periods. The lower sub-formation is comprises metamorphic rocks, including sericite schist, quartz schist and two-mica quartz.

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The upper sub-formation runs from the northwest to the southeast of the survey area along the Dak Long river. This layer is predominately made up of clean quartzite derived from terrigenous sands.

The research carried out during the survey revealed a small amount of magma intrusions within the survey area. A small amount of biotite granite was found in the southeastern region of the survey area. This granite had a massive structure, a pink-grey colouring and was comprised of quartz, plagioclase, feldspar kali and biotite. Pegmatite and quartz was also observed within the survey area.

The survey area is part of the Kon Tum massif. Due to this tectonic activity, there is difficulty in observing pre-Cenozoic era tectonic activities. Based on the current geomorphological understanding of the survey area, it is estimated that the tectonic activities within the survey area are similar to neighbouring areas, in which a tectonic fault runs from the northeast to the southwest.

Exploration methods


Works Unit QuantityGeodetic works- Exploration traverses km 1.82- Topographic section 1/10,000 km 0.92- Survey points per traverse point 11Geological works- Geological mapping 1/10,000 km2 0.38- Drilling m 120- Trenching m3 106- Sampling

- Collecting samples sample 40- Processing samples sample 16- Chemical analysis - seven elements sample 13- Chemical analysis - three elements sample 3- Density analysis sample 4

Hydro-geological works km2 0.38

Geodetic and geological

Boreholes were arranged within a 100m by 100m grid, with boreholes being drilled at depths of 50m. The grid was arranged using GPS and the boreholes to be dug were marked out with wooden stakes.

The geodetic exploration work was designed and implemented according to the technical regulations relating to geodetic surveys for geological investigations issued in 1990 by the Department of Geology and Minerals, Vietnam. This involved setting out the prospecting lines across the survey area on the map and the ground in order to ascertain the location of the trenching and drilling locations.

In order to produce the geological map at 1:10,000 scale, field traverses were arranged along the set prospecting lines, along trails, ravines and other locations where ore was exposed. The spacing between traverse routes was 80m to 100m. There were 11 survey points per traverse. At the survey points, the geologists logged details of the topographic, geomorphologic, geologic and mineralisation characteristics present at that survey point. Drawings were made or photographs taken in locations where there were ore outcrops, at the boundary between the ore and the surrounding rock and where there were tectonic or magmatic features.


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The drilling work was carried out in order to determine the stratification of the area and the existence and thickness of the orebodies. The drilling work was carried out using a drill core, with the use of the Chinese rotary drilling rig XY-1A. The drillbit was made of tungsten carbide with a diameter of 91mm, with the core samples collected having a diameter of 73mm. These core samples were collected continuously from the surface downwards and placed in the sample box in sequence to enable convenient visual examination and classification. 12 boreholes were dug at depths of 10m each. 11 of these boreholes encountered the orebody.

The purpose of the trenching works was to clarify the characteristics, morphology and mode of occurrence of the orebodies. The excavations were arranged based on the geologic characteristics, ore mineralisation, degree of ore exposure and the extension and direction of the orebody. The spacing between trenches in longitudinal direction was 50m, whilst in the transverse direction the spacing was 40m. In exceptional cases, some trenches were dug at 70m spacings. The trenches were two metres long and one metre wide, and were dug to a maximum depth of 2.2m. The logs were drawn with a 1:25 scale. 28 trenches were excavated, of which 25 encountered ore.

Sampling

The purpose of the sampling work undertaken was to determine the composition of the ore, the percentage of ore minerals, the ore density, etc., in order to determine the parameters for calculating the ore resources and evaluating the quality of the ore.

The sampling techniques, number of samples to be collected, the weight and dimension of samples varieddepending on the use to which the sample was to be put. For chemical analysis, channel samples were collected. The channel samples were collected from the walls of the trenches from the top to the bottom throughout the thickness of the orebody. The length of the samples was greater than the minimum thickness of the orebody, except for the case where the remaining part of the orebody was identified as being outside the boundary of the orebody. The samples were grounded, mixed evenly, split into two parts. 3kg was then separated and put into a plastic bag. A label was made with the sample number and put into the bag to avoid confusion. In the case of the core samples, each sample consisted of one metre core section and were prepared in the same manner as the channel samples.

Chemical analysis was undertaken on samples to identify the chemical components within the ore. 13 samples were analysed for the presence of seven chemical elements or compounds. Three samples were analysed for the presence of TFe and three chemical components.

The four samples taken to calculate density were collected as monolithic samples in cube form with dimensions of 0.2m by 0.2m by 0.2m. The samples were put into a closed box, coated with paraffin, with the label showing the sample number affixed to the box. Samples were analysed at the Group's laboratories.

Hydro-geological

Hydro-geological work was also carried out in order to analyse the moisture content of the ore.

Exploration results

The magnetite ore deposits were typically found at depths of between 0.3m and 1.2m. The overburden is comprised of sands, clays and organic humus.

The mineralisations tended to be in looser form towards the surface, with those ores found at greater depthsbeing found in larger and denser forms, but with some holes present. The ore deposits in the survey area were typically found in black, grey, brown and dark brown colours. The ores were typically in grape form with nuggets of iron clustered together. These clusters tended to have a volume of approximately 1m3 to 3m3.Therefore, the density of the ore varies, with holes in between the nuggets often filled with clay.

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Within the orebody, some gotite, limonite, quartz and pyrite was found in small quantities. The orebody was located with clay and quartz.

Below the orebody is a layer of quartz, clay and gravel. It is not known what rocks are present below that layer, as the drilling works did not reach this those depths. However, from examining the eroded material in the Sa Thay river near to the survey area, it can be inferred that this lower layer is made up of basaltic rocks in massif form.

From 13 samples, which were analysed for the presence of seven elements and compounds, it was found that the ratio of phosphorus, sulphur, aluminium oxide and silicon oxide are all at higher levels than are permitted under industrial standards. Samples showed that to 20 per cent. of the ore was made up of aluminium oxide and silicon oxide and up to 0.25 per cent. of the ore was phosphorous. The results of this chemical analysis also showed that the presence of arsenic, copper and lead are within acceptable ranges, being less than 0.1 per cent. of the ore.

The density sample analysis concluded that, from four samples, the average density of the ore was 3.12g/cm3.

The hydro-geological survey indicated that due to the solid mineralisation, groundwater drains away from the survey area to neighbouring rivers and lakes. However, there was some groundwater present within sand and clay, below the orebody.


The impact of the presence of high levels of aluminium oxide, silicon oxide, sulphur and phosphorous could be reduced by crushing the excavated ore and processing it through a water filtration system.

Overall, the findings of the ore analysis concluded that provided the crushed ore is processed through a water filtration system, it would be suitable for steel production. Further, due to the lack of surface water or groundwater in the survey area (apart from the layer below the orebody), the iron ore would be able to be excavated by means of open-cast mining.


The ore resources are calculated based on within the parameters set out in Decision 56/2000/QD-BCN dated 22 September 2000 by the Department of Industry. These criteria state that resources may be recognised where:

● The average iron content is greater than 23 per cent.;

● The ore's depth is at least 1m;

● The amount of aluminium oxide and silicon oxide does not exceed 25 per cent.;

● The amount of phosphorus present does not exceed 0.25 per cent.; and

● The amount of each of sulphur, lead, zinc, arsenic or copper does not exceed 0.1 per cent.

When determining the horizontal boundaries of the orebody, an extrapolation method was used whereby the boundary passes halfway between the data points which indicated mineralisations meeting the above criteria and those datapoints which did not observe such mineralisations. The vertical boundaries of the ore are calculated on an interpolation basis when a datapoint indicates that mineralisations are present which meets the above parameters.

The reserve parameters were calculated using the following formula:

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Where:

● Q = total iron volume (m3);

● Qi = iron content in block (m3);

● Si = area of block (m2);

● Ctb = average iron content in the ore;

● Dtb = average weight of ore;

● Mitb = average thickness of block, which can be calculated by using the following formula:

Where:

● m1, m2, mn = the thickness of ore at datapoints 1, 2, n; and

● n = the number of exploration works undertaken in the calculation of the reserve;

Where:

● Dtb = average weight of the ore (tonne/m3);

● D1, D2, Dn = weight of sample n (tonne/m3); and

● n = number of samples.

The survey area was estimated to contain 3.28 million tonnes of iron ore. The percentage of iron content found in the ore in the survey area was found to vary between 39.2 per cent. to 44.1 per cent., with an average iron content of 42.1 per cent in one resource block and 41.1 per cent. in the second resource block. This would result in a total iron reserves of 1.39 million tonnes.

For the purposes of the report, the orebody was divided into two blocks, details of which are set out below.

Block Area (km2)

Thickness(m)

Content(%)

Density (g/cm3) Recovery (%)

Reserve(million tonnes)

Level 121

Level 122

122 278 3.9 42.1 3.12 70 0.99

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121 92.8 3.9 41.1 3.12 80 0.38

The blocks were categorised by the report at levels 121 and 122 in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 121 and 122 reserves are classified as "probable mineral reserves". Level 122 resources differ from level 121 resources in that the thickness of the overburden is over 50cm and the orebody may be covered with forest or other vegetation which would be difficult to clear.

Once refined, and allowing for 10 per cent. loss during excavation, processing and refining, this would produce 1.91 million tonnes of 65 per cent. refined iron ore.

Tang Ta Lang Deposit


The survey area is in Ban Ta Lang Tang, H. Chung Dak, Se Kong, Laos and covers an area of 39km2. The Group has identified three sites within this area where it wishes to establish iron ore mines. The GeologicalDrilling and Excavation Subdivision of the Mid-Central Geological Division, Department of Geology and Minerals of Vietnam, prepared the report. The organisation's business address is No 613. Nguyen Thai Học Street, Quy Nhon City, Binh Dinh province, Vietnam. In accordance with Decision No 126 QD/DCKS-TCCB dated 29 April 2003, the organisation is mandated and qualified to undertake mineral exploration surveys. The organisation holds no material interest in the Company. The report was dated March 2010.

The survey area is located at the following UTM coordinates:

Point X(mE) Y(mN)1 187.36.000 17.39.0002 187.42000 17.39.0003 187.42.000 17.32.5004 187.36.000 17,321,500

The topography of this region comprises mountains and hills, covered by dense forests. The southern section of the survey area is forested, with some small plots used for rice cultivation. The elevation of the area varies from 1.3km to 1.5km. The temperature ranges from 25 to 30 degrees Celsius and the climate is hot and humid, with a rainy season from May to October each year.

This survey area is upstream of the Xe Ka Man river basin. Therefore, there are many streams in the area, which flow from north to south. The major river in the area is the Nam Pra Du river. There is potential for the stream network to be used to wash the ores excavated during the mining process.

The road network surrounding the Tang Ta Lang Deposit was underdeveloped, with only some poor quality roads used for timber transportation. These roads were only usable during the dry season. However, the Group has constructed a paved road from B. Tang Doi to one of the deposits at B. T. T. Lang. This road has a length of approximately 15km.

The local population live in small villages and hamlets and are mainly concerned with subsistence farming. The education system in this area remains weak; there is only a primary school. There are no medical clinics within the survey area and patients must be transported to Dac Chung hospital for examination and treatment.

In 1985, a Russian delegation led by Mr. Baculin detected iron ore in Dac Chung, Xe Kong province. In 1991, geologists of Vietnam, Laos and Cambodia published a geological map of Indochina (1:1,000,000

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scale). This map is still widely used. Intergeo Division has published geological map (1:200,000 scale) for the Xe Kong Province.

Within the survey area, there were three main deposits of ore. These are referred to as orebody 1, orebody 2 and orebody 3.

The Group has previously carried out preliminary exploration activities within the survey area. The first survey was carried out by the Group and the Department of Energy and Mines of Sekong province over 25 days between 17 August 2009 and 10 October 2009. This survey identified the three bodies of iron ore to the east and south of B. Tang Ta Lang.

The second survey was carried out by the Group and the Department of Geology, Laos. The exploration was undertaken over a 24 day period between 24 November 2009 to 17 December 2009. The survey examined the limonite iron ore strips in the B.Tang Ka Lo and Tang Doi areas. The survey team dug two trenches and two boreholes for sampling and drilling purposes.

The third preliminary survey in this area was carried out by the Group over a 47 day period from 21 December 2009 to 5 February 2010. During this survey, the Group examined further the distribution of the three iron deposits previously identified by means of geophysical surveying, trenching and drilling. Specifically the survey was conducted along 30 traverses, 26 trenches and six boreholes. Chemical analysis of 10 samples was also undertaken. It was during this period that the aforementioned 15km road was constructed.


Summary of the region's geology and stratification

From the northwest to the southeast of the survey area there is a long strip of sedimentary rocks from the early Cambrian period, the early Ordovician period, the early-middle Devonian period and the early-middle Triassic period. These rocks are covered by basalt rock from the late Neogene period and early Quaternary period which forms a flat plateau of bauxite ore. There is little magma intrusion with only a few small massifs along large faults close to the Vietnamese border. The rock composition of these massifs comprises granodiorit and granite from the early Triassic period. There are large tectonic fault systems in the area and these trend from the northwest to the southeast.

The potential mining area's geology and stratification

In the areas covered by orebody 1, orebody 2 and orebody 3, there are two stratigraphic beds. The first comprises metamorphosed sedimentary rocks from the early Cambrian and early Ordovician periods, and which are distributed to the north and east of the proposed mining areas. These rocks cover approximately two thirds of this project area and include sericite schist, quartz, sandstone, quaczit and small quantities of lime sandstone. Along major faults and within the aquifers there are occurrences of hydrothermal quartz and aplite.

The second stratigraphic bed comprises sedimentary rocks and volcanic rocks from the early-middle Triassic period which are distributed in the southwest corner of the survey area which covers the remaining third of that area. The rocks present include siltstone, sandstone, shale, rhyolite, dacite, volcanic tuff and limestone.

Although magma intrusions had not previously been found in the project area, the Group's three preliminary surveys discovered a number of blocks of granodiorit and biotite granite intrusions, ranging in length from 0.5km to 1.5km. The granitoid rocks are light grey with medium to large grains. They are found in homogenous blocks and when weathered often create ellipsoid shapes. The mineral composition of these intrusions are mainly feldspar (60 to 65 per cent.), quartz (25 to 30 per cent.), biotite and amphibole (10 to 15 per cent.).

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In the project area, there are many tectonic faults, trending from north to east and from north to south. In particular, there are six major faults along the Nam Pra Du river and its tributaries. Along the fault lines, there are bodies of quartz and hydrothermal iron ore, together with small amounts of granite.

Apart from iron ore, the other minerals previously found within the survey area include kaolin clay and gold. The gold deposits are small in quantity and could not be commercially excavated. The report suggests that the kaolin present in the survey area might be usable for pottery and porcelain production purposes.

Exploration methods


Works Unit QuantityGround survey line 30Vertical electrical sounding and magnetic resistivity survey

line 5

Trenching tunnel 28Drilling hole 8Geological field mapping and sampling (1:50,000 scale) km2 39Iron ore sampling sample 40Rock sampling sample 15Chemical analysis for TFe sample 17Mineral analysis sample 5Petrographic and spectral analysis sample 2Density analysis sample 8Hydro-geological survey N/A N/A

Due to the dense forestation, rugged relief and difficult access, the survey, prospecting and exploration did not completely cover the entire survey area. Therefore, there is a possibility of finding additional new orebodies within the survey area in the future.


From September 2009 to March 2010, the geologists carried out a ground survey, noting the characteristics of the survey area. These ground surveys were carried out along 25m or 50m lengths, parallel and perpendicular to the axis line. The traverses were set out at 10m intervals.

The geological field map produced (to a 1:50,000 scale) to define the extent of the orebodies was based on two existing topographical maps: M. Dak Chung D-48-23 and B. Alot D-48-ll. Each such map was produced to a 1:100,000 scale in 1987. GPS was used to aid this process.

Geophysical

From September 2009 to March 2010, geophysical methods were also used. In particular, magnetometers were used to determine the location, size and depth of the orebodies. US-made NT G856 AX equipment and Russian-made M.27 equipment was utilised during this part of the survey. Vertical electrical resistivity and sounding profiling was also undertaken using four-electrode probes in the Wenner configuration.

The magnetic survey grid applied for the whole survey area was set out with traverses at 50m intervals and survey points at 10m intervals along such traverses. In some places the grid was thickened to 25m by 10m, in order to accurately determine the boundary of an orebody. The traverses were arranged to align with the strike direction of the orebody and the lateral lines were arranged perpendicular to the traverses. Verification points in the exploration area were chosen at locations away from the orebodies.

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At orebody 1, four main traverses and two secondary traverses were arranged. The magnetic resistivity survey indicated magnetic anomalies ranging from -4000 to +3000 gammas.

At orebody 2, nine main traverses and three secondary traverses were arranged. Three vertical electrical sounding lines were arranged on the orebody and boreholes were located along these three lines.

At orebody 3, five main traverses and two secondary traverses were arranged. Trenches were excavated for checking the anomalies, the results are very accurate. The high grade magnetite ore occurs immediately under the overburden.


Trenching was carried out by local workers from December 2009 to March 2010. The purpose of these works was to determine the extent and characteristics of the ore and to take samples. The trenches dug were typically 2m long, 0.8 to 1m wide and between 1m to 3m in depth. The samples taken from the trenches were taken from strips running perpendicular to the orebody. The samples were taken from an areas which were 10cm to 15cm across, 5cm to 10cm deep and 1m to 3m long.

From December 2009 to March 2010, a Chinese-made XY-1 exploratory drilling rig was used to drill eight boreholes. The depth of these boreholes ranged from 10m to 40m. Boreholes were drilled with varying diameters. For those boreholes with a depth of between 0m to 15m, a borehole with a diameter of 130mm was dug. This increased to 110mm for boreholes dug to depths between 15m to 30m. For those boreholes dug to depths of over 30m, the diameter was increased to 91mm.

Hydro-geological

A hydro-geological investigation was undertaken to identify the characteristics of the rocks surrounding the orebody, together with the morphological characteristics of the surface water and groundwater.

Sampling

The geologists took samples from outcrops, trench samples and drill core samples for analysis. These samples were then analysed for the presence of particular chemical elements and minerals. Samples taken for chemical analysis each weighed 1kg to 3kg. Density and petrographic analysis was also carried out. Samples taken for density analysis each weighed 1kg.

Exploration results

Orebody 1

This iron ore deposit is 2km from the East of Tang Ta Lang, along the ridge of Mountain Pu Ka Cha. The deposit 1.2km2 and trends in a northwest-southeast direction. It is moon-shaped and is located close to a small tectonic fracture. The orebody is of hydrothermal genesis as it is located within cross-cutting weathered hydrothermal quartz from the Cambrian and early Ordovician periods and there is an injection of nearly concordant quartz-sericite schist. The orebody is also adjacent to a small granite massif and overlays a larger granite massif.

The orebody is 2.3km in length, 0.52km in width, with an average thickness of about one metre. The ore is found in large blocks and occurs in veins which are periodically exposed to the surface. Density analysis indicates that there are three tonnes of ore per cubic metre in this area. The iron ore is found in large blocks that comprise mainly magnetite, hematite and small quantities of sulphur ore and limonite.

There is also other ore nearby this area, which is found in isolated outcrops. Such outcrops are typically more than 10 metres long, five metres wide and three metres thick.

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The average concentration of the iron ore at this orebody is 45 per cent. Therefore, of the 8.61 million tonnes of ore estimated to be in the deposit, 3.88 million tonnes is estimated to be iron.

Orebody 2

One kilometre to the south of Tang Ta Lang, this deposit is made up of two smaller deposits.

The first deposit stretches across an area approximately 2.5km by 0.85km and has a thickness ranging from 0.2m to 2.5m, according to trenching and drilling results. The deposit is close to the surface, and runs along a road leading to the Dak Chung district. It is only covered in places by streams or small amounts of overburden. The deposit is located above sericite and quartz-sericite from the Quaternary period.

The second deposit is in lens form, with a length of approximately 0.25km, a width of 0.05km to 0.15km and is crescent shaped.

The total area covered by the orebody is 2,215km2. The density analysis indicated that there is 2.9 tonnes of ore per cubic metre in this orebody. Each deposit in this orebody was located within cross-cutting weathered hydrothermal quartz from the Cambrian and early-Ordovician periods. The deposit was discordant to large tectonic faults of the Nam Pru Du mountain, and trended from north to south. The ore is comprised of magnetite and, to a lesser extent, hematite. The average concentration of iron ore is 45 per cent. Therefore, of the 15.4 million tonnes of ore estimated to be in the deposit, 6.93 million tonnes is estimated to be iron.

Orebody 3

This iron ore deposit is distributed along the southern mountain slope of the Pu Ba Rung mountain, 0.6km to 1km to the west of Tang Ta Lang. The mountain slope is angled at 20 to 25 degrees. The deposit is rectangular in shape, is 2.25km long, 0.75km wide and, on average, 2.3m thick. The total area covered by the deposit is 1.69km2. Observed in seven exploration trenches, the higher quality ore is located under an overburden consisting on 10cm to 40cm of topsoil. The orebody lies across a small tectonic fault. The lower quality ore (which is 10 per cent. to 15 per cent. of the total estimated resource within the orebody) is located at a greater depth. The ore exists to depths of five to seven metres and is located within weathered quartz-sericite-schist from the Cambrian and early Ordovician periods. The main ore minerals present are magnetite, and to a lesser extent, hematite. Overall, the ore is of average quality. Volume/weight analysis indicates that there is 2.62 tonnes of ore per cubic metre in this area. The average concentration of iron ore is 45 per cent. Therefore, of the 10.2 million tonnes of ore estimated to be in the deposit, 4.58 million tonnes is iron.

General characteristics of the orebodies

Each of the three orebodies share common characteristics, being of post-magmatic hydrothermal origin related to the granite formations of the early Triassic period. These granite formations penetrated through tectonic faults within the early Cambrian and early Ordovician period sedimentary rock layers. The post-magmatic hydrothermal fluid containing the iron created quartz-magnetite veins and vein systems on the top of the granite massifs. After the magma and the quartz-magnetite veins were crystallised (probably during the Triassic period), a weathering, erosion and leaching process occurred. This resulted in the orebodies laying at the surface of the weathered crust or suspended within the loose weathered layer of the bedrock.

The orebodies were made up of mainly magnetite, with lesser amounts of hematite and limonite, together with small quantities of sulphur ore. The magnetite crystals analysed were commonly martitised. Although the orebodies are surrounded by quartz and related minerals, the overall amount of quartz within the ore is not significant. The sample analysis results state that that there is an average concentration of iron of 45 per cent. and silicon dioxide at 5.5 per cent. to 12 per cent., with an average of eight per cent. Other elements

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such as sulphur, arsenic, copper, lead and zinc are present in very low quantities (less than 0.05 per cent.), not exceeding the permitted Vietnamese regulatory limits for impurities.


Orebodies 1, 2 and 3 have average concentrations of iron content (45 per cent.). In addition, sulphur dioxide content is between 5.5 to 12 percent, averaging eight per cent. and other elements such as sulphur, arsenic, copper, lead and zinc each account for less than 0.05 per cent. of the ore and therefore do not exceed the permitted limits.

Orebodies 1, 2 and 3 are located above the water table and are not subject to landslide risks.

Overall, the ore is of average quality and meets local export and production standards. However, the three orebodies are in different locations and are small in scale. Notwithstanding this, due to favourable exploitation conditions, such as the option to excavate the ore by open-cast mining methods due to the ore's proximity to the surface, it is expected that it will be commercially viable to excavate the iron ore resources within the survey area.


The iron ore resources in the survey area was calculated based on the following formulae:

Qd = S x h x d

QFe = Qd x Ctb

Where:

● Qd is the ore reserves in tonnes;

● S is the area of distribution of the orebody surface (m2);

● h is the depth of the orebody based on drilling and geophysical results (m);

● d is the weight of the ore (tonnes per m3);

● Qfe is the useful iron resource; and

● Ctb is the average content of the useful component of the ore, as a percentage (in this case, 45 per cent.).

Orebody Area (length x width) (km2)

Average depth (m)

Weight (tonnes/m3)

Qd (million tonnes)

Ctb (%)

Qfe (million tonnes)

1 (2.3 x 0.52) = 1,200 2.4 3.00 8.61 45 3.882 (2.5 x 0.85) = 2,220 2.5 2.90 15.4 45 6.933 (2.25 x 0.75) = 1,688 2.3 2.62 10.2 45 4.58Total S = 5,009 34.2 45 15.39


As shown in the above resource calculation, the exploration study suggests that of the 34.2 million tonnes of iron ore in the survey area, an estimated aggregate of 15.4 million tonnes of iron can be exploited at the Tang Ta Lang Deposit. Once refined, and allowing for 10 per cent. loss during excavation, processing and

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refining, this would be equivalent to 21.3 million tonnes of refined 65 per cent. iron ore. These reserves were referred to in the report as being level 122 reserves in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 122 reserves are classified as "probable reserves".

Pa Non Deposit


The Geological Drilling and Excavation Subdivision of the Mid-Central Geological Division, Department of Geology and Minerals of Vietnam, prepared the report. The organisation's business address is No 613. Nguyen Thai Học Street, Quy Nhon City, Binh Dinh province, Vietnam. In accordance with Decision No 126 QD/DCKS-TCCB dated 29 April 2003, the organisation is mandated and qualified to undertake mineral exploration surveys. The organisation holds no material interest in the Company. The report was dated April 2008.

The survey area covers a 38km2 area and is located near to the border between Laos and Vietnam, within the area indicated by the following UTM coordinates:

Point X(m) Y(m)1 1753000 07300002 1754000 07320003 1750000 07360004 1749529 07370005 1748000 07370006 1748000 07390007 1746000 07390008 1746000 07350009 1748000 073100010 1749000 073000011 1750484 073151712 1752000 0730000

The survey area is located in mountainous terrain, at elevations of between 0.9km to 1.6km above sea level. The area has a dense network of streams, with the Pa Dang, the Ka Lieng and the A Tol streams running through the area. The Pa Dang stream flows to the west, the Ka Lieng stream flows to the southwest and the A Tol stream flows to the southwest. The survey area is forested.

Before 1975, J. Fromaget (1920, 1929, 1952), E. Saurin, M. Bornlli (1942) and Tran Kim Thach (1974) undertook research work in this region. In 2006, engineer Chau Van Tuan from the Geological Construction Group and representatives from Commercial and Industrial Quang Binh Company conducted some basic research in the survey area.


The survey area contains a metamorphic sedimentary rock formation. This formation includes the following rocks: feldspar-quartz, feldspar-quartz-seriate quaczit and silicon. The feldspar-quartz has dark colouring and is comprised of 15 per cent. quartz, 78 per cent. feldspar, with the remainder made up of zircon, apatite and biotite. The feldspar-quartz-seriate has a black colouring and is comprised of 15 per cent. quartz, 75 per cent. feldspar and five per cent. seriate.

The survey area has some magma intrusions. In the southeast of the survey area there are small volumes of late Proterozoic eon intrusions, specifically granodiorite and diorite. In the south of the survey area, further intrusions are made up of granite and granite biotite.

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Exploration methods

The following exploration methods were used during the survey.

- Analysis of slice sample sample 22


Geodetic methodologies were used to determine the traverses and survey points which would be subject to geophysical measurement during a later stage of the survey. GPS was used during this process.

Geological methodologies were used for the purposes of understanding the geological characteristics and the position and dimensions of the orebodies. The traverses were typically alongside the streams in the area or at right angles to the mountain slopes. 320 points were surveyed, with a density of 8.42 survey points per square kilometre. The spacings between the traverses was reduced where magnetic anomalies were recorded by the geophysical works.

Geophysical

A Russian-made MMII 203 proton magnetometer and a US-made G-856AX were used to measure magnetic fields within the survey area. These geophysical works were divided into two phases. During the first phase, the magnetometers were used to measure magnetic fields at 25m intervals. Where magnetic abnormalities and other evidence of ore was discovered, further geophysical work was undertaken along 100m traverses, with measurements taken every 5m to 10m.

The magnetic field at each abnormality was calculated using the following formula:

Where:

Tqs = value shown on the machine at measurement points on the traverse; and

Tkt = the control value on machine (taken daily).

(T)b = the adjustment for difference in magnetic value at check points and normal points.

Works Unit Quantity

Geodetic km 10Geophysical works:- Magnetic survey point 4,021Geological works:- Geological field mapping (1:25,000 scale) km2 38- Geological field mapping (1:10,000 scale) km2 38Drilling works:- Trenching m3 60.1Sampling:- Chemical analysis of seven elements sample 4- Chemical analysis of three elements sample 11- Mineralography analysis sample 13

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The first phase indicated that the survey area contained only three magnetic abnormalities. Positive magnetic fields covered more than half of the research area, located in the central and southeast areas. Negative magnetic field was located in the northwest and south-southeast of the survey area.


Due to the limited time-span of this survey, trenching work was only undertaken where it was necessary to determine orebody boundaries, to test magnetic abnormalities and to collect samples. Trenches were dug with a length of 6m to 8.5m, a width of one metre and a depth of 2m. The aggregate volume of the trenches dug within the survey area equalled 60.1m3.

Sampling

Samples were taken to determine rock types and ore characteristics. 22 of these samples were taken, each with dimensions of 3cm by 3cm by 1cm. 13 samples, with the same dimensions, were taken to analyse the mineral composition of the ore.

These samples were analysed at the laboratories of the Mid-Central Geological Division, Vietnam.

Further samples were collected from trenches within the survey area to analyse the amount of iron present in the ore (11 samples) and to analyse the presence of 11 chemical elements and compounds in the ore (four samples). 4kg to 5kg of sample material was collected in order to facilitate this analysis. The samples were under 1m in length, with widths and depths of 0.1m.

These samples were analysed at the laboratories of the Department of Geology and Minerals, Thanh Xuan district, Hanoi, Vietnam.

Exploration results

The survey area was found to have seven orebodies and three abnormal outlying deposits. These orebodies and outlying magnetic anomalies were found within four distinct zones (Pa Non 1, Pa Non 2, Pa Non 3 and Pa Non 4).

Zone 1: Pa Non 3

Pa Non 3 is a zone covering 2.1km2 and it is located within the area indicated by the following UTM coordinates.

Point X(m) Y(m)1 1752925 07306562 1753338 07313683 1751229 07327764 1750784 0732061

Orebody 1 (TQ1)

TQ1 is located on the right side of A Tol stream at an elevation of between 0.95km and 1km. The orebody has the chain shape, with lenses spread over 1.4km on a non-continuous basis from a northwest to the southeast of the zone. The average width of the orebody is 15m and was located at a depth of 30m.

The survey of the zone suggested that rolled ore was present with a dimensions of 0.5m by 2m. The rolled ore was hard and had a black colouration. The orebody was comprised of 4 per cent. to 6 per cent. ilmenite, 68 per cent. to 90 per cent. hematite and (to a lesser extent) magnetite, and 14 per cent. to 26 per cent. of non-ore material. Other minerals present included zircon.

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The chemical composition of the orebody (from one sample only) was as set out below:

● Iron oxide: 85.9 per cent.;

● Silicon oxide 7.94 per cent.;

● Aluminium oxide: 0.79 per cent.;

● Phosphorus: 0.19 per cent.;

● Sulphur: less than 0.01 per cent.;

● Copper: 0.007 per cent.;

● Lead: 0.003 per cent.;

● Zinc: 0.007 per cent.; and

● Arsenic: less than 0.01 per cent.

The total iron (TFe) in the area ranged from 28.9 per cent. to 60.9 per cent. across six samples and averaged 53.3 per cent.

An outlying magnetic anomaly was located by the magnetic resistivity survey within the Pa Non 3 zone and was deemed to be related to TQ1. This abnormal orebody had a positive magnetic field of 200Nt and an average width of 100m.

Orebody 2 (TQ2)

TQ2 is located 500m to the south–southeast of TQ11 at an elevation of 0.9km, with UTM coordinates of X(m): 17511722, Y(m): 0731938. This orebody was detected due to its magnetic abnormalities. The orebody is approximately 1m wide, 0.1km to 0.15km long, with an average thickness of 5m and at a depth of 30m.

TQ2 had a solid structure and black to brown colourings. The orebody was made up of hematite and (to a lesser extent) magnetite, ilmenite and limonite. It is believed that the total ore (TFe) at this site is 52.8 per cent.

Orebody 3 (TQ3)

TQ3 was located at the south-eastern edge of TQ2, at an elevation of 0.9km. The orebody was detected due to its geologic and magnetic abnormalities.

The orebody is lens-shaped and extends approximately 0.55km to 0.6km on a discontinuous basis from the northwest to the southeast and is cross-cut by feldspar-quartz-sericite. The TQ3 was located at depths that ranged from 1m to 10m and it was observed to be approximately 30m wide and between 0.6m to 0.8m thick. The ore is compact, with a weak magnetic field. The particles are small to medium-sized.

TQ3 was made up of 61 per cent. to 88 per cent. hematite, 12 per cent. ilmenite, one per cent. magnetite, and 11 per cent. to 27 per cent. of non-ore minerals, including zircon.

The total iron (TFe) in the TQ3 orebody ranged from 54.2 per cent. to 60.6 per cent, with an average of 57.4 per cent.

Orebody 4 (TQ4)

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TQ4 is located 0.3km to the southeast of TQ3, at an elevation of 0.85km above sea level and at UTM coordinates X(m): 1751118; Y(m) 0732308. The orebody was detected due to its geologic and magnetic abnormalities.

TQ4 is lens-shaped and has a number of cross-cutting feldspar-quartz-sericit veins. The ore has a black-brown colouration and is heavily cracked due to weathering. The ore is approximately 7m thick, 10m wide, 150m long and is at a depth of 40m. The minerals present in the ore are: 26 per cent. hematite, one to two per cent. ilmenite, one per cent. agnetite and 71 per cent. to 74 per cent. non-ore minerals, including zircon. The average iron content (TFe) of the ore is 28.5 per cent., which is mainly in the form of hematite ore.

Zone 2: Pa Non 2

Pa Non 2 is a zone covering 1.1km2 and it is located within the area indicated by the following UTM coordinates.

Point X(m) Y(m)1 1749800 07316272 1749800 07330033 1749000 07330334 1749000 0731627

Orebody 5 (TQ5)

TQ5 was located through trenching works and magnetic anomalies. The orebody is approximately 0.8km long, trending from the northwest to the east and is cross-cut with small light-coloured granite particles. The orebody is located at a depth of 0.2km and has a thickness of 15m.

The ore composition was: 90 per cent. magnetite, two to three per cent. hematite and eight per cent. non-ore minerals. The total iron content (TFe) ranged from 53 per cent. to 65 per cent. and averaged 59.3 per cent.

The chemical analysis of the ore indicated the presence of the following chemicals in the percentages shown:

● iron oxide: 76.7 per cent.;

● iron(II) oxide: 16.2 per cent.;

● silicon oxide: 3.76 per cent.;

● aluminium oxide: 1.17 per cent.;

● phosphorous: 0.04 per cent.;

● sulphur: less than 0.01 per cent.;

● copper: 0.01 per cent.;

● lead: 0.004 per cent.; and

● arsenic: less than 0.01 per cent.

A magnetic anomaly was also detected close to TQ5 and was deemed to be associated with the orebody.

Zone 3 (Pa Non 1)

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Pa Non 1 is a zone covering 1km2 and it is located within the area indicated by the following UTM coordinates.

Point X(m) Y(m)1 1743950 07354512 1748925 07362513 1748031 07368864 1747502 0736065

Orebody 6 (TQ6)

TQ6 is at an elevation of 1.3km above sea level and was discovered by magnetic anomalies and trenching works. TQ6 was found to be, on average 8m thick, 0.15km long and at a depth of 35m. It trends on a continuous basis from north to south and is cross-cut with small light-coloured granite particles.

The ore was comprised of 97 per cent. magnetite and three per cent. non-ore minerals, such as apatite and zircon.

The analysis of the ore indicated that the total iron content (TFe) was 66.5 per cent. The chemical analysis of the ore also indicated that the following chemical compounds were present in the percentages indicated:


● iron(II) oxide: 20 per cent.;






● lead: 0.003 per cent.;

● zinc: 0.01 per cent.; and


Zone 4 (Pa Non 4)

Pa Non 4 is a zone covering 1km2 and it is located within the area indicated by the following UTM coordinates.

Point X(m) Y(m)1 1746896 07375892 1747561 07385123 1746994 07389274 1746338 0738000

Orebody 7 (TQ7)

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TQ7 is at an elevation of 1.2km to 1.3km and was discovered due its magnetic anomalies. It is approximately 0.5km long, with an average thickness of 15m and a depth of 0.13km.

The mineralisation is comprised of 91 per cent. magnetite and nine per cent. non-ore minerals, including apatite and zircon.

The analysis of the ore indicated that the total iron content (TFe) was 60.68 per cent. The chemical analysis of the ore also indicated that the following chemical compounds were present in the percentages indicated:


● iron(II) oxide: 9.2 per cent.;






● lead: 0.001 per cent.;

● zinc: 0.008 per cent.; and


A magnetic anomaly was also detected in Pa Non 4 which was deemed to be related to TQ7.


The following table indicates the estimated iron resources present at each of the orebodies. The resource was categorised by the report at level 333 and 334 in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 333 and 334 resources are classified as "Inferred Mineral Resources" and "Reconnaissance Mineral Resources", respectively.

It should be noted that due to the need for further research on the survey area, the below numbers should be regarded as an exploration target as the potential quality and grade of the iron resource is conceptual in nature.

Orebody Target iron content (million tonnes)TQ1 20.2TQ2 0.05TQ3 2.32TQ4 0.08TQ5 0.7TQ6 0.13TQ7 3.55

Total: 27


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Given the limited nature of the exploration activities carried out (such as the shallow drilling), the report recommended that the Group carry out further research into the survey area in order to provide greater knowledge and assurance about the extent and characteristics of the resources present within the survey area.

Kachak Deposit


Pursuant to an agreement between the Group and the Ministry of Industry, Mines and Energy of Cambodia, Licence No. 1198 dated 16 December 2009 provided the Group with permission to explore the survey area. The Geological Drilling and Excavation Subdivision of the Mid-Central Geological Division, Department of Geology and Minerals of Vietnam, prepared the report. The organisation's business address is No 613. Nguyen Thai Học Street, Quy Nhon City, Binh Dinh province, Vietnam. In accordance with Decision No 126 QD/DCKS-TCCB dated 29 April 2003, the organisation is mandated and qualified to undertake mineral exploration surveys. The organisation holds no material interest in the Company. The report was dated 29 March 2010.

The survey area covers a 154km2 area and is located within the area indicated by the following coordinates.

Point X(m) Y(m)1 1524000 07450002 1524000 07560003 1509983 07560004 1509983 0745000

Malaria is widespread in the survey area. Therefore, exploration and exploitation activities are more difficult during the area's rainy season (May to November).

The southern part of the survey area is relatively flat, with some small hills. This area is also partly covered by rubber tree plantations. The northern part of the survey area is, due to the process of denudation, is more mountainous than the south, with elevations varying from 0.17km to 0.33km. The surface of the survey area does not contain any rivers, with the only surface water being small streams and a spring 8km from the proposed mining area. The soil layer has a thickness from 0.2m to 0.8m and is made up of clay, sand and grit. The soil turns soft in water. Bamboo trees tend to grow on this soil.

There are no paved roads within the survey area, with only minor roads being present for rubber plantation activities. To the south of the survey area, there is a new 8km road from Highway 78 to Phum Kachak. There are also asphalt roads to Ban Lung, the provincial capital of Rattanakiri province and to Gia Lai, Vietnam.

There is currently no electricity or telephone coverage within the survey area.

Only very limited preliminary exploration surveys have previously been carried out within the survey area.


An area of 55km2 from the west to the east of the survey area is made up of uninterrupted rocks from the Triassic period. These rocks include quartz-sericite schist, quartz-feldspar-schist, quaczit, sericite, with thin layers of porphyritic garnet mica schist, shale actinolite, muscovite-quartz schist and andalusite. The overall depth of this stragraphic section is estimated to be 0.5km.

An area of approximately 88km2 in the centre of the survey area is also made up of uninterrupted rocks from the Triassic period and includes andesite. The rocks are subjected to uneven, local hydrothermal

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alteration along the tectonic faults, forming hydrothermal iron ore veins. The overall depth of this stragraphic section is estimated to be 0.15km.

There is a further area of approximately 7km2 in the south of the survey area which is made up of a layer of rocks from the Pliocene epoch and the Pleistocene epoch. Basaltic eruptions resulted in the presence of olivine-augite-plagioclase basalt. The rocks have a compact structure and a porphyritic-ophiolite-dolerite background. The overall depth of this stragraphic section is estimated to be between 0.05km to 0.15km.

In a small beach and marshland area of a few square kilometres located in the north and northeast of the survey area, there are sediments from the Holocene epoch. The area comprises beach pebbles, clay, gravel, sand and alluvial deposits, with a depth of 3m to 5m.

There are small granite magma intrusions within the survey area.

The survey area is affected by the TonleSan regional fault which trends from the northwest to the southeast and the radial faults cutting along the Prekhop stream flowing from north to south, affecting and relating to the granite massif and extrusive formation referred to above.

Exploration methods


- Density analysis sample 5- Analysis of slice samples sample 5- Hydro-geological analysis sample 5


Generally, geological traverses were separated by approximately 0.5km. Each survey point along such traverses were separated by between 0.25km to 0.3km. However, where mineralisations were detected, these spacings were reduced to between 0.1km and 0.2km between the traverses and 0.05km to 0.1km between each survey point. The total length of the traverses was 130km and observations were made at 300 survey points.

Due to the fact that the orebodies within the survey area were widely spread across the survey area, GPS was used to determine the survey points.

Works Unit Quantity

Geophysical works:- Magnetic survey point 4,021- Electrical resistivity survey point 2,010- Sounding resistivity survey point 255Geological works:- Geological field mapping (1:25,000 scale) km2 154Geodetic works:- Exploration traverses km 6- Survey points point 108Drilling works :- Boreholes km 0.93- Trenching km3 1.33Sampling:- Chemical analysis of seven elements sample 120- Chemical analysis of three elements sample 24- Mineralography analysis sample 5

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Geophysical

A Canadian-made Genelink proton magnetometer was used to measure the magnetic fields within the survey area along the traverses and at the survey points indicated above (totalling 4,021 survey points). Magnetic resistivity (2,010 survey points) and vertical electrical sounding (255 survey points) surveys were also carried out along the same traverses. For these surveys, the Schlumberger configuration was used. The results of the vertical electrical sounding surveys were analysed using IPI 2Win software.

The results of these geophysical surveys were used to identify the 12 orebodies and this initial delineation was used as the basis of the other exploration works.


A total of 46 boreholes were dug to determine the thickness and quality of ore at the 12 orebodies. The combined length of the boreholes dug was 0.93km.

62 trenches were dug, with dimensions of 1m by 1m by 5m and with a combined volume of 1.33km3.

Sampling

120 samples were analysed for the presence of seven chemical elements (iron, sulphur, lead, phosphorus, zinc, arsenic and copper), and 24 samples were analysed for the presence of three chemical elements or compounds (iron, aluminium oxide and silicon oxide).

Five samples were analysed to determine the nature of the minerals present in the ore. Five samples underwent density analysis and five samples were tested for hydro-geological purposes.

Samples were sent to the Group's laboratories and the Southern Geological Mapping Division, Department of Geology and Minerals of Vietnam's laboratory at 16/9 Ky Dong, District 3, Ho Chi Minh City for analysis.

Exploration results

There were found to be 12 orebodies within the survey area. These are not adjacent to each other, being 0.5km to 2km apart.

The mineral composition of the 12 deposits comprised mainly magnetite, with lesser quantities of hematite and limonite. There was also pyrite, quartz and garnet present. The deposits' chemical composition includes copper, lead, zinc, sulphur and aluminium. The ore deposits are lenticular types with layers that are distributed along the northeast to southwest. The deposits were typically found at depths of between 0.3m to 0.5m, with other deposits located at depths of 14m to 26m. The deposits are surrounded by dispersed iron rings of deluvial and proluvial form, with thicknesses ranging from 3.5m to 4.5m.

The analysis indicated that the average density of iron ore resources ranged from 3.05g/m3 to 3.31g/m3, averaging 3.18g/m3.

The chemical analysis of samples taken showed high levels of iron, with the total amount of iron oxide ranging from 58.2 per cent. to 70.3 per cent. Other components such as arsenic, copper and phosphorous meet standard criteria for impurities.

On an analysis of 120 samples from the 12 sampling points, examining the presence of seven elements, the results showed that the iron content present in the ore deposits varied from 42.1 to 55.6 per cent., with an average iron composition of 47.1 per cent. The average iron content of each of the 12 deposits (as indicated by the samples analysed) is shown in the table below:

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Ore deposit Average iron content from ten samples (per cent.)1 45.82 47.93 46.94 47.35 47.26 47.57 478 46.29 47.110 46.611 48.512 47.2

On an analysis of 24 samples from the 12 sampling points, examining the presence of three elements, the average iron content present in ore deposits ranged from 43.2 per cent. to 52.2 per cent., with an average iron composition of 47 per cent. an average silicon oxide content of 24.1 per cent. and an average aluminium oxide content of 9.8 per cent. The average iron content of each of the 12 deposits (as indicated by the two samples analysed) is shown in the table below:

Ore deposit Average iron content from two samples (per cent.)1 47.22 48.33 46.74 47.75 46.76 46.37 45.88 46.89 47.310 47.711 48.712 46.7


Due to the proximity of the iron ore deposits to the surface, open-cast mining methods may be used to excavate the iron ore. As there are no major roads in the survey area, the Group will be required to construct roads and bridges to serve any mining activities. As there are no railways or waterways in close proximity to the deposits, all materials and output must be transported by road.

The report concluded that the iron ore resources of the Kachak Deposit are suitable for producing steel.


Pursuant to Decision 56/2000/QDBCN on passed on 22 September 2000 by the Department of Industry, and the standards applied by the Group, the following parameters were used to calculate resources:

● Average iron content of not less than 35 per cent.;

● The ore's depth is at least 1m;

● The amount of aluminium oxide and silicon oxide does not exceed 35 per cent.;

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● The amount of phosphorus present does not exceed 0.25 per cent.; and

● The amount of each of sulphur, lead, zinc, arsenic or copper does not exceed 0.1 per cent.

When determining the outer boundaries of the orebody, an extrapolation method was used whereby the orebody boundary passes halfway between the data points which indicated mineralisations meeting the above criteria and those datapoints which did not observe such mineralisations. The vertical boundaries of the ore are calculated on an interpolation basis when a datapoint indicates that mineralisations are present which meets the above parameters.

Ore reserve blocks were calculated using the following formula:

Where:

● Qi = Si x Mi x Ctb;

● Q = reserves;

● Qi = reserves in secondary blocks (tonnes); and

● Si = area of the ith block (m2).

Where:

● Mtb = average block thickness;

● m1, m2, mn = thickness at datapoint m1, m2, mn; and

● n = number of datapoints.

The average concentration of datapoints (giving the grade of the ore) was calculated using the following formula:

Where:

● Ctb = average grade at each datapoint;

● m1, m2, mn = thickness at datapoint m1, m2, mn; and

● C1, C2,… grade of each sample at datapoints C1, C2, etc.

The average block grade was calculated using below formula:

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Where M1, M2, Mn represented the average thickness at M1, M2, Mn .

Density was calculated using the arithmetic mean methods, as expressed by the following formula:

Where:

● Dtb = average density (tonnes/m3);

● D1, D2, Dn = density at datapoint D1, D2, Dn; and

● n = number of datapoints.

Overall, the reserves of the Kachak Deposit were estimated to have an average iron ore content of 47 per cent., with the minimum iron content in the survey area being 35 per cent. The ore was at least one metre thick. The highest aluminium oxide and silicon oxide content found in the ores was 35 per cent. The highest phosphorus content was 0.25 per cent., with the concentrations of other impurities such as sulphur, lead, zinc, arsenic and copper each comprising less than 0.1 per cent. of the ore.

The survey area was estimated to contain 46.1 million tonnes of iron ore. The average percentage of iron content found in the ore in the survey area was found to be 47 per cent. This would result in a total iron reserves of 21.7 million tonnes. These reserves were referred to in the report as being level 121 and level 122 reserves in accordance with the United Nations Framework Classification for Energy and Mineral Resources. Under the framework, level 121 and level 122 reserves are classified as "probable reserves". Level 122 resources differ from level 121 resources in that the thickness of the overburden is over 50cm and the orebody may be covered with forest or other vegetation which would be difficult to clear.

Once refined and allowing for 10 per cent. loss during excavation, processing and refining, the report estimated that this would produce 30 million tonnes of 65 per cent. refined iron ore.

Glossary of geological terms

Below is a glossary of some of the technical geological terms used in the above summaries of the Group's mining exploration reports.

Aeromagnetic survey: A type of geophysical survey carried out using a magnetometer aboard or towed behind an aircraft.

Alaskite: A granitic rock composed mainly of quartz and alkali feldspar, with few dark mineral components.

Amphibole: A group of generally dark-coloured rock-forming inosilicate minerals and generally containing ions of iron and/or magnesium in their structures.

Andalusite: An aluminium nesosilicate mineral.

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Andesite: Fine-grained igneous rock of intermediate composition. Up to half of the rock is plagioclase feldspar with the rest being ferromagnesian minerals.

Anomalies: An area where exploration has revealed results higher than the local background level.

Apatite: A group of phosphate minerals.

Aquifer: A permeable formation that stores and transmits groundwater in sufficient quantity to supply wells.

Basalt: A fine-grained, dark, mafic igneous rock composed largely of plagioclase feldspar and pyroxene.

Biotite: A sheet silicate. Iron, magnesium, aluminium, silicon, oxygen, and hydrogen form sheets that are weakly bond together by potassium ions.

Clay: Any of a number of hydrous aluminosilicate minerals formed by weathering and hydration of other silicates; also, any mineral fragment smaller than 1/255mm.

Concordant intrusion: An intrusive igneous rock having contacts with the country rock that are parallel to bedding or foliation planes.

Country rock: The rock into which an igneous rock intrudes or a mineral deposit is emplaced.

Crenulation: A texture formed in metamorphic rocks such as phyllite, schist and some gneiss by two or more stress directions resulting in superimposed foliations.

Crumpled: A term used to describe a rock which contains folding or crenulation.

Dacite: An igneous, volcanic rock with a high iron content.

Density: The mass per unit volume of a substance, commonly expressed in grams/cubic centimetre.

Dip: Direction of strike of a structure or zone. The inclination of a geologic structure, especially a fold axis, measured by its departure from the horizontal. Also known as a plunge, pitch or rake.

Dipole-dipole: A common electrode configuration used with induced polarisation work.

Discordant intrusion: An intrusive igneous rock that has contacts with the country rock cutting across bedding or foliation planes.

Drill core: A drill specifically designed to remove a cylinder of material.

Electrical resistivity survey: The process of mapping horizontal changes in resistivity across a site. Lateral changes in resistivity are detected by using a fixed electrode separation and moving the whole electrode array between each resistivity.

Elevation: The vertical height of one point on the Earth above a given datum plane, usually sea level.

Eon: The largest division of geologic time, embracing several Eras, for example, the Phanerozoic, 600 million years ago to present).

Epoch: One subdivision of a geologic period, often chosen to correspond to a stratigraphic series.

Era: A time period including several periods, but smaller than an eon. Commonly recognised eras are Precambrian, Paleozoic, Mesozoic, and Cenozoic.

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Erosion: The set of all processes by which soil and rock are loosened and moved downhill or downwind.

Euhedral: A quality pertaining to crystals that are well-formed with sharp, easily-recognised faces.

Fault: A planar or gently curved fracture in the Earth's crust across which there has been relative displacement.

Feldspars: The group of most common minerals of the Earth's crust. All feldspars contain silicon, aluminium, and oxygen and may contain potassium, calcium and sodium.

Folding: The deformation of a single or multiple strata, such as sediments and rocks, which were originally planar horizontal surfaces.

Formation: The basic unit for the naming of rocks in stratigraphy: a set of rocks that are or once were horizontally continuous, that share some distinctive feature of lithology, and are large enough to be mapped.

Friability: The ability of a solid substance to be reduced to smaller pieces with little effort.

Gabbro: A dense, greenish or dark-coloured rock which contains pyroxene, plagioclase, amphibole, and olivine.

Gneiss: A coarse-grained regional metamorphic rock that shows compositional banding and parallel alignment of minerals.

Geodetics: the scientific discipline that deals with the measurement and representation of the Earth, including its gravitational field, in a three-dimensional time-varying space. Geodesists also study geodynamical phenomena such as crustal motion, tides, and polar motion. For this they design global and national control networks, using space and terrestrial techniques while relying on datums and coordinate systems.

Geomorphology: the scientific study of landforms and the processes that shape them.

Geophysical survey: any exploration technique which measures the physical properties of rocks (e.g. conductivity, magnetic and gravity) and contrasts the properties of different rock types, thus defining geophysical anomalies.

Granite: A coarse-grained, intrusive igneous rock composed of quartz, orthoclase feldspar, sodic plagioclase feldspar, and micas. Also sometimes a metamorphic product.

Granitisation: The set of natural processes that transform solid rock of various origins (sedimentary, igneous, or metamorphic) into rock of granitoid mineral and chemical composition.

Granulite: A metamorphic rock with coarse interlocking grains and little or no foliation.

Gravel: The coarsest of alluvial sediments, containing mostly particles larger than 2mm in size and including cobbles and boulders.

Groundwater: The mass of water in the ground below the phreatic zone, occupying the total pore space in the rock and moving slowly downhill where permeability allows.

Hematite: The mineral form of iron(III) oxide, one of several iron oxides.

Hornblende: A complex inosilicate series of minerals. Hornblende is not a recognised mineral in its own right, but the name is used as a field term to refer to a dark amphibole.

Humus: The decayed part of the organic matter in a soil

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Hydrogeology: the study of the distribution and movement of groundwater in the soil and rocks of the Earth's crust

Hydrothermal activity: Any process involving high-temperature groundwaters, especially the alteration and emplacement of minerals and the formation of hot springs and geysers.

Hydrothermal vein: A cluster of minerals precipitated by hydrothermal activity in a rock cavity.

Ilmenite: A weakly magnetic titanium-iron oxide mineral which is iron-black or steel-grey.

Induced polarisation: A geophysical imaging technique used to identify subsurface materials, such as ore. An electric current is induced into the subsurface through two electrodes, and voltage is monitored through two other electrodes.

Interburden: Material of any nature that lies between two or more bedded orebodies.

Intrusion: An igneous rock body that has forced its way in a molten state into surrounding country rock.

IPI2win: A program for automatic and manual interpretation of electrical sounding curves.

Karst: A type of topography form particularly on limestone rocks formed by dissolution and characterised by sinkholes, caves and underground drainage.

Leaching: The removal of elements from a soil by dissolution in water moving downward in the ground.

Lepidoblastic: A flaky schistosity caused by an abundance of minerals like micas and chlorites with a general parallel arrangement.

Leucocratic: A rock composed mainly of light-coloured minerals.

Limonite: An ore consisting in a mixture of hydrated iron(III) oxide-hydroxide of varying composition.

Lithology: The lithology of a rock unit is a description of its physical characteristics visible at outcrop, in hand or core samples or with low magnification microscopy, such as colour, texture, grain size, or composition. It may be either a detailed description of these characteristics or be a summary of the gross physical character of a rock.

Magma: Molten rock material that forms igneous rocks upon cooling.

Magnetic anomaly: An increase or decrease in the local magnetic field compared to the normally expected value.

Magnetic survey: A systematic collection of readings of the Earth's magnetic field at a series of different locations in order to define the distribution and variations of values that may be indicative of different rock types, formations, ores etc.

Magnetite: A ferrimagnetic mineral, one of several iron oxides and a member of the spinel group.

Magnetometer: An instrument for measuring either one orthogonal component or the entire intensity of the Earth's magnetic field at various points.

Massif/massive rock: A rock that is little or not at all broken by joints, cracks, foliation, or bedding, tending to present a homogeneous appearance.

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Metamorphic rock: A rock whose original mineralogy, texture, or composition has been changed by the effects of pressure, temperature, or the gain or loss of chemical components.

Metasomatism: The chemical alteration of a rock by hydrothermal and other fluids.

Mica: A group of sheet silicate (phyllosilicate) minerals includes several closely related materials having highly perfect basal cleavage.

Migmatisation: The process whereby a rock undergoes partial melting during extreme metamorphism, producing a migmatite.

Mineral: A naturally occurring element or compound with a precise chemical formula and a regular internal lattice structure. Organic products are usually not included.

Mountain: A steep-sided topographic elevation larger than a hill; also a single prominence forming part of a ridge or mountain range.

Muscovite: A phyllosilicate mineral of aluminium and potassium. A common mica, it is found in granites, pegmatites, gneisses, and schists, and as a contact metamorphic rock or as a secondary mineral resulting from the alteration of topaz, feldspar, kyanite, etc.

Olivine: A mineral silicate of iron and magnesium found in igneous and metamorphic rocks.

Open-pit mining: A method of extracting rock or minerals from the earth by their removal from an open pit. The term is used to differentiate this form of mining from extractive methods that require tunnelling into the earth. Open-pit mines are used when resources are found near the surface; that is, where the overburden is relatively thin.

Ore: A natural deposit in which a valuable metallic element occurs in high enough concentration to make mining economically feasible.

Orebody: A well defined mass of ore.

Outcrop: A segment of bedrock exposed to the atmosphere.

Overburden: The rock, soil and ecosystem that lies above an orebody.

Plagioclase: An important series of tectosilicate minerals within the feldspar family.

Pegmatite: A very coarse-grained, intrusive igneous rock composed of interlocking grains usually larger than 2.5cm in size.

Petrography: The science of analysing the mineral content and the textural relationships within a rock.

Porphyritic: An adjective used in geology, specifically for igneous rocks, for a rock that has a distinct difference in the size of the crystals, with at least one group of crystals obviously larger than another group.

Porphyry: A rock containing relatively large conspicuous crystals, especially feldspar, in a finegrained igneous matrix.

Pyrite: Iron pyrite is formed from cooling magma and is found as an igneous segregation and also in metamorphic rocks and as vein deposits. Often it is found in sedimentary rocks being both primary and secondary in origin.

Quartz: A mineral comprising crystalline silica.

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Quartzite: (1) A very hard, clean, white metamorphic rock formed from a quartz arenite sandstone. (2) A quartz arenite containing so much cement that it resembles (1).

Relief: The maximum regional difference in elevation.

Rolled ore: Angular massive ore fragments cemented by iron hydroxide.

Schist: A metamorphic rock characterised by strong foliation or schistosity.

Schistosity: The parallel arrangement of shaly or prismatic minerals like micas and amphiboles resulting from non-hydrostatic stress in metamorphism.

Schlumberger configuration: A common configuration used with induced polarisation work.

Sedimentary rock: A rock formed by the accumulation and cementation of mineral grains transported by wind, water, or ice to the site of deposition or chemically precipitated at the depositional site.

Skarn: a metamorphic rock. It usually forms by chemical metasomatism of rocks during metamorphism and in the contact zone of magmatic intrusions like granites with carbonate-rich rocks such as limestone ordolostone. Skarns in the igneous environment are associated with hornfels, marble hornfels and wider zones of calc-silicate rocks.

Stratification: A structure of sedimentary rocks, which have recognizable parallel beds of considerable lateral extent.

Stratigraphic sequence: A set of beds deposited that reflects the geologic history of a region.

Strike: The angle between true north and the horizontal line contained in any planar feature (inclined bed, fault plane, etc.); also the geographic direction of this horizontal line.

Tectonic: Pertaining to the forces involved in, or the resulting structures of, movement in the Earth's crust.

Terrigenous: Pertaining to the sediments derived from the erosion of rocks on land.

Topography: The shape of the Earth's surface, above and below sea level; the set of landforms in a region; the distribution of elevations.

Trace element: An element that appears in minerals in a concentration of less than l percent (often less than 0.001 percent).

Traverses: Traverses across geological, structural and geophysical features.

Tuff: A consolidated rock composed of pyroclastic fragments and fine ash.

UTM: The Universal Transverse Mercator geographic coordinate system: a grid-based method of specifying locations on the surface of the Earth

Vein: A deposit of foreign minerals within a rock fracture or joint.

Vertical electrical sounding: The method of vertical electrical sounding provides detailed information on the vertical succession of different conducting zones and their individual thickness and resistivity.

Water table: A gently-curved surface below the ground at which the vadose zone ends and the phreatic zone begins; the level to which a well would fill with water.

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Weathering: The set of all processes that decay and break up bedrock, by a combination of physically fracturing or chemical decomposition.

Wenner configuration: A common configuration used with induced polarisation work.

Wollastonite A calcium inosilicate mineral that may contain small amounts of iron, magnesium, and manganese substituting for calcium. It forms when impure limestone or dolostone is subjected to high temperature and pressure sometimes in the presence of silica-bearing fluids as in skarns or metamorphic rocks.

Zircon: A zirconium silicate mineral belonging to the group of nesosilicat.

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DIRECTORS AND MANAGEMENT

In this section and elsewhere in this document (as defined in "Definitions"), except where stated otherwise, the expression "Directors" refers to the members of the Board of Directors, Board of Management and the Supervisory Board, and "Director" shall be construed accordingly.

Board of Directors

The Board of Directors is elected at a Shareholders' Meeting. The existing Board of Directors currently consists of seven members, one of whom serves as a Chairman. The Directors' business addresses are the same as the Company's registered office address.

The main responsibilities of the Board of Directors are to:

● determine the Company's plans, based on its strategic objectives, which are passed by a Shareholders' Meeting;

● devise the business plan and set the annual budget of the Company;

● formulate the organisational and management structure of the Company, including the appointment, dismissal and removal of the Company's management personnel and setting management pay; and

● propose dividend payout ratios and organising dividend distributions.

The Board of Directors consists of the following seven members:

Mr. Doan Nguyen Duc – Chairman

Mr. Doan Nguyen Duc was born in Binh Dinh in 1963. He has been involved with the Company since 1993 and was a founder shareholder. He has led the Group's expansion and diversification from its origins in furniture manufacturing. In 2006, Mr Duc was appointed as Chairman of the Board of Directors.

Mr. Nguyen Van Su

Mr. Nguyen Van Su was born in Quang Nam in 1958 and has worked for the Company since 1994, holding a number of positions. He was appointed as a Director on 2 March 2009. Prior to working for the Company, Nguyen Van Su worked for the Gia Lai Department of Industry for 13 years, where he was responsible for project planning. He holds a bachelor's degree in commerce from the University of Economics, Da Nang. He is responsible for the Group's mining and hydropower businesses in addition to holding other broader management responsibilities. His appointment is due to expire on 2 March 2011.

Mr. Doan Nguyen Thu

Mr. Doan Nguyen Thu was born in Pleiku City in 1977. He was appointed as a Director on 22 September 2006. Before joining the Company in 1999, Doan Nguyen Thu worked for Hoang Anh Sai Gon Co. Ltd. He has an MBA and is responsible for the Group's furniture and granite manufacturing operations.

Mr. Le Hung

Mr. Le Hung was born in Tien Giang in 1956 and since 2006 has been a director of Hoang Anh Construction and Housing Development Company. Prior to that, he spent five years as Director of Hung Thinh Co. Ltd and has also spent eight years as a Director of Hung Thinh Co. Ltd. Mr. Hung has over 20 years of experience in the real estate sector in a number of different companies. In 2009, Mr. Hung

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received a bachelor's degree in business administration from Ho Chi Minh City Economic University. In 2003, he obtained the master of business administration from Fullerton University in USA.

Mr. Nguyen Van Minh

Mr. Nguyen Van Minh was born in Tinh Tho, Son Tinh in 1959 and has worked for the Company since 1992, before it was established as a private enterprise. Prior to working for the Company, Mr. Nguyen Van Minh spent three years working at Gia Lai Coffee Company and eight years prior to that working for the Agricultural Department in Dak To district in Kon Tum province. He holds a bachelor's degree in agricultural engineering. Given his expertise in agricultural engineer, Mr. Minh is responsible for the Group's rubber plantation operations.

Ms. Vo Thi Huyen Lan

Ms. Vo Thi Huyen Lan was born in Tien Giang in 1971 and has been a member of the Board of Management since 7 February 2008. From 1996 to 2002, she was the Chief Accountant and Deputy General Director of Prezioso. From 2002 to 2006, she was the Financial Director of Big C Viet Nam. She is currently a member of the Boards of Management of a number of other Vietnamese companies. Ms. Vo Thi Huyen Lan holds a Masters of Economics, a Masters of Finance and an MBA. She is a representative of Jaccar Capital.

Mr. Vu Huu Dien

Mr. Vu Huu Dien was born in Ho Chi Minh City in 1972 and is a representative of Dragon Capital Group.

The Board of Management

The Board of Management is appointed by the Board of Directors and currently consists of six full-time members, consisting of a General Director and five Deputy General Directors.

The main responsibilities of the Board of Management are to:

● implement the resolutions of the Board of Directors;

● make decisions upon other issues that are not subject to resolutions of the Board of Directors;

● submit an annual plan to the Board of Directors for approval and implement the annual business plan passed by the Board of Directors and a Shareholders' Meeting; and

● oversee employee issues, including employee appointment and removal, monitoring overall employee numbers, employee salaries, benefits and allowances, and various other terms relating to employees' conditions of employment.

The Board of Management currently consists of the following six members. All six members were appointed on 19 March 2004, and their terms of appointment expire on 19 March 2014.

Mr. Nguyen Van Su – General Director

Mr. Nguyen Van Su was born in Quang Nam in 1958 and has worked for the Company since 1994. He was appointed as a Director on 2 March 2009. Prior to working for the Company, Nguyen Van Su worked for the Gia Lai Department of Industry for 13 years. He holds a bachelor's degree from the University of Economics, Ho Chi Minh City. He is responsible for the Group's mining and hydropower businesses, as well as possessing other broader management responsibilities.

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Mr. Doan Nguyen Thu –Deputy General Director

Mr. Doan Nguyen Thu was born in Pleiku City in 1977. He was appointed as a Director on 22 September 2006. Before working for the Company, Doan Nguyen Thu worked for Hoang Anh Sai Gon Co. Ltd. He has an MBA and is responsible for the Group's furniture and granite manufacturing operations.

Mr. Le Van Ro – Deputy General Director

Mr. Le Van Ro was born in An Nhon, Binh Dinh in 1951. He has worked for the Company since 1993. On 22 September 2006, he was appointed as Deputy General Director with control over the Group's real estate construction business in central Vietnam and the Group's acquisition or construction of plant and equipment.

Mr. Tra Van Han – Deputy General Director

Mr. Tra Van Han was born in Phu Cat in Binh Dinh province in 1960. From 1977 to 1989, Mr. Han worked for a number of state-owned companies in the hotel and tourism industry. He has been employed by the Company since 1990. On 22 September 2006, he was appointed as Deputy General Director responsible for the Company's hotels and resorts. Before this, he worked at Gia Lai Forest Specialty Company and also spent time working for the Gia Lai Food and Beverage and Hotel Company. Mr. Tra Van Han holds an economics intermediate degree and is now responsible for the Group's real estate construction business in Ho Chi Minh City.

Mr. Nguyen Van Minh – Deputy General Director

Mr. Nguyen Van Minh was born in Tinh Tho, Son Tinh in 1959 and has worked for the Company since 1992, before it was established as a private enterprise. Prior to working for the Company, Mr. Nguyen Van Minh spent three years working at Gia Lai Coffee Company and eight years prior to that working for the Agricultural Department in Dak To District in Kon Tum province. He holds a bachelor's degree in agricultural engineering. He is responsible for the Group's rubber plantation operations.

Mr. Vo Truong Son – Deputy General Director

Mr. Vo Truong Son was born in An Giang province in 1973. On 1 September 2008, Mr. Son was appointed as a Deputy General Director with responsibility for the Group's finance function. He holds a Masters in Finance and is a member of the Association of Chartered Certified Accountants, the British accountancy body. He is responsible for the Group's finance and planning functions.

The Supervisory Board

The Supervisory Board is elected at a Shareholders' Meeting. No member of the Supervisory Board is permitted to serve more than a five-year term.

The main role of the Supervisory Board is to monitor the business activities of the Company to ensure that it complies with all applicable legal and regulatory provisions. The Supervisory Board also assesses the quality of the Company's operations and monitors the implementation of resolutions and decisions of the Board of Directors. The Supervisory Board performs broadly similar functions to what would usually be described as an audit committee.

Additionally, the Supervisory Board also monitors the financial statements of the Company to ensure the relevant accounting procedures are being followed.

The Supervisory Board currently has three members. All current members were appointed on 19 March 2010, and their terms of appointment expire on 19 March 2014.

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Mr. Nguyen Van Ton –Head of the Supervisory Board

Mr. Nguyen Van Ton was born in Ninh Binh province in 1976. He has been employed by the Company since 2006 and has previously worked for an audit firm. He is a certified public accountant.

Mr. Lam Hoang Haii

Mr. Lam Hoang Haii was born in Tay Ninh province in 1980. He worked for an audit firm before joining the Company in 2008. He holds a bachelor's degree from the University of Economics, Ho Chi Minh City.

Mr. Nguyen Xuan Thang

Mr. Nguyen Xuan Thang was born in Nam Dinh province in 1977 and has worked for the Company since 2007. He holds a bachelor's degree in finance.

Chief Accountant

Ms Ho Thi Kim Chi

Ms Ho Thi Kim Chi was born in Gia Lai province in 1976 and has been working with the Company since 1998. She holds a bachelor's degree from the University of Economics, Ho Chi Minh City.

Founder Shareholders

The following persons were founder Shareholders of the Company: Mr. Doan Nguyen Duc, Mr. Nguyen Van Su and Mr. Doan Nguyen Thu.

Management Structure

The Company's management team assists in the management of the following areas of the Group's business activities or operations: investment and planning, financial and accounting, cost management, human resources, public relations, transportation, imports and exports, mining, rubber, hydropower, mining and construction.

Each subsidiary's management team also assists in the management of the Group business segment in which that particular subsidiary operates.

Mining management

The Group's mining operations are principally run by the following senior managers (the "Mining Management") each of whom has the geological or mining experience and qualifications set out below their names:

Nguyen Thu Giao – Geological Exploration

Mr. Giao worked as a geological exploration engineer at the Geological Research Centre, Vietnam from 1982 to 2005. In May 2005. he graduated from the Mining and Geology University, Vietnam, with a bachelor's degree in geological engineering.

Doan Bao Dong – Geological Engineering

From 1995 to 2008, Mr. Dong was deputy head of the technological lab at Research and Construction No. 4 Joint Stock Company. In May 2007, he graduated with a bachelor's degree in geological construction engineering from Hue Science University, Vietnam.

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Cao Tuan Cuong – Geological Exploration

From 1994 to 2008, Mr. Cuong was head of site construction at the Mid-Central Geological Division, Department of Geology and Minerals of Vietnam. In June 2005, he graduated from the Mining and Geology University, Vietnam, with a bachelor's degree in geological exploration engineering.

Nguyen Quang Huy – Geological Engineering

From 1994 to 2006, Mr. Huy was director of Technological and Geophysical Company (under the Ministry of Nature and Environment). In August 2000, he graduated from the Natural Science University, Vietnam, with a bachelor's degree in geophysical engineering.

Nguyen Duc Hiep – Geological Exploration

In May 1997, Mr. Hiep graduated from the Mining and Geology University, Vietnam, with a bachelor's degree in geological exploration engineering. From 1983 to 2008, he worked as a project director at the Mid-Central Geological Division, Department of Geology and Minerals of Vietnam.

Pham Dac Luc – Geological Exploration

In December 1990, Mr. Luc graduated from the Mining and Geology University, Vietnam, with a bachelor's degree in geological exploration engineering. From 1991 to 2008, Mr. Luc was deputy head of the physical and geological group at the Southern Geological Mapping Division, Department of Geology and Minerals of Vietnam.

The business address of Mr. Giao and Mr. Dong is 100 Le Loi Street, Chanh Lo ward, Quang Ngai City, Quang Ngai province, Vietnam and the business address of each of the remaining members of the Mining Management is No 15 Truong Chinh Street, Phu Dong commune, Pleiku City, Gia Lai province, Vietnam.

Corporate Governance Policy

The Supervisory Board and the Group's internal audit function review and evaluate the key processes of the Company, conduct site visits at the Group's factories and branches in order to identify inherent risks or misstatements, and provide appropriate recommendations to the Group's management.

The Supervisory Board also conduct periodical reviews of the financial statements to assess the integrity of the financial information contained therein. The Supervisory Board reviews the impact of any material misstatements in the financial statements and implements any recommendations provided by the independent auditors in relation to the strengthening the Company's internal control system.

The Company is in compliance with Vietnam's corporate governance regime.

Remuneration

During 2009, the amount of remuneration paid (including any contingent or deferred compensation) and benefits in kind granted to each of the Directors was as set out in the table below. The Company does not have a remuneration committee.

Name of Director

Position(s) 2009 salary 2009 other benefits,

allowances and bonus (VND)

2009 Total Remuneration

(VND)

Doan Nguyen Duc

Chairman, Board of Directors

1,874,520,000 1,081,508,699 2,956,028699

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Vo Thi Huyen Lan

Member, Board of Directors

- 215,265,000 215,265,000

Tran Viet Anh Member, Board of Directors

- 160,065,000 160,065,000

Le Hung Member, Board of Directors

749,951,000 540,754,349 1,290,705,349

Vu Huu Dien Member, Board of Directors

- 55,200,000 55,200,000

Nguyen Van Su Member, Board of Directors; General Director, Board of Management

1,455,390,000 811,131,524 2,266,521,524

Nguyen Van Minh

Member, Board of Directors; Deputy General Director, Board of Management

1,036,260,000 540,754,349 1,577,014,349

Doan Nguyen Thu

Member, Board of Directors; Deputy General Director, Board of Management

1,036,260,000 540,754,349 1,577,014,349

Tra Van Han Deputy General Director, Board of Management

1,036,260,000 540,754,349 1,577,014,349

Vo Truong Son Deputy General Director, Board of Management

1,036,260,000 540,754,349 1,577,014,349

Le Van Ro Deputy General Director, Board of Management

674,340,000 378,528,044 1,052,868,044

Tran Van Vui Head of Supervisory Board

396,000,000 107,632,500 503,632,500

Nguyen Van Ton

Member of Supervisory Board

421,217,000 86,106,000 507,323,000

Ho Thi Kim Nga

Member of Supervisory Board

- 86,106,000 86,106,000

Total 9,716,458,000 6,226,068,861 15,942,526,861

In 2009, the Group paid total remuneration of VND 2,982,512,000 (including any contingent or deferred consideration) to members of its Mining Management.

Directors' Service and Employment Contracts

Each of the Directors have standard employment or service contracts with the Company. These contracts do not provide for any benefits upon termination of employment.

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Equity Holdings

The table below details the Shares held by each of the Directors at the date of these Listing Particulars. The Directors do not hold any options over Shares.

Name of Director Position(s) Shares

Doan Nguyen Duc Chairman, Board of Directors 219,987,226

Vo Thi Huyen Lan Member, Board of Directors -

Tran Viet Anh Member, Board of Directors -

Le Hung Member, Board of Directors 221,751

Vu Huu Dien Member, Board of Directors -

Nguyen Van Su Member, Board of Directors; General Director, Board of Management

1,635,372

Nguyen Van Minh Member, Board of Directors; Deputy General Director, Board of Management

2,258,263

Doan Nguyen Thu Member, Board of Directors; Deputy General Director, Board of Management

2,695,854

Tra Van Han Deputy General Director, Board of Management

676,996

Vo Truong Son Deputy General Director, Board of Management

25,201

Le Van Ro Deputy General Director, Board of Management

86,841

Tran Van Vui Head of Supervisory Board -

Nguyen Van Ton Member of Supervisory Board 15,508

Ho Thi Kim Nga Member of Supervisory Board 13,570

Total 227,057,835

Potential Conflicts of Interest

At the date of these Listing Particulars, Mr. Doan Nguyen Duc, the Chairman of the Board of Directors, held 47.08 per cent. of the Shares. For more information on the significant risks posed by the size of Mr. Duc's shareholding, see "Risk Factors - The Company's controlling Shareholder may be able to take actions that do not reflect the will or best interests of other Shareholders". Save as set out in this paragraph, the

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Company is not aware of any existing or potential conflicts of interest between any duties owed by the Directors or the Mining Management and their private interests and/or other duties.

Stock Option Plan

In December 2009, the Company issued 1,000,000 Shares to employees. This issuance was funded from the Company's bonus and welfare fund. The Shares issued to employees are subject to a five-year lock-up period. Therefore, the relevant employees may not be able to transfer or otherwise dispose of the Shares issued to them until December 2014.

Pension Schemes

The Group does not provide any pension or retirement benefits to the any of the Directors.

Family Relationships

Mr. Doan Nguyen Duc and Mr. Doan Nguyen Thu are brothers. Otherwise, there are no family relationships between any of the Directors or members of the Group's Mining Management.

Confirmations

None of the Directors or members of the Group's Mining Management for at least the previous five years:

● has any convictions in relation to fraudulent offences;

● has been bankrupt or the subject of an individual voluntary arrangement or had a receiver appointed to any asset of such director;

● has been a director of any company that, while he or she was a director or within 12 months after he or she ceased to be a director, had a receiver appointed or went into compulsory liquidation, creditors' voluntary liquidation, administration or company voluntary arrangement or made any composition or arrangement with its creditors generally or with any class of its creditors;

● has been a partner of any partnership that, while he or she was a partner or within 12 months after he or she ceased to be a partner, went into compulsory liquidation, administration or partnership voluntary arrangement or had a receiver appointed to any partnership asset;

● has had any public incrimination and/or sanction by statutory or regulatory authorities (including designated professional bodies); or

● has been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company.

Other Directorships

In addition to being directors and/or members of the Board of Management or members of the Supervisory Board of the Company and of certain Group companies, the Directors hold or have held the directorships of the companies specified opposite their respective names below within the five years prior to the date of these Listing Particulars. No members of the Group's mining management hold or have held directorships in relation to any company at any time within the five years prior to the date of these Listing Particulars.

Director Current directorships Previous directorships

Mr. Doan Nguyen Duc None None

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Mr. Nguyen Van Su None None

Mr. Doan Nguyen Thu None None

Mr. Le Hung None None

Mr. Nguyen Van Minh None None

Ms Vo Thi Huyen Lan Viet Au Joint Stock CompanyLong Hau CompanyHiep Phuoc Industrial Park JSCDai Viet Securities JSCAgrex SaigonEver Fortune JSCSinopacific Shipyard JSCSouth East Asia Shipbuilding JSCBourbon Sugar JSCBourbon, S.A. Jaccar Holdings

Bourbon Anh LacTuong Anh Vegetable Oil Joint Stock Company

Mr. Vu Huu Dien Dragon CapitalHanoi Lake View Sport JV Company

Mr. Le Van Ro None None

Mr. Tra Van Han None None

Mr. Nguyen Van Minh None None

Mr. Vo Truong Song None None

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MAJOR SHAREHOLDERS

As at the date of these Listing Particulars, other than the Depositary, which holds 24,324,375 Shares on trust for Holders under the Deposit Agreement, the Company is not aware of any persons (other than Directors) who directly or indirectly have an interest of five per cent. or more of the Shares or voting rights in respect of the Company.

Permitted non-domestic shareholding limit

At 5 August 2010, the foreign shareholding in the Company was 27.69 per cent. Under Vietnamese law, the ceiling for foreign holdings is 49 per cent. Dragon Capital and Jaccar Capital are two key foreign Shareholders.

Pending likely changes to the Share capital and shareholding composition

In September 2010, the Company placed 1.1 million convertible bonds with Northbrooks Investments (Mauritius) Pte Ltd, an affiliate of Temasek Holdings Pte Ltd, the Singapore government's sovereign fund, for a total of VND 1.1 trillion. The bonds are convertible into Shares at a conversion price of VND 67,375 within one year. If converted, 16.32 million Shares will be added to the total number of the Company's issued Shares, and those Shares would represent approximately 5.29 per cent. of the Company's total number of issued Shares at the time of the placement. The bonds have a zero per cent. Coupon over the first year. However, if the bonds are not converted within this time period, the coupon will be determined by the average interest rates applicable to the interest rates paid on deposits by ACB, Sacombank, Techcombank and Eximbank, within a margin of three per cent. per annum payable on maturity.

Voting rights

None of the Shareholders holding at least five per cent. of the Shares have different voting rights attaching to Shares held by them.

Change in control

The Company is not aware of any arrangements which may at a subsequent date result in a change in control of the Company.

Control of the Company

At the date of these Listing Particulars, Mr. Doan Nguyen Duc, the Chairman of the Board of Directors, held 47.08 per cent. of the Shares. The influence of Mr. Duc on the Company may be substantial and, as set out in "Risk Factors", this influence may have an impact on the operations and business strategy of the Company. Mr. Duc currently possesses a blocking minority and he is therefore able to block resolutions proposed at Shareholders' Meetings, including the approval of takeovers, acquisitions or mergers.

Furthermore, the trading price of the Shares could be adversely affected if Mr. Duc was to sell substantial numbers of his Shares or if potential new investors are disinclined to invest in the Company because they perceive disadvantages to a large shareholding being concentrated in the hands of a single Shareholder.

Although there is no formal agreement between Mr. Duc and the Company regarding the manner in which Mr. Duc is permitted to exercise of his voting rights in the Company, Mr. Duc remains subject to Vietnamese law and regulations relating to directors, duties. Under these laws, directors must abide by the company's charter and resolutions taken in accordance with the charter, and must only exercise their powers for their proper purposes. As set out in more detail under "Vietnamese Regulatory Law Overview", the Law on Enterprises requires directors to use reasonable care, skill and diligence in carrying out their tasks. In addition, a director must act in the company's and the shareholders' best interests. A director must be loyal to the interests of the company and shareholders of the company; must not use information, secrets, and business opportunities of the company; and must not abuse his or her position and powers and

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assets of the company for his or her own personal benefits or for the benefit of other organisations or individuals. In addition, contracts relating to a transaction between a director and a company of which he or she is a director must be approved by either the board of directors or a general meeting of shareholders.

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VIETNAMESE SECURITIES MARKET

Overview

The Vietnamese stock market, formerly known as the Securities Trading Centre ("STC"), located in Ho Chi Minh City, was launched on 28 July 2000. At the opening trading session, only two individual stocks with a total market capitalisation of VND 444,000 million were traded on the market. Over the first five years of operation (to the end of 2005), the number of listed companies increased to 32 with an aggregate market capitalisation of VND 6,337,478 million.

The STC was formally converted to a stock exchange in July 2007 and renamed the Ho Chi Minh City Stock Exchange. At the end of September 2010, there were 267 stocks and five funds listed on the HoSE.

There is also a secondary market in Hanoi formerly known as the Hanoi Securities Trading Centre. This was formally converted to a stock exchange in September 2009 and renamed the Hanoi Stock Exchange ("HNX"). The HNX regulates over-the-counter (OTC) transactions as well as the admission and trading of securities that are listed on HNX. The HNX is also now the exclusive trading floor for Government bonds. At the end of September 2010, there were 346 stocks trading on the HNX.

The securities that are traded on the HoSE and HNX are quite limited, and no complex hybrids, futures or derivates are traded on these exchanges. The HoSE and HNX trade only ordinary shares, bonds and fund certificates.

The SSC is responsible for the day-to-day monitoring and supervision of the securities market and securities businesses. The SSC is the body that licences securities businesses (e.g., funds management and securities companies) and their representative offices and branches; approves public offers of securities and public takeover; and issues infringement for breaches of securities regulations. The SSC also oversees the operations of the HoSE and HNX.

Equity listing rules

Public offer

To qualify for admission on any of HoSE or HNX, the applicant must first obtain approval from the SSC for a public offer of shares. Public offers in Vietnam do not necessarily involve listing, it is an offer to more than 100 non-institutional investors. Therefore, a listing involves two applications: an application to the SSC and an application to the relevant exchange. This does not stop the applicant from concurrently preparing the documents for the applications. The application file to the SSC in respect of a public offer involves the submission of the following forms:

● Completed application form

This is a standard application form which is signed and sealed by the legal representative of the applicant.

● Prospectus

An original and copy of the prospectus in the prescribed form.

● Audited financial report

The applicant must submit the latest audited annual financial reports for the last two consecutive years which must comply with various standards including VAS.

● Company's charter

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A notarised copy of the company's charter in the prescribed form.

● Shareholder resolution

A shareholder resolution approving the issuance plan, use of proceeds from the offer and charter capital increase.

● Board of management resolution

A board of management resolution approving the application file.

● Underwriter undertaking

If an underwriter is engaged, an undertaking from the undertaker to guarantee the issuance. The underwriting agreement must also be provided.

● Curricula vitae

Curricula vitae in standard form of the principal officers of the company must be provided. The principal officers include members of the board of management, inspection committee and directors.

● Business registration certificate

A notarised copy of the company's business registration certificate or investment certificate (as the case may be) must be submitted.

The application process involves the submission of the above documents in draft form in both hardcopy and softcopy. The SSC will review these documents and may ask for amendments. Once the SSC is happy with the draft, the SSC will issue an in principle approval for the public offer. The final approval will be given following the submission of the final application file which must pick up any suggested amendments from the SSC.

Admission criteria

The admission criteria depends on which market the listing occurs (i.e. HoSE or HNX) and whether the listing is the first for that company. The listing rules is a "check the box" exercise involving the submission of relevant application file documents and satisfying prescribed minimum requirements set out in the Vietnamese Securities Laws.

HoSE

There are six admission criteria on the HoSE which the applicant company must satisfy at the time of applying for admission.

● Capitalisation

The applicant company must have a minimum paid up charter capital of VND 80 billion.

● Profitability

The applicant company must have operated at a profit over the previous two consecutive years and there must not be any accumulated losses up to the year of the proposed listing.

● Indebtedness

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Any overdue debt must be earmarked for payment from existing reserves and disclosure must be made in relation to any debts owed to the applicant company by any board member, inspection committee member, general director, deputy general director, chief accountant, major shareholder or an affiliate of any of these persons.

● Minimum shareholders

At least 20 per cent. of the voting shares (i.e., ordinary shares) of the applicant company must be held by at least 100 shareholders who are not institutional investors or major shareholders (i.e., shareholders who own directly or indirectly five per cent. or more of the voting shares of the applicant company), except for state-owned companies converted into shareholding companies under regulations of the Prime Minister.

● Share lock-up

A shareholder who is a board member, inspection committee member, general director, deputy general director and chief accountant must agree to not sell:

● any of its shares for the first six months after listing; and● 50 per cent. of its shares for six months after the expiry of the time in the preceding

paragraph.

The shares above exclude shares which the shareholder holds on behalf of the State.

● Application file

The applicant company must submit a complete application file in form and substance as required by the HoSE.

HNX

The secondary market in the HNX has a lower admission threshold. There are also six admission criteria which the applicant company must satisfy at the time of applying for listing.

● Capitalisation

The applicant company must have a minimum paid up charter capital of VND 10 billion.

● Profitability

The applicant company must operate at a profit for the immediately preceding year prior to the proposed listing.

● Indebtedness

The applicant company must not owe any unpaid debt which is overdue for more than one year, it must have discharged all financial liabilities owed to the State and its financial status must be healthy up until the time of the registration for listing.

● Minimum shareholders

At least 100 shareholders must own voting (i.e., ordinary) shares.

● Share lock-up

A shareholder who is a board member, inspection committee member, general director, deputy general director and chief accountant must agree to not sell:

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● any of its shares for the first six months after listing; and● 50 per cent. of its shares for six months after the expiry of the time in the preceding paragraph.

The shares above exclude shares which the shareholder holds on behalf of the State.

● Application file

The applicant company must submit a complete application file in form and substance as required by HNX.

Disclosure of information

Public companies and listed companies

Public companies and listed companies are required to disclose publicly all information that is important for investors' investment decisions. The SSC has implemented a full disclosure policy, allowing investors to receive accurate, adequate and timely information in order to ensure market transparency and integrity. Practically, the information disclosure is conducted through the mass media, websites and bulletin of the SSC or websites and bulletin of the relevant exchange. In addition, all public companies, including listed companies, are required to establish and maintain a website on shareholders' relations. The disclosures required from public companies and listed companies are categorised into two main types: periodic disclosures and extraordinary disclosures.

Periodic disclosures

All public companies are required to disclose:

● the annual audited financial report within 10 days after the finalisation of the report, which must occur within 90 days of the end of the financial year; and

● the annual report within 20 days of the finalisation of the annual financial report.

In addition, listed companies (which are all public companies and subject to the rules described above) must disclose:

● a half yearly report within 45 days of the end of the second financial quarter or within 60 days for a group company;

● quarterly reports within 25 days of the end of each quarter or 50 days for a group company;

● profit fluctuations in the case where a listed company's profits in the middle of any reporting period are 10 per cent. higher or lower than at the same time in the previous year; and

● documents for the annual general meeting (which include the agenda, proxy and voting forms, draft resolutions and any other related items) at least seven days before the meeting.

Extraordinary disclosures

All public companies must disclose the following matters within 24 hours of their occurrence:

● any suspension of business;

● the freezing of the company's bank account;

● the board's decision on the redemption of shares, the date of conversion of bonds into shares and the date bondholders may exercise their option to buy shares;

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● any judgement of a court in relation to the company's operations or a decision to commence litigation against a board member or the general director; and

● any change in the company's key personnel.

Within a 72 hour time frame, public companies must also disclose:

● any decision to enter into a loan or to issue bonds valued at 30 per cent. or more of the company's equity;

● any board decision on the strategic and business development plan for the company;

● a court notice to commence bankruptcy proceedings; or

● a decision to establish a subsidiary or joint venture.

Investor disclosure

A shareholder who individually, or together with their related parties, owns five per cent. or more of the ordinary shares in a public company (referred to as a "large shareholder") must disclose that ownership, as well as any change of more than one per cent. in that shareholding.

In addition, public company founding shareholders who transfer their shares within the initial three-year transfer lock-up period, must disclose their intent to make such a transfer at least three days before the transaction and report on the results of the transaction no later than three days after it takes place.

An "internal shareholder" (who is a board member, inspection committee member, general director, director, deputy general director, director or large shareholder, or the related parties of any such persons) must disclose any intended share transaction at least three business days before the transaction takes place. The disclosure rules do permit the internal shareholder to disclose an anticipated period during which the transaction will take place, but the disclosed period must not be longer than two months from the date of the notice of intention to trade. Such notices of intention to trade will be published by the relevant exchange, and the internal shareholder may only commence trading 24 hours after such publication. The internal shareholder must also report on any trading results within three business days of the transaction occurring.

Trading hours

Trading on both HoSE and HNX occurs from Monday through Friday, between 8.30 a.m. And 11 a.m. The HoSE and HNX are closed on public holidays.

Trading bands

In order to prevent excessive changes in individual stock prices at a given trading session and to foster an orderly market, the SSC has regulated the daily price limits for all stocks listed on HoSE and HNX. The price limits, which bind the daily stock price movements, are determined on the basis of the previous day's closing prices and trading bands. It is observed that the trading bands have changed several times since the establishment of the stock market. The current trading bands are seven per cent. for HNX and five per cent. for HoSE respectively.

Foreign shareholdings

Foreign investors (institutions and individuals) can buy or sell shares on both HoSE and HNX through securities companies. However, their ownership (the aggregated ownership of all foreign investors) in a listed firm is limited to 49 per cent. of the firm's equity (or 30 per cent. of the equity of a company

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operating in a number of restricted areas; for example the banking industry). In addition, foreign investors who wish to participate on HoSE or HNX (or both) are required to obtain a securities trading code from the VSD and open a trading account with one securities company. Moreover, foreign securities business institutions are allowed to buy shares of the Vietnamese securities and/or investment fund management companies, or contribute capital to establish new originated joint-venture securities and/or investment fund management companies with Vietnamese partners. However, the proportion of capital contribution by foreign partners in a joint venture may not be more than 49 per cent. of the firm's chartered capital.

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DESCRIPTION OF THE SHARES

Set forth below is certain information relating to the share capital of the Company, including brief summaries of the rights and privileges of shareholders conferred by the laws of Vietnam and the Charter. A summary of the Charter is set out in "General Information".

The following description of the Shares is subject to and qualified in its entirety by the Charter and any applicable provisions of Vietnamese law.

Share capital

As at the date of these Listing Particulars, the Company had an authorised, issued and paid-up share capital of VND 4,672,810,450,000 consisting of 467,281,045 Shares, all of which are outstanding Shares. All the issued and outstanding Shares are recorded in the Company's register of Shareholders which is maintained by the VSD, as described below. Each Share ranks equally with another in terms of voting rights, dividends and other rights attaching to them. Each Share has a par value of VND 10,000.

At 31 December 2009, being the most recent balance sheet date covered by the historical annual financial information in these Listing Particulars, the Company had 270,465,458 Shares authorised to be issued and 270,465,458 Shares issued and fully paid. Of these, 512,290 were treasury Shares and therefore 269,953,168 Shares were outstanding at this date. On 1 January 2009, the Company had 179,814,501 Shares authorised to be issued and 179,814,501 Shares issued and fully paid. Of these, 2,792,141 were treasury Shares and therefore 177,022,360 Shares were outstanding.

All the Existing Shares were listed on the HoSE prior to the issue of the New Shares. Application was made for the New Shares (together with 2,783,750 Shares placed with a strategic investor on 20 December 2010) to be listed on the HoSE and trading of these Shares on the HoSE commenced on 12 January 2011. All Shares currently in issue have been admitted to trading on the HoSE. The Shares are currently traded in dematerialised form. Shares are in registered book-entry form. The VSD maintains the records of shareholdings in Shares. The VSD's address is 164 Tran Quang Khai, Hanoi, Vietnam. The ISIN number for the Shares is VN000000HAG6. The Shares were created under the 2005 Law on Enterprises.

History of Share Issuances

The following table sets forth, for the periods indicated, the changes in the issued share capital of the Company.

Date Description of issue

Number of Shares issued

Total number of Shares in issue after issuance

Chartered capital after issuance

(VND '000)

1 June 2006 Offering of Shares on the re-establishment of the Company as a joint stock company

29,683,634 29,683,634 296,836,340

15 June 2006 Offering of Shares for employees and other investors

3,000,000 32,683,634 326,836,340

2 January 2007 Private placement with strategic investors

7,316,366 40,000,000 400,000,000

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15 May 2007 Private placement with strategic investors

4,000,000 44,000,000 440,000,000

8 June 2007 Group restructuring by way of consolidating some of the Company's subsidiaries into the Company

59,756,388 103,756,388 1,037,563,880

24 December 2007

Private placement and restructuring of the Group by way of offering Shares

16,200,000 119,956,388 1,199,563,880

21 July 2008 Share dividend 59,858,113 179,814,501 1,798,145,010

7 November2009

Bonus issue of Shares, including an issue of 1,000,000 to employees

90,650,957 270,465,458 2,704,654,580

17 May 2010 Conversion of convertible bonds into Shares pursuant to a resolution of the Board of Directors

22,055,239 292,520,697 2,925,206,970

20 December 2010

Issue and private placement of Shares with a strategic investor

2,783,750 308,736,947 3,087,369,470

20 December 2010

Issue of the New Shares

16,216,250 311,520,697 3,115,206,970

21 January 2011 Bonus issue of Shares

155,760,348 467,281,045 4,672,810,450

In October 2009, the Company issued zero coupon convertible bonds for a total of VND 1,450 billion, with an option to convert into Shares at a conversion price of VND 65,743 within a period of one year. The conversion price was discounted by 20 per cent. of the average closing market price of the Shares within 15 consecutive trading days before the last purchase registration date and will be adjusted according to the effect of any bonus shares subsequently issued. On 19 March 2010, the Company's Shareholders approved the conversion of the bonds into Shares. Subsequently, all the bond holders registered to exercise their conversion rights. As a result, on 17 May 22,055,239 new Shares were issued to reflect the additional

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share capital at total par value of VND 220,552,390,000 and a share premium of VND 1,214,447,610,000 recognised after deducting the bond issuance costs.

New Shares

Further Shares may be issued by way of option to existing Shareholders or otherwise to any personsincluding non-Shareholders subject to the resolution of a Shareholders' Meeting. The Shareholders will make decisions on classes of shares or the total number of shares of each class which may be offered for sale in a Shareholders' Meeting. Issuance of new Shares by way of public offering or private placement must be approved by the SSC. In addition, any change in share capital of the Company must be registered with the local business registration authority. The existing listing rules of HoSE require the Company to apply to HoSE for the admission to listing of new Shares. The New Shares were admitted to trading on the HoSE on 12 January 2011. The 8,108,125 Shares deposited in accordance with the terms of the Deposit Agreement pursuant to a bonus share issue on 26 January and which are represented by GDRs were admitted to trading on the HoSE on 28 February 2011.

Shareholders have a pre-emptive right in subscribing for any new Shares offered for sale in proportion to the number of Shares each of them holds. This pre-emptive right may be waived by a resolution the relevant Shareholders' Meeting. The Company will announce to all Shareholders details of the offering, the number of shares for sale and the deadline for subscription. The period for which Shares are open for subscription must be not less than 20 working days. Any unsubscribed Shares will be under the control of the Board of Management. The Board of Management may allot the options for subscribing for those shares to anyone subject to any conditions and in any manner that the Board of Management deems fit, provided that the Shares may not be sold under terms and conditions more advantageous than those offered to the existing Shareholders, unless otherwise approved by a Shareholders' Meeting and except in the case of sale of Shares via a stock exchange.

Variation of rights

Subject to approval of the Shareholders' Meeting, the rights attaching to any class of shares may be varied with the written consent of the holder(s) holding at least 75 per cent. of shares in the class.

Transferability of Shares

Shares held by non-founding Shareholders are freely transferable. All listed shares must be transferred in electronic form via HoSE in accordance with regulations laid down by HoSE, except for Shares being bequeathed or donated or some other cases pursuant to HoSE and VSD regulations and laws which will be transferred via VSD. Rights and obligations of the transferees are valid upon their names being recorded in the Company's register of Shareholders, which is maintained by VSD.

Pursuant to the Vietnamese Securities Laws and the Deposit Agreement, the Deposited Shares will be subject to a 12-month restriction on transferability during the Lock-up Period. The GDRs representing the Shares will be freely transferable during the Lock-up Period.

Repurchase of Shares

The Company may repurchase up to 30 per cent. of its Shares in issue as treasury shares subject to certain conditions under the Charter and other applicable Vietnamese laws. The treasury shares may be resold by the Board of Management in accordance with the Charter and other applicable Vietnamese law.

Dividends

See "Use of Proceeds and Dividend Policy" for further details regarding the payment of dividends, the Company's dividend policy and restrictions on the payment of dividends.

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Bonus Shares

Any issue of bonus shares to Shareholders must be approved at a Shareholders' Meeting.

In September 2009, a Shareholders' Meeting approved the issuance of bonus Shares to Shareholders with the effect that each Shareholder who owned two Shares received one new bonus Share. 40 per cent. of this issuance was funded from retained earnings from the Company's financial year ended 31 December 2008, with the remaining 60 per cent. funded from the Company's share premium fund. According to the VSD, the Company issued a total of 89,650,957 Shares to existing Shareholders during the year ended 31 December 2009. Also in September 2009, a Shareholders' Meeting approved the issuance of 1,000,000 bonus Shares to employees, funded from the Group's bonus and welfare fund.

In March 2010, a Shareholders' Meeting approved the issuance of bonus Shares to Shareholders in the ratio of 2:1 (a Shareholder owning two Shares will receive one new Share). The bonus Shares were issued on 21 January 2011. The bonus Shares were issued to Shareholders holding Shares at 21 January 2011 and therefore the issuance is reflected in the number of Shares underlying the GDRs at the date of this document.

Shares with Differential Voting Rights

No preference shares in the Company have been issued and no Shareholder enjoys different or enhanced voting rights from any other Shareholder.

Register of Shareholders

The Company is obliged to maintain a register of Shareholders at the VSD. The Company recognises the persons whose names are recorded as holders of Shares in its register of shareholders as a Shareholder. Shareholders are the owners of the Company and have rights and obligations corresponding to the number and types of shares they own. The liability of each Shareholder is limited to the par value of the Shares it holds.

A person holding Shares through the VSD book-entry settlement system may only attend, speak and vote at a Shareholders' Meeting as a Shareholder if his name appears on the register of Shareholders maintained by VSD on the book closure date fixed by the Company or VSD (acting on the authorisation of the Company) for the purpose of the proposed Shareholders' Meeting.

Resolution approving the issue of the New Shares

On 18 August 2010, the Board of Directors issued a board resolution noting that the Shareholders on the register of members as at 5 August 2010 had, amongst other matters, approved the issue of the New Shares. The shareholders' resolution approved the disapplication of shareholders' pre-emption rights in relation to the issue of the New Shares and imposed a maximum price at which the New Shares could be sold of VND 72,000 per New Share.

Convertible Securities

The Company may issue from time to time debt instruments that are partly and fully convertible into Shares and/or warrants to purchase Shares subject to approval of the Shareholders' Meeting.

In September 2010, the Company placed 1.1 million convertible bonds with Northbrooks Investments (Mauritius) Pte Ltd, an affiliate of Temasek Holdings Pte Ltd, the Singapore government's sovereign fund, for a total of VND 1.1 trillion. The bonds are convertible into Shares at a conversion price of VND 67,375 within one year. If converted, 16.32 million Shares will be added to the total number of the Company's issued Shares, and those Shares would represent approximately 5.29 per cent. of the Company's total number of issued Shares at the time of the placement. The bonds have a zero per cent. coupon over the first

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year. However, if the bonds are not converted within this time period, the coupon will be determined by the average interest rates applicable to the interest rates paid on deposits by ACB, Sacombank, Techcombank and Eximbank, within a margin of three per cent. per annum payable on maturity.

Liquidation or other return of capital

In the event of a dissolution or liquidation of the Company and provided it has fully paid its debts and obligations, the Shareholders may receive part of the remaining assets in proportion to the number of Shares held by them.

Limitations on Rights to Hold or Vote on Shares

Under applicable Vietnamese laws, foreign investors may only hold up to 49 per cent. of the Shares.

Minority Rights

In addition to rights of a Shareholder, a Shareholder or a group of Shareholders holding more than 5 per cent. of the Shares for six consecutive months or longer will have rights (i) to nominate members to the Board of Management and the Supervisory Board; (ii) to call a Shareholders' Meeting as provided for in the Charter; (iii) to examine and receive a copy of or excerpt from the list of Shareholders eligible to participate and vote at Shareholders' Meetings; and (iv) to request the Supervisory Board to inspect each particular issue relating to the management and administration of the operations in cases where it is considered necessary.

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RELATED PARTY TRANSACTIONS

All related party transactions entered into by the Group over the four-year period to the date of these Listing Particulars were concluded at arms length.

The Group has not entered into any related party transactions between 30 September 2010 and the date of these Listing Particulars.

A temporary loan to Mr. Doan Nguyen Duc (the Chairman of the Board of Directors) was a receivable of the Company at the date of these Listing Particulars and the outstanding amount at that date was VND 8,239,637,000. No other related party loans or guarantees remain outstanding.

The figures set out below next to "Related party transactions (receivable and payable) as a percentage of turnover during the period" was calculated by adding both the receivable and payable related party transactions together and expressing the total as a percentage of the Group's turnover during the relevant period. The calculation did not involve any net-off between receivable and payable transactions.

Related party transactions entered into by the Group during the nine-month period ended 30 September 2010

Related party Group's relationship with party

Transaction Receivable or payable

Value of transaction(VND '000)

Truc Thinh Trading and Services Company Limited

Related company –a director of Truc Thinh Trading and Services Company Limited is the brother-in-law of Mr. Duc, the Chairman of theCompany

Construction of apartments for the Group

Payable 41,026,925


Related company –see above

Office rental received Receivable 196,679

Huynh De Construction Corporation

Related company –a director ofHuynh De Construction Corporation is the brother-in-law of Mr. Duc, the Chairman of the Company

Construction of apartments for the Group

Payable 26,798,364


Related company –see above

Office rental received Receivable 223,976

Total 68,245,944Related party transactions (receivable and

2.21 per cent.

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payable) as a percentage of turnover during the period

Related party transactions entered into by the Group during the year ended 31 December 2009





Related company – see above

Construction of New Saigon and River View apartments for the Group

Payable 130,831,744



Subcontract work provided by the Company's An Phu branch

Receivable 72,046,294



Sale of goods from the Group




Construction of New Saigon apartments for the Group

Payable 130,823,162



Advances received for construction of Phu Hoang Anh apartments for the Group




Sale of goods from the Group


Binh Dinh Constrexim JSC

Associate – the Company owns 42 per cent. of Binh Dinh Constrexim JSC

Construction of hydropower plants and a hospital for the Group

Payable 54,416,628

Total 656,525,739Related party transactions (receivable and payable) as a percentage of turnover during the period

15.02 per cent.

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Construction of New Saigon and Tran Xuan Soan apartments for the Group

Payable 339,072,463







Sales of apartments




Offsetting receivables from sales of apartments against construction costs due to Huynh De




Construction of New Saigon, River View and Tran Xuan Soan apartments for the Group

Payable 278,307,338







Sales of goods Receivable 3,545,756

Hoang Anh Mang Yang Rubber JSC

Associate – the Company owned 40 per cent. of Hoang Anh Mang Yang Rubber JSC at the time of the transaction

Rendering construction works

Payable 695,717


Associate – see above



Associate – see above


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Thanh Da Construction and Real Estates Investment JSC

Associate – the Company owned 24 per cent. of Thanh Da Construction and Real Estates Investment JSC at the time of the loan

Loan to the Group Payable 60,000,000

Mr. Nguyen Ngoc An

Shareholder of the Company

Loan to the Group Payable 120,000,000

Total 1,550,913,947Related party transactions (receivable and payable) as a percentage of turnover during the period

82.27 per cent.





Mr. Doan Nguyen Duc

Chairman Loan to the Group Payable 200,000,000

Mr. Le Hung Board of Management member

Buying shares Payable 109,000,000

Huynh De Construction Company Limited

Affiliate company – see above

Construction of apartments

Payable 251,643,424



Subcontract works provided by the Group




Sale of goods Receivable 97,483,200



Sale of goods Receivable 88,621,091

Gia Bang Company Affiliate company – a director of Gia Bang Company is a sibling of Mr. Nguyen Van Su,

Sale of apartments Receivable 36,402,295

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the General Director of the Company

Lam Tay Nguyen Investment Company Limited

Affiliate company – the major shareholders of Lam Tay Nguyen Investment Company Limited are shareholders and managers of the Company

Sale of apartments Receivable 59,475,350

Total 1,111,229,230Related party transactions (receivable and payable) as a percentage of turnover during the period

69.91 per cent.

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TERMS AND CONDITIONS OF THE GLOBALDEPOSITARY RECEIPTS

The following terms and conditions (excepting sentences in italics) will apply to the Global Depositary Receipts, and will be endorsed on each Global Depositary Receipt certificate:

The global depositary receipts represented by this certificate (the "GDRs") are each issued in respect of one equity share of par value VND 10,000 each in Hoang Anh Gia Lai Joint Stock Company (the "Company") (the "Shares") pursuant to and subject to an agreement dated 6 December 2010 between the Company and Deutsche Bank Trust Company Americas as depositary (as defined below) (such agreement, as amended from time to time, being hereinafter referred to as the "Deposit Agreement").

Pursuant to the provisions of the Deposit Agreement, the Depositary has appointed Deutsche Bank AG Ho Chi Minh City Branch as Custodian (as defined below) to receive and hold on its behalf the share certificates in respect of certain Shares (the "Deposited Shares") and all rights, securities, property and cash deposited with the Custodian which are attributable to the Deposited Shares (together with the Deposited Shares, the "Deposited Property"). The Custodian on behalf of the Depositary shall hold Deposited Shares for the benefit of the Holders (as defined below) in proportion to the number of Shares in respect of which the GDRs held by them are issued.

In these terms and conditions (the "Conditions"), references to the "Depositary" are to Deutsche Bank Trust Company Americas and/or any other depositary which may from time to time be appointed under the Deposit Agreement, references to the "Custodian" are to Deutsche Bank AG, Ho Chi Minh City Branch or any other custodian from time to time appointed under the Deposit Agreement and references to the "Custodian's Office" mean, in relation to the Custodian, its office at Floor 14, Saigon Centre 65, Le Loi Boulevard, District 1, Ho Chi Minh City, Vietnam (or such other office as from time to time may be designated by the Custodian with the approval of the Depositary).

GDRs may take the form of GDRs evidenced by one or more Master GDRs (each a "Master GDR") registered in the name of a common nominee for, and held by, a common depositary (the "Common Depositary") for the Clearing Systems and held for the account of accountholders in the relevant Clearing System, exchangeable at the option of the Holder (as defined below) of such Master GDR and at the expense of any person shown in the records of the relevant Clearing System(s) as the owner of a GDR (as defined below) in certain circumstances and upon delivery to the Depositary of either (a) a certificate substantially in the form of Schedule 3 of the Deposit Agreement or (b) an electronic certification through the relevant Clearing System(s), as the case may be, in lieu of such certification set forth in Schedule 3 of the Deposit Agreement, for a certificate in definitive registered form in respect of GDRs evidencing all or part of the interest of such person in such Master GDR. A GDR evidenced by an individual definitive certificate will not be eligible for clearing and settlement through a Clearing System.

At the time of issue of the Master GDR, the Company will not have issued the relevant Shares to the Custodian on behalf of the Depositary. The Deposited Property at such time will comprise a preferential allotment letter from the Company in, or substantially in, the form set out in Schedule 4 of the Deposit Agreement.

The Master GDR will only be exchanged for definitive GDRs in registered form in the circumstances described in (i), (ii), (iii) or (iv) below in whole. The Depositary shall deliver, within 60 days of the occurrence of the relevant event described in (i), (ii), (iii) or (iv) below, GDRs in definitive form, in exchange for the Master GDR, to Holders in the event that:

(i) the Holder of the Master GDR is unwilling or unable to continue as Common Depositary (or as nominee thereof), as the case may be, and a successor common depositary or successor depositary (or successor nominee therefor), as the case may be, is not appointed within 90 calendar days; or

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(ii) either of the Clearing Systems are closed for business for a continuous period of 14 calendar days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does, in fact, do so and no alternative clearing system satisfactory to the Depositary is available within 45 calendar days; or

(iii) the Depositary has determined that, on the occasion of the next payment in respect of the GDRs, the Company, the Depositary or its Agent would be required to make any deduction or withholding from any payment in respect of the GDRs which would not be required were the GDRs in definitive form; or

(iv) in the determination of the Depositary, it is impracticable or unduly burdensome or expensive to continue to have the GDRs represented by Master GDRs.

References in these Conditions to the "Holder" of any GDR shall mean the person or persons registered on the books of the Depositary maintained for such purpose (the "Register") as holder. These Conditions include summaries of, and are subject to, the detailed provisions of the Deposit Agreement, which includes the forms of the certificates in respect of the GDRs. Copies of the Deposit Agreement are available for inspection at the specified office of the Depositary and each Agent (as defined in Condition 17) and at the Custodian's Office. Holders are deemed to have notice of and be bound by all of the provisions of the Deposit Agreement.

Terms used in these Conditions and not defined herein but which are defined in the Deposit Agreement have the meanings ascribed to them in the Deposit Agreement.

1 DEPOSIT OF SHARES AND OTHER SECURITIES

(A) After the initial deposit of Shares by the Company in respect of each GDR, unless otherwise agreed by the Depositary and the Company and permitted by applicable law, only the following may be deposited under the Deposit Agreement in respect of such GDR:

(i) Shares issued as a dividend or free distribution on Deposited Shares pursuant to Condition 5;

(ii) Shares subscribed or acquired by Holders from the Company through the exercise of rights distributed by the Company to such persons in respect of Deposited Shares pursuant to Condition 7;

(iii) securities issued by the Company to the Holders in respect of Deposited Shares as a result of any change in the par value, sub-division, consolidation or other reclassification of Deposited Shares or otherwise pursuant to Condition 10. References in these Conditions to "Deposited Shares" or "Shares" shall include any such securities, where the context permits; and

(iv) any other Shares in issue or purchased by the Depositary pursuant to Condition 1(B).

(B) The Depositary will issue GDRs (a) on the Closing Date, subject to confirmation by or on behalf of the Company as to the number of Shares to be evidenced by the Master GDR and receipt by the Depositary of the Preferential Allotment Letter, and provided that the Depositary may cancel those GDRs so issued (or a portion of them) in accordance with Clause 2 of the Deposit Agreement; and (b) in respect of (i) Shares accepted for deposit under Condition 1(A) and (ii) subject to the Depositary being pre-funded, indemnified and/or secured to its satisfaction, and such other conditions being satisfied as the Depositary may require, Shares purchased by the Depositary on behalf of depositors in accordance with this Condition. Under the Deposit Agreement, the Company must inform the Depositary if any Shares issued by it which may be deposited under this Condition do not, by reason of the date of issue or otherwise, rank pari passu in all respects

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with the other Deposited Shares. Subject to the provisions of Conditions 5, 7 and 10, if the Depositary purchases such Shares on behalf of depositors and accepts such Shares for deposit, it will arrange for the issue of temporary GDRs in respect of such Shares which will form a different class of GDRs from the other GDRs until such time as the Shares which they represent become fully fungible with the other Deposited Shares.

Subject to the terms and conditions of the Deposit Agreement and applicable law, upon physical delivery to the Custodian of Shares by the Depositary on behalf of depositors, delivery to the Depositary of (i) a certificate and/or instruction, the form of which will be available from the Depositary and/or (ii) an electronic certification through the relevant Clearing System and payment of necessary taxes, governmental charges (including transfer taxes) and other charges as set forth in the Deposit Agreement, the Depositary will adjust its records for the number of GDRs issued in respect of the Shares so purchased and deposited and will notify the Common Depositary as to the increase in the number of GDRs evidenced by the Master GDR. Each person receiving a GDR or interest therein will be deemed to make the representations, covenants and acknowledgements set forth under "Transfer Restrictions" of the Listing Particulars.

(C) The Depositary will use reasonable endeavours, subject to all applicable laws and regulations, and providing it has been pre-funded, indemnified and/or secured to its satisfaction, to apply any funds received from depositors for the purchase of Shares in accordance with Clause 3.3 of the Deposit Agreement, to apply such funds towards the purchase of such number of Shares (such Shares purchased shall form Deposited Property) as specified by the depositor in the notice delivered pursuant to Clause 3.3 of the Deposit Agreement at the then prevailing market price and will issue the corresponding number of GDRs and will make the appropriate entries in the Register to show such issue and either (i) make the appropriate entries on the Master GDR to reflect the increase in the number of GDRs evidenced by the Master GDR or (ii) issue a further Master GDR in respect of the new issue of GDRs (which further Master GDR may or may not have a temporary ISIN as appropriate in the circumstances) and shall notify the Clearing Systems and the Company of such increase. The Depositary will refuse to accept Purchase Funds for the purchase of Shares on behalf of depositors and/or will refuse to purchase and accept Shares for deposit whenever it is notified in writing that the Company has restricted the purchase or transfer of such Shares to comply with ownership restrictions under applicable Vietnamese law or that such purchase or deposit would result in any violation of any applicable Vietnamese laws or governmental or stock exchange regulations. The Depositary may also refuse to accept Purchase Funds for the purchase of Shares on behalf of depositors and/or will refuse to purchase and accept Shares for deposit in certain other circumstances as set out in the Deposit Agreement.

(D) The Depositary shall, if after accepting Purchase Funds it is unable, using reasonable endeavours, to apply such Purchase Funds (less all fees, taxes, duties, charges, costs and expenses incurred or that may be incurred by or on behalf of the Depositary with respect to such purchase) towards the purchase of such number of Shares specified by the depositor in the notice delivered pursuant to Clause 3.3 of the Deposit Agreement, contact the depositor (or its broker-dealer acting as agent on its behalf) for further instructions. The Depositary will not, under any circumstances, be required to pay the depositor any interest on such Purchase Funds and, if such Purchase Funds are returned to the depositor, the depositor shall have no further claim in respect of such Purchase Funds or against the Depositary.

(E) The number of Shares or other Deposited Property not deposited but represented by GDRs outstanding at any time as a result of Pre-Releases will not normally exceed thirty percent (30%) of the Shares or other Deposited Property deposited hereunder; provided, however, that the Depositary reserves the right to disregard such limit from time to time as it deems reasonably appropriate, and may change such limit for purposes of general application. Nothing in Condition 1(D) shall obligate the Company to issue any new Shares in respect of any Pre-Release by the Depositary.

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(F) Subject to the limitations set forth in the Deposit Agreement, the Depositary may (but is not required to) issue GDRs prior to the delivery to it of Purchase Funds for the purchase of Shares on behalf of depositors in respect of which such GDRs are to be issued.

2 WITHDRAWAL OF DEPOSITED PROPERTY

(A) Deposited Property may not be withdrawn at any time during the period of 12 months beginning on the date of the initial deposit of Shares by the Company, or such other statutory period as may apply to the holding of the Shares by the Custodian pursuant to applicable Vietnamese law and regulations relating to private placements in effect from time to time (the "Lock Up Period"), details of which shall be notified to the Holders in accordance with Condition 23. Subject as set out above, any Holder may request withdrawal of, and the Depositary shall thereupon sell (either by public or private sale and otherwise at its discretion, subject to Vietnamese laws and regulations), the Deposited Property (other than the Deposited Property held in cash), and shall distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to, or to the order in writing of, the person or persons specified in the order for withdrawal, upon production of such evidence that such person is the Holder of, and entitled to, the relative GDR as the Depositary may reasonably require at the specified office of the Depositary or any Agent accompanied by:

(i) a duly executed order (in a form approved by the Depositary) requesting the Depositary to cause the Deposited Property being withdrawn to be sold in accordance with this Condition and Condition 4;

(ii) either (a) a certificate and/or instruction, the form of which will be available from the Depositary, by or on behalf of the person who will be the beneficial owner of the Deposited Property to be delivered in respect of such GDRs and/or (b) an electronic certification through the relevant Clearing System and in any case, delivery of such other documentation to the Depositary as may reasonably be requested by the Depositary;

(iii) confirmation from such Holder that the payment of such fees, taxes, duties, charges, costs and expenses as may be required under these Conditions or the Deposit Agreement may be deducted from the proceeds of such sale of Deposited Property; and

(iv) the surrender (if appropriate) of GDR certificates in definitive registered form to which the Deposited Property being withdrawn is attributable.

Vietnamese corporate income tax is payable on the transfer of securities by a foreign investor at a rate of 0.1 per cent. of the sale price of the Securities. Holders are advised to consult their tax advisers to determine whether the tax will apply to any specific transfer or withdrawal.

(B) Upon production of such documentation and the satisfaction of the requirements in accordance with Condition 2(A), the Depositary will direct the Custodian, within a reasonable time after receiving such direction from such Holder, to deliver at the Custodian's Office to, or to the order in writing of, the person or persons designated in the accompanying order all other property forming part of the Deposited Property attributable to such GDR, accompanied, if required by law, by one or more duly executed endorsements or instruments of transfer in respect thereof as aforesaid, provided that the Depositary (at the request, risk and expense of any Holder so surrendering a GDR) will deliver any property forming part of the Deposited Property which may be held by the Depositary and is attributable to such GDR (accompanied by such instruments of transfer in blank or to the person or persons specified in such order and such other documents, if any, as are required by law for the transfer thereto), to the Specified Office from time to time of the Depositary or, if any, or to the specified office from time to time of any Agent (located in Vietnam or such other place as is permitted under applicable law from time to time) as designated by the surrendering Holder in such accompanying order as aforesaid.

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(C) Delivery by the Depositary, any Agent and the Custodian of all certificates, instruments, dividends or other property forming part of the Deposited Property as specified in this Condition will be made subject to any laws or regulations applicable thereto.

(D) The Depositary may suspend the withdrawal of all or any category of Deposited Property during any period when the register of shareholders or other relevant holders of other securities of the Company is closed, generally or in one or more localities, or in order to comply with any applicable Vietnamese law or governmental or stock exchange regulations.

3 TRANSFER AND OWNERSHIP

The GDRs are in registered form, each issued in respect of one Share. Title to the GDRs passes by registration in the records of the Depositary. The Depositary will refuse to accept for transfer any GDRs if it reasonably believes that such transfer would result in a violation of applicable laws. The Holder of any GDR will (except as otherwise required by law) be treated as its absolute owner for all purposes (whether or not any payment or other distribution in respect of such GDR is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft or loss of any certificate issued in respect of it) and no person will be liable for so treating the Holder.

The Deposit Agreement defines the "owner of GDRs" as, (i) in respect of any GDRs represented by a Master GDR, such person whose name appears in the records of the Clearing Systems as the owner of a particular amount of GDRs, (ii) in respect of any other GDR, the Holder thereof and (iii) "beneficial owner of GDRs" as a person holding beneficial title to such GDRs or interests therein.

Vietnamese corporate income tax is payable on the transfer of securities by a foreign investor at a rate of 0.1 per cent. of the sale price of the Securities. Holders are advised to consult their tax advisers to determine whether the tax will apply to any specific transfer or withdrawal.

4 CASH DISTRIBUTIONS

Whenever the Depositary (or the Custodian on its behalf) shall receive from the Company any cash dividend or other cash distribution on or in respect of the Deposited Shares (including any amounts received in the liquidation of the Company) or otherwise in connection with the Deposited Property, the Depositary, its Agent or Custodian shall, as soon as practicable, at the Depositary's discretion, convert the same into United States dollars in accordance with Condition 8. The Depositary shall, if practicable in the opinion of the Depositary, give notice to the Holders of its receipt of such payment in accordance with Condition 23, specifying the amount per Deposited Share payable in respect of such dividend or distribution and the date, determined by the Depositary, for such payment to Holders and shall, as soon as practicable, distribute any such amounts to the Holders in proportion to the number of Deposited Shares represented by the GDRs so held by them respectively, subject to and in accordance with the provisions of Conditions 9 and 11; provided that:

(i) in the event that any Deposited Shares shall not be entitled, by reason of the date of issue or transfer or otherwise, to such full proportionate amount, the amount so distributed to the relative Holders shall be adjusted accordingly; and

(ii) the Depositary will distribute only such amounts of cash dividends and other distributions as may be distributed without attributing to any GDR a fraction of the lowest integral unit of currency in which the distribution is made by the Depositary, and any balance remaining shall be retained by the Depositary beneficially as an additional fee under Condition 16(A)(iv).

5 DISTRIBUTIONS OF SHARES

Whenever the Depositary (or the Custodian on its behalf) shall receive from the Company any distribution in respect of Deposited Shares which consists of a dividend in or free distribution or bonus issue of Shares,

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the Depositary shall cause to be distributed to the Holders entitled thereto, in proportion to the number of Deposited Shares represented by the GDRs held by them respectively, additional GDRs representing an aggregate number of Shares received pursuant to such dividend or distribution, by an increase in the number of GDRs evidenced by the Master GDR or an issue of certificates in definitive registered form in respect of GDRs, according to the manner in which the Holders hold their GDRs; provided that, if and in so far as the Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, owing to the fractions which would otherwise result or to any requirement that the Company, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary shall sell (either by public or private sale and otherwise at its discretion, subject to Vietnamese laws and regulations) such Shares so received and distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto.

6 DISTRIBUTIONS OTHER THAN IN CASH OR SHARES

Whenever the Depositary shall receive from the Company any dividend or distribution in securities (other than Shares) or in other property (other than cash) on or in respect of the Deposited Property, the Depositary shall distribute or cause to be distributed such securities or other property to the Holders entitled thereto, in proportion to the number of Deposited Shares represented by the GDRs held by them respectively, in any manner that the Depositary may deem equitable and practicable for effecting such distribution; provided that, if and in so far as the Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Company, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary shall sell the securities or property so received, or any part thereof (either by public or private sale and otherwise at its discretion, subject to Vietnamese laws and regulations), and shall distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto.

7 RIGHTS ISSUES

(A) If and whenever the Company announces its intention to make any offer or invitation to the holders of Shares to subscribe for or to acquire Shares, securities or other assets by way of rights, the Depositary shall as soon as practicable give notice to the Holders, in accordance with Condition 23, of such offer or invitation specifying, if applicable, the earliest date established for acceptance thereof, the last date established for acceptance thereof and the manner by which and time during which Holders may request the Depositary to exercise such rights as provided below or, if such be the case, give details of how the Depositary proposes to distribute the rights or the proceeds of sale. The Depositary will deal with such rights in the manner described below:

(i) If, at its discretion, the Depositary shall be satisfied that it is lawful and reasonably practicable and, to the extent that it is so satisfied, the Depositary shall make arrangements whereby the Holders may, upon payment of the subscription price in VND or other currency (where appropriate) together with such fees, taxes, duties, charges, costs and expenses as may be required under the Deposit Agreement and completion of such undertakings, declarations, certifications and other documents as the Depositary may reasonably require, request the Depositary to exercise such rights on their behalf with respect to the Deposited Shares and in the case of Shares so subscribed or acquired to distribute them to the Holders entitled thereto by an increase in the numbers of GDRs evidenced by the Master GDR or an issue of certificates in definitive form in respect of GDRs, according to the manner in which the Holders hold their GDRs;

(ii) If, at its discretion, the Depositary shall be satisfied that it is lawful and reasonably practicable and to the extent that it is so satisfied, the Depositary shall distribute such securities or other assets by way of rights or the rights themselves to the Holders entitled thereto in proportion to the number of Deposited Shares represented by the GDRs held by them respectively in such manner as the Depositary may at its discretion determine; or

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(iii) If, and insofar as the Depositary is not satisfied that, any such arrangement and distribution to all or any Holders is lawful and reasonably practicable (including, without limitation, owing to the fractions which would otherwise result or to any requirement that the Company, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or is so satisfied that it is unlawful, the Depositary will, provided that Holders have not taken up rights through the Depositary as provided in (i) above, sell such rights (either by public or private sale and otherwise at its discretion, subject to Vietnamese laws and regulations) and distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto except to the extent prohibited by applicable law.

(B) If at the time of the offering of any rights, at its discretion, the Depositary shall be satisfied that it is not lawful or practicable (for reasons outside its control) to dispose of the rights in any manner provided in Condition 7(A) the Depositary shall permit the rights to lapse. In the absence of its own wilful default, gross negligence or bad faith the Depositary will not be responsible for any failure to determine that it may be lawful or practicable to make rights available to Holders in general or to any Holder in particular.

(C) The Company has agreed in the Deposit Agreement that it will, unless prohibited by applicable law, give its consent to, and if requested use all reasonable endeavours (subject to the next paragraph) to facilitate any such distribution, sale or subscription by the Depositary, the Custodian or the Holders, as the case may be, pursuant to Conditions 4, 5, 6, 7 or 10.

(D) If the Company notifies the Depositary that registration is required in any jurisdiction under any applicable law of the rights, securities or other property to be distributed under Conditions 4, 5, 6, 7 or 10 or the securities to which such rights relate in order for the Depositary to offer such rights or distribute such securities or other property to the Holders or owners of GDRs and to sell the securities represented by such rights, the Depositary will not offer such rights or distribute such securities or other property to Holders of GDRs unless and until the Company procures, at the Company's expense, the receipt by the Depositary of an opinion from counsel satisfactory to the Depositary that the necessary registration has been effected or that the offer and sale of such rights, securities or property to Holders of GDRs are exempt registration. Neither the Company nor the Depositary shall be liable to register such rights, securities or other property or the securities to which such rights relate and they shall not be liable for any losses, damages or expenses resulting from any failure to do so.

If at the time of the offering of any rights, at its discretion, the Depositary shall be satisfied that it is not lawful or practicable to dispose of the rights in any manner provided in paragraphs (i), (ii) and (iii) above, the Depositary shall permit the rights to lapse.

In the absence of its own wilful default, gross negligence or bad faith, the Depositary will not be responsible for any failure to determine that it may be lawful or practicable to make rights available to Holders or owners of GDRs in general or to any Holder or owner of a GDR or Holders or owners of GDRs in particular.

8 CONVERSION OF FOREIGN CURRENCY

Whenever the Depositary shall receive any currency other than United States dollars by way of dividend or other distribution or as the net proceeds from the sale of securities, other property or rights, and if at the time of the receipt thereof the currency so received can in the judgment of the Depositary be converted on a reasonable basis into United States dollars and distributed to the Holders entitled thereto, the Depositary shall as soon as practicable itself convert or cause to be converted by another bank, by sale or in any other manner that it may determine, the currency so received into United States dollars. If such conversion or distribution can be effected only with the approval or licence of any government or agency thereof, the Depositary, with the assistance of the Company, shall make reasonable efforts to apply, or procure that an application be made, for such approval or licence, if any, as it may consider necessary. If at any time the

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Depositary shall determine that in its judgment any currency other than United States dollars is not convertible on a reasonable basis into United States dollars and distributable to the Holders entitled thereto, or if any approval or licence of any government or agency thereof which is required for such conversion is denied or, in the opinion of the Depositary, is not obtainable, or if any such approval or licence is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute such other currency received by it (or an appropriate document evidencing the right to receive such other currency) to the Holders entitled thereto to the extent permitted under applicable law, or the Depositary may in its discretion hold such other currency for the benefit of the Holders entitled thereto. If any conversion of any such currency can be effected in whole or in part for distribution to some (but not all) Holders entitled thereto, the Depositary may in its discretion make such conversion and distribution in United States dollars to the extent possible to the Holders entitled thereto and may distribute the balance of such other currency received by the Depositary to, or hold such balance in non-interest bearing accounts for the account of, the Holders entitled thereto and notify the Holders accordingly.

Whenever the Depositary shall receive any currency other than Vietnamese dong by way of funds deposited for the purchase of Shares, other property or rights, and if at the time of the receipt thereof the currency so received can in the judgment of the Depositary be converted on a reasonable basis into Vietnamese dong and applied for the purchase of Shares, the Depositary shall as soon as practicable itself convert or cause to be converted by another bank, by sale or in any other manner that it may determine, the currency so received into Vietnamese dong. If such conversion or distribution can be effected only with the approval or licence of any government or agency thereof, the Depositary, with the assistance of the Company, shall make reasonable efforts to apply, or procure that an application be made, for such approval or licence, if any, as it may consider necessary. If at any time the Depositary shall determine that in its judgment any currency other than Vietnamese dong is not convertible on a reasonable basis into Vietnamese dong or if any approval or licence of any government or agency thereof which is required for such conversion is denied or, in the opinion of the Depositary, is not obtainable, or if any such approval or licence is not obtained within a reasonable period as determined by the Depositary, the Depositary shall return such currency to the relevant depositor. If any conversion of any such currency can be effected in whole or in part towards the purchase of some (but not all) Shares, the Depositary shall, upon receipt of written instructions from such depositor, make such conversion to the extent possible and may return the balance of such other currency received by the Depositary to, or hold such balance on non-interest bearing accounts for the account of, the depositors entitled thereto and notify the depositors accordingly.

Any currency conversion pursuant to this Condition 8 shall be net of all fees, taxes, duties, charges, costs and expenses incurred or that may be incurred by or on behalf of the Depositary with respect to such conversion.

9 DISTRIBUTION OF ANY PAYMENTS

(A) Any distribution of cash under Conditions 4, 5, 6, 7 or 10 will be made by the Depositary to those Holders who are Holders of record on the record date established by the Depositary (which shall be the same date as the Record Date or, if different from the Record Date, shall be set after consultation with the Company and shall be as near as practicable to the Record Date) for that purpose and, if practicable in the opinion of the Depositary, notice shall be given promptly to Holders in accordance with Condition 23, in each case subject to any laws or regulations applicable thereto and (subject to the provisions of Condition 8) distributions will be made in United States dollars by cheque drawn upon a bank in New York City or, in the case of the Master GDR, according to usual practice between the Depositary and the relevant Clearing System(s). The Depositary or the Agent, as the case may be, may deduct and retain from all moneys due in respect of such GDR in accordance with the Deposit Agreement all fees, taxes, duties, charges, costs and expenses which may become or have become payable under the Deposit Agreement or under applicable law in respect of such GDR or the relative Deposited Property.

(B) Delivery of any securities or other property or rights other than cash shall be made as soon as practicable to the entitled Holder, subject to any laws or regulations applicable thereto. If any distribution made by the Company with respect to the Deposited Property and received by the

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Depositary shall remain unclaimed at the end of 12 years from the first date upon which such distribution is made available to Holders in accordance with the Deposit Agreement, all rights of the Holders to such distribution or the proceeds of the sale thereof shall be extinguished and the Depositary shall (except for any distribution upon the liquidation of the Company, which remains unclaimed for such period as aforesaid, when the Depositary shall retain the same) return the same to the Company for its own use and benefit subject, in all cases, to the provisions of applicable law.

10 CAPITAL REORGANISATION

Upon any change in the par value, sub-division, consolidation or other reclassification of Deposited Shares or any other part of the Deposited Property or upon any reduction of capital or upon any reorganisation, merger or consolidation of the Company or to which it is a party (except where the Company is the continuing corporation), the Depositary shall as soon as practicable give notice of such event to the Holders in accordance with Condition 23 and, at its discretion, may treat such event as a distribution and comply with the relevant provisions of Conditions 4, 5, 6, 7 and 9 with respect thereto, or may execute and deliver additional GDRs in respect of Shares or may require the exchange of existing GDRs for new GDRs which reflect the effect of such change.

11 TAXATION AND APPLICABLE LAWS

(A) Payments to Holders of dividends or other distributions made to Holders on or in respect of the Deposited Shares will be subject to deduction of Vietnamese and other withholding taxes, if any, at the applicable rates.

(B) If any governmental or administrative authorisation, consent, registration or permit or any report to any governmental or administrative authority is required under any applicable law in Vietnam in order for the Depositary to receive from the Company Shares to be deposited under the Conditions or in order for Shares, other securities or other property to be distributed under Conditions 4, 5, 6 or 9 to be subscribed under Condition 7, the Depositary shall request that the Company apply for such authorisation, consent, registration or permit or file such report on behalf of the Holders within the time required under such law. In this connection, the Company has undertaken in the Deposit Agreement, to the extent reasonably practicable and that does not involve unreasonable expense on behalf of the Company, to take such action as may be required in obtaining or filing the same. The Depositary shall not distribute GDRs, Shares, other securities or other property with respect to which such authorisation, consent, registration or permit or such report has not been obtained or filed, as the case may be, and shall have no duties to obtain any such authorisation, consent or permit, or to file any such report except in circumstances where the same may only be obtained or filed by the Depositary without, in the opinion of the Depositary, unreasonable burden or expense.

12 VOTING RIGHTS

Holders of GDRs will have no voting rights with respect to the Deposited Shares. The Depositary will not exercise any voting rights in respect of the Deposited Shares unless it is required to do so by law. If so required, the Depositary will, at the direction of the Board of Directors of the Company (subject to the advice of legal counsel taken by the Depositary and the Company at the expense of the Company), either vote as directed by the Board of Directors of the Company or give a proxy or power of attorney to vote the Deposited Shares in favour of a Director of the Company or other person or vote in the same manner as those shareholders designated by the Board of Directors of the Company. A valid corporate decision of the Company will bind the Depositary and the Holders of GDRs notwithstanding these restrictions on voting rights. The Depositary shall in no circumstances exercise any discretion with respect to the voting of the Deposited Shares.

13 DOCUMENTS TO BE FURNISHED, RECOVERY OF TAXES, DUTIES AND OTHER CHARGES

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The Depositary shall not be liable for any taxes, duties, charges, costs or expenses which may become payable in respect of Shares purchased on behalf of depositors, the Deposited Shares or other Deposited Property or the GDRs, whether under any present or future fiscal or other laws or regulations, and such part thereof as is proportionate or referable to a GDR shall be payable by the Holder thereof to the Depositary at any time on request or may be deducted from any amount deposited with the Depositary by such depositor or due or becoming due on such GDR in respect of any dividend or other distribution. In default thereof, the Depositary may for the account of the Holder discharge the same out of the proceeds of sale and subject to Vietnamese law and regulations, of an appropriate number of Deposited Shares (being an integral multiple of the number of Shares in respect of which a single GDR is issued) or other Deposited Property and subsequently pay any surplus to the Holder. Any such request shall be made by giving notice pursuant to Condition 23.

14 LIABILITY

(A) None of the Depositary, the Custodian, the Company, or any of their agents, officers, directors or employees or any Agent shall incur any liability to any other of them or to any Holder or owner of a GDR if, by reason of any provision of any present or future law or regulation of Vietnam or any other country or of any relevant governmental authority, or by reason of the interpretation or application of any such present or future law or regulation or any change therein, or by reason of any other circumstances beyond their control, or, in the case of the Depositary, the Custodian, or any of their agents, officers, directors or employees or any Agent by reason of any provision, present or future, of the Constitutive Documents, any of them shall be prevented, delayed or forbidden from doing or performing any act or thing which the terms of the Deposit Agreement or these Conditions provide shall or may be done or performed; nor (save in the case of wilful default, gross negligence or bad faith) shall any of them incur any liability to any Holder or owner of a GDR or a person with an interest in a GDR by reason of any non-performance or delay, caused as aforesaid, in performance of any act or thing which the terms of these Conditions or the Deposit Agreement provide shall or may be done or performed, or by reason of any exercise of, or failure to exercise, caused as aforesaid, any voting rights attached to the Deposited Shares or any of them or any other discretion or power provided for in these Conditions or the Deposit Agreement. Any such party may rely on, and shall be protected in acting upon, any written notice, request, direction or other document believed by it to be genuine and to have been duly signed or presented (including a translation which is made by a translator believed by it to be competent or which appears to be authentic).

(B) None of the Depositary, the Custodian or any Agent shall be liable (except by reason of its own wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees) to the Company or any Holder or owner of GDRs, by reason of having accepted as valid, or not having rejected, any document relating to Shares or GDRs or any signature on any transfer or instruction purporting to be such and subsequently found to be forged or not authentic (except as aforementioned) for its failure to perform any obligations under the Deposit Agreement or these Conditions.

(C) The Depositary and each of its Agents (and any holding, subsidiary or associated company of the Depositary) may engage or be interested in any financial or other business transactions with the Company or any of its subsidiaries or affiliates, or in relation to the Deposited Property (including, without prejudice to the generality of the foregoing, the conversion of any part of the Deposited Property from one currency to another), may at any time hold GDRs for its own account, and shall be entitled to charge and be paid all usual fees, commissions and other charges for business transacted and acts done by it as a bank or in any other capacity, and not in the capacity ofDepositary, in relation to matters arising under the Deposit Agreement (including, without prejudice to the generality of the foregoing, charges on the conversion of any part of the Deposited Property from one currency to another and on any sales of property) without accounting to Holders or owners of GDRs or a person with an interest in a GDR or any other person for any profit arising therefrom.

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(D) The Depositary shall endeavour to effect any such sale as is referred to or contemplated in Conditions 5, 6, 7, 10, 13 or 21 or any such conversion as is referred to in Condition 8 in accordance with the Depositary's normal practices and procedures but shall have no liability (in the absence of its own wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees) with respect to the terms of such sale or conversion or if such sale or conversion shall not be possible. In the absence of its own wilful default, gross negligence or bad faith, the Depositary will not be responsible for any failure to determine that it may be lawful or practicable to make rights available to Holders in general or to any Holder in particular pursuant to Condition 7.

(E) The Company, the Depositary and any of their respective agents shall not be liable to Holders of GDRs for any indirect, special, punitive or consequential damages.

(F) Neither the Company nor the Depositary shall be required or obliged to monitor, supervise or enforce the observance and performance by the other of its obligations under, or in connection with, the Deposit Agreement or these Conditions.

(G) Neither the Company nor the Depositary shall, subject to all applicable laws, have any responsibility whatsoever to the other party hereto, any Holder or any owner of GDRs or a person with an interest in a GDR as regards any deficiency which might arise because the Depositary is subject to any tax in respect of the Deposited Property or any part thereof or any income therefrom or any proceeds thereof.

(H) In connection with any proposed modification, waiver, authorisation or determination permitted by the terms of these Conditions or the Deposit Agreement, the Depositary shall not, except as otherwise expressly provided in Condition 22, be obliged to have regard to the consequence thereof for the Holders or owners of GDRs or a person with an interest in a GDR or any other person.

(I) Notwithstanding anything else contained in these Conditions or the Deposit Agreement, the Depositary may refrain from doing anything which could or might, in its reasonable opinion, be contrary to any law of any jurisdiction or any directive or regulation of any agency or state or which would or might otherwise render it liable to any person and the Depositary may do anything which is, in its reasonable opinion, necessary to comply with any such law, directive or regulation.

(J) Applicable laws and regulations in Vietnam, as amended from time to time, and the Constitutive Documents of the Company, may require holders and beneficial owners of Shares and/or GDRs to satisfy reporting requirements, comply with ownership restrictions or obtain regulatory approvals in certain circumstances. The Depositary and the Custodian shall be under no obligation to check, monitor or enforce compliance with any such reporting requirements, ownership restrictions, regulatory approvals or Constitutive Documents in respect of GDRs or Shares. Holders and beneficial owners of GDRs are solely responsible for complying with such reporting requirements, ownership restrictions and Constitutive Documents and obtaining such approvals. None of the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall have any liability in respect of such reporting requirements, ownership restrictions, approvals orConstitutive Documents and shall not be required to take any actions whatsoever on behalf of Holders or beneficial owners of GDRs to satisfy or comply with such reporting requirements, ownership restrictions or Constitutive Documents or obtain such regulatory approvals under applicable laws and regulations.

(K) Notwithstanding the generality of Condition 3, the Depositary shall refuse to register any transfer of GDRs or any deposit of Shares against issue of GDRs if notified by the Company, or if the Depositary becomes aware of the fact, that such transfer or issue would be in violation of the limitations set forth above or any other applicable laws.

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(L) The Depositary may, in relation to the Deposit Agreement and these Conditions, act or take no action on the advice or opinion of, or any certificate or information obtained from, any lawyer, valuer, accountant, banker, broker, securities company or other expert whether obtained by the Company, the Depositary or otherwise and shall not be responsible or liable for any loss or liability occasioned by so acting or refraining from acting or relying on information from persons presenting Shares for deposit or GDRs for surrender or requesting transfer thereof. Any such advice, opinion, certificate or information may be sent or obtained by letter, telex or facsimile transmission, and the Depositary shall not be liable for acting on any advice, opinion, certificate or information purported to be conveyed by any such letter, telex or facsimile transmission.

(M) The Depositary may call for and shall be at liberty to accept as sufficient evidence of any fact or matter or the expediency of any transaction or thing, a certificate, letter or other written communication signed or otherwise communicated on behalf of the Company by the Board of Directors or by a person duly authorised by the Board of Directors or such other certificate from persons specified in Condition 14(L) above which the Depositary considers appropriate and the Depositary shall not be bound in any such case to call for further evidence or be responsible for any loss or liability that may be occasioned by the Depositary acting on such certificate.

(N) Notwithstanding anything to the contrary contained in these Conditions or the Deposit Agreement, the Depositary shall not be liable in respect of any loss or damage which arises out of or in connection with the performance or non-performance of or the exercise or attempted exercise of, or the failure to exercise any of, its powers or discretions under the Deposit Agreement, except to the extent that such loss or damage arises from its own wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees.

(O) No provision of these Conditions or the Deposit Agreement shall require the Depositary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity and security against such risk of liability is not assured.

(P) The Depositary may, in the performance of its obligations hereunder, instead of acting personally, employ and pay an agent, whether a lawyer or other person, including obtaining an opinion of legal advisers in form and substance reasonably satisfactory to it, to transact or concur in transacting any business and do or concur in doing all acts required to be done by such party, including the receipt and payment of money. Save for (i) the failure on the part of the Depositary to exercise reasonable care in the selection or retention of any such agent or (ii) any misconduct or omission by an agent which is an affiliate of the Depositary, the Depositary will not be liable to anyone for any misconduct or omission by any such agent so employed by it or be bound to supervise the proceedings or acts of any such agent.

(Q) The Depositary may, having given prior notification to the Company, delegate by power of attorney or otherwise to any person or persons or fluctuating body of persons, whether being a joint Depositary of the Deposit Agreement or not and not being a person to whom the Company may reasonably object, all or any of the powers, authorities and discretions vested in the Depositary by the Deposit Agreement and such delegation may be made upon such terms and subject to such conditions, including power to sub-delegate and subject to such regulations as the Depositary may in the interest of the Holders think fit, provided that no objection from the Company to any such delegation as aforesaid may be made to an Affiliate. Any delegation by the Depositary shall be on the basis that the Depositary is acting on behalf of the Holders and the Company in making such delegation. The Company shall not in any circumstances and the Depositary shall not (provided that it shall have exercised reasonable care in the selection of such delegate) be bound to supervise the proceedings or be in any way responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of any misconduct or default on the part of any such delegate or sub-delegate, except that the Depositary shall be responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of any

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misconduct or default on the part of any such delegate or sub-delegate which is an Affiliate. However, the Depositary shall, if practicable, and if so requested by the Company, pursue (at the Company's expense and subject to receipt by the Depositary of such indemnity and security for costs as the Depositary may reasonably require) any legal action it may have against such delegate or sub-delegate, arising out of any such loss caused by reason of any such misconduct or default. The Depositary shall, within a reasonable time of any such delegation or any renewal, extension or termination thereof, give notice thereof to the Company. Any delegation under this Condition which includes the power to sub-delegate shall provide that the delegate shall, within a specified time of any sub-delegation or amendment, extension or termination thereof, give notice thereof to the Company and the Depositary.

(R) The Depositary shall be at liberty to hold or to deposit the Deposit Agreement and any deed or document relating thereto in any part of the world at the cost of the Depositary with any banking company or companies (including itself) whose business includes undertaking the safe custody of deeds or documents or with any lawyer or firm of lawyers of good repute, and may pay all sums due in respect thereof and the Depositary shall not (in the case of deposit with itself, in the absence of wilful default, gross negligence or bad faith or that of its agents, directors, officers or employees) be responsible for any losses or liability incurred in connection with any such deposit.

(S) In acting hereunder the Depositary shall have only those duties, obligations and responsibilities expressly specified in these Conditions or the Deposit Agreement and, other than holding the Deposited Property for the benefit of Holders as bare trustee, does not assume any relationship of trust for or with the Holders or the owners of GDRs except that any funds received by the Depositary for payment of any amount due, in accordance with the Conditions, on the GDRs shall, subject to Condition 9(B) be held by it in trust for the relevant Holder until duly paid thereto and any funds received by the Depositary for the purchase of Shares shall be held by the Depositary on trust for such depositor.

(T) No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement.

(U) In acting hereunder the Depositary does not give any assurance that the Initial Shares will be issued by the Company and if the Initial Shares are not issued, the Depositary shall not be liable to any person in respect of any loss or damage arising as a result of the Company's failure to issue the Initial Shares and/or the Depositary's right to cancel the GDRs in accordance with Clause 2.4.

15 ISSUE AND DELIVERY OF REPLACEMENT GDRS AND EXCHANGE OF GDRS

Subject to the payment of the relevant fees, taxes, duties, charges, costs and expenses and such terms as to evidence and indemnity as the Depositary may require, replacement GDRs will be issued by the Depositary and will be delivered in exchange for or replacement of outstanding lost, stolen, mutilated, defaced or destroyed GDRs upon surrender thereof (except in the case of destruction, loss or theft) at the specified office of the Depositary or (at the request, risk and expense of the holder) at the specified office of any Agent.

16 DEPOSITARY'S FEES, COSTS AND EXPENSES

(A) The Depositary shall be entitled to charge the following remuneration and receive the following remuneration and reimbursement (such remuneration and reimbursement being payable on demand) from the Holders in respect of its services under the Deposit Agreement:

(i) for the issue of GDRs or the cancellation of GDRs upon the withdrawal of Deposited Property: USD 0.05 or less per GDR issued or cancelled;

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(ii) for issuing GDR certificates in definitive registered form in replacement for mutilated, defaced, lost, stolen or destroyed GDR certificates: a sum per GDR certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs and expenses involved;

(iii) for issuing GDR certificates in definitive registered form (other than pursuant to (ii) above): a sum per GDR certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs (including, but not limited to, printing costs) and expenses involved;

(iv) for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Shares: a fee of USD 0.05 or less per GDR for each such dividend or distribution;

(v) in respect of any issue of rights or distribution of Shares (whether or not evidenced by GDRs) or other securities or other property (other than cash) upon exercise of any rights, any free distribution, stock dividend or other distribution (except where converted to cash): USD 0.05 or less per outstanding GDR for each such issue of rights, dividend or distribution;

(vi) for the operation and maintenance costs associated with the administration of the GDRs: an annual fee of USD 0.05 or less per GDR; (such fee to be assessed against Holders of record as at the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such Holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions); and

(vii) for the issue of GDRs pursuant to a change for any reason in the number of Shares represented by each GDR, regardless of whether or not there has been a deposit of Shares to the Custodian or the Depositary for such issuance: a fee of USD 0.05 or less per GDR (or portion thereof),

together with all expenses, transfer and registration fees, taxes, duties and charges payable by the Depositary, any Agent or the Custodian in connection with any of the above including, but not limited to charges imposed by a central depositary and such customary expenses as are incurred by the Depositary in the conversion of currencies other than US dollars into US dollars and fees imposed by any relevant regulatory authority.

(B) The Depositary is entitled to receive from the Company such fees, taxes, duties, charges, costs, expenses and other payments as agreed between them in any agreement concerning such fees, taxes, duties, charges, costs, expenses and other payments.

17 AGENTS

(A) The Depositary shall be entitled to appoint one or more Agents for the purpose, inter alia, of receiving funds from depositors, purchasing Shares, selling Deposited Property and making distributions to the Holders.

(B) Notice of appointment or removal of any Agent or of any change in the specified office of the Depositary or any Agent will be duly given by the Depositary to the Holders.

18 LISTING

The Company has undertaken in the Deposit Agreement to use its best endeavours to obtain and thereafter maintain, so long as any GDR is outstanding, a listing of the GDRs on the GDR Exchange, an admission to trading on the Professional Securities Market of the GDR Exchange and a listing of the Shares on the Share

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Exchange. For that purpose the Company will pay all fees and sign and deliver all undertakings required by the GDR Exchange and the Stock Exchange in connection therewith. In the event that such GDR listing is not obtained and maintained, the Company has undertaken in the Deposit Agreement to use its best endeavours to obtain and maintain a listing of the GDRs on another internationally recognised investment exchange designated as a "recognised stock exchange" for the purposes of section 1005 of the Income Tax Act 2007 and a listing of the Shares on one or more stock exchanges in Vietnam.

19 THE CUSTODIAN

The Depositary has, pursuant to the Deposit Agreement, agreed with the Custodian that the Custodian will receive and hold (or appoint agents approved by the Depositary to receive and hold) all Deposited Property for the account and to the order of the Depositary in accordance with the applicable terms of the Deposit Agreement, which include a requirement to segregate the Deposited Property from the other property of, or held by, the Custodian. The Custodian shall be responsible solely to the Depositary provided that, if at any time the Depositary and the Custodian are the same legal entity, references to them separately in these Conditions and the Deposit Agreement are for convenience only and that legal entity shall be responsible for discharging both functions directly to the Holders and the Company. Upon receiving notice of the resignation of the Custodian, the Depositary shall promptly appoint a successor custodian (which must be an entity incorporated in Vietnam) and a registered member of the Vietnam Securities Depositary which shall, upon acceptance of such appointment, become the Custodian under the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Holders to do so, it may terminate the appointment of the Custodian and, in the event of the termination of the appointment of the Custodian, the Depositary shall promptly appoint a successor Custodian which shall, upon acceptance of such appointment, become the Custodian under the Deposit Agreement on the effective date of such termination. The Depositary shall notify Holders of such change as soon as is practically possible following such change taking effect in accordance with Condition 23. Notwithstanding the foregoing, the Depositary may temporarily deposit the Deposited Property in a manner or a place other than as herein specified. In case of transportation of the Deposited Property under this Condition, the Depositary shall obtain appropriate insurance at the expense of the Company if, and to the extent that, the obtaining of such insurance is reasonably practicable and the premiums payable are, in the opinion of the Depositary, of a reasonable amount.

20 RESIGNATION AND TERMINATION OF APPOINTMENT OF THE DEPOSITARY

(A) Following the expiry of the Lock Up Period, unless otherwise agreed to in writing between the Company and Depositary from time to time, the Company may terminate the appointment of the Depositary under the Deposit Agreement by giving at least 90 calendar days' notice in writing to the Depositary and the Custodian, and the Depositary may resign as Depositary by giving at least 90 calendar days' notice in writing to the Company and the Custodian. Within 30 calendar days after the giving of such notice, notice thereof shall be duly given by the Depositary to the Holders, in accordance with Condition 23. Such resignation by the Depositary shall be subject to the terms and conditions of any other agreement executed between the Depositary and the Company.

The termination of the appointment or the resignation of the Depositary shall take effect on the date specified in the relevant notice provided that no such termination of appointment or resignation shall take effect until the appointment by the Company of a successor depositary, the grant of such approvals as may be necessary to comply with applicable laws and with the Constitutive Documents for the transfer of the Deposited Property to such successor depositary, the acceptance of such appointment to act in accordance with the terms thereof by the successor depositary and the payment to the Depositary of all fees, taxes, duties, charges, costs, expenses and other payments as agreed by the Depositary and the Company in any agreement concerning such fees, taxes, duties, charges, costs, expenses and other payments. The Company has undertaken in the Deposit Agreement to use its best endeavours to procure the appointment of a successor depositary with effect from the date of termination specified in such notice as soon as reasonably possible following notice of such termination or resignation. Upon any such

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appointment and acceptance, notice thereof shall be duly given by the successor depositary to the Holders in accordance with Condition 23.

(B) Upon the termination of appointment or resignation of the Depositary, the Depositary shall deliver to its successor depositary sufficient information and records to enable such successor efficiently to perform its obligations under the Deposit Agreement and shall deliver and pay to such successor depositary all Deposited Property held by it under the Deposit Agreement. Upon the date when such termination of appointment or resignation takes effect, the Deposit Agreement provides that the Custodian shall be deemed to be the Custodian thereunder for such successor depositary and shall hold the Deposited Property for such successor depositary and the Depositary shall thereafter have no obligation thereunder.

21 TERMINATION OF DEPOSIT AGREEMENT

(A) Following the expiry of the Lock Up Period, subject as set out below, either the Company or the Depositary but, in the case of the Depositary, only if the Company has failed to appoint a replacement Depositary within 90 calendar days of the date on which the Depositary has given notice pursuant to Condition 20 that it wishes to resign, may terminate the Deposit Agreement by giving 90 calendar days' notice to the other and to the Custodian. Within 30 calendar days after the giving of such notice, notice of such termination shall be duly given by the Depositary to Holders of all GDRs then outstanding in accordance with Condition 23.

(B) If the Company terminates the Deposit Agreement, it will (unless the termination is due to the wilful default, gross negligence or bad faith of the Depositary) be obligated, prior to such termination, to reimburse to the Depositary all amounts owed to the Depositary as set out in the Deposit Agreement and in any agreement between the Depositary and the Company.

(C) During the period beginning on the date of the giving of such notice by the Depositary to the Holders and ending on the date on which such termination takes effect, each Holder shall be entitled to obtain delivery of the Deposited Property relative to each GDR held by it, subject to the provisions of Condition 2(D) and upon compliance with Condition 2, and further upon payment by the Holder of any sums payable by the Depositary to the Custodian in connection therewith for such delivery and surrender but otherwise in accordance with the Deposit Agreement.

(D) If any GDRs remain outstanding after the date of termination, the Depositary shall as soon as reasonably practicable sell the Deposited Property then held by it under the Deposit Agreement and shall not register transfers, shall not pass on dividends or distributions or take any other action except that it will deliver the net proceeds of any such sale, together with any other cash then held by it under the Deposit Agreement, pro rata to Holders of GDRs which have not previously been so surrendered by reference to that proportion of the Deposited Property which is represented by the GDRs of which they are Holders. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement and these Conditions, except its obligations to account to Holders for such net proceeds of sale and other cash comprising the Deposited Property without interest.

(E) The Company has agreed not to appoint any other depositary for the issue of depositary receipts so long as Deutsche Bank Trust Company Americas is acting as Depositary under the Deposit Agreement.

22 AMENDMENT OF DEPOSIT AGREEMENT AND CONDITIONS

All and any of the provisions of the Deposit Agreement and these Conditions (other than this Condition 22 and Clause 12 of the Deposit Agreement) may at any time and from time to time be amended by written agreement between the Company and the Depositary and if required, the Regulatory Authority in any respect which they may deem necessary or desirable. Notice of any amendment of these Conditions

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(except to correct a manifest error) shall be duly given to the Holders by the Depositary and any amendment (except as aforesaid) which shall increase or impose fees or charges payable by Holders or which shall otherwise, in the opinion of the Depositary, be materially prejudicial to the interests of the Holders (as a class) shall not become effective so as to impose any obligation on the Holders of the outstanding GDRs until the expiry of three months after such notice shall have been given. During such period of three months, each Holder shall be entitled to obtain, subject to and upon compliance with Condition 2, delivery of the Deposited Property relative to each GDR held by it upon surrender thereof, free of the charge specified in Condition 16(A)(i) for such delivery and surrender but otherwise in accordance with the Deposit Agreement. Each Holder at the time when any such amendment so becomes effective shall be deemed, by continuing to hold a GDR, to approve such amendment and to be bound by the terms thereof in so far as they affect the rights of the Holders. In no event shall any amendment impair the right of any Holder to receive, subject to and upon compliance with Condition 2, the Deposited Property attributable to the relevant GDR.

23 NOTICES

All notices to Holders shall be validly given if mailed to them at their respective addresses in the register ofHolders maintained by the Depositary or furnished to them by electronic transmission as agreed between the Company and the Depositary. Any such notice shall be deemed to have been given on the later of such publication and the seventh day after being so mailed.

All notices required to be given by the Company to the holders of any Shares or other Deposited Property pursuant to any applicable laws, regulations or other agreements shall be given by the Company to the Depositary and upon receipt of any such notices, the Depositary shall forward such notices to the Holders. The Depositary shall not be liable for any notices required to be given by the Company which the Depositary has not received from the Company, nor shall the Depositary be liable to monitor the obligations of the Company to provide such notices to the holders of any Shares or other Deposited Property.

For as long as the GDRs are listed on the Official List of the UKLA and admitted to trading on the LSE, and the rules of the UKLA or the LSE so require, all notices to be given to Holders generally will also be published in a leading daily newspaper having general circulation in London (which is expected to be The Financial Times).

24 REPORTS AND INFORMATION ON THE COMPANY

(A) The Company has undertaken in the Deposit Agreement (so long as any GDR is outstanding) to furnish the Depositary with six copies in the English language by mail, facsimile, or electronic transmission as agreed between the Company and the Depositary (and to make available to the Depositary, the Custodian and each Agent as many further copies as they may reasonably require to satisfy requests from Holders) of:

(i) in respect of the financial year ending on 31 December 2010 and in respect of each financial year thereafter, the non-consolidated (or, if published for holders of Shares, consolidated) balance sheets as at the end of such financial year and the non-consolidated (or, if published for holders of Shares, consolidated) statements of income for such financial year in respect of the Company, prepared in conformity with either generally accepted accounting principles in Vietnam or, at the option of the Company, in accordance with IFRS and reported upon by independent public accountants selected by the Company, as soon as practicable (and in any event within nine months) after the end of such year;

(ii) quarterly and (if produced) semi-annual non-consolidated (and, if published for holders of Shares, consolidated) financial statements as soon as practicable (after the same arepublished and, in any event, not later than four months after the date to which they relate).

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(B) The Depositary shall, upon receipt thereof, give due notice to the Holders that such copies are available upon request at its specified office and the specified office of any Agent.

25 COPIES OF COMPANY NOTICES

On or before the day when the Company first gives notice, by mail, publication or otherwise, to holders of any Shares or other Deposited Property, whether in relation to the taking of any action in respect thereof or in respect of any dividend or other distribution thereon or of any meeting or adjourned meeting of such holders or otherwise, the Company has undertaken in the Deposit Agreement to transmit to the Custodian and the Depositary such number of copies of such notice and any other material (which in the opinion of the Company contains information having a material bearing on the interests of the Holders) furnished to such holders by the Company in connection therewith as the Depositary may reasonably request. If such notice is not furnished to the Depositary in English, either by the Company or the Custodian, the Depositary shall, at the Company's expense, arrange for an English translation thereof (which may be in such summarised form as the Depositary may deem adequate to provide sufficient information) to be prepared. The Depositary shall, as soon as practicable after receiving notice of such transmission or (where appropriate) upon completion of translation thereof, give due notice to the Holders which notice may be given together with a notice pursuant to Condition 9(A), and shall make the same available to Holders in such manner as it may determine.

26 MONEYS HELD BY THE DEPOSITARY

The Depositary shall be entitled to deal with moneys paid to it by the Company for the purposes of the Deposit Agreement in the same manner as other moneys paid to it as a banker by its customers and shall not be liable to account to the Company or any Holder or any other person for any interest thereon, except as otherwise agreed.

27 DISCLOSURE OF BENEFICIAL OWNERSHIP AND OTHER INFORMATION

The Depositary may from time to time request Holders or former Holders or any clearing system in which the GDRs are from time to time cleared to provide information as to the capacity in which they hold or held GDRs and regarding the identity of any other persons then or previously interested in such GDRs and the nature of such interest and various other matters. Each such Holder agrees to provide any such information reasonably requested by the Depositary pursuant to the Deposit Agreement whether or not still a Holder at the time of such request.

28 SEVERABILITY

If any one or more of the provisions contained in the Deposit Agreement or in these Conditions shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained therein or herein shall in no way be affected, prejudiced or otherwise disturbed thereby.

29 GOVERNING LAW

(A) The Deposit Agreement, the GDRs and any non-contractual obligations arising out of or in connection with either of them are governed by, and shall be construed in accordance with English law. The rights and obligations attaching to the Deposited Property will be governed byVietnamese law. The Company has submitted in respect of the Deposit Agreement and these Conditions to the jurisdiction of the English courts.

(B) The courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with the GDRs and accordingly any Proceedings may be brought in such courts. This submission is made for the benefit of each of the Holders and shall not limit the right of any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of

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Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

(C) The Depositary irrevocably appoints the Managing Director for the time being of Deutsche Trustee Company Limited, currently situated at Winchester House, 1 Great Winchester Street, London EC2N 2DB as its authorised agent for service of process in England. If for any reason the Depositary does not have such an agent in England, it will promptly appoint a substitute process agent and notify the Company of such appointment. Nothing herein shall affect the right to serve process in any other manner permitted by law.

30 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce these Conditions under the Contracts (Rights of Third Parties) Act 1999 of the United Kingdom except and to the extent (if any) that these Conditions expressly provide for such Act to apply.

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SUMMARY OF PROVISIONS RELATING TO THE GDRS WHILE IN MASTER FORM

The GDRs will initially be evidenced by a single Master GDR in registered form. The Master GDR has been deposited with Deutsche Bank AG, London Branch as common depositary for Euroclear and Clearstream, Luxembourg and registered in the name of BT Globenet Nominees Ltd. The Master GDR contains provisions which apply to the GDRs while they are in master form, some of which modify the effect of the Terms and Conditions of the Global Depositary Receipts set out in these Listing Particulars. The following is a summary of certain of those provisions. Unless otherwise defined herein, the terms defined in the Terms and Conditions of the GDRs shall have the same meaning herein.

The Master GDR will only be exchanged for certificates in definitive registered form evidencing GDRs in the circumstances described in (i), (ii), (iii) or (iv) below in whole but not, except in the case of (iii) below, in part. Subject to the Terms and Conditions of the Global Depositary Receipts, the Depositary will irrevocably undertake (unless otherwise agreed with the Company) to deliver certificates evidencing GDRs in definitive registered form in exchange for this Master GDR to persons entitled to interests in this Master GDR within 60 calendar days in the event that:

(i) the Holder of the Master GDR is unwilling or unable to continue as common depositary (or as nominee thereof) and a successor common depositary (or successor depositary) (or successor nominee thereof), is not appointed within 90 calendar days; or

(ii) either of the Clearing Systems is closed for business for a continuous period of 14 calendar days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does, in fact, do so and no alternative clearing system satisfactory to the Depositary is available within 45 calendar days; or

(iii) the Depositary has determined that, on the occasion of the next payment in respect of the GDRs, the Company, the Depositary or its Agent would be required to make any deduction orwithholding from any payment in respect of the GDRs which would not be required were the GDRs in definitive form; or

(iv) in the determination of the Depositary, it is impracticable or unduly burdensome or expensive to continue to have the GDRs represented by Master GDRs.

In relation to (iii) above any person appearing in the records maintained by the Clearing Systems as entitled to any interest in this Master GDR shall be entitled to require the Holder to procure the exchange of an appropriate part of this Master GDR for a definitive GDR for an interest held by such person in the Master GDR in the above circumstances upon notice to the Holder. Any such exchange shall be at the expense (including printing costs) of the Holder in the case of such appropriate part or at the expense of the Holders in case of exchange of the whole of the Master GDR for the definitive GDRs.

A GDR evidenced by an individual definitive certificate will not be eligible for clearing and settlement through the Clearing Systems.

Upon any exchange of a part of the Master GDR for a certificate evidencing a GDR or GDRs in definitive form, or any distribution of GDRs pursuant to Conditions 3, 5, 6, 7 or 10, or any reduction in the number of GDRs evidenced by the Master GDR following any withdrawal of any Deposited Property pursuant to Condition 2, or any increase in the number of GDRs following the purchase and deposit of Shares pursuant to Condition 1, the relevant details shall be entered on the Register of the Depositary, whereupon the number of GDRs evidenced by the Master GDR shall be reduced or increased (as the case may be) for all purposes by the amount so exchanged and entered on the Register, provided always that if the number of GDRs represented by the Master GDR is reduced to zero, such Master GDR shall continue in existence

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until the obligations of the Company under the Deposit Agreement and the obligations of the Depositary pursuant to the Deposit Agreement and the Conditions have terminated.

Payments and Distributions

Payments of cash dividends and other amounts (including cash distributions) in respect of the GDRs evidenced by the Master GDR will be made by the Depositary through the Clearing Systems on behalf of persons entitled thereto upon receipt of funds therefor from the Company. A free distribution or rights issue of Shares to the Depositary on behalf of Holders may result in the Master GDR being marked up to reflect the enlarged number of GDRs it thereby evidences.

Surrender of GDRs

Any requirement in the Terms and Conditions of the Global Depositary Receipts relating to the surrender of a GDR to the Depositary shall be satisfied by the production by the Common Depositary on behalf of a Holder of such evidence of entitlement of such Holder as the Depositary may reasonably require, which is expected to be a certificate or other documents issued by the Clearing Systems or, if relevant, an alternative clearing system. The delivery or production of any such evidence shall be sufficient evidence, in favour of the Depositary, any Agent and the Custodian of the title of such person to receive (or to issue instructions for the receipt of) all moneys or other property payable or distributable, in respect of the Deposited Property evidenced by such GDRs.

Notices

For so long as the Master GDR is registered in the name of a common depositary on behalf of the Clearing Systems, notices may be given by the Depositary by delivery of the relevant notice to the Common Depositary for communication to persons entitled thereto in substitution for publication required by Condition 23.

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INFORMATION RELATING TO THE DEPOSITARY

The Depositary is Deutsche Bank Trust Company Americas. Deutsche Bank Trust Company Americas was incorporated in 1903 as a bank with limited liability in the State of New York and is a wholly-owned subsidiary of Deutsche Bank Trust Corporation, a registered bank holding company. Deutsche Bank Trust Corporation is a wholly-owned subsidiary of Deutsche Bank AG. The Depositary is subject to regulation and supervision by the New York State Banking Department, the Federal Reserve Board and the Federal Deposit Insurance Corporation. The registered office of the Depositary is located at 60 Wall Street, New York, NY 10005 and the registered number is BR1026.

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TRANSFER RESTRICTIONS

Due to the following restrictions, recipients are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the GDRs and the Shares represented thereby.

The GDRs and the Shares represented thereby have not been, and will not be, registered under the Securities Act or with any securities regulatory authority of any state in the United States or other jurisdiction, and subject to certain exceptions, may not be offered or sold within the United States. The GDRs and the Shares represented thereby will only be issued outside the United States in reliance on the exemption from registration under Regulation S.

Each recipient of GDRs outside of the United States pursuant to Regulation S will be deemed to have represented, acknowledged and agreed as follows:

1. It (a) is aware that the issuance or transfer of such GDRs to it is being made pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act, (b) is, or at the time such GDRs are received, will be, the beneficial owner of such GDRs and (c) is receiving such shares in an offshore transaction meeting the requirements of Regulation S.

2. It understands that the GDRs and the Shares represented thereby have not been and will not be registered under the Securities Act.

3. The GDRs (including the Master GDR) will bear a legend substantially to the following effect, unless the Depositary and the Company determine otherwise in compliance with applicable law:

AT THE TIME OF ISSUE OF THIS MASTER GDR, THE COMPANY WILL NOT HAVE ISSUED THE RELEVANT SHARES TO THE CUSTODIAN ON BEHALF OF THE DEPOSITARY. THE DEPOSITED PROPERTY AT SUCH TIME WILL COMPRISE A PREFERENTIAL ALLOTMENT LETTER FROM THE COMPANY IN, OR SUBSTANTIALLY IN, THE FORM SET OUT IN SCHEDULE 4 OF THE DEPOSIT AGREEMENT. THIS MASTER GDR, THE GLOBAL DEPOSITARY RECEIPTS ("GDRs") EVIDENCED HEREBY AND THE EQUITY SHARES REPRESENTED THEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH THE SECURITIES ACT, AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.

THE GDRs EVIDENCED HEREBY MAY NOT BE OFFERED OR SOLD DIRECTLY OR INDIRECTLY IN THE SOCIALIST REPUBLIC OF VIETNAM ("VIETNAM") OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT IN VIETNAM (WHICH TERM AS USED HEREIN SHALL MEAN (A) ANY PERSON RESIDENT IN VIETNAM, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANISED UNDER THE LAWS OF VIETNAM (A "VIETNAMESE ENTITY"), OR (B) ANY VIETNAMESE CITIZEN RESIDING ABROAD OR ANY VIETNAMESE ENTITY ACTING THROUGH A REPRESENTATIVE OFFICE OR A BRANCH ESTABLISHED IN ANY OTHER COUNTRY (UNLESS SUCH BRANCH IS PERMITTED BY THE STATE BANK OF VIETNAM TO PURCHASE FOREIGN SECURITIES)). UNLESS PERMITTED UNDER THE SECURITIES LAWS OF VIETNAM, NO ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE GDRs MAY BE ISSUED IN VIETNAM OR ELSEWHERE, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, ANY PERSON IN VIETNAM.

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EACH HOLDER BY ITS ACCEPTANCE OF THE GDRs EVIDENCED HEREBY AND THE BENEFICIAL INTEREST IN THE SHARES REPRESENTED THEREBY REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.

4. It acknowledges that the Company, the Depositary and their respective affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

Any sale or other transfer, or attempted sale or other transfer, made other than in compliance with the above-stated restrictions, shall not be recognised by the Company or the Depositary in respect of the GDRs and the Shares represented thereby.

Because of the foregoing restrictions, recipients are advised to consult legal counsel prior to making any resale, pledge or transfer of GDRs.

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FOREIGN INVESTMENT AND EXCHANGE CONTROLS

Foreign Investment

The accession of Vietnam to the WTO on 1 July 2006 precipitated significant changes to the Vietnamese laws applicable to foreign investors doing business in Vietnam. The Law on Enterprises and the Law on Investment which both took effect on 1 July 2006 are equally applicable to both foreign investors and local investors. However, there are some restrictions on the investments made by foreign entities, depending on the sectors in which they operate. This summary does not purport to be an exhaustive description of the laws regulating foreign investment and the laws referred to may be changed from time to time and without notice.

Direct investment

Direct investment is deemed to occur when an entity invests its capital and participates in the management of the investment target. Direct investment may take the following forms:

● the establishment of a company which is wholly owned by foreign investors;

● the establishment of a joint venture between local and foreign investors;

● investment by means of Business Cooperation Contracts, Build-Operate-Transfers, Build-Transfer-Operate, and Build-Transfer Contracts. The build-operate-transfer, build-transfer-operate and build-transfer contracts may be signed with state agencies to undertake projects relating to the construction, expansion, modernisation or operation of infrastructure facilities in the domains of transport, electricity production and business, water supply and drainage, waste treatment and other domains;

● the entry into business cooperation contracts with an agreed form of profit-sharing or production-sharing;

● investments made to aid the development of a business (for example, in order to facilitate the growth of the business, modernise plant and machinery, increase the quality of products or to reduce pollution levels);

● the purchase of shares or contributing capital to companies in Vietnam. The applicable ratio of shares purchased or capital contributed by foreign investors in certain fields and industries will be specified by the Government; and

● the acquisition of, or merger with, a Vietnamese company.

Indirect investment

Indirect investment is a form of investment made through the purchase of shares, share certificates, bonds, other valuable papers or a securities investment fund and through intermediary financial institutions where the investor does not participate directly in the management of the investment target.

Indirect investment may take the following forms:

● the purchase of shares, bonds and other valuable papers;

● investment into securities investment funds; and

● investment through other intermediary financial institutions.

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Fields and industries entitled to investment incentives

Investors in certain business sectors and industries are entitled to receive particular investment incentives, specifically in the form of certain tax exemptions or reductions.

The Law on Investment provides a list of fields and industries that are entitled to investment incentives. These apply equally to local and foreign investors and include:

● Production of new materials or new energy; manufacture of hi-tech products, bio-technology or information technology; mechanical engineering.

● Farming and agricultural activities, forestry, aquatic products, salt production, development of hybrids, new plant varieties and/or animal breeds.

● Use of or research and development into advanced technology or modern techniques.

● Protection of the environment.

● Employment of a large workforce.

● Building and developing infrastructures, important and large-scale projects.

● Development of education, training, health care, physical training and sports and national culture.

● Development of traditional crafts and industries.

Investment incentives are also granted to investment in specified geographical areas, which include:

● those where socio-economic conditions are either difficult or especially difficult; and

● industrial zones, export-processing zones, high technology zones and economic zones.

Foreign investors' rights

Under the Law on Investment, foreign investors carrying on investment activities in Vietnam have the right to:

● autonomy in investment and business;

● access and use investment resources;

● import and export;

● market and advertise;

● process and re-process goods relevant to investment activities;

● purchase foreign currencies;

● assign or adjust capital or investment project; and

● mortgage land use rights and assets attached to land and other rights are permitted under the laws of Vietnam.

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An investor has the right to assign or adjust capital or an investment project in accordance with the laws of Vietnam. Where profits arise from an assignment, the investor must pay income tax in accordance with Vietnamese taxation laws.

Market Access

Foreign investors may generally invest directly in listed and unlisted Vietnamese securities. Pursuant to Decision No. 121/2008/QD-BTC of the Ministry of Finance dated 2 December 2008 on foreign participation in the Vietnamese securities markets, foreign investors are required to apply to the VSD for a securities trading code in order to invest in listed and unlisted Vietnamese securities. However, a foreign investor is not required to obtain a securities trading code if it wishes to invest in Vietnam securities through a fund management company pursuant to an investment management agreement with that fund management company.

A foreign investor is required to open a capital account with a commercial bank licenced to operate in Vietnam for the purpose of making investments in Vietnamese listed and unlisted securities. All funds paid or received in respect of its investments must be channelled through this account. The bank operating the account has a statutory duty to monitor the operation of the account and it may not give effect to any transfer of funds out of Vietnam in the event the foreign investor fails to submit necessary documentationfor the bank's examination.

Foreign investments are substantially restricted and controlled in respect of some industries such as the telecommunications, aviation or banking sectors. In addition, under Vietnamese law, foreign investors may only hold 49 per cent. of the outstanding shares in each listed company or public company. In addition, a foreign investor may be required to hold its investment in a privatised company that was previously Government-owned for a period of at least three years if it invests in that company as a strategic partner. Similarly, if a foreign investor is permitted to hold up to 10 per cent. of the share capital of a commercial bank, the shares it holds in that bank will be subject to a three year lock-up period. However, this lock-up period is extended to five years if the foreign investor invests in a commercial bank as a strategic partner (in which case it may be permitted to hold up to 15 per cent. of share capital of the commercial bank). In addition, where shares issued by a Vietnamese company are deemed to be privately placed under the Vietnamese Securities Laws, a foreign investor must hold those shares for a lock-up period of 12 months.

Exchange Controls

Vietnam has historically imposed exchange control mechanisms designed to limit foreign currency outflows, generally requiring the use of the Vietnamese Dong for domestic transactions and channelling the flow of foreign currencies into the banking system. Vietnam's exchange control policy is administered primarily by the SBV.

Government regulations permit companies to open or to use more than one foreign currency account in Vietnam and to hold multiple offshore bank accounts with the approval of the SBV. Joint stock companies may convert Vietnamese Dong into foreign currency to cover current payments denominated in foreign currency and to repay foreign loans. In addition, the Government has undertaken to provide certain support and guarantees for foreign currency requirements of infrastructure projects and other high-priority projects.

Under the current Vietnamese foreign exchange control regulations, any person or organisation may exchange Vietnamese Dong into foreign currency at official rates, provided that the intended use of the money is permissible under applicable laws and regulations. Foreign currencies may be freely exchanged into Vietnamese Dong provided official exchange rates are used.

There are no restrictions on inward remittances of foreign currency, but cash amounts valued over US$7,000 in any currency must be declared at customs. Outward remittances of foreign currency by domestic enterprises may only be made to pay for imported goods and services, to repay offshore loans registered with the SBV or to make overseas investments. Outward remittances of foreign currency by

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Vietnamese citizens may be made for tourism, education, health care, private residential, inheritance and other legal purposes.

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VIETNAMESE REGULATORY APPROVALS AND FILINGS

The issuance of securities by a Vietnamese issuer in Vietnam or outside Vietnam is regulated by the Vietnamese Securities Laws.

The provisions of the Vietnamese Securities Laws with respect to the GDRs

There are no restrictions under the Vietnamese Securities Laws on indirect foreign holdings of Vietnamese equity securities by way of holding GDRs. As foreign Holders do not have direct recourse to the Shares represented by the GDRs, there would also be no Vietnamese legal restrictions on foreign shareholdings of the GDRs. To that extent, the Depositary is not required to obtain any licence or approval from Vietnamese market regulators in Vietnam in order to issue GDRs to foreign investors.

In the absence of specific provisions of the Vietnamese Securities Laws with respect to GDRs representing shares of companies incorporated in Vietnam, the Company consulted with the SSC on a no-names basis and the SSC advised that the Company would not be required to obtain an approval for the GDRs from the SSC.

Vietnamese Securities Laws with respect to the Shares

As the Company is a listed joint stock company in Vietnam, the offering of Shares by way of a private placement to the Depositary will be subject to the Vietnamese Securities Laws.

Pursuant to the Vietnamese Securities Laws, the deposit of the Shares with the Depositary under the terms of the Deposit Agreement will be deemed to be a private placement. Therefore, the Company was required to register the placement with the SSC at least 20 days prior to the proposed placement date. A private placement is defined under the Vietnamese Securities Laws as a placement of shares, or the right to directly acquire shares, without the use of the mass media, to either (i) institutional investors (i.e., A commercial bank, finance company, finance leasing company, insurance business company, or securities house); or (ii) less than 100 non-institutional investors.

The Company was required to submit an application file for registration which included an issuing plan setting out among other things, the Lock-up Period applicable to the Shares. Further details on the contents of an application file are set out in "Vietnamese Securities Market". The issue of the New Shares was approved by the SSC on 19 November 2010. The New Shares were admitted to trading on the HoSE on 12 January 2011. The 8,108,125 Shares deposited in accordance with the terms of the Deposit Agreement pursuant to a bonus share issue on 26 January and which are represented by GDRs were admitted to trading on the HoSE on 28 February 2011.

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TAXATION

Vietnamese Tax Considerations

The statements made in these Listing Particulars regarding Vietnamese taxation are general in nature and based on certain aspects of the tax laws of Vietnam and administrative guidelines issued by the relevant authorities in force as of the date of this offering document and are subject to the enactment of such budget measures, and any changes in such laws or administrative guidelines, or in the interpretation of these laws or guidelines, occurring after such date, which changes could be made on a retrospective basis. These laws and guidelines are also subject to various interpretations and the relevant tax authorities or the courts could later disagree with the explanations or conclusions set out below.

The following is a summary of the material Vietnam tax consequences to a Holder of GDRs. The statements below are not to be regarded as advice on the tax position of any Holder of GDRs or of any person acquiring, selling or otherwise dealing with the GDRs or on any tax implications arising from the acquisition, sale or other dealings in respect of the GDRs. The statements made in this offering document do not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of the GDRs and do not purport to deal with the tax consequences applicable to all categories of investors some of which (such as dealers in securities) may be subject to special rules. Prospective holders of the GDRs are advised to consult their own tax advisers as to the Vietnam or other tax consequences of the acquisition, ownership or disposition of the GDRs including, in particular, the effect of any foreign state or local tax laws to which they are subject.

This description is based on laws, regulations and interpretations as now in effect and available as of the date of this document. The laws, regulations and interpretations, however, may change at any time, and any change may be retroactive to the date of the issuance of the GDRs. The laws and regulations are also subject to various interpretations and the relevant tax authorities or the courts may later disagree with the explanations or conclusions set out below.

Since the GDRs will only be offered to investors outside of Vietnam, this section only considers the Vietnamese tax implications for foreign investors of holding the GDRs and/or the Shares and does not address the tax implications for Vietnamese tax residents. Potential investors in the GDRs who are classified as "residents" for Vietnamese tax purposes should consult their own tax advisers concerning the tax implications of holding the GDRs and/or the Shares.

Transfer of GDRs admitted to trading on the Professional Securities Market

During the Lock-up Period, Holders of GDRs will not be able to withdraw any Deposited Shares. However, such Holders may trade the GDRs on the Professional Securities Market.

There is no specific guidance on the tax treatment applicable to a transfer of GDRs of a Vietnamese company listed on a foreign stock exchange. However, given the judgments made in Vietnamese cases regarding overseas transfers of other securities (the taxation of which has been confirmed in recent rulings issued by the Vietnamese General Department of Taxation as well as by local tax office(s)) and by logical interpretation, capital gains derived from the transfer of GDRs representing shares of a Vietnamese company, which are listed on the Official List and traded on the Professional Securities Market, should be treated as arising in the United Kingdom and therefore be subject to United Kingdom tax regulations. Therefore, Holders of GDRs realising such gains would not be subject to tax on these gains in Vietnam, regardless of whether the investors were individuals or institutions. There is no specific requirement for a tax declaration by foreign investors in these circumstances.

Distribution of dividends from Shares underlying the GDRs

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A corporation resident in Vietnam and which generates taxable income (such as the Company) will be subject to Corporate Income Tax ("CIT") in Vietnam. The common CIT rate is 25 per cent. However, CIT rates of 10 per cent and 20 per cent. are applicable to certain activities.

The tax treatment applicable to dividends distributed to Shareholders who are foreign institutional investors differs, depending on the form of the dividends received:

● Cash dividends are exempt from CIT in Vietnam. There is also no withholding tax payable on dividends remitted to foreign institutional investors. Foreign institutional investors are not required to make tax declarations.

● For share dividends or bonus share issues, foreign institutional investors are not subject to CIT on the value of the share dividends and/or bonus shares recorded on the books of issuers. It is, however, subject to CIT on the future gains realised upon sales of any shares received as a dividend or as part of a bonus share issue. As foreign institutional investors are subject to a withholding tax regime which does not take into account the cost of investments, any subsequent sales of shares received as a dividend or as part of a bonus share issue will be subject to 0.1 per cent. withholding tax on the value of the transaction.

Withdrawal and Sales of Deposited Shares underlying the GDRs

After the expiry of the Lock-up Period, any Holder of GDRs may request withdrawal of, and the Depositary shall thereupon sell (either public or private sale and otherwise at its discretion), subject to Vietnamese laws and regulations the Deposited Shares and shall distribute the net proceeds of such sale as a cash distribution to the person or persons specified in the order for withdrawal.

Subsequently, any sales of Deposited Shares by the Depositary will be subject to a withholding tax, equivalent to 0.1 per cent. of the value of the sale transaction which will be deducted by the securities firm acting as the broker for the selling investor prior to the remittance of the sales proceeds to such investor in accordance with prevailing regulations. No relief is allowed for transaction costs and no allowance is taken for the cost of investments (i.e., the existence of actual profits is irrelevant).

Value Added Tax

The transfer of GDRs or Shares by an investor, institutional or individual, resident or non-resident, is not subject to value added tax in Vietnam, on the basis that it would likely be treated as a capital or securities transfer.

United States Federal Income Tax Considerations

Notice Pursuant to United States Internal Revenue Circular 230

The following discussion is not intended or written by the Company or the Company's counsel to be used, and cannot be used, by any person for the purpose of avoiding tax penalties that may be imposed under US tax laws. The following discussion is provided to support the promotion or marketing of the GDRs. Each potential investor should seek advice based on the investor's particular circumstances from an independent tax advisor concerning the potential tax consequences of an investment in the GDRs.

General

The following summary describes certain material US federal income tax consequences relating to an investment in the Shares or GDRs. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), its legislative history, existing final, temporary and proposed Treasury Regulations, rulings and judicial decisions, all as currently in effect and all of which are subject to prospective and retroactive rulings and changes. The Company will not seek a ruling from the Internal

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Revenue Service with regard to the US federal income tax treatment relating to investment in the Shares or GDRs and, therefore, there can be no assurance that the IRS will agree with the conclusions set forth below.

This summary does not purport to address all US federal income tax consequences that may be relevant to a particular investor and potential investors are urged to consult their own tax advisor regarding their specific tax situation. The summary applies only to holders who hold Shares or GDRs as "capital assets"(generally, property held for investment) under the Code, and does not address the tax consequences that may be relevant to investors in special tax situations including, for example:

● insurance companies; regulated investment companies and real estate investment trusts;

● tax-exempt organisations;

● broker-dealers:

● traders in securities that elect to mark to market;

● banks or other financial institutions;

● investors whose functional currency is not the US dollar;

● US expatriates;

● investors that hold the Shares or GDRs as part of a hedge, straddle or conversion transaction; or

● holders that own, directly, indirectly or constructively, 10.0 per cent. or more of the total combined voting stock.

Further, this summary does not address the alternative minimum tax consequences of an investment in Shares or GDRs or the indirect consequences to holders of equity interests in entities that own the Shares or GDRs. In addition, this summary does not address the state, local and foreign tax consequences of an investment in the Shares or GDRs. Potential investors should consult their own tax advisor regarding the US federal, state, local and foreign and other tax consequences of purchasing, owning and disposing of the Shares or GDRs in their particular circumstances.

A "US Holder" is a beneficial owner of Shares or GDRs who is for US federal income tax purposes:

● an individual citizen or resident of the US;

● a corporation, or any other entity taxable as a corporation, created or organised in or under the laws of the US or any state thereof, including the District of Columbia;

● an estate the income of which is subject to US federal income tax regardless of its source; or

● a trust if a court within the US is able to exercise primary supervision over its administration and one or more US persons have the authority to control all substantial decisions of the trust, or if the trust has made a valid election to be treated as a US person.

A "Non-US Holder" is a beneficial owner of Shares or GDRs that is, for US federal income tax purposes:

● a non-resident alien individual;

● a foreign corporation;

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● an estate that is not generally subject to US federal income tax; or

● a trust if no court within the US is able to exercise primary supervision over its administration or no US persons have the authority to control all substantial decisions of the trust, and it has no election in effect to be treated as a US person.

If a partnership holds Shares or GDRs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of partnerships holding the Shares or GDRs should consult their own tax advisors.

Taxation of US Holders

For US federal income tax purposes, a US Holder of a GDR will generally be treated as the owner of the Shares represented by the GDR. Accordingly, no gain or loss will be recognised upon the exchange of an GDR for Shares. A US Holder's tax basis in the Shares will be the same as the tax basis in the GDR surrendered therefor, and the holding period in the Shares will include the period during which the holder held the surrendered GDR. However, the US Treasury has expressed concerns that parties to whom depositary shares are pre-released may be taking actions that are inconsistent with the claiming of foreign tax credits by the Holders. Accordingly, the analysis of the creditability of Vietnamese taxes paid with respect to the GDRs could be affected by future actions that may be taken by the US Treasury.

Distributions on Equity Shares or GDRs

Cash distributions made by the Company to a US Holder with respect to Shares or GDRs (including amounts withheld in respect of any Vietnamese withholding taxes) generally will be taxable to such US Holder as ordinary dividend income when such US Holder receives the distribution, actually or constructively, to the extent paid out of the Company's current or accumulated earnings and profits (as determined for US federal income tax purposes). However, such dividends will not be treated as qualified dividend income and, generally, will not be eligible for the reduced rate of tax allowed qualified dividend income. Distributions in excess of the Company's current or accumulated earnings and profits will be treated first as a non-taxable return of capital reducing such US Holder's tax basis in the Shares or GDRs. Any distribution in excess of such tax basis will be treated as capital gain and will be either long-term or short-term capital gain depending upon whether the US Holder held the Shares or GDRs for more than one year. Dividends paid by the Company generally will not be eligible for the dividends-received deduction available to certain US corporate shareholders.

Subject to certain limitations, a US Holder may be entitled to a credit or deduction against its US federal income taxes for the amount of any Vietnamese taxes that are withheld from dividend distributions made to such US Holder. The decision to claim either a credit or deduction must be made annually, and will apply to all foreign taxes paid by the US Holder to any foreign country or US possession with respect to the applicable tax year. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Income received with respect to the Shares or GDRs will be treated as "passive category income" or "general category income" for US foreign tax credit limitation purposes. The rules regarding the availability of foreign tax credits are complex and US Holders may be subject to various limitations on the amount of foreign tax credits that are available. The Company therefore urges potential investors to consult their own tax advisor regarding the availability of the foreign tax credit under their particular circumstances.

The amount of any cash distribution paid in Vietnamese Dong will equal the US dollar value of the distribution, calculated by reference to the exchange rate in effect at the time the distribution is received by the depositary (in the case of GDRs) or by the US Holder (in the case of Shares held directly by such US Holder), regardless of whether the payment is in fact converted to US dollars at that time. Generally, a US Holder should not recognise any foreign currency gain or loss if such Vietnamese Dong are converted into US dollars on the date received. If the Vietnamese Dong are not converted into US dollars on the date of receipt, however, gain or loss may be recognised upon a subsequent sale or other disposition of the Vietnamese Dong. Such foreign currency gain or loss, if any, will be US source ordinary income or loss.

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Sale or Exchange of Equity Shares or GDRs

A US Holder will generally recognise capital gain or loss upon the sale, exchange or other disposition of the Shares or GDRs measured by the difference between the US dollar value of the amount received and the US Holder's tax basis (determined in US dollars) in the Shares or GDRs. Any gain or loss will be long-term capital gain or loss if the Shares or GDRs have been held for more than one year and will generally be US source gain or loss. The ability of a potential investor to deduct capital losses is subject to limitations. Under certain circumstances described under "Vietnamese Taxation", a potential investor may be subject to Vietnamese tax upon the disposition of Shares or GDRs. In such circumstances and subject to applicable limitations (and the relief provided by an applicable income tax treaty), a potential investor may be able to credit the Vietnamese tax against their US federal income tax liability. Potential investors should consult their tax adviser regarding the availability of the foreign tax credit under their particular circumstances.

For cash-basis US Holders who receive foreign currency in connection with a sale or other taxable disposition of Shares or GDRs, the amount realised will be based upon the US dollar value of the foreign currency received with respect to such Shares or GDRs as determined on the settlement date of such sale or other taxable disposition. Accrual-basis US Holders may elect the same treatment required of cash-basis taxpayers with respect to a sale or other taxable disposition of Shares or GDRs, provided that the election is applied consistently from year to year. Such election cannot be changed without the consent of the US Internal Revenue Service. Accrual-basis US Holders that do not elect to be treated as cash-basis taxpayers (pursuant to the Treasury Regulations applicable to foreign currency transactions) for this purpose may have a foreign currency gain or loss for US federal income tax purposes because of differences between the US dollar value of the foreign currency received prevailing on the date of such sale or other taxable disposition and the value prevailing on the date of payment. Any such currency gain or loss will generally be treated as ordinary income or loss that is US source, in addition to the gain or loss, if any, recognised on the sale or other taxable disposition of Shares or GDRs.

Passive Foreign Investment Company Rules

US Holders generally will be subject to a special, adverse tax regime that would differ in certain respects from the tax treatment described above if the Company is, or were to become, a passive foreign investment company ("PFIC") for US federal income tax purposes. Although the determination of whether a corporation is a PFIC is made annually and thus may be subject to change, the Company does not believe that it is, nor does it expect to become, a PFIC for US federal income tax purposes. However, the matter is not free from doubt. The Company urges potential investors to consult their own tax advisor regarding the adverse tax consequences of owning the Shares or GDRs of a PFIC and making certain elections designed to lessen those adverse consequences.

Taxation of Non-US Holders

Non-US Holders generally will not be subject to US federal income or withholding tax on dividends received from the Company with respect to Shares or GDRs, unless such income is considered effectively connected with the Non-US Holder's conduct of a US trade or business (and, if required by an applicable income tax treaty, the income is attributable to a permanent establishment maintained in the US).

Sale or Exchange of Equity Shares or GDRs

Non-US Holders generally will not be subject to US federal income tax on any gain realised upon the sale, exchange or other disposition of Shares or GDRs unless:

● such gain is considered effectively connected with the Non-US Holder's conduct of a US trade or business (and, if required by an applicable income tax treaty, the income is attributable to a permanent establishment maintained in the US); or

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● if such Non-US Holder is an individual that is present in the US for 183 days or more during the taxable year of the disposition and certain other conditions are met.

In addition, if the potential investor is a corporate Non-US Holder, any effectively connected dividend income or gain (subject to certain adjustments) may be subject to an additional branch profits tax at a rate of 30 per cent. (or such lower rate as may be specified by an applicable income tax treaty).

Backup Withholding and Information Reporting

In general, dividends on Shares or GDRs, and payments of the proceeds of a sale, exchange or other disposition of Shares or GDRs, paid to a US Holder within the US or through certain US-related financial intermediaries are subject to information reporting and may be subject to backup withholding, unless the holder:

● is a corporation or other exempt recipient; or

● provides an accurate taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred.

Non-US Holders generally are not subject to information reporting or backup withholding. However, such holders may be required to provide a certification to establish its non-US status in connection with payments received within the US or through certain US-related financial intermediaries.

Backup withholding is not an additional tax. Potential investors generally will be allowed a credit of the amount of any backup withholding against their US federal income tax liability or potential investors may obtain a refund of any amounts withheld under the backup withholding rules that exceed their income tax liability by filing a refund claim with the US Internal Revenue Service.

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ENFORCEABILITY OF CIVIL LIABILITIES

A foreign judgment may be enforced in Vietnam if it is recognised by a Vietnamese court. However, the Vietnamese courts will only recognise a foreign judgment if it is delivered by a court of a country adhering to a bilateral or multilateral treaty on juridical assistance with Vietnam. Otherwise, the Vietnamese courts may also consider the recognition at their sole discretion on a reciprocal basis. In addition, recognition of a foreign judgment would not be considered if enforcement of such foreign judgment may be contradictory to the principles of Vietnamese law.

The process of enforcing a foreign judgment is summarised below:

(a) The lender submits to the Ministry of Justice a set of application for the recognition of a foreign judgment (including documents evidencing the validity of foreign judgment and specifying the need for enforcement in Vietnam).

(b) The Ministry of Justice and the relevant court have 10 days to consider the application.

(c) If it accepts the case for further consideration, the relevant court will have four months to decide whether it should take or reject the case.

(d) If it decides to take the case, the relevant court will initiate a hearing within one month from the date of its decision to take the case.

(e) In the event the court enters its decision for the applicant, the applicant would submit the court decision to the relevant judgment enforcement agency in order to enforce the decision.

(f) The judgment enforcement agency would enforce the court decision in accordance with the terms of the judgment.

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GENERAL INFORMATION

1. The Company was re-established as a joint stock company in Vietnam on 1 June 2006 as Hoang Anh Gia Lai Joint Stock Company. The Company's registered office is located at 15 Truong Chinh Street, Phu Dong Ward, Pleiku City, Gia Lai province, Vietnam. Upon re-establishment, the Company was issued with Business Registration Certificate number 3903000083, which on 17 May 2010 was reissued as Business Registration Certificate number 5900377720. The Company's telephone number is +84 592 222 249 and its fax number is +84 592 222 247.

2. On 17 May 2010, the Planning and Investment Department of Gia Lai province approved the increase in the Company's share capital to VND 2,925,206,970,000 and issued the necessary (fifteenth) amendment to the Company's Business Registration Certificate.

3. The following is a summary of certain provisions of the Charter that was approved by resolution of a Shareholders' Meeting on 14 April 2009. This summary does not purport to be complete and is qualified in its entirety by the full terms of the Charter. Copies of the Charter are available for inspection as detailed below.

Objects of the Company

The Charter provides that the Company's objects are, amongst other things, to carry on business that involves: forestation; purchasing and processing wood; producing handicrafts, furniture and wooden products; purchasing and exporting rubber latex and products made from rubber latex; granite production; running a football club; purchasing oil and petrol; exploiting metal ores; real estate activities; industrial and transport construction; and hotel and restaurant services. The objects of the Company are set out in full in Article 3 of the Charter.

Shares

Share capital

The share capital of the Company may be increased or decreased with the approval of Shareholders at a Shareholders' Meeting.

Share classes

All Shares issued by the Company on the date of the approval of the Charter were ordinary shares. Subject to obtaining the approval of the Shareholders by resolution of a Shareholders' Meeting, the Company may issue preference shares in line with the prevailing regulations of the Law on Enterprises.

Pre-emption rights

Shareholders possess pre-emption rights in respect of the issue of new Shares and shall therefore be offered the opportunity to purchase such newly issued Shares in proportion to their existing shareholding in the Company. These pre-emption rights may be disapplied by a resolution passed by a Shareholders' Meeting.

Transfers of Shares

Unless the Board of Directors issues different regulations (in accordance with the Law on Enterprises or the Vietnamese Securities Laws), all transfers of registered Shares may be carried out in writing or in any way which may be accepted by the Board of Directors. Transfer documents are signed by or on behalf of the transferor and (except in cases in which the Shares are fully paid) by or on behalf of the transferee. The transferor will continue to be the legal owner of

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the Share until the name of the transferee is listed in the Company's register of members, unless a Shareholders' Meeting takes place during that time, in which case the transferee has the right to attend that meeting. The Board of Directors may refuse registration for the transfer of any registered Shares for which full payment has not yet been made. Shares listed on a stock exchange will be transferred in line with that exchange's regulations.

Rights and obligations attaching to the classes of shares

Shareholders have rights and obligations corresponding to the number and types of shares they own. The liability of each Shareholder is limited to the number of Shares they hold. Shareholders have responsibility for debts and other property obligations of the Company within the amount of share capital contributed to the Company.

The Charter provides that Shareholders have the right to:

● participate and speak at Shareholders' Meetings and execute voting rights directly or via proxy;

● receive dividends at amounts stipulated by a Shareholders' Meeting;

● freely transfer Shares for which payment is complete in accordance with the Charter and the Law on Enterprises;

● pre-emption rights in respect of the issue of new Shares and shall therefore be offered the opportunity to purchase such newly issued Shares in proportion to their existing shareholding in the Company;

● examine information related to Shareholders on the list of Shareholders eligible to participate in Shareholders' Meetings, and to ask for incorrect information to be corrected;

● inspect and make an extract or copy of the Charter, minutes and resolutions of Shareholders' Meetings;

● in the case of the Company's dissolution, receive assets of the Company in an amount corresponding to the number of Shares they hold, but only after the Company fulfils all its debts and obligations, and after holders of preference shares in the Company are compensated first;

● request the Company to re-purchase their shares in the cases stipulated by Article 90.1 of the Law on Enterprises at a price to be decided by the Board of Directors;

and to exercise all other rights stipulated by the Charter and the Law on Enterprises.

A Shareholder or a group of Shareholders holding more than five per cent. of the total number of Shares in issue for a minimum six consecutive months (and such threshold shall be prevail over the statutory threshold of ten per cent.) have the right to:

● nominate members to the Board of Directors or the Supervisory Board in accordance with the relevant provisions of the Charter;

● request that a Shareholders' Meeting be called as prescribed in the Law on Enterprises;

● examine and receive a copy of, or excerpt from, the list of Shareholders eligible to participate and vote at Shareholders' Meetings;

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● request the Supervisory Board to inspect each particular issue relating to the management and administration of the operations of the Company in cases where it is considered necessary;

and to exercise all other rights stipulated by the Charter.

The Charter provides that Shareholders are obliged to:

● abide by the Charter, decisions of the Board of Directors and resolutions of Shareholders' Meetings;

● fully pay for Shares according to the number of such Shares allotted to that Shareholder;

● accept liability for the debts and other property obligations of the Company within the amount of share capital that Shareholder has contributed to the Company;

● not withdraw the capital contributed to the Company by such Shareholder's purchase of Shares from the Company, except where that Shareholder's Shares are redeemed by the Company or other persons;

● provide their correct address when registering to purchase Shares;

● fulfil other obligations stipulated by the Law on Enterprises; and

● accept personal liability in the event that he or she performs one of the following acts in the name of the Company:

— An act which constitutes a breach of any law of Vietnam; or

— Doing business or entering transactions for his or her personal benefit or that of other organisations or individuals.

Amendments to class rights

With the approval of a Shareholders' Meeting, special rights attached to each class of shares may be changed or annulled upon an agreement in writing between shareholders holding at least 75 per cent. of the voting rights of the issued shares of the Company in that class.

For a class meeting to be quorate, there must be at least two shareholders (or their proxies) in attendance who together hold at least one third of the par value of shares in the relevant share class. Should the class meeting be inquorate, the meeting shall be reconvened within 30 days and any persons holding shares in that class who attends directly or through a proxy shall count towards the quorum. Anyone present at a class meeting who holds shares of that class or who is acting as a proxy for someone who holds shares in that class, has the right to request a secret ballot. Each person will be given one vote for each of the shares of that class which he holds.

Unless the terms of a share issue specify otherwise, special rights related to the division of profits or assets of the Company attached to preference shares shall not be deemed to be amended if more shares of the same class are issued.

Shareholders' meetings

Shareholders' Meetings include annual and extraordinary meetings.

Remit of Shareholders' Meetings

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At the Annual Shareholders' Meeting, the Shareholders may discuss and approve the following:

(a) annual financial statements;

(b) audited annual financial statements;

(c) reports of the Supervisory Board;

(d) reports of the Board of Directors;

(e) short-term and long-term development plans of the Company;

(f) the annual dividend rates for each type of shares and other rights associated with that type of share, such annual dividend rates are not exceeded the proposal by the Board of Directors;

(g) the number of members of the Board of Directors;

(h) the appointment of auditors;

(i) the election, removal and replacement of members of the Board of Directors and the Supervisory Board and the appointment of General Director by the Board of Directors;

(j) the total remuneration of the Board of Directors;

(k) the amendments and modifications to the Charter;

(l) the types of shares and the quantity of new shares to be issued for each type;

(m) the division, separation, consolidation and merger or conversion of the Company;

(n) the re-organisation, liquidation and dissolution of HAGL and the appointment ofliquidators;

(o) the examination and treatment of violations of the Board of Directors or the Supervisory Board that cause damage to the Company and the Shareholders;

(p) the disposal of the Company's or a subsidiary of the Company's assets or the investment of which the value is equal to or greater than 50 per cent. of the total assets of the Company or the relevant subsidiary respectively based on the most recently audited financial statements;

(q) redemption of more than 10 per cent. of the total number of shares of each class already sold;

(r) one person holding the positions of General Director and Chairman of the Board of Directors at the same time;

(s) the engagement of the Company or a subsidiary of the Company in any agreement to which the person as defined in clause 120.1 of the Law on Enterprises is a party and of which total value of such transaction is equal or greater than 20 per cent. of the total assets of the Company or the relevant subsidiary of the Company respectively based on the most recently audited financial statements; and

(t) other matters as provided for by the Charter or the Company's by-laws.

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The business of extraordinary Shareholders' Meetings may include the discussion and approval of the issues specified in paragraph (a) and from paragraphs (e) to (t) above inclusive.

Convening of Annual Shareholders' Meetings and Shareholders' Meetings

The Board of Directors must convene an Annual Shareholders' Meeting in Vietnam within four months from the last day of the previous fiscal year of the Company (or six months if approved by the competent authorities).

The Board of Directors may call an extraordinary Shareholders' Meeting:

(a) whenever the Board of Directors deems it appropriate for the Company's benefit;

(b) when the annual accounting balance sheet, or the quarterly or half-yearly financial reports, or the annual audited financial statements show that half of the issued and paid-up share capital is lost;

(c) the number of members of the Board of Directors is lower than the number required by law or less than half of the number stipulated by the Charter;

(d) upon request by a Shareholder or a group of Shareholders holding more than five per cent. of the Shares for at least six consecutive months; or

(e) upon request of the Supervisory Board, if the Supervisory Board has evidence to believe that any member of the Board of Directors or any key management personnel has seriously breached his or her obligations or intends to misuse his or her powers.

At least 15 days prior to the date appointed for holding a Shareholders' Meeting, a notice of the meeting together with the meeting's agenda and other information concerned must be sent to the Shareholders by way of post, email or facsimile and be published on VSD's, HoSE's and the Company's websites.

Quorum

Shareholders present holding own at least 65 per cent. of the total voting shares in the Company shall constitute a quorum at a Shareholders' Meeting.

Where there are not sufficient delegates for the meeting to be declared quorate within 30 minutes from the time set for the opening of meeting, the meeting shall be declared inquorate and a second meeting must be reconvened within 30 days. Such a second meeting shall be declared quorate if and only if all attending Shareholders and authorised representatives hold at least 51 per cent. of the total voting shares in the Company.

If the second meeting is not quorate within 30 minutes from the time set for the opening of meeting, a third meeting may be convened within 20 days from the scheduled date of the second meeting. At the third meeting, any number of attending Shareholders and authorised representatives shall constitute a quorum, and the participants shall be entitled to decide on all issues that were expected to be decided by the first meeting.

Proxies

A Shareholder is entitled to attend, speak and vote at any Shareholders' Meeting, in person or by proxy. A proxy need not be a Shareholder.

Voting

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The following matters must be decided by a resolution of the attending Shareholders holding at least 65 per cent. of voting shares of the Shareholders present in person or by proxy at such meeting:

(a) annual financial statements;

(b) short-term and long-term developmental plans; and

(c) the election, removal and replacement of members of the Board of Directors and the Supervisory Board and the appointment of General Director by the Board of Directors.

The following matters must be decided by a resolution of the attending Shareholders holding at least 75 per cent. of voting shares of the Shareholders present in person or by proxy at such meeting:

(a) amendment of and addition to the Charter;

(b) types of shares and number of shares offered for sale;

(c) disposal of the Company's assets or a subsidiary of the Company's assets where the value of such assets exceeds 50 per cent. of the book value of the total assets of the Company or the relevant subsidiary of the Company respectively based on the most recently audited financial statements; and

(d) re-organisation or dissolution.

Minutes

The minutes of Shareholders' Meeting must be sent to Shareholders within 15 days from the date of the closing of the relevant meeting.

Written resolutions

A resolution of a Shareholders' Meeting may also be passed by means of written resolutions whereby the proposed shareholder resolutions are circulated to Shareholders for their approval. The matters reserved for approval at an Annual Shareholders' Meeting may not be approved by written resolution. Written resolutions require the approval of Shareholders holding at least 75 per cent. of total voting shares.

Administrative, Management and Supervisory Bodies

Board of Directors

The number of members of the Board of Directors shall not be less than five nor more than 11. Each member of the Board of Directors may serve a maximum term of five years. At the Shareholders' Meeting following the expiry of a member of the Board of Directors' term, such member may be re-elected by Shareholders with or without a further term limit.

At least one third of members of the Board of Directors must be independent non-executive members. Members of the Board of Directors need not be a Shareholder. However, members of the Board of Directors must have at least three years' experience in one of the industries in which the Company operates. They must also have capacity and not be disqualified from serving as a director under the Law on Enterprises.

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Three of the members of the Board of Directors are nominated by the Company's founding Shareholders in accordance to the portion of Shares each founding Shareholder owns. Founding Shareholders are entitled to aggregate the number of voting rights of each such Shareholder to nominate members to the Board of Directors.

Shareholders who own at least five per cent. of the Shares for at least six consecutive months are entitled to aggregate the number of voting rights of each such Shareholder to nominate a person for appointment to the Board of Directors. Shareholders or a group of Shareholders who hold more than five per cent. to below 10 per cent. of total shares with voting rights for at least six consecutive months have the right to nominate one member to the Board of Directors; in cases of from 10 per cent. to below 30 per cent., they have the right to nominate two members; in cases of from 30 per cent. to below 50 per cent., they have the right to nominate three members; in cases of from 50 per cent. to below 65 per cent., they have the right to nominate four members; and in cases of at least 65 per cent., they have the right to nominate all five members.

A member of the Board of Directors shall not retain Board membership status in the following cases:

● The member is no longer eligible to be a member of a Board of Directors under regulations of the Law on Enterprises or any other applicable law;

● The member sends a letter resigning his membership of the Board of Directors to the Company's headquarters;

● The member is affected by a nervous disorder and other members of the Board of Directors are provided with professional advice and evidence that the relevant member does not have the capacity to continue to act as a member of the Board of Directors;

● The member is absent from and does not participate in meetings of the Board of Directors for six consecutive months without the permission of the Board of Directors, and the Board of Directors concludes that the position of the member has therefore been left vacant;

● The member is dismissed from the Board of Directors pursuant to a resolution of a Shareholders' Meeting.

The Board of Directors may appoint a new member to fill in any vacancy that arises unexpectedly in the Board of Directors, and any member appointed in this manner must have his appointment ratified at the next Shareholders' Meeting. Upon such ratification, the appointment shall be deemed to have taken effect on the date on which the member was appointed by the Board of Directors.

The Board of Directors are required to elect a Chairman and a Vice-Chairman from among the members of the Board. The Chairman of the Board of Directors shall not also hold the position of General Director of the Company, unless otherwise decided by a resolution of the Annual Shareholders' Meeting.

The Company has a General Director, Deputy General Directors and a Chief Accountant, each of whom are appointed by the Board of Directors. The General Director and Deputy General Directors may be members of the Board of Directors at the same time and are appointed or dismissed by a resolution of the Board of Directors.

The Board of Directors shall appoint a company secretary on such terms as decided by the Board of Directors. The Board of Directors may dismiss a company secretary at any time. Two or more

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people may be appointed as co-company secretaries. The Board of Directors may appoint one or more assistant company secretaries at any time.

Supervisory Board

The Supervisory Board may not have fewer than three members nor more than five members. One member shall be qualified in accounting. Such a member may not be a member or employee of the Company's auditor nor an employee of the Company itself. The Supervisory Board must appoint one member who is a Shareholder as chairman.

Shareholders or a group of Shareholders who hold more than five per cent. to below 10 per cent. of voting shares for a consecutive period of at least six months shall be entitled to nominate one member to the Supervisory Board; in cases of from 10 per cent. to below 30 per cent., they have the right to nominate two members; in cases of from 30 per cent. to below 50 per cent., they have the right to nominate three members, in cases of from below 50 per cent. to below 65 per cent., they have the right to nominate four members; and in cases of at least 65 per cent., they have the right to nominate all five members.

The members of the Supervisory Board are appointed by the Shareholders' Meeting to a maximum term of five years and may be re-elected at the next Shareholders' Meeting following the expiry of this term.

Chartered Capital

The Company may only increase or decrease its chartered capital by means of a resolution of a Shareholders' Meeting.

Change in Control

No provision of the Charter has the effect of delaying, deferring or preventing a change in control of the Company.

Disclosure of shareholdings

No provision of the Charter stipulates a shareholding threshold above which details of a shareholding must be disclosed. For statutory disclosure requirements, see "Vietnamese Regulatory Law Overview".

4. The entry by the Company into the Deposit Agreement was authorised and approved by the Board of Directors on 15 November 2010.

5. On 20 December 2010, the Company issued the New Shares pursuant to approvals by the Shareholders by way of a postal ballot (the results of which were published on 18 August 2010), under which, inter alia, the Shareholders resolved to approve the issue of the New Shares.

6. Application has been made for the GDRs to be listed on the Official List and, with respect to GDRs issued in global form through the facilities of Euroclear and Clearstream, Luxembourg, admitted to trading on the Professional Securities Market.

7. The New Shares were admitted to trading on the HoSE on 12 January 2011. The 8,108,125 Shares deposited in accordance with the terms of the Deposit Agreement pursuant to a bonus share issue on 26 January and which are represented by GDRs were admitted to trading on the HoSE on 28 February 2011.

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8. There has been no significant change in the financial or trading position of the Group since 31 December 2010, the date of its last published interim financial information, being the Group's unaudited preliminary consolidated financial statements (which are included on pages F-1 to F-39 of these Listing Particulars).

9. The following contracts (not being a contract entered into in the ordinary course of business) have been entered into by the Group within two years immediately preceding the date of the publication of these Listing Particulars and are, or may be, material:

● During the period beginning 29 June 2009 and ending on 17 September 2010, the Company made capital contributions amounting to VND 30.6 billion in order to acquire a 51 per cent. interest in Song Da Ban Me Joint Stock Company, which is located in Daklak Province. The current principal business activities of Song Da Ban Me Joint Stock Company are to manufacture and sell concrete and cement. It is also in the process of constructing and development of the Group's DakPsi 2B and DakPsi 2C hydropower projects.

● On 2 April 2010, Hoang Anh Housing Construction and Development Joint Stock Company ("HAH") acquired 99.9 per cent. interest in Dong Nam Real Estate Joint Stock Company ("DNC") from DNC's existing shareholders for a total consideration of VND 1,108,890,000,000. The excess of the purchase consideration over the net assets of DNC which are comprised mainly of land amounting to VND 809,190,000,000 at the acquisition date has been recognised in the 30 September 2010 interim consolidated balance sheet as part of the value of DNC's land held for development.

● During 2010, the Company has sold in aggregate a total of 23,500,000 shares of HAH (11.75 per cent.) to strategic investors with total consideration of VND 1,167 billion.

● On 12 January 2009, the Company agreed to the disposal of its Quy Nhon hotel resort to a third party with total proceeds of VND 175,000,000,000.

● On 20 March 2009, the Company entered into a loan agreement with Vietcombank, Gia Lai branch. The amount of the facility is VND 231 billion and the facility matures on 20 September 2011. The facility is secured on the Daksrong 2 hydropower plant. The interest rate is equal to the applicable SBV base rate plus 3 per cent. per annum.

● On 24 June 2009, HAH acquired a 24 per cent. minority interest in Phu Hoang Anh Joint Stock Company ("PHA"), from Phu Long Company Limited for a consideration of VND 229.32 billion. The acquisition increased the ownership of HAH in PHA's equity from 70 per cent. to 94 per cent. The excess of the purchase consideration over the net assets of PHA of VND 106 billion at the acquisition date was recognised in the consolidated balance sheet as part of the cost of PHA's land currently under development.

● On 5 August 2009, the Company entered into a loan agreement with Vietcombank, Gia Lai branch. The amount of the facility is VND 183 billion and the facility matures on 5 February 2012. The facility is secured on the Daksrong 2A hydropower plant. The interest rate is equal to the applicable SBV base rate plus 3.4 per cent. per annum.

● On 17 August 2009, the Company's subsidiary, Hoang Anh Dak Lak Joint Stock Company, acquired a 50 per cent. interest in Dai Lam Construction and Trade Company Limited for a total consideration of VND 1.5 billion. The current principal business activity of Dai Lam Construction and Trade Company Limited is to develop rubber plantations.

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Save as disclosed in this paragraph nine, the Group has not, within the two years immediately preceding the date of these Listing Particulars, entered into any contract which is or may be material (not being a contract entered into in the ordinary course of business) and which directly concerns the issue of the GDRs.

10. The Company has obtained all necessary consents, approvals and authorisations required in connection with the issue of the GDRs.

11. There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during the 12 months immediately preceding the date of these Listing Particulars which may have, or have had in the recent past, significant effects on the Company's and/or Group's financial position or profitability.

12. The statutory auditors of the Company for the period covered by the historical information in these Listing Particulars were and are Ernst & Young Vietnam Limited, whose registered address is Saigon Riverside Office Center, 8th Floor, 2A-4A Ton Duc Thong Street, District 1, Ho Chi MinhCity, Vietnam. The auditors are members of the Vietnam Association of Certified Public Accountants.

13. For so long as any of the GDRs are outstanding, listed on the Official List and, with respect to GDRs issued in global form through the facilities of Euroclear and Clearstream, Luxembourg, traded on the Professional Securities Market, copies of:

● the Group's most recent annual report;

● the Group's annual consolidated audited accounts, quarterly consolidated unaudited accounts and interim consolidated unaudited accounts;

● the full translations of the mining reports relating to the Group's mining activities, being those in relation to the Kbang Mines, the Thanh Hoa Deposit, the Mo Rai Deposit, the Pa Non Deposit and the Kachak Deposit;

● these Listing Particulars;

● the Charter; and

● the Deposit Agreement,

will be available for inspection free of charge on weekdays at the offices of the Company and Elara Capital PLC.

14. Deutsche Bank Trust Company Americas will maintain the register of GDR Holders at its specified office or at the specified office of its agent.

15. The GDRs issued in global form will be cleared and settled through the facilities of Euroclear or Clearstream, Luxembourg. The CUSIP number for the Master GDR is 433718103, the ISIN is US4337181030 and the Common Code is 056263730.

A GDR represented by an individual definitive certificate will not be eligible for clearing and settlement through Euroclear or Clearstream, Luxembourg or for trading on the Professional Securities Market. Upon cancellation of such GDRs represented either by a statement of holding or a definitive certificated GDR, as the case may be, the Depositary will cause the mark up of the Master GDR with a corresponding number of GDRs and will cause the delivery of GDRs, in dematerialised book-entry form, to the designated Euroclear and/or Clearstream, Luxembourg account as specified in such written delivery instructions. Upon being issued with an interest in a

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Master GDR, a Holder may trade such GDRs held in the Euroclear and Clearstream, Luxembourg clearing systems on the Professional Securities Market in accordance with its rules and regulations.

16. Neither the Company, nor another company in which the Company has a direct or indirect holding of more than 50 per cent., have acquired or hold any of their own shares which do not appear as a separate item on the balance sheet.

17. The Company has not paid any remuneration or benefits in kind granted during the last completed financial year that have been charged to overheads or the profit appropriation account, to members of the administrative, management and supervisory bodies.

18. During the preceding financial and current financial year, no interests of members of the administrative, management and supervisory bodies of the Company, in transactions effected by the Company, have been unusual in their nature or conditions.

19. There are no outstanding loans that have been granted by the Company to members of its administrative, management or supervisory bodies, nor any guarantees provided by the Company for their benefit.

20. There have been no public takeover or exchange offers by third parties in respect of the Shares, nor any public exchange offers made by the Company in respect of other companies' shares during the last and the current financial year.

21. Any offer to purchase voting shares resulting in the holding of 25 per cent., 51 per cent., 65 per cent. or 75 per cent. or more of the total issued and outstanding Shares must be made through a public offer and the approval of the SSC must be sought in advance.

22. For so long as any of the GDRs are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period in which the Company is neither subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, nor exempt from the reporting requirements of the Exchange Act under Rule 12g3-2(b) thereunder, provide to the holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, in each case upon the written request of such holder, beneficial owner or prospective purchaser, the information required to be provided by rule 144A(d)(4) under the Securities Act.

23. The Company is not aware of any Directors or major shareholders that intend to become a Holder.

24. Descriptions of the principal investments of the Group for each of the financial years ended 31 December 2009, 2008 and 2007 and the nine month period ended 30 September 2010 can be found in the Group's consolidated financial statements in respect of those periods which are appended to these Listing Particulars. The relevant principal investments can be found: in the case of the financial statements relating to the financial year ended 31 December 2009 and to the nine month period ended 30 September 2010 in notes 15 and 16 to those financial statements; in the case of the financial statements relating to the financial year ended 31 December 2008 in notes 13 and 14 of those financial statements; and in the case of the financial statements relating to the financial year ended 31 December 2007 in notes 14 and 15 of those financial statements.

25. Except for the Golden House apartment project, all other apartments for sale or under construction, including the associated land use rights, have been mortgaged to secure the Group's outstanding borrowings. Other material tangible fixed assets of the Group have been secured against the Group's borrowings, as indicated in the notes to the financial statements and interim financial statements concerning the short-term borrowings and long-term debt of the Group on pages F-74, F-78, F-115, F-154, F-158 to F-161 of these Listing Particulars.

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26. The Group's consolidated financial statements for each of the years ended 31 December 2009, 31 December 2008 and 31 December 2007 were audited by Ernst & Young Vietnam Limited, whose registered office is Saigon Riverside Office Center, 8th Floor, 2A-4A Ton Duc Thang Street, District 1, Ho Chi Minh City. The last published audited consolidated financial statements of the Group were in respect of the year ended 31 December 2009. The consolidated financial statements were audited in accordance with Generally Accepted Auditing Standards in Vietnam, and the Company is not aware of any significant differences between these audit standards and International Standards on Auditing.

27. The total costs, charges and expenses payable by the Company in connection with the issue of the GDRs are estimated to be US$ 3.5 million. The gross proceeds from the 16,216,250 GDRs issued on 6 December 2010 were approximately US$ 60 million. The net proceeds from the issue of such GDRs were therefore approximately US$ 56.5 million.

28. The Depositary shall be entitled to charge and receive the following remuneration and reimbursement from the Holders in respect of its services under the Deposit Agreement and in relation to the Listing:

a) for the issue of GDRs upon the withdrawal of Deposited Property: US$ 0.05 or less per GDR issued at a rate based on the Depositary's standard fee schedule reproduced below (subject to change from time to time but current as of the Closing Date);

GDR price (at issuance or cancellation)(US$)

Fee charged by Depositary per GDR (US$)

0.00 to 3.49 0.030

3.50 to 4.99 0.035

5.00 to 7.49 0.040

7.50 to 9.99 0.045

10.00 and greater 0.050

b) for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Shares: a fee of US$ 0.02 or less each per net dividend or distribution (at a rate based on the Depositary's standard fee schedule reproduced below (subject to change from timeto time but current as of the date of these Listing Particulars));

Net US$ dividend after tax US$ fee per dividend

0.250 and greater 0.020

0.200 to 0.249 0.017

0.150 to 0.199 0.015

0.100 to 0.149 0.012

0.050 to 0.099 0.010

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0.025 to 0.049 0.005

0.020 to 0.024 0.004

0.015 to 0.019 0.003

0.010 to 0.014 0.002

0.005 to 0.009 0.001

together with all expenses, transfer and registration fees, taxes, duties and charges payable by the Depositary, any agent or the Custodian in connection with any of the above, including, but not limited to, charges imposed by the common depositary and such customary expenses as are incurred by the Depositary in the conversion of VND (and/or other currencies other than US dollars) into US dollars and any fees imposed by any relevant regulatory authority.

30. The contact details for Deutsche Bank AG's broker services as at the date of these Listing Particulars were:

New York: +1 212 250 9100London: +44 020 7547 6500

31. Local costs associated with buying and selling of securities, funds transfers and foreign exchange will be deducted from the amounts sent to the Depositary (for issuance of GDRs) or proceeds sent by the Depositary (from cancellation of GDRs, subject to the expiry of any applicable Lock-up Period) were (as at the date of these Listing Particulars) as follows:

GDR issuance (VAT additional for each fee)

Receipt of funds fees waived

Brokerage commission 0.10 per cent.

Return of funds (excess from prefunding of buys / return of funds due to cancellation of the buy order)

To banks inside Ho Chi Minh City and Hanoi

High-value payments (greater than VND 500,000,000)

Electronic payment 0.025 per cent. (capped at VND 450,000)

Non-electronic payment 0.045 per cent. (capped at VND 550,000)

Low-value payments (less than VND 500,000,000)

Electronic payment VND 18,000

Non-electronic payment VND 36,000

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To banks outside Ho Chi Minh City and Hanoi

High-value payments (greater than or equal to VND 500,000,000)






GDR Cancellation

Brokerage commission 0.10 per cent.

Return of proceeds – VND

To banks inside Ho Chi Minh City and Hanoi

High-value payments (greater than or equal to VND 500,000,000)







High-value payments (greater than or equal to VND 500,000,000):



Low-value payments (less than VND 500,000,000):


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Return of proceeds – USD

Foreign exchange fees and commissions

Fund transfer fees – Domestic Fund Transfer In Foreign Currency

To banks inside Ho Chi Minh City and Hanoi:

Electronic payment US$3

Non-electronic payment US$4


Electronic payment 0.20 per cent. (minimum US$5, maximum US$80)

Non-electronic payment 0.25 per cent. (minimum US$ 5, maximum US$ 80)

Fund transfer fees – international payments

Electronic payment 0.15 per cent. (minimum US$ 10, maximum US$ 200)

Non-electronic payment 0.20 per cent. (minimum US$ 20, maximum US$ 200)

Cable (Telex Charge) US$ 20 per message

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SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN VAS AND IFRS

The following paragraphs summarise the principal areas in which there could be significant differences between IFRS and VAS that could be significant to the Group's financial condition and result of operations.

The Group has not quantified these differences, nor performed a reconciliation of any of its VAS financial statements to IFRS. Had the Group undertaken any such quantification or reconciliation, other potential significant accounting and disclosure differences may have come to its attention that are not summarised below. Accordingly, the Group cannot offer any assurances that the differences described below would, in fact, be the accounting principles creating all differences between the financial statements of the Group as prepared under VAS compared to IFRS. However, all principal differences between VAS and IFRS are disclosed in this section. In addition, the Group cannot estimate the net effect that applying IFRS would have on its financial information or results of operations, or any component thereof, or in any of the presentation of financial information in these Listing Particulars.

Potential investors should consult their own professional advisers for an understanding of the differences between IFRS and VAS, and how these differences might affect the financial information set out herein.

No attempt has been made to identify all disclosure, presentation or classification that would affect the manner in which transactions or events are presented in the financial statements or notes thereto. Regulatory bodies that promulgate IFRS and VAS have significant projects ongoing that could affect comparisons such as this one. Further, no attempt has been made to identify future differences between IFRS and VAS that may affect the financial statements as a result of transactions or events that may occur in the future.

Financial statements

VAS 21 (Presentation of Financial Statements) does not specifically require the disclosure of management's key judgments, key assumptions concerning the future and other key sources of estimation uncertainty. However, it does encourage financial statements to provide this information where necessary. IAS 1 (Presentation of Financial Statements) requires disclosure, in the summary of significant accounting policies or other notes, of the judgements management has made in the process of applying the entity's accounting policies that have the most significant effect on the amounts recognised in the financial statements. IAS 1 also requires disclosure of information about the assumptions concerning the future, and other major sources of estimation uncertainty at the balance sheet date, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. In respect of those assets and liabilities, the notes must include details of their nature and their carrying amount as at the balance sheet date.

VAS 21 requires an analysis of changes in equity in the notes to the financial statements rather than as a primary statement as required under IAS 1. Information to be presented on the face of the balance sheet and income statements are based on the standard VAS financial statement format.

Companies reporting under VAS are also required to apply the VAS chart of accounts and standard financial statements format, prescribed by Decision 15/2006-QD-BTC issued by the Ministry of Finance and its subsequent additions and amendments, which are descriptive and inflexible. Therefore, financial statements prepared under VAS may have various classification and presentational differences compared to financial statements prepared under IFRS.

IFRS requires disclosures on the entity's objectives, policies and processes for managing capital, quantitative data about the entity as regards capital, whether the entity has complied with any capital requirements and if it has not complied, the consequences of such non-compliance. There are no such disclosure requirements under VAS.

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Under VAS, minority interests represent the portion of profit or loss and net assets not held by the Company's shareholders. Minority interest is disclosed as a separate line item in the consolidated balance sheet after owners' equity. No separate disclosure on minority interest is made in the statement of equity, where VAS 21 requires an analysis of the minority interests in the notes to the financial statements rather than as a primary statement.

Under IFRS, non-controlling interests (formerly minority interest) (collectively referred to as "non-controlling interests") are presented within equity, separately from parent shareholders' equity. The amount attributable to non-controlling interests is required to be separately disclosed in the statement of equity. IAS 1 allows the company to present all items of income and expense recognised in a period either in a single statement of comprehensive income, or in two statements: a statement displaying components of profit or loss (separate income statement) and a second statement beginning with profit or loss and displaying components of other comprehensive income (statement of comprehensive income). VAS 21 only requires one statement displaying components of profit or loss.

Under VAS 11 (Business Combinations), for each business combination, the acquirer is required to measure any non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the acquiree's identifiable net assets. Under IFRS 3 (Business Combinations), for each business combination, the acquirer shall measure any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's identifiable net assets.

Consolidation

Investment in subsidiaries

Under VAS 25 (Consolidated Financial Statements and Accounting for Investments in Subsidiaries), a parent is exempted from preparing consolidated financial statements if the parent is a wholly-owned subsidiary, or is virtually wholly-owned, provided in the case of one that is virtually wholly-owned, the parent obtains the approval of the owners of the minority interest. More conditions must be met under IAS 27 (Consolidated and Separate Financial Statements) before this exemption is permitted.

Investment in a subsidiary that meets the held for sale criteria must be classified as non-current asset held for sale in accordance with IFRS 5 (Non Current Asset Held for Sale and Discontinued Operations). Under VAS 25, such a subsidiary is excluded from consolidation.

Under IFRS, losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. Under VAS, losses incurred by subsidiary are attributed to the minority interest until the balance is reduced to nil. Any further excess losses should be attributed to the parent, unless the non-controlling interest had a binding obligation to cover these. If the subsidiary subsequently report profits, such profits are allocated back to the parent until the minority's share of losses previously covered by the parent has been fully recovered.

Under VAS, there is no specific guidance on how to account for acquisition of subsidiary that is not a business. IAS 27 applies to all entities under the control of a parent irrespective of whether the entity is a business or an asset or a group of assets. The acquirer recognises 100 per cent. of the underlying assets in the consolidated financial statements by grossing up the asset for the consideration paid. The acquirer applies IAS 27, and consolidates its investment in the entity, recognising non-controlling interests for the proportion of their interest in the subsidiary.

Under IFRS, a change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

● Derecognises the assets (including goodwill) and liabilities of the subsidiary

● Derecognises the carrying amount of any non-controlling interest

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● Derecognises the cumulative translation differences, recorded in equity

● Recognises the fair value of the consideration received

● Recognises the fair value of any investment retained

● Recognises any surplus or deficit in profit or loss

● Reclassifies the parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Basis of consolidation prior to 1 January 2010

Certain of the above-mentioned requirements should be applied on a prospective basis. The following differences, however, are carried forward in certain instances from the previous basis of consolidation:

● Acquisitions of non-controlling interests, prior to 1 January 2010, should be accounted for using the parent entity extension method, whereby the difference between the consideration and the book value of the share of the net assets acquired should be recognised in goodwill.

● Losses incurred by the Group should be attributed to the non-controlling interest until the balance was reduced to nil. Any further excess losses are attributed to the parent, unless the non-controlling interest had a binding obligation to cover these. Losses prior to 1 January 2010 should not be reallocated between NCI and the parent shareholders.

● Upon loss of control, the Group should be accounted for the investment retained at its proportionate share of net asset value at the date control is lost. The carrying value of such investments at 1 January 2010 has not been restated.

VAS does not have such specific guidance on how to account the foregoing.

Investments in associates

Under VAS 7 (Accounting for Investments in Associates), such investment must be classified as investment in an associate at cost until it is sold or disposed. Under IAS 28 (Accounting for Investments in Associates), an investment in an associate is accounted for using the equity method. Under the equity method, the investment in the associate is carried in the statement of financial position at cost plus post acquisition changes in the company's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.

Interests in joint ventures

Under VAS 8 (Financial Reporting of Interests in Joint Ventures) the proportionate consolidation method is not allowed, while under IAS 31 (Interests in Joint Ventures), a company is allowed to recognise its interest in a jointly controlled entity using proportionate consolidation or the equity method.

Business combination and goodwill

Under VAS 11 (Business Combination)

Under VAS 11 (Business Combination), business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities

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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 of the business combination over the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities. If the cost of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortisation.

Goodwill is amortised over 10 year period on a straight-line basis. Goodwill is not subject to mandatory annual impairment review.

Under IFRS 3 (Business Combination)

Business combinations from 1 January 2010

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date through profit or loss. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it should not be re-measured until it is finally settled within equity.

Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the company's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Business combinations prior to 1 January 2010

In comparison to the above-mentioned requirements, the following differences apply: Business combinations should be accounted for using the purchase method. Transaction costs directly attributable to the acquisition form part of the acquisition costs. The non-controlling interest (formerly known as minority interest) should be measured at the proportionate share of the acquiree's identifiable net assets.

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Business combinations achieved in stages should be accounted for as separate steps. Any additional acquired share of interest should not affect previously recognised goodwill. When the company acquires a business, embedded derivatives are separated from the host contract and the acquiree should not be reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that otherwise would have been required under the contract. Contingent consideration should be recognised if, and only if, the company had a present obligation, the economic outflow is more likely than not and a reliable estimate is determinable. Subsequent adjustments to the contingent consideration should be recognised as part of goodwill.

Business combinations involving entities under common control

Under VAS, there is no specific guidance for the accounting of business contributions among entities under common control.

Under IFRS, the accounting for business combinations amongst entities under common control is also scoped out of IFRS 3 (Business Combinations). IFRS 3 no longer includes specific guidance on how to treat common control business combinations and is therefore not prescriptive as to what method must be followed in these transactions. An entity may therefore apply IAS 8 (Accounting Policies - Changes in Accounting Estimates and Errors) which requires that in the absence of specific guidance in IFRS, an entity should use its judgment in developing and applying an accounting policy that is relevant and reliable. In the absence of a standard or interpretation that deals with similar or relating issues and in the absence of guidance in the Framework for the Preparation and Presentation of Financial Guidance, guidance issued by other standard-setting bodies may be referred to. Several such bodies have issued guidance and some allow or require the pooling of interests method (or predecessor accounting or merger accounting as it is known in some jurisdictions) in accounting for business combinations involving entities under common control. In addition, an entity can also elect as their accounting policy to apply the acquisition method (as in IFRS 3). However, where the acquisition method of accounting is selected, the transaction must have substance from the perspective of the reporting entity. Nonetheless, whichever policy is adopted, it should be applied consistently.

Inventories

Manufacturing and trading of goods

Estimation techniques such as standard cost and the retail method are not permitted under VAS. Under IFRS, standard cost method or the retail method may be used for convenience if the results approximate actual costs. Standard costs should be regularly reviewed and revised in the light of current conditions.

First in, first out ("FIFO") specific identification and weighted average methods are all accepted under VAS and IFRS. The last in first out ("LIFO") method is not permitted under IFRS but it is permitted under VAS. However, if LIFO method is used, under VAS, disclosure of the effect of using LIFO in comparison to FIFO or weighted average or net realisable value, depending on which one is lower is required.

Apartment for sale under construction

Under VAS, apartments for sale under construction are carried at the lower of cost and net realisable value. Costs include all expenditures, including borrowing costs, directly attributable to the development and construction of the apartments. Net realisable value represents current selling price less estimated cost to complete and estimated selling and marketing expenses.

Under IFRS, 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 and is measured at the lower of cost and net realisable value.

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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.

The effects of changes in foreign exchange rates

VAS 10 (The Effects of Changes in Foreign Exchange Rates) does not include a requirement to determine 'functional currency'. However, according to the Circular 244//2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance, providing amendments to the VAS, enterprises and organisations having foreign investment capital and which mainly collect revenues and make payments in foreign currency may select its functional currency and measure its results and financial position in that currency in accordance with the accounting laws. Such monetary unit should be the currency which is mainly used in their sale of goods and purchases, and normally be the one used for computing revenues, labour costs, purchasing materials, etc.

IAS 21 (The Effects of Changes in Foreign Exchange Rates) requires each individual entity included in the reporting entity whether it is a stand-alone entity, an entity with foreign operations (such as a parent) or a foreign operation (such as a subsidiary or branch) to determine its functional currency and measure its results and financial position in that currency. The functional currency is the currency of the primary economic environment in which the entity operates. Under VAS 10, there is no definition of functional currency and enterprises are required to use VND for recording and statutory reporting purposes. The use of foreign currency other than VND for recording and statutory reporting purposes should be approved by the Ministry of Finance.

VAS 10 prescribes that realised and unrealised foreign exchange differences arising during the construction phase are recorded in the equity section of the consolidated balance sheet. Upon the completion of construction, all accumulated realised exchange differences arising during the construction period, and unrealised exchange differences arising upon translation of monetary items at the date of commencing operations, are transferred to prepaid expense in the consolidated balance sheet and amortised to finance income/expense over a period of five years. There is no similar requirement under IFRS.

IAS 21 revises the requirements in the previous version of IAS 21 for distinguishing between foreign operations that are integral to the operations of the reporting entity (referred to below as 'integral foreign operations') and foreign entities. The requirements are now among the indicators of an entity's functional currency. As a result:

● There is no distinction between integral foreign operations and foreign entities. Rather, an entity that was previously classified as an integral foreign operation will have the same functional currency as the reporting entity.

● Only one translation method is used for foreign operations, namely that described in the previous version of IAS 21 as applying to foreign entities.

● The provisions dealing with the distinction between an integral foreign operation and a foreign entity and the provisions specifying the translation method to be used for the former have been deleted.

Property, plant and equipment

VAS 3 (Tangible Fixed Assets) requires an asset to have value greater than VND 10,000,000 to be recognised as fixed asset. IAS 16 (Property, Plant and Equipment) does not have the same condition.

VAS 3 does not include within its scope the measurement and recognition of asset dismantlement, removal and restoration costs like in IAS 16.

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Under VAS 3, after initial recognition, property, plant and equipment ("PPE") should be carried at cost less depreciation. Revaluation of PPE is not allowed unless specific approval is obtained from the Government.

IAS 16 requires PPE to measure after initial recognition at either the cost model or the revaluation model. Following cost model, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses. Following the revaluation model, an item of property, plant and equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

PPE is not subject to impairment testing under VAS 3 and impairment write down of PPE is not allowed under VAS 3 unless specific approval is obtained from the Government.

Impairment

There is no existing VAS which is equivalent to IAS 36 (Impairment of Non-Current Assets).

Intangible assets

VAS 4 (Intangible Fixed Assets) requires an asset to have useful life of more than one year and a value greater than VND 10,000,000 to be recognised as an intangible fixed asset. IAS 38 (Intangible Assets) does not have the same conditions.

Under VAS 4, after initial recognition, intangible assets should be carried at cost less amortisation. VAS 4 does not mention about revaluation of recognised intangible asset.

IAS 38 requires intangible assets to measure after initial recognition at either the cost model or the revaluation model. Following cost model, an item of intangible assets shall be carried at its cost less any accumulated amortisation and any accumulated impairment losses. Following revaluation model, an item of intangible assets whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated amortisation and subsequent accumulated impairment losses.

Intangible assets recognised in accordance with VAS 4 must be amortised over a useful life of no longer than 20 years, unless there is persuasive evidence that a life over 20 years is appropriate. IAS 38 does not have such a limitation.

Under VAS, intangible assets are not subject to impairment testing and revaluation or write down for impairment is not allowed.

Construction Contracts

VAS 15 (Construction Contracts) is similar to IAS 11 (Construction Contracts) except that under IAS 11, when it is probable that total contract costs will exceed total contract revenue, the expected loss shall be recognised as an expense immediately. VAS 15 does not have such guidance.

Non-current assets held for sale

Under VAS, there is no specific accounting standard on non-current assets held for sale and discontinued operations, which is governed under IFRS 5 (Non-Current Assets Held for Sale).

Financial instruments – initial recognition and subsequent measurement

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There is no existing VAS which is equivalent to IAS 32 (Financial Instruments: Presentation), IAS 39 (Financial Instruments: Recognition and Measurement) and IFRS 7 (Financial Instruments: Disclosure).

However, on 6 November 2009, the Ministry of Finance issued Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments. The adoption of the circular will require further disclosures and have impact on the presentation of certain financial instruments in the financial statements. The circular will become effective for financial years beginning on or after 31 December 2011.

Revenue

VAS 14 (Revenues and Other Income) only allows the use of time proportion basis to record interest revenue.

Under IAS 18 (Revenue) interest revenue should be recognised using the effective interest method; on a time proportion basis that takes into account the effective yield on the asset.

Disclosure requirements relating to revenue are similar under both IFRS and VAS, except that VAS does not allow consideration of a provision for contingent liabilities.

Sales of property under development

Under VAS

The VAS revenue recognition standards are contained within VAS 14 (Revenue and Other Income) and VAS 16 (Construction Contracts). In 2007, there was a lack of specific local accounting guidance and regulations on recognition of revenue specifically for sales of apartments in Vietnam. The Group's policy was for apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. Where apartments are sold before completion of construction, the Group has material obligations to complete the apartment project and the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the Group's policy was for the revenue and associated costs to be recognised as the related obligations are fulfilled by reference to the stage of completion at the balance sheet date.

Effective 1 January 2011, the Group's management has decided to change its revenue recognition policy for pre-completion sales of apartments in recognition of the recent developments in the international financial reporting standards relevant to this matter and to align with the developing local industry practice. Accordingly, revenue should be recognised when and only when all of the following criteria are met in accordance with VAS 14 (Revenue and Other Income):

● the entity has transferred to the buyer the significant risks and rewards of ownership of the goods;

● the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

● the amount of revenue can be measured reliably;

● it is probable that the economic benefits associated with the transaction will flow to the entity; and

● the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Under IFRS

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Prior to July 2008, accounting for arrangements for construction of real estates was not consistent. Some real estate developers recognise revenue based on the percentage of completion method, while others recognise revenue only when the completed unit is handed over to the buyer.

In July 2008, IFRIC 15 (Agreements for Construction of Real Estates) was issued and became effective beginning or after 1 January 2009 which addresses this divergence and provides guidance on how to determine whether the agreement is within the scope of IAS 11 (Construction Contracts) or IAS 18 (Revenue). There is no specific Vietnamese guidance or standard which is equivalent to IFRIC 15.

IFRIC 15 clarifies that the terms and conditions and the surrounding facts and circumstances of each agreement should be analysed very carefully and the agreements may have to be split into separate components, for example a sale of land and a construction component. The land component will typically fall to be treated as a sale under IAS 18. The construction component is less straightforward; the key question being whether the arrangement meets the definition of a construction contract in accordance with IAS 11 or, if IAS 11 does not apply, the arrangement is for the rendering of services under IAS 18 or it is considered a sale of goods, whether, in the latter case, a continuous transfer of work in progress takes place under IAS 18.

IFRIC 15 also clarifies that where property is under development and agreement has been reached to sell such property when construction is complete, the directors consider whether the contract comprises:

● a contract to construct a property; or

● a contract for the sale of a completed property.

Where a contract is judged to be for the construction of a property, revenue is recognised using the percentage of completion method as construction progresses. Where the contract is judged to be for the sale of a completed property, revenue is recognised when the significant risks and rewards of ownership of the real estate have been transferred to the buyer. If, however, the legal terms of the contract are such that the construction represents the continuous transfer of work in progress to the purchaser, the percentage of completion method of revenue recognition is applied and revenue is recognised as work progresses. Continuous transfer of work in progress is applied when:

● The buyer controls the work in progress, typically when the land on which the development is taking place is owned by the final customer; and

● All significant risks and rewards of ownership of the work in progress in its present state are transferred to the buyer as construction progresses, typically when buyer cannot put the incomplete property back.

Events after the balance sheet date

While IAS 10 (Events After the Reporting Period) provides guidance on the determination of the date the financial statements are authorised for issue which will vary depending upon the management structure, statutory requirements and procedures to follow in preparing and finalising the financial statements.

VAS 23 (Events After the Balance Sheet Date) specifically states that the issuing date is the date when the head of the reporting entity (or an authorised person) authorises the issue of the financial statements to outsiders.

Agriculture

IAS 41 (Agriculture) prescribes the accounting treatment, financial statement presentation, and disclosures related to agricultural activity. Agricultural activity is the management by an entity of the biological

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transformation of living animals or plants (biological assets) for sale, into agricultural produce, or into additional biological assets. There is no existing VAS which is equivalent to IAS 41.

Exploration for and evaluation of mineral resources

IFRS 6 (Exploration for and Evaluation of Mineral Resources) requires entities recognising exploration and evaluation assets to perform an impairment test on those assets when facts and circumstances suggest that the carrying amount of the assets may exceed their recoverable amount. There is no existing VAS which is equivalent to IFRS 6.

Employee benefits

There is no equivalent VAS which is equivalent to IAS 19 (Employee Benefits).

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DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise:

"Annual Shareholders' Meeting" the annual Shareholders' Meeting held, convened and held in accordance with the Company's Charter

"ANRPC" Association of Natural Rubber Producing Countries

"ASEAN" the Association of Southeast Asian Nations

"Board of Directors" the Board of Directors of the Company

"Board of Management" the Board of Management of the Company

"CDM" the Clean Development Mechanism, as implemented by the Government

"CERs" Certified Emission Reductions, a form of emissions credits under the CDM

"Charter" the Company's charter, details of which are set out in "General Information"

"Clearing Systems" Clearstream, Luxembourg and Euroclear

"Clearstream, Luxembourg" Clearstream, Luxembourg Banking, société anonyme

"Closing Date" 6 December 2010

"Company" Hoang Anh Gia Lai Joint Stock Company

"Condition" a condition of the Terms and Conditions of the Global Depositary Receipts and "Conditions" shall be construed accordingly

"Custodian" Deutsche Bank AG, Ho Chi Minh City Branch

"Deposit Agreement" the agreement between the Company and the Depositary dated on 6 December 2010

"Depositary" Deutsche Bank Trust Company Americas

"Deposited Property" shall have the meaning given to it in the Terms and Conditions of the Global Depositary Receipts

"Deposited Shares" shall have the meaning given to it in the Terms and Conditions of the Global Depositary Receipts

"Directors" any of the members of the Board of Directors, Board of Management or Supervisory Board and "Director" shall be construed accordingly

"ERAV" Electricity Regulatory Authority of Vietnam

"Exchange Act" the United States Securities Exchange Act 1934 (as amended)

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"Existing Shares" the 292,520,697 Shares in issue at 19 December 2010 and the 2,783,750 Shares issued to a strategic investor on 20 December 2010

"Euroclear" Euroclear Bank S.A./N.V.

"EVN" Electricity Vietnam

"Financial Adviser" Elara Capital PLC

"GDRs" the global depositary receipts issued pursuant to the Listing

"Government" the government of Vietnam

"Group" the Company and its subsidiaries and subsidiary undertakings as described in "Business"

"Holders" the holders of GDRs

"HoSE" the Ho Chi Minh City Stock Exchange (and the same meaning shall apply to the terms "Share Exchange" and "Stock Exchange" in "Terms and Conditions of the Global Depositary Receipts")

"IFRS" International Financial Reporting Standards adopted pursuant to the procedure of Article 5 of Regulation (EC) No. 1606/2002

"Land Law" the Land Law, passed on 26 November 2003 by the National Assembly with effect from 1 July 2004 (as amended) together with its implementing regulations

"Law on Enterprises" Law on Enterprises No.60/2005/QH11 passed by the National Assembly on 29 November 2005 (as amended)

"Listing" the listing of the GDRs on the Official List

"Lock-up Period" the 12 month period following 20 December 2010, being the date of the deposit of the New Shares with the Depositary in accordance with the terms of the Deposit Agreement, or such other statutory period as may apply to the holding of the Deposited Shares by the Custodian pursuant to Vietnamese law and regulations relating to private placements in effect from time to time

"London Stock Exchange" London Stock Exchange plc (and the same meaning shall apply to the term "GDR Exchange" in "Terms and Conditions of the Global Depositary Receipts")

"National Assembly" the National Assembly of Vietnam

"New Shares" the 16,216,250 Shares issued on 20 December 2010 to be represented by the GDRs

"Official List" the Official List of the UK Listing Authority

"Preferential Allotment Letter" a letter issued by the Company giving an undertaking to issue the New Shares on a date specified in the Preferential Allotment Letter

"Professional Securities Market" the Professional Securities Market of the London Stock Exchange, an unregulated market for the purposes of Directive 2004/39/EC (the Markets in Financial Instruments Directive)

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"Prospectus Directive" Directive 2003/71/EC, together with any applicable implementing measures in any member state of the European Economic Area

"Regulation S" Regulation S promulgated under the Securities Act

"Relevant Member State" any member state of the European Economic Area that has implemented the Prospectus Directive

"SBV" State Bank of Vietnam

"SEA Games" the 25th South East Asian Games, held in Laos

"SEC" the US Securities and Exchange Commission

"Securities Act" the United States Securities Act 1933 (as amended)

"Share" an ordinary share with a par value of VND 10,000 in the share capital of the Company and "Shares" shall be construed accordingly

"Shareholders" holders of Shares, each individually being a "Shareholder"

"Shareholders' Meeting" a validly constituted meeting of the Shareholders

"SSC" the State Securities Commission

"Supervisory Board" the Supervisory Board of the Company

"UK Listing Authority" the Financial Services Authority acting in its capacity as competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000

"US GAAP" the generally accepted accounting principles in the United States

"VAS" Vietnamese Accounting System and Vietnamese Accounting Standards issued by the Ministry of Finance

"Vietnam" the Socialist Republic of Vietnam

"Vietnamese Securities Laws" the 2006 Law on Securities, Decree No. 52/2006/ND-CP dated 19 May 2006, Decree No. 14/2007/ND-CP dated 19 January 2007 (as amended), Decree No. 53/2009/ND-CP dated 4 June 2009 and Decree 01/2010/ND-CP dated 04 January 2010, Circular 09/2010/TT-BTC dated 15 January 2010 and associated guidance documents

"VSA" the Vietnam Steel Association

"VSC" the Vietnam Steel Corporation

"VSD" the Vietnam Securities Depositary

"WTO" the World Trade Organisation

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INDEX TO FINANCIAL STATEMENTS

THE FINANCIAL INFORMATION OF THE GROUP INCLUDED IN THESE LISTING PARTICULARS HAS NOT BEEN PREPARED IN ACCORDANCE WITH IFRS AND THERE MAY BE MATERIAL DIFFERENCES IN THE FINANCIAL INFORMATION HAD IFRS BEEN APPLIED TO THE FINANCIAL INFORMATION. A DESCRIPTION OF THE SIGNIFICANT DIFFERENCES BETWEEN VIETNAMESE GAAP, IFRS AND US GAAP IS INCLUDED IN THESE LISTING PARTICULARS UNDER "SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN VIETNAMESE GAAP, IFRS AND US GAAP".

THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED 31 DECEMBER 2007, 31 DECEMBER 2008 AND 31 DECEMBER 2009 WERE EACH AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS IN VIETNAM.

Unaudited unreviewed preliminary consolidated financial statements as of and for the three months and the year ended 31 December 2010

Consolidated Balance Sheet F-3

Consolidated Income Statement F-5

Consolidated Cash Flow Statement F-7

Notes to the Consolidated Financial Statements F-9

Note: The unaudited unreviewed preliminary consolidated financial statements as of and for the three months and the year ended 31 December 2010 disclose figures relating to the Group's 2010 financial year (1 January to 31 December). However, although the financial statements are entitled "quarter 4/2010", only the Group's consolidated income statement and notes 25 (Revenues), 26 (Costs of goods sold and services rendered), 27 (Expenses from financial activities) and 28 (Other income and expenses) to the financial statements disclose information relating specifically to the fourth quarter of 2010 (1 October to 31 December). Such quarterly figures, where included, appear together with comparative figures from the fourth quarter of 2009. The Group's consolidated balance sheet statement, consolidated cash flow statement and the notes to the financial statements other than notes 25, 26, 27 and 28 contain only figures from the full 2010 financial year and do not disclose figures relating specifically to the fourth quarter of 2010. These financial statements have not been audited, nor have they been reviewed by the Group's auditors.

Unaudited reviewed interim consolidated financial statements as of and for the nine month period ended 30 September 2010

Interim Consolidated Balance Sheet F-46

Interim Consolidated Income Statement F-48

Interim Consolidated Cash Flow Statement F-49


Unaudited reviewed interim consolidated financial statements as of and for the nine month period ended 30 September 2009

Interim Consolidated Balance Sheet F-93

Interim Consolidated Income Statement F-95

Interim Consolidated Cash Flow Statement F-97


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Audited consolidated financial statements as of and for the year ended 31 December 2009

Independent Auditors' Report F-129

















Hoang Anh Gia Lai Joint Stock Company

Consolidated Financial Statements

quarter 4/2010

F-1

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries

CONTENTS

Pages

Consolidated balance sheet 1 - 2

Consolidated income statement 3 - 4

Consolidated cash flow statement 5 – 6

Notes to the consolidated financial statements 7 - 37

F-2


CONSOLIDATED BALANCE SHEET B01-DN/HNas at 31 December 2010

VND’000

Code ASSETS NotesEnding

balanceBeginning

balance

100 A. CURRENT ASSETS 11,085,919,707 7,403,555,092

110 I. Cash 3,588,663,440 1,944,228,950111 1. Cash 4 3,588,663,440 1,944,228,950

120 II. Short-term investments 81,783,240 157,571,210121 1. Short-term investments 5 81,783,240 157,571,210

130 III. Current accounts receivable 4,362,062,643 2,956,113,887131 1. Trade receivables 6 2,785,902,169 1,694,730,505132 2. Advances to suppliers 7 1,249,025,710 870,124,080135 3. Other receivables 8 328,293,202 392,823,227139 4. Provision for doubtful debts (1,158,438) (1,563,925)

140 IV. Inventories 2,848,965,731 2,213,150,611141 1. Inventories 9 2,849,019,215 2,213,663,205149 2. Provision for obsolete inventories (53,484) (512,594)

150 V. Other current assets 204,444,653 132,490,434151 1. Short-term prepaid expenses 47,251,854 32,418,109152 2. Value-added tax deductibles 77,671,693 43,369,234152 3. Tax and other receivables 737,960 36,986158 4. Other current assets 10 78,783,146 56,666,105

200 B. NON-CURRENT ASSETS 7,690,307,236 4,792,656,182

220 I. Fixed assets 4,414,295,004 2,517,309,488221 1. Tangible fixed assets 11 1,401,270,498 671,688,850222 Cost 1,598,371,382 795,779,397223 Accumulated depreciation (197,100,884) (124,090,547)224 2. Finance lease 14,284,184 -225 Cost 14,896,718 -226 Accumulated depreciation (612,534) -227 3. Intangible fixed assets 12 115,360,179 94,463,918228 Cost 117,755,393 96,080,465229 Accumulated amortisation (2,395,214) (1,616,547)230 4. Construction in progress 13 2,883,380,143 1,751,156,720

250 II. Long-term investments 3,001,290,028 2,061,446,000252 1. Investments in associates 14.2 30,931,029 69,098,898258 2. Other long-term investments 15 2,970,358,999 1,992,347,102

260 III. Other long-term assets 195,803,063 213,900,694261 1. Long-term prepaid expenses 16 153,570,220 141,963,630262 2. Deferred tax assets 29.2 37,920,152 69,237,539268 3. Other long-term assets 4,312,691 2,699,525

269 IV. Goodwill 78,919,141 -

270 TOTAL ASSETS 18,776,226,943 12,196,211,274

F-3


CONSOLIDATED BALANCE SHEET (continued) B01-DN/HNas at 31 December 2010

VND’000

Code RESOURCES NotesEnding

balanceBeginning

balance

300 A. LIABILITIES 8,699,073,179 7,085,142,093

310 I. Current liabilities 4,908,006,153 4,311,427,635311 1. Short-term loans and borrowings 17 2,856,363,146 2,991,797,773312 2. Trade payables 736,661,496 197,537,916313 3. Advances from customers 18 3,519,158 44,397,490314 4. Statutory obligations 19 491,200,946 265,774,014315 5. Payables to employees 22,396,669 17,811,136316 6. Accrued expenses 20 471,955,163 644,983,946319 7. Other payables 21 236,565,689 132,540,015320 8. Short-term provisions 21,480,614 -323 9. Bonus and welfare fund 67,863,272 16,585,345

330 II. Non-current liabilities 3,791,067,026 2,773,714,458333 1. Other long-term liabilities 22 23,718,851 23,992,393334 2. Long-term loans and debts 23 3,022,120,970 2,248,707,163335 3. Deferred tax liabilities 29.2 743,794,382 499,210,181336 4. Provision for severance allowance 1,432,823 1,804,721

400 B. OWNERS’ EQUITY 9,213,323,493 4,694,914,864

410 I. Capital 24 9,213,323,493 4,694,914,864411 1. Share capital 3,115,206,970 2,704,654,580412 2. Share premium 3,504,012,140 1,223,971,061413 3. Consolidation reserve (346,885,112) (399,237,919)415 4. Treasury shares - (30,091,699)416 5. Foreign exchange differences 59,665,483 20,463,787417 6. Investment and development fund 8,622,737 8,622,737418 7. Financial reserve fund 210,865,390 82,528,069420 8. Undistributed earnings 2,661,835,885 1,084,004,248

500 C. MINORITY INTEREST 863,830,271 416,154,317

440 TOTAL LIABILITIES AND OWNERS’EQUITY 18,776,226,943 12,196,211,274

Mrs Ho Thi Kim Chi Mr Nguyen Van SuChief Accountant General Director

7 March 2011

F-4


CONSOLIDATED INCOME STATEMENT B02-DN/HNquarter 4/2010

VND’000

Code ITEMS Notes

Quarter 4Accumulated from the beginning of

the year

Current year Previous year Current year Previous year

01 1. Revenues from sale of goods and rendering of services 25.1 1,444,145,558 1,088,196,918 4,526,468,760 4,370,251,754

02 2. Deductions 25.1 (88,034) (597,551) (1,591,144) (4,943,033)

10 3. Net revenues from sale of goods and rendering of services 25.1 1,444,057,524 1,087,599,367 4,524,877,616 4,365,308,721

11 4. Costs of goods sold and services rendered 26 (652,885,143) (633,826,440) (2,232,774,917) (2,358,546,997)

20 5. Gross profit from sale of goods and rendering of services 791,172,381 453,772,927 2,292,102,699 2,006,761,724

21 6. Income from financial activities 25.2 176,778,159 152,321,962 1,260,909,037 199,381,768

22 7. Expenses from financial activities 27 (71,907,890) (53,270,495) (212,747,759) (213,430,505)23 In which: Interest expenses (60,499,211) (52,296,900) (195,373,358) (207,443,514)

24 8. Selling expenses (41,990,192) (20,256,594) (133,031,950) (108,523,436)

25 9. General and administration expenses (45,870,330) (46,409,872) (181,704,569) (162,416,224)

30 10. Operating profit 808,182,128 486,157,928 3,025,527,458 1,721,773,327

31 11. Other income 28 6,892,260 11,710,121 21,835,172 48,461,912

32 12. Other expenses 28 (14,719,775) (6,401,432) (29,952,993) (26,730,915)

40 13. Other (loss) profit 28 (7,827,515) 5,308,689 (8,117,821) 21,730,997

F-5


CONSOLIDATED INCOME STATEMENT (continued) B02-DN/HNquarter 4/2010

VND’000

Code ITEMS Notes

Quarter 4Accumulated from the beginning of

the year


50 15. Profit before tax 800,354,613 491,466,617 3,017,409,637 1,743,504,324

51 16. Current corporate income tax expense 29.1 (127,080,949) (131,242,233) (443,474,926) (137,652,012)

52 17. Deferred corporate income tax expense 29.2 (101,427,998) (10,146,871) (327,393,983) (318,953,626)

60 18. Net profit for the period 571,845,666 350,077,513 2,246,540,728 1,286,898,686Attributable to:18.1 Minority interest 33,535,063 18,426,321 115,100,547 98,045,42318.2 The Company's shareholders 538,310,603 331,651,192 2,131,440,181 1,188,853,263

70 19. Basic earnings per share (VND) 1,821 1,236 7,487 4,432


7 March 2011

F-6


CONSOLIDATED CASH FLOW STATEMENT B03-DN/HNquarter 4/2010

VND’000

Code ITEMS Notes

Accumulated from the beginningof the year

Current year Previous year

I. CASH FLOWS FROM OPERATINGACTIVITIES

01 Net profit before tax 3,017,409,637 1,743,504,324Adjustments for:

02 Depreciation and amortisation 11,12 78,723,612 159,105,68603 Provisions (864,597) 963,44704 Unrealised foreign exchange gains (15,911,337) -05 Profits from investing activities (1,245,071,983) (196,435,954)06 Interest expense 27 195,373,358 207,443,514

08 Operating income before changes inworking capital 2,029,658,690 1,914,581,017

09Increase in receivables (1,372,344,876) (339,054,195)

10 Decrease (increase) in inventories 196,925,563 (168,204,732)11 Increase in payables 184,462,315 37,845,13112 (Increase) decrease in prepaid

expenses (41,440,335) 66,934,10613 Interest paid (182,832,931) (189,041,621)14 Corporate income tax paid (286,178,589) (212,869,539)16 Other cash outflows from operating

activities (81,984,889) (26,879,395)

20 Net cash from operating activities 446,264,948 1,083,310,772

II. CASH FLOWS FROM INVESTINGACTIVITIES

21 Purchases and construction of fixedassets and long-term assets (2,307,174,811) (1,357,528,506)

22 Proceeds from disposals of fixed assetsand other long-term assets 6,109,407 32,965,491

25Investments in other entities (1,496,226,774) (568,353,883)

26 Proceeds from sale of investments inother entities and other long-termassets 1,691,966,557 134,000,000

27 Interest and dividends received 167,770,297 85,997,296

30Net cash used in investing activities (1,937,555,324) (1,672,919,602)

III. CASH FLOWS FROM FINANCINGACTIVITIES

31 Proceeds from issuing new shares andselling treasury shares 1,339,754,093 248,393,276

32 Capital redemption - (30,091,699)33 Borrowings received 5,142,574,833 4,720,800,92534 Borrowings repaid (3,054,595,653) (2,577,048,046)36 Dividends paid 24.1 (292,008,407) (359,302,070)

40 Net cash from financing activities 3,135,724,866 2,002,752,386

F-7


CONSOLIDATED CASH FLOW STATEMENT (continued) B03-DN/HNquarter 4/2010

VND’000

Code ITEMS Notes

Accumulated from the beginningof the year


50 Net increase in cash during the period 1,644,434,490 1,413,143,556

60 Cash at beginning of period 1,944,228,950 531,085,394

70 Cash at end of period 4 3,588,663,440 1,944,228,950


7 March 2011

F-8


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B09-DN/HNquarter 4/2010

1. CORPORATE INFORMATION

Hoang Anh Gia Lai Joint Stock Company (”the Company”) is a joint stock companyestablished in Vietnam in accordance with Business Registration Certificate No.3903000083 dated 1 June 2006 issued by the Department of Planning and Investment ofGia Lai Province and the following amendments (No 5900377720):

First amendment 5 August 2006Second amendment 20 December 2006Third amendment 10 January 2007Fourth amendment 7 March 2007Fifth amendment 1 June 2007Sixth amendment 19 June 2007Seventh amendment 20 December 2007Eighth amendment 29 August 2008Ninth amendment 24 November 2008Tenth amendment 13 May 2009Eleventh amendment 11 June 2009Twelfth amendment 15 September 2009Thirteenth amendment 18 November 2009Fourteenth amendment 23 December 2009Fifteenth amendment 17 May 2010Sixteenth amendment 17 September 2010Seventeenth amendment 28 December 2010Eighteenth amendment 28 January 2011

As at 31 December 2010, the Company has 42 subsidiaries and 3 associates (31 December2009: 32 subsidiaries and 4 associates) as disclosed in Note 14 to the consolidated financialstatements. At present, the Group is principally engaged in developing apartments for saleand lease; construction; planting rubber trees, processing and trading rubber latex andrubber wood; developing and operating hydropower plants; mining; producing and tradingfurniture and granite products; building and operating hotels and resorts; and sport andentertainment activities.

The Company’s head office is located at No. 15 Truong Chinh Street, Phu Dong Ward,Pleiku City, Gia Lai Province, Vietnam.

2. BASIS OF PREPARATION

2.1. Accounting standards and system

The consolidated financial statements of the Group, expressed in thousands of Vietnamdong (“VND’000”), are prepared in accordance with the Vietnamese Accounting System andVietnamese Accounting Standards issued by the Ministry of Finance as per:

► Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance andPromulgation of Four Vietnamese Standards on Accounting (Series 1);

► Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance andPromulgation of Six Vietnamese Standards on Accounting (Series 2);

► Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance andPromulgation of Six Vietnamese Standards on Accounting (Series 3);

► Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance andPromulgation of Six Vietnamese Standards on Accounting (Series 4); and

► Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance andPromulgation of Four Vietnamese Standards on Accounting (Series 5).

F-9


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) B09-DN/HNquarter 4/2010

2. BASIS OF PREPARATION (continued)

2.1. Accounting standards and system (continued)

Accordingly, the accompanying consolidated balance sheet, consolidated incomestatement, consolidated cash flow statement and related notes, including their utilisation arenot designed for those who are not informed about Vietnam’s accounting principles,procedures and practices and furthermore are not intended to present the financial positionand results of operations and cash flows of the Group in accordance with accountingprinciples and practices generally accepted in countries other than Vietnam.

Accounting Standard(s) and guidance issued but not yet effective

Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of theInternational Financial Reporting Standards on presentation and disclosures of financialinstruments

On 6 November 2009, the Ministry of Finance issued Circular 210/2009/TT-BTC providingguidance for the adoption in Vietnam of the International Financial Reporting Standards onpresentation and disclosures of financial instruments. The adoption of the circular willrequire further disclosures and have impact on the presentation of certain financialinstruments in the financial statements. The circular will become effective for financial yearsbeginning on or after 31 December 2011. The Company’s management is currentlyassessing the impact of adopting the circular on the future financial statements of theGroup.

2.2. Registered accounting documentation system

The Company’s registered accounting documentation system is the General Journalsystem.

2.3. Accounting currency

The Company maintains its accounting records in VND.

2.4. Fiscal year

The Company’s fiscal year starts on 1 January and ends on 31 December. These financialstatements are prepared for the period from 1 October 2010 to 31 December 2010.

2.5. Basis of consolidation

The consolidated financial statements comprise the financial statements of the Companyand its subsidiaries (“the Group”) as at and for the fourth quarter of the fiscal year ending 31December 2010. The financial statements of the subsidiaries are prepared for the sameperiod as the Company, using accounting policies consistent with the Company’saccounting policies. Adjustments are made for any difference in accounting policies thatmay exist to ensure consistency between the subsidiaries and the Company.

All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unlesscosts cannot be recovered.

Minority interests represent the portion of profit or loss and net assets not held by theCompany’s shareholders and are presented separately in the consolidated incomestatements and in the consolidated balance sheet.

The subsidiaries are consolidated from the date on which the Company obtains control andcease to be consolidated from the date on which the Company ceases to control. Wherethere is a loss of control over the subsidiaries, the consolidated financial statements stillinclude results for the period of the reporting year during which the Company has control.

F-10




2.5. Basis of consolidation (continued)

Except for subsidiaries acquired under common control which are accounted for under thepooling of interests method, other subsidiaries have been included in the consolidatedfinancial statements using the purchase method of accounting that measures thesubsidiaries’ assets and liabilities at their fair value at the acquisition date.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1. Change in accounting policies

The accounting policies adopted by the Group are consistent with those of previous financialyears except for the following:

During the financial year, the Group adopted Circular No. 244/2009/TT-BTC issued by theMinistry of Finance on 31 December 2009 (“the Circular 244”) providing amendments andsupplements to the existing accounting regime. One of the key changes applicable to theGroup is the classification of bonus and welfare fund as a liability in the balance sheet asopposed to the prior year’s classification as an owner’s equity item.

The Circular 244 is applied retrospectively. The change increases the total liabilities of theGroup as at 31 December 2010 by VND’000 67,863,201 (31 December 2009: increased byVND’000 16,585,345) and reduces the total owners’ equity by the same amount.

3.2. Cash

Cash comprise cash on hand, cash in banks and cash in transit.

3.3. Receivables

Receivables are presented in the consolidated financial statements at the carrying amountsdue from customers and other debtors, along with the provision for doubtful debts.

The provision for doubtful debts represents the estimated loss due to non-payment arisingon receivables that were outstanding at the balance sheet date. Increases and decreases tothe provision balance are recorded as general and administration expense in theconsolidated income statement.

3.4. Inventories

Inventories are stated at the lower of cost incurred in bringing each product to its presentlocation and condition, and net realisable value. Net realisable value represents theestimated selling price less anticipated cost of disposal and after making allowance fordamaged, obsolete and slow-moving items.


Raw materials, tools and supplies andmerchandise goods

Finished goods and work-in-process

- Actual cost on a weighted average basis.

- Cost of direct materials and labour plusattributable overheads based on the normaloperating capacity on a weighted averagebasis.

Apartments for sale under construction are carried at the lower of cost and net realisablevalue. Costs include all expenditures including borrowing costs, directly attributable to thedevelopment and construction of the apartments. Net realisable value represents currentselling price less estimated cost to complete and estimated selling and marketing expenses.

F-11



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.5. Provision for obsolete inventories

An inventory provision is created for the estimated loss arising due to the impairment(through diminution, damage, obsolescence, etc) of raw materials, finished goods, and otherinventories owned by the Group, based on appropriate evidence of impairment available atthe balance sheet date.

Increases and decreases to the provision balance are recorded into the cost of goods soldaccount in the consolidated income statement.

3.6. Tangible fixed assets


The costs of tangible fixed assets consist of their purchase prices and any directlyattributable costs of bringing the fixed assets to working condition for their intended use.

Expenditures for additions, improvements and renewals are capitalised and expenditures formaintenance and repairs are charged to the consolidated income statement when incurred.

When fixed assets are sold or retired, their cost and accumulated depreciation are removedfrom the consolidated balance sheet and any gain or loss resulting from their disposal isincluded in the consolidated income statement.

3.7. Leased assets

The determination of whether an arrangement is, or contains a lease is based on thesubstance of the arrangement at inception date and requires an assessment of whether thefulfilment of the arrangement is dependent on the use of a specific asset and thearrangement conveys a right to use the asset.

A lease is classified as a finance lease whenever the terms of the lease transfersubstantially all the risks and rewards of ownership of the asset to the lessee. All otherleases are classified as operating leases.


Assets held under finance leases are capitalised in the consolidated balance sheet at theinception of the lease at the fair value of the leased assets or, if lower, at the net presentvalue of the minimum lease payments. The principal amount included in future leasepayments under finance leases are recorded as a liability. The interest amounts included inlease payments are charged to the consolidated income statement over the lease term toachieve a constant rate on interest on the remaining balance of the finance lease liability.

Capitalised financial leased assets are depreciated using straight-line basis over the shorterof the estimated useful live of the asset and the lease term if it is not certain that theownership of the leased assets will be transferred to .

Rentals under operating leases are charged to the consolidated income statement on astraight-line basis over the term of the lease.

Where the Group is the lessor

Assets subject to operating leases are included as the Group’s fixed assets in theconsolidated balance sheet. Lease income is recognised in the consolidated incomestatement on a straight-line basis over the lease term.

F-12




3.8. Intangible fixed assets


The cost of an intangible fixed asset comprises of its purchase price and any directlyattributable costs of preparing the intangible fixed asset for its intended use.

Expenditures for additions, improvements are added to the carrying amount of the assetsand other expenditures are charged to the consolidated income statement as incurred.

When tangible fixed assets are sold or retired, their costs and accumulated amortisation areremoved from the consolidated balance sheet and any gain or loss resulting from theirdisposal is included in the consolidated income statement.

Land use rights

Land use rights are recorded as intangible assets when the Group has the land use rightcertificates. The costs of land use rights comprise all directly attributable costs of bringingthe land to the condition available for use.

Computer software

Computer software which is not an integral part of hardware is recorded as intangible assetand amortised over the term of benefits.

3.9. Depreciation and amortisation

Depreciation and amortisation of tangible fixed assets and intangible assets are calculatedon a straight-line basis over the estimated useful life of each asset as follows:

Machinery and equipment 5 - 20 yearsBuildings and structures 10 - 50 yearsMotor vehicles 8 - 20 yearsOffice equipment 3 - 10 yearsPerennial trees 20 yearsLand use rights 45 yearsComputer software 5 yearsOther assets 8 - 15 years

3.10. Construction in progress

Construction in progress represents costs attributable directly to the construction of theGroup’s buildings, offices for lease, hydro-power plants, rubber plantation, plants andmachinery which have not yet been completed as at the date of these consolidated financialstatements.

Buildings and offices for lease

Costs include attributable costs related directly to the construction of the Group’s buildingsand offices for lease such as contractors’ costs, survey and designing fees and other costs.

Rubber plantation costs

Costs include attributable costs related directly to the rubber plantation such as survey, landcompensation, land clearance, rubber seeds, fertilizer, transportation of rubber seeds andother materials, workers’ wages, building roads and fences, fire prevention and securityguards, anti-botanic drugs and other related costs.

Hydro-power plants

Costs include attributable costs related directly to the construction of hydro-power plantssuch as survey, land compensation, land clearance, machinery and equipment, constructioncosts, workers’ wages and other related costs.

F-13




3.10. Construction in progress (continued)

Mining costs

Costs include attributable costs related directly to the exploration of mining such as survey,licensing fees, workers’ wages, machinery and equipment and other related costs.

3.11. Borrowing costs

Borrowing costs include interest and other costs incurred from the borrowings of the Group.

Borrowing costs are recorded as expense during the year in which they are incurred, exceptto the extent that they are capitalised as explained in the following paragraph.

Borrowing costs that are directly attributable to the acquisition, construction or production ofa particular asset are capitalised as part of the cost of the asset. Capitalisation of borrowingcosts is suspended during extended years in which active development of the asset isinterrupted unless such interruption is considered necessary. Capitalisation of borrowingcosts is ceased when substantially all the activities necessary to prepare the qualifyingasset for its intended use or sale are complete.

3.12. Prepaid expenses

Prepaid expenses are reported as short-term or long-term prepaid expenses on theconsolidated balance sheet and amortised over the period for which the amounts are paid orthe period in which economic benefits are generated in relation to these expenses.


Prepaid rental;

Prepaid insurance premium; and

Tools and consumables with large value issued into production and can be used formore than one year.

3.13. Business combinations and goodwill

Business combinations are accounted for using the purchase method. The cost of abusiness combination is measured as the fair value of assets given, equity instrumentsissued and liabilities incurred or assumed at the date of exchange plus any costs directlyattributable to the business combination. Identifiable assets and liabilities and contingentliabilities assumed in a business combination are measured initially at fair values at the dateof business combination.

Goodwill acquired in a business combination is initially measured at cost being the excess ofthe cost of the business combination over the Group’s interest in the net fair value of theacquiree’s identifiable assets, liabilities and contingent liabilities. After initial recognition,goodwill is measured at cost less any accumulated amortisation. Goodwill is amortised over10-year period on a straight-line basis. If the cost of a business combination is less than thefair value of the net assets of the subsidiary acquired, the difference is recognised directly inthe consolidated income statement.

When the Company acquires the minority interests of a subsidiary, the difference betweenthe cost of acquisition and the carrying amount of the minority interest is reflected asgoodwill in the consolidated balance sheet.

Where the acquisition of subsidiary which is not a business rather than an asset acquisition,the individual identifiable assets acquired and liabilities assumed are identified andrecognised. The cost of the acquisition shall be allocated to the individual identifiable assetsand liabilities on the basis of their relative fair values at the date of purchase. Such atransaction or event does not give rise to goodwill.

F-14




3.13. Business combinations and goodwill (continued)

Where the business combinations involving entities or businesses under common control,the pooling of interest method is applied as follows:

► The assets and liabilities of the combining entities are reflected at their carryingamounts;

► No new goodwill is recognised as a result of the combination;

► The consolidated income statement reflects the results of the combining entities for thefull year, irrespective of when the combination took place; and

► Comparatives are presented as if the entities had always been combined.

3.14. Disposal of investments in subsidiaries


► derecognises the assets (including any goodwill) and liabilities of the subsidiary at theircarrying amounts at the date when control is lost;

► derecognises the carrying amount of any non-controlling interests in the formersubsidiary at the date when control is lost;

► recognises:

- the fair value of the consideration received, if any, from the transaction, event orcircumstances that resulted in the loss of control; and

- if the transaction that resulted in the loss of control involves a distribution of shares ofthe subsidiary to owners in their capacity as owners, that distribution:

o recognises any investment retained in the former subsidiary at its fair value at thedate when control is lost; and

o recognises any resulting difference as a gain or loss in profit or loss attributable tothe parent.

Where there is disposal of part of an ownership interest in a subsidiary without loss ofcontrol, a reduction of an interest in a subsidiary is accounted for in a manner consistentwith the accounting policy applied for accounting for an increase in an interest in asubsidiary. As a result, gain or loss is recognised in the consolidated income statementupon disposal of an ownership interest in a subsidiary.

3.15. Investments in associates

The Group’s investment in its associate is accounted for using the equity method ofaccounting. An associate is an entity in which the Group has significant influence that areneither subsidiaries nor joint ventures. The Group generally deems they have significantinfluence if they have over 20% of the voting rights.

Under the equity method, the investment is carried in the consolidated balance sheet at costplus post acquisition changes in the Group’s share of net assets of the associates. Goodwillarising on acquisition of the associate is included in the carrying amount of the investmentand is amortised over ten (10) year period. The consolidated income statement reflects theshare of the post-acquisition results of operation of the associate.

F-15

sa021565

Rectangle

sa021565

Rectangle




3.15. Investments in associates (continued)

The share of post-acquisition profit/(loss) of the associates is presented on face of theconsolidated income statement and its share of post-acquisition movements in reserves isrecognised in reserves. The cumulative post-acquisition movements are adjusted againstthe carrying amount of the investment. Dividends receivable from associates reduce thecarrying amount of the investment.

The financial statements of the associates are prepared for the same reporting period as theparent company. Where necessary, adjustments are made to bring the accounting policiesin line with those of the Group.

3.16. Land held for development, investments in securities and other investments

Land held for development which is presented as part of “Other long-term investments” iscarried at the lower of cost and net realisable value. Costs include all expenditures includingborrowing costs directly related to the acquisition, site clearance and land compensation.Net realisable value represents estimated current selling price less anticipated cost ofdisposal.

Investments in securities and other investments are stated at their acquisition cost.Provision is made for any decline in value of the marketable investments at the balancesheet date representing the excess of the acquisition cost over the market value at that datein accordance with the guidance under Circular 228/2009/TT-BTC issued by the Ministry ofFinance on 7 December 2009. Increases and decreases to the provision balance arerecorded as finance expense in the consolidated income statement.

3.17. Payables and accruals

Payables and accruals are recognised for amounts to be paid in the future for goods andservices received, whether or not billed to the Group.

3.18. Provision for severance allowance

The severance pay to employee is accrued at the end of each reporting period for allemployees who have more than 12 months in service up to 31 December 2008 at the rate ofone-half of the average monthly salary for each year of service up to 31 December 2008 inaccordance with the Labour Code, the Law on Social Insurance and related implementingguidance. Commencing 1 January 2009, the Company pays unemployment insurance inaccordance with Decree No.127/2008/ND-CP dated 12 December 2008.

3.19. Earnings per share

Basic earnings per share amount is computed by dividing net profit for the year attributableto ordinary shareholders before any appropriation of bonus and welfare fund by theweighted average number of ordinary shares outstanding during the accounting period.

Diluted earnings per share amounts are calculated by dividing the net profit after taxattributable to ordinary equity holders of the Group (after adjusting for interest on theconvertible loans) by the weighted average number of ordinary shares outstanding duringthe year plus the weighted average number of ordinary shares that would be issued onconversion of all the dilutive potential ordinary shares into ordinary shares.

3.20. Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognised at cost anddeducted from equity. No gain or loss is recognised in profit or loss upon purchase, sale,issue or cancellation of the Company’s own equity instruments.

F-16


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B09-DN/HNquarter 4/2010


3.21. Foreign currency transactions

The Company follows the guidance under VAS 10 “The Effects of Changes in ExchangeRates” (the “VAS 10”) in relation to foreign currency transactions as applied consistently inprior years.

Transactions in currencies other than the Company’s reporting currency of VND are recordedat the inter-bank exchange rates ruling at the date of the transaction. At year-end, monetaryassets and liabilities denominated in foreign currencies are revalued at exchange rates rulingat the balance sheet date. All realised and unrealised foreign exchange differences are takento the consolidated income statement.

The above guidance related to unrealised foreign exchange differences provided by VAS 10is different from those stipulated in the Circular No. 201/2009/TT-BTC issued on 15 October2009 by the Ministry of Finance providing guidance for the treatment of foreign exchangedifferences (the “Circular 201”) as follows:

Transaction VAS 10 Circular 201

Translation ofshort-termmonetary assetsand liabilitiesdenominated inforeign currencies.

All unrealisedforeign exchangedifferences aretaken to the incomestatement.

All unrealised foreign exchange differencesare taken to the “Foreign exchangedifferences reserve” account in the equitysection of the balance sheet and will bereversed on the following year.

Translation oflong-termmonetary liabilitiesdenominated inforeign currenciesat year end.

All unrealisedforeign exchangedifferences aretaken to the incomestatement.

- All unrealised foreign exchange gains aretaken to the consolidated income statement.

All foreign exchange losses will be charged tothe consolidated income statement. However,if the charging of all foreign exchange lossesresults in net loss before tax for the Group,part of the exchange losses can be deferredand allocated to the income statement withinthe subsequent five years. In any case, thetotal foreign exchange loss to be charged tocurrent year’s income must be at leastequivalent to the foreign exchange lossesarising from the translation of the currentportion of the long-term liabilities, while theremaining portion of the foreign exchangelosses can be deferred in the balance sheetand allocated to the income statement withinthe subsequent five years.

The impact to the consolidated financial statements had the Group adopted the Circular 201for the years beginning 1 January 2009 is not material to the consolidated financialstatements taken as a whole.

F-17




3.22. Appropriation of net profit

Net profit after tax is available for appropriation to shareholders after approval by theshareholders at the Annual General Meeting, and after making appropriation to reserve fundsin accordance with the Company’s Charter and Vietnamese regulatory requirements.


Financial reserve fund is appropriated from the Company’s net profit as proposed by theBoard of Management and subject to shareholders’ approval at the Annual General Meeting.This fund is set aside to protect the Company's normal operations from business risks orlosses, or to prepare for unforeseen losses or damages and force majeure, such as fire,economic and financial turmoil of the country or elsewhere etc.


Investment and development fund is appropriated from the Company’s net profit as proposedby the Board of Management and subject to approval by shareholders at the Annual GeneralMeeting. This fund is set aside for use in the Company’s expansion of its operation or in-depthinvestments.


Bonus and welfare fund is appropriated from the Company’s net profit as proposed by theBoard of Management and subject to shareholders’ approval at the Annual General Meeting.This fund is set aside for the purpose of pecuniary rewarding and encouragement, commonbenefits and improvement of the employees’ material and spiritual benefits.

During the year, the Company has reclassified and presented the balance of bonus andwelfare fund as a liability in the consolidated balance sheet in accordance with therequirements of Circular No. 244/2009/TT-BTC dated 31 December 2009.

3.23. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow tothe Group and the revenue can be reliably measured. The following specific recognitioncriteria must also be met before revenue is recognised:

Sale of apartments

For apartments sold after completion of construction, the revenue and associated costs arerecognised when the significant risks and rewards of ownership of the apartments havepassed to the buyers. For apartments sold before completion of construction where the Grouphas material obligations to complete the apartment project and where the buyers makepayments in line with the progress of construction and effectively assume market risks andrewards, the revenue and associated costs are recognised as the related obligations arefulfilled by reference to the stage of completion at the balance sheet date. Cost of apartmentssold before completion is determined based on actual land, land development andconstruction costs and estimated costs to complete the project. The estimated costs tocomplete the sold apartments are accrued in the balance sheet. Actual expenditures arecharged to this accrual account as incurred.

This revenue recognition policy which is a generally accepted accounting principle in Vietnamand other jurisdictions has been applied consistently with the previous years.


Where the outcome of a construction contract can be estimated reliably and certified bycustomers, revenue and costs are recognised by reference to the amount of work completedat the balance sheet date. Variations in contract work, claims and incentive payments areincluded to the extent that they have been agreed with the customer.

F-18




3.23. Revenue recognition (continued)

Construction contracts (continued)

Where the outcome of a construction contract can be estimated reliably and certified bycustomers, revenue and costs are recognised by reference to the amount of work completedat the balance sheet date. Variations in contract work, claims and incentive payments areincluded to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenueis recognised to the extent of contract costs incurred that it is probable will be recoverable.Contract costs are recognised as expenses in the accounting period in which they areincurred.

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods havepassed to the buyer.

Rental income

Rental income arising from operating leases is accounted for on a straight line basis over thelease terms on going leases.


Revenue from rendering of services is recognized when the services are rendered and isstated net of discounts, allowances and non-refundable taxes.

Interest

Revenue is recognised as the interest accrues (taking into account the effective yield on theasset) unless collectibility is in doubt.

3.24. Taxation

Current tax

Current tax assets and liabilities for the current and prior years are measured at the amountexpected to be recovered from or paid to the taxation authorities. The tax rates and tax lawsused to compute the amount are those that are enacted by the balance sheet date.

Deferred tax

Deferred tax is provided using the balance sheet liability method on temporary differences atthe balance sheet date between the tax base of assets and liabilities and their carryingamount for financial reporting purpose.


► where the deferred tax liability arises from the initial recognition of an asset or liability in atransaction which at the time of the transaction affects neither the accounting profit nortaxable profit or loss; and

► in respect of taxable temporary differences associated with investments in subsidiariesand associates, and interests in joint ventures where timing of the reversal of thetemporary difference can be controlled and it is probable that the temporary differencewill not reverse in the foreseeable future.

F-19




3.24. Taxation (continued)

Deferred tax (continued)

Deferred tax assets are recognised for all deductible temporary differences, carried forward ofunused tax credit and unused tax losses, to the extent that it is probable that taxable profitswill be available against which deductible temporary differences, carried forward of unusedtax credit and unused tax losses can be utilised, except :

► where the deferred tax asset arises from the initial recognition of an asset or liability in atransaction which at the time of the transaction affects neither the accounting profit nortaxable profit or loss; and

► in respect of deductible temporarily differences associated with investments insubsidiaries and associates, and interests in joint ventures, deferred tax assets arerecognised only to the extent that it is probable that the temporary difference will reversein the foreseeable future and taxable profits will be available against which the temporarydifferences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet dateand reduced to the extent that it is no longer probable that sufficient taxable profits will beavailable to allow all or part of the asset to be recovered. Previously unrecognised deferredincome tax assets are re assessed at each balance sheet date and are recognised to theextent that it has become probable that future taxable profit will allow the deferred tax assetsto be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected toapply in the accounting period when the asset realised or the liability is settled based on taxrates and tax laws that have been enacted at the balance sheet date.

Deferred tax is charged or credited to the income statement, except when it relates to itemsrecognised directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set offcurrent tax assets against current tax liabilities and when they relate to income taxes levied bythe same taxable entity and the same taxation authority and the taxable entity intends tosettle its current tax assets and liabilities on a net basis.

Taxes paid or payable representing the required 2% of progress payments received frombuyers for sales of apartments before completion is deducted from the deferred tax liabilitiesat the consolidated balance sheet date.

F-20



4. CASH

VND’000

Ending balance Beginning balance

Cash in banks 3,580,759,361 1,938,118,707Cash on hand 7,904,079 6,110,243

Total 3,588,663,440 1,944,228,950

5. SHORT-TERM INVESTMENTS

Short-term investments at 31 December 2010 represent the net carrying value of Da Latresort which has been agreed to be disposed to a third party, pending completion of the legalprocedures.

6. TRADE RECEIVABLES

VND’000


Receivables from sale of apartments 2,101,497,636 1,540,626,758Construction receivables 415,568,763 14,784,383Trade and service receivables 268,835,770 139,319,364

Total 2,785,902,169 1,694,730,505

7. ADVANCES TO SUPPLIERS

VND’000


Advances to contractors 931,469,365 773,468,674Advances for acquisition of land and real estateprojects 154,538,556 28,081,051Advances to suppliers of goods and services 124,817,789 68,574,355Advances for share acquisition 38,200,000 -

Total 1,249,025,710 870,124,080

Advances to contractors represent the amounts advanced to build real estate projects andhydro power of the Group.

8. OTHER RECEIVABLES

VND’000


Receivables from employees 91,368,218 74,971,330Loans to other companies 56,343,034 57,385,399Short-term loans to employees 52,552,255 61,136,442Accrued interest receivable on bank deposits 34,485,835 27,521,566Receivables from disposal of investments 7,000,000 128,000,000Others 86,543,860 43,808,490

Total 328,293,202 392,823,227

F-21



9. INVENTORIES

VND’000


Apartments for sale under construction 2,294,583,750 1,806,305,701Finished goods 129,504,120 96,183,765Merchandise goods 33,855,388 49,131,285Goods in transit 369,694 9,970,486Work in process 186,770,256 119,973,449Of which from:

Manufacturing 99,674,111 79,589,385Construction contract 87,096,145 39,741,107Rendered services - 642,957

Raw materials 183,479,811 129,034,391Construction materials 12,334,340 91,694Tools and supplies 8,121,856 2,972,434

Total 2,849,019,215 2,213,663,205

10. OTHER CURRENT ASSETS

VND’000


Business advances to employees 78,621,252 47,785,437Short-term deposits 161,894 8,757,210Others - 123,458

Total 78,783,146 56,666,105

F-22



11. TANGIBLE FIXED ASSETS

VND’000

Buildings andstructures

Machinery andequipment

Motorvehicles

Officeequipment

Perennialtrees Other assets Total

Cost

Beginning balance 423,631,909 237,314,494 115,010,780 6,652,686 6,635,322 6,534,206 795,779,397

Additions 458,209,106 285,248,352 69,977,165 3,600,995 63,023 2,290,071 819,388,712

Disposal (5,691,139) (4,219,975) (5,756,298) (721,171) - (408,144) (16,796,727)

Ending balance 876,149,876 518,342,871 179,231,647 9,532,510 6,698,345 8,416,133 1,598,371,382

Accumulated depreciation

Beginning balance (36,015,307) (62,828,217) (20,317,343) (2,245,207) (773,523) (1,910,950) (124,090,547)

Increase (18,434,858) (38,653,738) (17,263,411) (1,791,754) (168,433) (987,662) (77,299,856)

Disposal 910,237 592,254 2,522,856 241,542 - 22,630 4,289,519

Ending balance (53,539,928) (100,889,701) (35,057,898) (3,795,419) (941,956) (2,875,982) (197,100,884)

Net carrying amount


Ending balance 822,609,948 417,453,170 144,173,749 5,737,091 5,756,389 5,540,151 1,401,270,498

F-23



12. INTANGIBLE FIXED ASSETS

VND’000

Land use rights Computer software Total

Cost

Beginning balance 89,237,364 6,843,101 96,080,465

Addition 20,943,275 1,553,163 22,496,438

Disposal (778,751) (42,759) (821,510)

Ending balance 109,401,888 8,353,505 117,755,393

Accumulated amortisation

Beginning balance (1,352,594) (263,953) (1,616,547)

Amortisation charge (203,143) (608,079) (811,222)

Disposal - 32,555 32,555

Ending balance (1,555,737) (839,477) (2,395,214)

Net carrying amount


Ending balance 107,846,151 7,514,028 115,360,179

13. CONSTRUCTION IN PROGRESS

VND’000


Rubber plantations 1,174,766,048 541,842,682Hydro-power plants 710,593,707 445,607,334Office for lease 706,604,709 663,550,389Building and structures 150,941,462 82,011,839Mining facilities 104,797,176 -Other construction works 35,677,041 18,144,476

Total 2,883,380,143 1,751,156,720

F-24



14. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

14.1. Investments in subsidiaries

Details of the Company’s subsidiaries as at 31 December 2010 are as follows:

Name of subsidiaries LocationStatus ofoperation

Date ofestablishmentor acquisition

%holding

Rubber plantation

Hoang Anh Gia Lai RubberPlantation JSC

Gia Lai, Vietnam Pre-operating 26/05/2010 99.00

Gia Lai Industrial Plantation JSC Gia Lai, Vietnam Pre-operating 09/09/2008 98.76

Hoang Anh - Quang MinhRubber JSC

Gia Lai, Vietnam Operating 01/02/2007 56.93

Hoang Anh Attapeu AgriculturalDevelopment Co Ltd

Attapeu, Laos Pre-operating 22/05/2008 83.70

Dai Lam Construction and TradingCo Ltd

Dak Lak,Vietnam

Pre-operating 17/08/2009 71.46

Hoang Anh Dak Lak JSCDak Lak,Vietnam

Operating 12/09/2007 71.46

Mining

Hoang Anh Gia Lai Mining JSC Gia Lai, Vietnam Pre-operating 08/12/2007 83.70

Quang Ngai Mining JSC Quang Ngai,Vietnam


Gia Lai Mining JSC Gia Lai, Vietnam Pre-operating 12/04/2007 66.93

Hoang Anh - Thanh Hoa MiningCo Ltd

Thanh Hoa,Vietnam


Rattanakiri Co Ltd Rattanakiri,Cambodia

Pre-operating 18/11/2009 100.00

KBang Mining One Member CoLtd


Hoang Anh GL - Kontum MiningLimited Company

Kontum,Vietnam


Hoang Anh Sekong Co Ltd Attapeu, Laos Pre-operating 15/10/2009 83.70

Energy

Hoang Anh Gia Lai HydropowerJSC


Hoang Anh - Thanh HoaHydropower JSC

Thanh Hoa,Vietnam


Hoang Anh Dakbla HydropowerJSC

Kontum,Vietnam


Hoang Anh Tona HydropowerJoint Stock Company


Song Da Ban Me JSCDak Lak,Vietnam

Operating 06/2009 50.67

F-25



14. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES (continued)

14.1. Investments in subsidiaries (continued)

Name of subsidiaries LocationStatus ofoperation

Date ofestablishmentor acquisition

%holding

Real estate

Hoang Anh Construction andHousing Development JSC

HCMC, Vietnam Operating 04/06/2007 88.21

Phu Hoang Anh JSC HCMC, Vietnam Operating 15/01/2007 82.91

Hoang Nguyen InvestmentConstruction and Housing JSC

HCMC, Vietnam Operating 29/03/2007 78.50

Minh Tuan Company Limited HCMC, Vietnam Operating 22/06/2007 62.80

Hoang Anh Me Kong Corporation HCMC, Vietnam Operating 24/10/2007 44.99

Phuc Bao Minh TradingConstruction Services Corporation

HCMC, Vietnam Pre-operating 04/10/2008 87.84

Minh Thanh Co Ltd HCMC, Vietnam Pre-operating 28/11/2008 43.46

Hoang Anh Incomex Co Ltd HCMC, Vietnam Pre-operating 2007 70.56

An Tien Co Ltd HCMC, Vietnam Pre-operating 10/01/2008 77.40

Hoang Phuc InvestmentConstruction and Housing JSC

HCMC, Vietnam Pre-operating 2009 44.94

Hoang Anh Gia Lai - Bangkok CoLtd

Bangkok,Thailand

Pre-operating 2009 41.46

Dong Nam Real Estate JSC HCMC, Vietnam Pre-operating 02/04/2010 88.12

An Phu Construction JSC HCMC, Vietnam Operating 9/2010 88.13

Hoang Anh Real EstateManagement Services JSC

HCMC, Vietnam Operating 2007 44.99

Hoang Anh Far East Co Ltd HCMC, Vietnam Operating 03/10/2009 64.21

Manufacturing

Hoang Anh Gia Lai Furniture JSC Gia Lai, Vietnam Operating 28/09/2009 94.07

Furniture Materials One MemberCo Ltd


Construction, trading and services

Hoang Anh Gia Lai Sport JSC Gia Lai, Vietnam Operating 12/01/2009 63.34

Central HAGL JSC Da Nang,Vietnam

Operating 06/07/2007 51.85

Hoang Anh Gia Lai Hospital JSC Gia Lai, Vietnam Pre-operating 07/05/2008 46.20

Hoang Anh Gia Lai RoadConstruction JSC


V&H Corporation (Lao) Co Ltd Attapeu, Laos Pre-operating 26/03/2009 80.00

Hoang Anh Gia Lai Vientiane CoLtd

Vientiane, Laos Pre-operating 06/05/2010 100.00

F-26





Name of associates Business activities


% holdingCarrying value

VND’000 % holdingCarrying value

VND’000

Binh Dinh Constrexim JSC Construction ofhydro-power plants 42.04 15,573,259 39.20 14,431,170

Hoang Anh Gia Dinh JSC Real estate 25.00 7,475,610 25.00 7,457,531

A Dong Investment and Construction Consultant JSC Electric design andconsultancy 25.00 7,882,160 25.00 5,504,609

Hoang Anh – Mang Yang Rubber JSC Rubber plantation - - 40.00 41,705,588

Total 30,931,029 69,098,898

F-27



15. OTHER LONG-TERM INVESTMENTS

VND’000


Land held for development 2,310,869,163 1,217,848,242Investments in Business Cooperation Contracts(“BCC”) for development of real estate projects 350,000,000 492,991,756Loans to the Laos Government 280,819,684 266,120,201Investments in common stocks 28,670,152 15,386,903

Total 2,970,358,999 1,992,347,102

16. LONG-TERM PREPAID EXPENSES

VND’000


Beginning balance 141,963,630 331,880,376Increase 103,100,069 97,573,931Decrease from contract liquidations - (198,133,393)Amortisation charge for the period (87,831,978) (89,357,284)Reclassification to other accounts (3,661,501) -

Ending balance 153,570,220 141,963,630

17. SHORT-TERM LOANS AND BORROWINGS

VND’000


Short-term loansLoans payable to banks 1,320,961,318 842,197,137Loans payable to other entities and individuals - 57,000

Current portion of long-term bank loans (Note 23) 435,401,828 699,543,636

1,756,363,146 1,541,797,773Convertible bonds 1,100,000,000 1,450,000,000

Total 2,856,363,146 2,991,797,773

18. ADVANCES FROM CUSTOMERS

VND’000


Advances from trade customers 3,519,158 42,900,982Deposits from customers for purchase ofapartments - 1,496,508

Total 3,519,158 44,397,490

F-28



19. STATUTORY OBLIGATIONS

VND’000


Corporate income tax 366,117,378 133,031,368Value-added tax 122,294,798 130,553,105Personal income tax 1,553,371 943,412

Others 1,235,399 1,246,129

Total 491,200,946 265,774,014

20. ACCRUED EXPENSES

VND’000


Accrued construction costs for completion ofthe sold units of apartment 337,780,019 548,643,141Construction warranty costs 52,722,341 28,994,252Interest expense 48,734,489 35,503,544

Others 32,718,314 31,843,009

Total 471,955,163 644,983,946

21. OTHER PAYABLES

VND’000


Payable to other companies 102,108,127 53,188,942Payable to employees 45,350,449 23,441,156Payable for land acquisition 18,259,456 18,259,456

Others 70,847,657 37,650,461

Total 236,565,689 132,540,015

22. OTHER LONG-TERM LIABILITIES

VND’000


Advance from the sale of Certificate ofEmission Reduction (“CER”) 19,757,878 19,757,878Deposits received from tenants for office leases 3,960,973 4,234,515

Total 23,718,851 23,992,393

F-29



23. LONG-TERM LOANS AND DEBTS

VND’000


Straight bonds 1,330,000,000 1,450,000,000Long-term bank loans 2,110,370,181 1,498,250,799Finance lease liabilities 11,567,600 -Loans from individual 5,585,017 -

Total 3,457,522,798 2,948,250,799

In whichCurrent portion (Note 17) 435,401,828 699,543,636Non-current portion 3,022,120,970 2,248,707,163

F-30



24. OWNERS’ EQUITY

24.1. Increase and decrease in owners’ equity

VND’000

Share capitalShare

premiumConsolidation

reserveTreasury

shares

Foreignexchange

differences

Investmentand

developmentfund

Financialreserve

fundUndistributed

earnings Total

Beginning balance 2,704,654,580 1,223,971,061 (399,237,919) (30,091,699) 20,463,787 8,622,737 82,528,069 1,084,004,248 4,694,914,864Net profit for the period - - - - - - - 2,131,440,181 2,131,440,181Issuance of new sharesfor conversion of bonds 220,552,390 1,214,447,610 - - - - - - 1,435,000,000Issuance 19.000.000new shares 190,000,000 1,109,600,000 - - - - - - 1,299,600,000Disposal of treasuryshares - 10,062,394 - 30,091,699 - - - - 40,154,093Reversal of previouslyrecognised sharepremium from pre-acquisition profits of asubsidiary - (54,068,925) 54,068,925 - - - - - -Appropriation to financialreserve fund - - - - - - 128,337,321 (128,337,321) -Appropriation to bonusand welfare fund - - - - - - - (123,322,073) (123,322,073)Foreign exchangedifferences - - - - 39,201,696 - - - 39,201,696Dividend paid - - - - - - - (292,008,407) (292,008,407)Remuneration of theBoard of Managementand Supervisors - - - - - - - (9,940,743) (9,940,743)

Other adjustments - - (1,716,118) - - - - - (1,716,118)

Ending balance 3,115,206,970 3,504,012,140 (346,885,112) - 59,665,483 8,622,737 210,865,390 2,661,835,885 9,213,323,493

F-31



24. OWNERS’ EQUITY (continued)

24.2. Shares


Shares Shares

Shares authorised to be issued311,520,697 270,465,458

Shares issued and fully paid 311,520,697 270,465,458Ordinary shares 311,520,697 270,465,458

Treasury shares - 512,290Ordinary shares - 512,290

Outstanding shares 311,520,697 269,953,168Ordinary shares 311,520,697 269,953,168

F-32



25. REVENUES

25.1 Revenues from sale of goods and rendering of services

VND’000

Quarter 4Accumulated from the beginning

of the year


Gross revenues 1,444,145,558 1,088,196,918 4,526,468,760 4,370,251,754Of which:

Sale of apartments 1,040,209,910 801,742,448 2,833,440,471 3,373,859,483Sale of goods 85,104,957 241,240,230 889,537,818 543,253,583Revenue from construction contracts 276,210,217 20,338,624 619,144,525 319,242,570Revenue from services 19,986,091 24,875,616 161,711,563 133,896,118Revenue from hydropower 22,634,383 - 22,634,383 -

Less (88,034) (597,551) (1,591,144) (4,943,033)Sales returns (10,950) (597,551) (1,255,299) (4,943,033)

Special consumption tax (77,084) - (335,845) -

Net revenues 1,444,057,524 1,087,599,367 4,524,877,616 4,365,308,721

Of which:Sale of apartments 1,040,209,910 801,742,448 2,833,440,471 3,373,859,483Sale of goods 85,049,413 240,037,185 888,282,519 538,519,063Revenue from construction contracts 276,210,217 20,338,624 619,144,525 319,242,570Rendering of services 19,953,601 25,481,110 161,375,718 133,687,605Revenue from hydropower 22,634,383 - 22,634,383 -

F-33



25. REVENUES (continued)

25.2 Income from financial activities

VND’000


of the year


Gain on disposal of equity and other investments 84,000,703 119,657,997 1,071,825,831 102,889,197Interest income from deposits with banks 89,677,851 31,939,744 164,840,271 53,197,663Foreign exchange gains 3,099,605 - 16,480,778 7,450,806Share of net profit of associates - - 4,832,131 5,142,260

Others - 724,221 2,930,026 30,701,842

Total 176,778,159 152,321,962 1,260,909,037 199,381,768

26. COSTS OF GOODS SOLD AND SERVICES RENDERED

VND’000


of the year


Cost of apartments sold 543,698,910 390,380,824 1,445,787,203 1,681,180,646Cost of goods sold 51,236,231 175,390,368 502,143,604 384,391,396Cost of construction contracts 32,273,602 17,278,783 179,811,674 171,498,379Cost of services rendered 19,079,743 50,776,465 98,435,779 121,476,576

Cost of hydropower 6,596,657 - 6,596,657 -

Total 652,885,143 633,826,440 2,232,774,917 2,358,546,997

F-34



27. EXPENSES FROM FINANCIAL ACTIVITIES

VND’000


of the year


Interest expense on bank loans and bonds issued 60,499,211 52,296,900 195,373,358 207,443,514Foreign exchange loss - 357,779 - 5,368,425

Others 11,408,679 615,816 17,374,401 618,566

Total 71,907,890 53,270,495 212,747,759 213,430,505

28. OTHER INCOME AND EXPENSES

VND’000


of the year


Other income 6,892,260 11,710,121 21,835,172 48,461,912Proceeds from disposal of fixed assets 1,958,382 - 6,109,407 32,965,491Scrap sales 2,734,954 8,492,640 6,854,947 9,992,765Others 2,198,924 3,217,481 8,870,818 5,503,656

Other expenses (14,719,775) (6,401,432) (29,952,993) (26,730,915)Net carrying amounts of disposed assets (1,449,751) - (6,666,390) (16,459,788)Costs of scrap sales - (4,143,431) - (4,143,431)

Others (13,270,024) (2,258,001) (23,286,603) (6,127,696)

Other (loss) profit (7,827,515) 5,308,689 (8,117,821) 21,730,997

F-35



29. CORPORATE INCOME TAX

The Company and its subsidiaries have the obligation to pay separately corporate incometax ("CIT") at the rate of 25% of taxable profits.

The tax returns are subject to examination by the tax authorities. Because the application oftax laws and regulations to many types of transactions is susceptible to varyinginterpretations, the amounts reported in the consolidated financial statements could bechanged at a later date upon final determination by the tax authorities.

The current tax payable is based on taxable profit for the period. Taxable profit differs fromprofit as reported in the consolidated income statement because it excludes items of incomeor expense that are taxable or deductible in other years and it further excludes items that arenever taxable or deductible. The Group’s liability for current tax is calculated using applicabletax rates that have been enacted by the balance sheet date.

The CIT expense for the period comprised of:

VND’000


Current tax 443,474,926 137,652,012Deferred tax 327,393,983 318,953,626

Total 770,868,909 456,605,638

F-36



29. CORPORATE INCOME TAX (continued)

29.1. Current tax

VND’000


Profit before tax 3,017,409,637 1,743,504,324Adjustments to increase (decrease) accountingprofitAdjustments to increase

Revenue from sale of apartments recognised understage of completion in prior periods and billed thisperiod 717,607,038 1,031,956,167Cost from sale of apartments recognised under stageof completion in the current period 1,354,170,730 1,695,652,999Cost of non-taxable construction work rendered - 164,920,172Cost of non-taxable hydropower 6,596,657 -Land cost allocation at the consolidation level 93,094,013 76,259,873Accrued expenses 77,097,582 183,504,104Loss from subsidiaries 78,920,516 44,422,616Non-deductible cost of disposal of an associate - 9,110,803Expenses without adequate supporting documents 29,964,122 6,341,899Others 1,062,327 -

Adjustments to decreaseRevenue from sale of apartments recognised understage of completion in the current period but not yetbilled (2,780,876,979) (3,343,133,037)Non-taxable revenue of construction work rendered - (241,748,669)Non-taxable revenue of hydropower (22,634,383) -Cost from sale of apartments recognised under stageof completion in prior periods and billed this period (475,207,179) (658,205,379)Prior year accrued expenses paid in the current period (112,693,601) (45,741,081)Prior year’s intra-group unrealised profit which wasrealised in the current period (1,392,515) (109,109,170)Share of profit in associates (4,832,131) (5,142,260)Dividend received (884,537) (1,804,491)Minority interest’s share of loss on disposal of treasuryshare - (3,622,915)Others (3,893,586) (8,507,974)

Adjusted net profit before loss carry forward andtax

1,973,507,711 538,657,981

Tax loss carried forward (93,971,703) -

Estimated current taxable profit 1,879,536,008 538,657,981

CIT at flat rate of 25% 469,884,004 134,664,495

Under provision of CIT in previous year 8,508,787 2,987,517CIT reduction (34,917,865) -

Estimated current CIT for the period 443,474,926 137,652,012

CIT reduction represents 30% reduction on CIT payable of 2009 and the fourth quarter of2008 of the Company’s subsidiary based on Circular No. 03/2009/TT-BTC issued by theMinistry of Finance on 13 January 2009.

F-37




29.2. Deferred tax

The following comprise the Group’s deferred tax assets and liabilities and the movementsthereon during the period.

VND’000

consolidatedbalance sheet

Credit (charge)to consolidated

incomestatementEnding balance

Beginningbalance

Deferred tax assetsTax losses of subsidiaries 4,800,809 19,450,913 14,650,104Unrealised intra-group profit 348,129 3,910,600 3,562,471

Accrued expenses 32,771,214 45,876,026 13,104,812

37,920,152 69,237,539

Deferred tax liabilitiesNegative goodwill credited tothe consolidated incomestatement 61,439,435 61,439,435 -Profit from apartment salerecognised under stage ofcompletion but not yet taxable 806,149,341 510,072,745 296,076,596

867,588,776 571,512,180Advance CIT payable on advancesfrom customers (123,794,394) (72,301,999)

743,794,382 499,210,181

Net deferred income tax charge toconsolidated income statement 327,393,983

F-38



30. EVENTS AFTER THE BALANCE SHEET DATE

Changes in accounting policy

On 21 January 2011, the Company’s Board of Management issued a resolution on thechange in the revenue recognition policy for pre-completion sale of apartments in recognitionof the recent development in the International Finance Reporting Standards and to align withthe developing local industry practice. This revolution has been applicable from 1 January2011. Accordingly, revenue and associated costs of apartments sold before completingconstruction will be recognized when satisfying the follow conditions:

► the Group has transferred to the buyer the significant risks and rewards of ownership ofthe goods;

► the Group retains neither continuing managerial involvement to the degree usuallyassociated with ownership nor effective control over the goods sold;

► the amount of revenue can be measured reliably;

► it is probable that the economic benefits associated with the transaction will flow to theentity; and

► the costs incurred or to be incurred in respect of the transaction can be measuredreliably.

On 8 February 2011, the Company submitted an official letter to the Ministry of Finance toseek for guidance on adoption of this change in accounting policy.

On 18 February 2011, the Company received the official letter No. 2205/BTC-CĐKT from the Ministry of Finance providing guidance on adoption of the change of accounting policy.Accordingly, the Company has determined that the new accounting policy will be applied onretrospective basis.

Issuing bonus shares to shareholders

On 26 January 2011, the Company issued bonus shares to existing shareholders at the ratioof 2:1 (two existing shares for one new share); of which 60% would be funded fromundistributed earnings and 40% would be taken from the share premium of the Company.These shares were officially listed and traded on the Ho Chi Minh City Stock Exchange on 28February 2011.


7 March 2011

F-39

Hoang Anh Gia Lai Joint Stock Company Report of the Board of Management and Interim Consolidated Financial Statements 30 September 2010

F-40


CONTENTS Pages REPORT OF THE BOARD OF MANAGEMENT 1 - 3 REVIEWED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Auditors’ report on review of interim consolidated financial statements 4 Interim consolidated balance sheet 5 - 6 Interim consolidated income statement 7 Interim consolidated cash flow statement 8 - 9 Notes to the interim consolidated financial statements 10 - 48

F-41

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries REPORT OF THE BOARD OF MANAGEMENT

The Board of Management of Hoang Anh Gia Lai Joint Stock Company (“the Company” or “the parent company”) is pleased to present its report and the interim consolidated financial statements of the Company and its subsidiaries (collectively referred to as “the Group”) as at 30 September 2010 and for the nine-month period then ended. THE COMPANY The Company is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the Department of Planning and Investment of Gia Lai Province and the following amendments (No 5900377720): First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008 Ninth amendment 24 November 2008 Tenth amendment 13 May 2009 Eleventh amendment 11 June 2009 Twelfth amendment 15 September 2009 Thirteenth amendment 18 November 2009 Fourteenth amendment 23 December 2009 Fifteenth amendment 17 May 2010 Sixteenth amendment 17 September 2010 As at 30 September 2010, the Company has 43 subsidiaries and 3 associates (31 December 2009: 32 subsidiaries and 4 associates) as disclosed in Note 15 to the interim consolidated financial statements. At present, the Group is principally engaged in developing apartments for sale and lease; construction; planting rubber trees, processing and trading rubber latex and rubber wood; developing and operating hydropower plants; mining; producing and trading furniture and granite products; building and operating hotels and resorts; and sport and entertainment activities. The Company’s head office is located at No. 15 Truong Chinh Street, Phu Dong Commune, Pleiku City, Gia Lai Province, Vietnam. RESULTS AND DIVIDENDS

VND’000

For the nine-

month period ended 30 September 2010

For the nine-month period ended 30 September 2009

Net profit after tax for the period attributed to the equity holders of the parent company 1,492,645,946 857,202,071 Dividends paid during the period 292,008,407 269,721,752 Undistributed earnings at the end of the period 2,079,858,048 1,252,761,123

F-42

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The Board of Management of Hoang Anh Gia Lai Joint Stock Company (“the Company” or “the parent company”) is pleased to present its report and the interim consolidated financial statements of the Company and its subsidiaries (collectively referred to as “the Group”) as at 30 September 2010 and for the nine-month period then ended. THE COMPANY The Company is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the Department of Planning and Investment of Gia Lai Province and the following amendments (No 5900377720): First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008 Ninth amendment 24 November 2008 Tenth amendment 13 May 2009 Eleventh amendment 11 June 2009 Twelfth amendment 15 September 2009 Thirteenth amendment 18 November 2009 Fourteenth amendment 23 December 2009 Fifteenth amendment 17 May 2010 Sixteenth amendment 17 September 2010 As at 30 September 2010, the Company has 43 subsidiaries and 3 associates (31 December 2009: 32 subsidiaries and 4 associates) as disclosed in Note 15 to the interim consolidated financial statements. At present, the Group is principally engaged in developing apartments for sale and lease; construction; planting rubber trees, processing and trading rubber latex and rubber wood; developing and operating hydropower plants; mining; producing and trading furniture and granite products; building and operating hotels and resorts; and sport and entertainment activities. The Company’s head office is located at No. 15 Truong Chinh Street, Phu Dong Commune, Pleiku City, Gia Lai Province, Vietnam RESULTS AND DIVIDENDS

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries REPORT OF THE BOARD OF MANAGEMENT (continued)

THE BOARD OF MANAGEMENT The members of the Board of Management during the period and at the date of this report are:

Name Position Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Mr Doan Nguyen Thu Member Mr Le Hung Member Mr Nguyen Van Minh Member Ms Vo Thi Huyen Lan Member Mr Vu Huu Dien Member THE BOARD OF DIRECTORS The members of the Board of Directors during the period and at the date of this report are:

Name Position Mr Nguyen Van Su General Director Mr Doan Nguyen Thu Deputy General Director Mr Le Van Ro Deputy General Director Mr Tra Van Han Deputy General Director Mr Nguyen Van Minh Deputy General Director Mr Vo Truong Son Deputy General Director EVENTS SINCE THE BALANCE SHEET DATE On 8 October 2010, the Company issued to some investors VND 530 billion straight bonds at par value of VND 1 billion per unit which will be redeemable at par value by 8 October 2013. The bonds bear interest rate of 15.2% per annum in the first interest payment period and an average 12-month saving deposit rate applicable to individuals of four local banks plus (+) a margin of 4.2% per annum in the following periods. The proceeds are being used to finance the working capital requirements and the ongoing real estate, hydropower and rubber plantation projects of the Group. In October 2010, the Company has disposed its entire 512,290 treasury shares with total proceeds of VND’000 40,254,700. AUDITORS The auditors, Ernst and Young, have expressed their willingness to accept reappointment. STATEMENT OF THE MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS The Group’s management is responsible for the interim consolidated financial statements of each financial period which give a true and fair view of the interim consolidated state of affairs of the Group and of the Group’s interim consolidated results and interim consolidated cash flows for the period. In preparing those interim consolidated financial statements, management is required to:

� select suitable accounting policies and then apply them consistently;

� make judgements and estimates that are reasonable and prudent;

� state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the interim consolidated financial statements; and

� prepare the interim consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue its business.

F-43


STATEMENT OF THE MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued) Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the interim consolidated financial position of the Group and to ensure that the accounting records comply with the registered 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. The Group’s management has confirmed to the Board of Management that the Group has complied with the above requirements in preparing the accompanying interim consolidated financial statements. APPROVAL OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS We hereby approve the accompanying interim consolidated financial statements which give a true and fair view of the interim consolidated financial position of the Group as at 30 September 2010, the interim consolidated results of its operations and the interim consolidated cash flows for the nine-month period then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements. On behalf of the Board of Management:

Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Pleiku City, Gia Lai Province, Vietnam

12 November 2010

F-44

Reference: 60752790/406259 AUDITORS’ REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS To the Board of Management of Hoang Anh Gia Lai Joint Stock Company We have reviewed the interim consolidated balance sheet of Hoang Anh Gia Lai Joint Stock Company and its subsidiaries (collectively referred to as “the Group”) as at 30 September 2010 and the interim consolidated income statement and interim consolidated cash flow statement for the nine-month period then ended, and the notes thereto (collectively referred to as “the interim consolidated financial statements”) as set out on pages 5 to 48. These interim consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to issue a report on these interim consolidated financial statements based on our review. We conducted our review in accordance with Vietnamese and International Standards on Auditing applicable to review engagements. These standards require that we plan and perform the review to obtain moderate assurance about whether the interim consolidated financial statements are free of material misstatement. A review is limited primarily to inquiries of the Group’s personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements do not give a true and fair view of the interim consolidated financial position of the Group as at 30 September 2010, and of the interim consolidated results of its operations and its interim consolidated cash flows for the nine-month period then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements. Ernst & Young Vietnam Limited Narciso T. Torres Jr. Deputy General Director Registered Auditor Certificate No. N.0868/KTV Ho Chi Minh City, Vietnam 12 November 2010

F-45

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries INTERIM CONSOLIDATED BALANCE SHEET B01-DN/HN as at 30 September 2010

VND’000

Code ASSETS Notes Ending

balance Beginning

balance

100 A. CURRENT ASSETS 9,162,579,866 7,403,555,092

110 I. Cash 4 2,192,592,098 1,944,228,950 111 1. Cash 2,192,592,098 1,944,228,950

120 II. Short-term investments 5 81,783,240 157,571,210 121 1. Short-term investments 81,783,240 157,571,210

130 III. Current accounts receivable 3,717,363,079 2,956,113,887 131 1. Trade receivables 6 1,992,224,916 1,694,730,505 132 2. Advances to suppliers 7 1,169,192,419 870,124,080 135 3. Other receivables 8 556,974,767 392,823,227 139 4. Provision for doubtful debts (1,029,023) (1,563,925)

140 IV. Inventories 2,942,587,923 2,213,150,611 141 1. Inventories 9 2,943,100,517 2,213,663,205 149 2. Provision for obsolete inventories (512,594) (512,594)

150 V. Other current assets 228,253,526 132,490,434 151 1. Short-term prepaid expenses 57,641,291 32,418,109 152 2. Value-added tax deductibles 85,042,696 43,369,234 152 3. Tax and other receivables 339,393 36,986 158 4. Other current assets 10 85,230,146 56,666,105


220 I. Fixed assets 3,854,267,988 2,517,309,488 221 1. Tangible fixed assets 11 817,724,039 671,688,850 222 Cost 931,244,905 795,779,397 223 Accumulated depreciation (113,520,866) (124,090,547) 224 2. Finance lease 7,551,819 - 225 Cost 7,745,455 - 226 Accumulated depreciation (193,636) - 227 3. Intangible fixed assets 12 114,363,611 94,463,918 228 Cost 116,531,253 96,080,465 229 Accumulated amortisation (2,167,642) (1,616,547) 230 4. Construction in progress 13 2,914,628,519 1,751,156,720

250 II. Long-term investments 2,717,321,030 2,061,446,000 252 1. Investments in associates 15.2 30,931,029 69,098,898 258 2. Other long-term investments 16 2,686,390,001 1,992,347,102

260 III. Other long-term assets 208,748,045 213,900,694 261 1. Long-term prepaid expenses 17 142,221,236 141,963,630 262 2. Deferred tax assets 31.2 61,585,199 69,237,539 268 3. Other long-term assets 4,941,610 2,699,525

270 TOTAL ASSETS 15,942,916,929 12,196,211,274

F-46

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries INTERIM CONSOLIDATED BALANCE SHEET (continued) B01-DN/HN as at 30 September 2010

VND’000

Code RESOURCES Notes Ending

balance Beginning

balance

300 A. LIABILITIES 7,891,893,803 7,085,142,093

310 I. Current liabilities 4,757,530,134 4,311,427,635 311 1. Short-term loans and borrowings 18 2,665,041,407 2,991,797,773 312 2. Trade payables 19 599,667,761 197,537,916 313 3. Advances from customers 24,256,613 44,397,490 314 4. Statutory obligations 20 438,816,858 265,774,014 315 5. Payables to employees 20,810,339 17,811,136 316 6. Accrued expenses 21 692,905,728 644,983,946 319 7. Other payables 22 265,208,248 132,540,015 323 8. Bonus and welfare fund 50,823,180 16,585,345

330 II. Non-current liabilities 3,134,363,669 2,773,714,458 333 1. Other long-term liabilities 23 24,371,562 23,992,393 334 2. Long-term loans and debts 24 2,428,011,123 2,248,707,163 335 3. Deferred tax liabilities 31.2 680,438,367 499,210,181 336 4. Provision for severance allowance 1,542,617 1,804,721

400 B. OWNERS’ EQUITY 25 7,182,183,364 4,694,914,864

410 I. Capital 7,182,183,364 4,694,914,864 411 1. Share capital 2,925,206,970 2,704,654,580 412 2. Share premium 2,384,349,746 1,223,971,061 413 3. Consolidation reserve (392,133,835) (399,237,919) 415 4. Treasury shares (30,091,699) (30,091,699) 416 5. Foreign exchange differences 22,395,463 20,463,787 417 6. Investment and development fund 8,622,737 8,622,737 418 7. Financial reserve fund 183,975,934 82,528,069 420 8. Undistributed earnings 2,079,858,048 1,084,004,248


440 TOTAL LIABILITIES AND OWNERS’ EQUITY 15,942,916,929 12,196,211,274

Mrs Ho Thi Kim Chi Mr Nguyen Van Su Chief Accountant General Director 12 November 2010

F-47

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries INTERIM CONSOLIDATED INCOME STATEMENT B02-DN/HN for the nine-month period ended 30 September 2010

VND’000

Code ITEMS Notes

For the nine-month period

ended 30 September 2010



01 1. Revenues from sale of goods and

rendering of services 27.1 3,082,323,202 3,282,054,836

02 2. Deductions 27.1 (1,503,110) (4,345,482)

10 3. Net revenues from sale of goods and rendering of services 27.1 3,080,820,092 3,277,709,354

11 4. Costs of goods sold and services

rendered 28 (1,579,889,774) (1,724,720,557)

20 5. Gross profit from sale of goods and rendering of services 1,500,930,318 1,552,988,797

21 6. Income from financial activities 27.2 1,081,593,159 40,469,896

22 7. Expenses from financial activities 29 (140,839,869) (160,160,010) 23 In which: Interest expenses (134,874,147) (155,146,614)

24 8. Selling expenses (91,041,758) (88,266,842)

25 9. General and administration expenses (135,834,239) (116,006,352)

30 10. Operating profit 2,214,807,611 1,229,025,489

31 11. Other income 30 42,882,076 36,751,791

32 12. Other expenses 30 (43,172,382) (20,329,483)

40 13. Other (loss) profit 30 (290,306) 16,422,308

45 14. Shares of profit in associates 2,537,719 6,589,910

50 15. Profit before tax 2,217,055,024 1,252,037,707

51 16. Current corporate income tax

expense 31.1 (316,393,977) (6,409,779)

52 17. Deferred corporate income tax expense 31.2 (225,965,985) (308,806,755)

60 18. Net profit for the period 1,674,695,062 936,821,173 Attributable to: 18.1 Minority interest 182,049,116 79,619,102 18.2 The Company's shareholders 1,492,645,946 857,202,071

70 19. Basic earnings per share (VND) 26 5,312 4,842


F-48

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries INTERIM CONSOLIDATED CASH FLOW STATEMENT B03-DN/HN for the nine-month period ended 30 September 2010

VND’000

Code ITEMS Notes


ended 30 September

2010


ended 30 September

2009 I. CASH FLOWS FROM OPERATING

ACTIVITIES 01 Net profit before tax 2,217,055,024 1,252,037,707 Adjustments for:

02 Depreciation and amortisation 47,135,516 83,434,215 03 Provisions (534,902) 311,063 04 Unrealised foreign exchange gains (8,944,344) - 05 Profits from investing activities (1,065,373,198) (65,821,348) 06 Interest expense 29 134,874,147 155,146,614

08 Operating income before changes in

working capital 1,324,212,243 1,425,108,251 09 Increase in receivables (757,328,318) (442,601,568) 10 Increase in inventories (4,343,540) (127,560,090) 11 Increase in payables 287,587,531 136,918,274 12 Increase in prepaid expenses (40,480,788) (4,990,635) 13 Interest paid (151,233,185) (142,711,329) 14 Corporate income tax paid (184,946,066) (190,446,376) 16 Other cash outflows from operating

activities (69,098,039) (5,511,622)

20 Net cash from operating activities 404,369,838 648,204,905 II. CASH FLOWS FROM INVESTING

ACTIVITIES 21 Purchases and construction of fixed

assets and long-term prepaid expenses (1,753,762,395) (421,392,567) 22 Proceeds from disposals of fixed assets

and other long-term assets 38,426,408 29,124,481 25 Investments in other entities (1,022,761,398) (481,855,591) 26 Proceeds from sale of investments in

other entities and other long-term assets 1,493,593,598 -

27 Interest and dividends received 27.2 77,957,910 16,293,799

30 Net cash used in investing activities (1,166,545,877) (857,829,878) III. CASH FLOWS FROM FINANCING

ACTIVITIES 31 Proceeds from disposal of treasury

shares - 248,393,276 32 Capital redemption - (30,091,699) 33 Borrowings received 3,521,253,776 2,343,731,369 34 Borrowings repaid (2,218,706,182) (2,016,569,246) 36 Dividends paid (292,008,407) (269,721,752)

40 Net cash from financing activities 1,010,539,187 275,741,948

F-49

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries INTERIM CONSOLIDATED CASH FLOW STATEMENT (continued) B03-DN/HN for the nine-month period ended 30 September 2010

VND’000

Code ITEMS Notes





50 Net increase in cash during the period 248,363,148 66,116,975

60 Cash at beginning of period 1,944,228,950 531,085,394

70 Cash at end of period 4 2,192,592,098 597,202,369


F-50

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS B09-DN/HN as at and for the nine-month period ended 30 September 2010


Hoang Anh Gia Lai Joint Stock Company (”the Company”) is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the Department of Planning and Investment of Gia Lai Province and the following amendments (No 5900377720):

First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008 Ninth amendment 24 November 2008 Tenth amendment 13 May 2009 Eleventh amendment 11 June 2009 Twelfth amendment 15 September 2009 Thirteenth amendment 18 November 2009 Fourteenth amendment 23 December 2009 Fifteenth amendment 17 May 2010 Sixteenth amendment 17 September 2010 As at 30 September 2010, the Company has 43 subsidiaries and 3 associates (31 December 2009: 32 subsidiaries and 4 associates) as disclosed in Note 15 to the interim consolidated financial statements. At present, the Group is principally engaged in developing apartments for sale and lease; construction; planting rubber trees, processing and trading rubber latex and rubber wood; developing and operating hydropower plants; mining; producing and trading furniture and granite products; building and operating hotels and resorts; and sport and entertainment activities.

The Company’s head office is located at No. 15 Truong Chinh Street, Phu Dong Commune, Pleiku City, Gia Lai Province, Vietnam. THE BOARD OF MANAGEMENT The members of the Board of Management during the period and at the date of this report are: Name Position Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Mr Doan Nguyen Thu Member Mr Le Hung Member Mr Nguyen Van Minh Member Ms Vo Thi Huyen Lan Member Mr Vu Huu Dien Member THE BOARD OF DIRECTORS The members of the Board of Directors during the period and at the date of this report are:

Name Position Mr Nguyen Van Su General Director Mr Doan Nguyen Thu Deputy General Director Mr Le Van Ro Deputy General Director Mr Tra Van Han Deputy General Director Mr Nguyen Van Minh Deputy General Director Mr Vo Truong Son Deputy General Director

F-51

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued) B09-DN/HN as at and for the nine-month period ended 30 September 2010

2. BASIS OF PREPARATION 2.1. Accounting standards and system

The interim consolidated financial statements of the Group, expressed in thousands of Vietnam dong (“VND’000”), are prepared in accordance with Decision No. 15/2006/QD-BTC and the Vietnamese 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 Standards on Accounting (Series 1);

► Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2);


► Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and

► Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).

Accordingly, the accompanying interim consolidated balance sheet, interim consolidated income statement, interim consolidated cash flow statement and related notes, 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 interim financial position and interim results of operations and interim cash flows of the Group in accordance with accounting principles and practices generally accepted in countries other than Vietnam. Accounting Standard(s) and guidance issued but not yet effective

Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments

On 6 November 2009, the Ministry of Finance issued Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments. The adoption of the circular will require further disclosures and have impact on the presentation of certain financial instruments in the financial statements. The circular will become effective for financial years beginning on or after 31 December 2011. The Company’s management is currently assessing the impact of adopting the circular on the future financial statements of the Group.


The Company’s registered accounting documentation system is the General Journal system.



2.4. Fiscal year

The Company’s fiscal year starts on 1 January and ends on 31 December. The Company has also prepared its interim consolidated financial statements for the nine-month period ended 30 September 2010 for its own use purposes.

F-52




The interim consolidated financial statements comprise the financial statements of the Company and its subsidiaries (“the Group”) as at and for the nine-month period ended 30 September 2010. The interim financial statements of the subsidiaries are prepared for the same period as the Company, using accounting policies consistent with the Company’s accounting policies. Adjustments are made for any difference in accounting policies that may exist to ensure consistency between the subsidiaries and the Company.

All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Minority interests represent the portion of profit or loss and net assets not held by the Company’s shareholders and are presented separately in the interim consolidated income statements and in the interim consolidated balance sheet.

The subsidiaries are consolidated from the date on which the Company obtains control and cease to be consolidated from the date on which the Company ceases to control. Where there is a loss of control over the subsidiaries, the interim consolidated financial statements still include results for the period of the reporting year during which the Company has control.

Except for subsidiaries acquired under common control which are accounted for under the pooling of interests method, other subsidiaries have been included in the interim consolidated financial statements using the purchase method of accounting that measures the subsidiaries’ assets and liabilities at their fair value at the acquisition date.


3.1. Cash


3.2. Receivables

Receivables are presented in the interim consolidated financial statements at the carrying amounts due from customers and other debtors, along with the provision for doubtful debts.

The provision for doubtful debts represents the estimated loss due to non-payment arising on receivables that were outstanding at the balance sheet date. Increases and decreases to the provision balance are recorded as general and administration expense in the interim consolidated income statement.

3.3. Inventories



Raw and construction materials tools and supplies and merchandise goods



- Cost of direct materials and labour plus attributable overheads based on the normal operating capacity on a weighted average basis.

F-53


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 Inventories (continued)

Apartments for sale under construction are carried at the lower of cost and net realisable value. Costs include all expenditures including borrowing costs, directly attributable to the development and construction of the apartments. Net realisable value represents current selling price less estimated cost to complete and estimated selling and marketing expenses.


An inventory provision is created for the estimated loss arising due to the impairment (through diminution, damage, obsolescence, etc) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the interim balance sheet date.

Increases and decreases to the provision balance are recorded into the cost of goods sold account in the interim consolidated income statement.

3.5. Tangible fixed assets


The costs of tangible fixed assets consist of their purchase prices and any directly attributable costs of bringing the fixed assets to working condition for their intended use.

Expenditures for additions, improvements and renewals are capitalised and expenditures for maintenance and repairs are charged to the interim consolidated income statement when incurred.

When fixed assets are sold or retired, their cost and accumulated depreciation are removed from the interim consolidated balance sheet and any gain or loss resulting from their disposal is included in the interim consolidated income statement.

3.6. Leased assets

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset.

A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.


Assets held under finance leases are capitalised in the interim consolidated balance sheet at the inception of the lease at the fair value of the leased assets or, if lower, at the net present value of the minimum lease payments. The principal amount included in future lease payments under finance leases are recorded as a liability. The interest amounts included in lease payments are charged to the interim consolidated income statement over the lease term to achieve a constant rate on interest on the remaining balance of the finance lease liability.

Capitalised financial leased assets are depreciated using straight-line basis over the shorter of the estimated useful live of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term of three (3) years.

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3.6. Leased assets (continued)

Where the Group is the lessee (continued)

Rentals under operating leases are charged to the interim consolidated income statement on a straight-line basis over the term of the lease. Where the Group is the lessor

Assets subject to operating leases are included as the Group’s fixed assets in the interim consolidated balance sheet. Lease income is recognised in the interim consolidated income statement on a straight-line basis over the lease term.

3.7. Intangible fixed assets


The cost of an intangible fixed asset comprises of its purchase price and any directly attributable costs of preparing the intangible fixed asset for its intended use.

Expenditures for additions, improvements are added to the carrying amount of the assets and other expenditures are charged to the interim consolidated income statement as incurred.

When tangible fixed assets are sold or retired, their costs and accumulated amortisation are removed from the Interim consolidated balance sheet and any gain or loss resulting from their disposal is included in the interim consolidated income statement. Land use rights

Land use rights are recorded as intangible assets when the Group has the land use right certificates. The costs of land use rights comprise all directly attributable costs of bringing the land to the condition available for use. Computer software

Computer software which is not an integral part of hardware is recorded as intangible asset and amortised over the term of benefits.


Depreciation and amortisation of tangible fixed assets and intangible assets are calculated on a straight-line basis over the estimated useful life of each asset as follows:

Machinery and equipment 5 - 12 years Buildings and structures 10 - 50 years Motor vehicles 8 - 20 years Office equipment 8 - 10 years Perennial trees 20 years Land use rights 45 years Computer software 5 years Other assets 8 - 15 years

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Borrowing costs are recorded as expense during the period in which they are incurred, except to the extent that they are capitalised as explained in the following paragraph.

Borrowing costs that are directly attributable to the acquisition, construction or production of a particular asset are capitalised as part of the cost of the asset. Capitalisation of borrowing costs is suspended during extended periods in which active development of the asset is interrupted unless such interruption is considered necessary. Capitalisation of borrowing costs is ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

3.10. Long-term prepaid expenses

Prepaid expenses are reported as short-term or long-term prepaid expenses on the interim consolidated balance sheet and amortised over the period for which the amount are paid or the period in which economic benefit are generated in relation to these expenses.


� Prepaid rental;

� Prepaid insurance premium; and

� Tools and consumables with large value issued into production and can be used for more than one year.

3.11. Business combinations and goodwill

Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of business combination.

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the interim consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortisation. Goodwill is amortised over 10-year period on a straight-line basis.

When the Company acquires the minority interests of a subsidiary, the difference between the cost of acquisition and the carrying amount of the minority interest is reflected as an equity transaction and presented as consolidation reserve in the interim consolidated balance sheet, except for acquisition of an asset or group of assets where such difference is included in the cost of asset(s).

Where the acquisition of subsidiary is not considered as a business combination rather than an asset acquisition, the individual identifiable assets acquired and liabilities assumed are identified and recognised. The cost of the acquisition shall be allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event does not give rise to goodwill.

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.12. Disposal of investments in subsidiaries


► derecognises the assets (including any goodwill) and liabilities of the subsidiary at their carrying amounts at the date when control is lost;

► derecognises the carrying amount of any non-controlling interests in the former subsidiary at the date when control is lost;

► recognises:

- the fair value of the consideration received, if any, from the transaction, event or circumstances that resulted in the loss of control; and

- if the transaction that resulted in the loss of control involves a distribution of shares of the subsidiary to owners in their capacity as owners, that distribution:

- recognises any investment retained in the former subsidiary at its fair value at the date when control is lost; and

- recognises any resulting difference as a gain or loss in profit or loss attributable to the parent.

Where there is disposal of part of an ownership interest in a subsidiary without loss of control, a reduction of an interest in a subsidiary is accounted for in a manner consistent with the accounting policy applied for accounting for an increase in an interest in a subsidiary. As a result, the entire transaction is treated as a transaction with other equity shareholders, with no gain or loss recognised in the interim consolidated income statement, except for disposal of an ownership interest in a subsidiary which was previously acquired for the purpose of asset acquistion rather than business combination, in such case gain or loss from disposal is recognised in the interim consolidated income statement. No change is recognised in goodwill.


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 significant influence that are neither subsidiaries nor joint ventures. The Group generally deems they have significant influence if they have over 20% of the voting rights.

Under the equity method, the investment is carried in the Interim 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 and is amortised over ten (10) year period. The interim consolidated income statement reflects the share of the post-acquisition results of operation of the associate.

The share of post-acquisition profit/(loss) of the associates is presented on face of the interim consolidated income statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment.

The financial statements of the associates are prepared for the same reporting period as the parent company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

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3.14. Land held for development, investments in securities and other investments

Land held for development which is presented as part of “Other long-term investments” is carried at the lower of cost and net realisable value. Costs include all expenditures including borrowing costs directly related to the acquisition, site clearance and land compensation. Net realisable value represents estimated current selling price less anticipated cost of disposal.

Investments in securities and other investments are stated at their acquisition cost. Provision is made for any decline in value of the marketable investments at the interim balance sheet date representing the excess of the acquisition cost over the market value at that date in accordance with the guidance under Circular 228/2009/TT-BTC issued by the Ministry of Finance on 7 December 2009. Increases and decreases to the provision balance are recorded as finance expense in the interim consolidated income statement.

3.15. 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.


The severance pay to employee is accrued at the end of each reporting period for all employees who have more than 12 months in service 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, the Law on Social Insurance and related implementing guidance. Commencing 1 January 2009, the average monthly salary used in this calculation will be revised at the end of each reporting period following the average monthly salary of the 6-month period up to the reporting date. Any changes to the accrued amount will be taken to the interim consolidated income statement.



Diluted earnings per share amounts are calculated by dividing the net profit after tax attributable to ordinary equity holders of the Group (after adjusting for interest on the convertible loans) by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.


Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss upon purchase, sale, issue or cancellation of the Company’s own equity instruments.

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The Company follows the guidance under VAS 10 “The Effects of Changes in Exchange Rates” (the “VAS 10”) in relation to foreign currency transactions as applied consistently in prior years.

Transactions in currencies other than the Company’s reporting currency of VND are recorded at the inter-bank exchange rates ruling at the date of the transaction. At period-end, monetary assets and liabilities denominated in foreign currencies are revalued at exchange rates ruling at the interim balance sheet date. All realised and unrealised foreign exchange differences are taken to the interim consolidated income statement.

The above guidance related to unrealised foreign exchange differences provided by VAS 10 is different from those stipulated in the Circular No. 201/2009/TT-BTC issued on 15 October 2009 by the Ministry of Finance providing guidance for the treatment of foreign exchange differences (the “Circular 201”) as follows: Transaction VAS 10 Circular 201

Translation of short-term monetary assets and liabilities denominated in foreign currencies.


All unrealised foreign exchange differences are taken to the “Foreign exchange differences reserve” account in the equity section of the balance sheet and will be reversed on the following period.

Translation of long-term monetary liabilities denominated in foreign currencies at year end.


- All unrealised foreign exchange gains are taken to the interim consolidated income statement.

All foreign exchange losses will be charged to the interim consolidated income statement. However, if the charging of all foreign exchange losses results in net loss before tax for the Group, part of the exchange losses can be deferred and allocated to the income statement within the subsequent five years. In any case, the total foreign exchange loss to be charged to current year’s income must be at least equivalent to the foreign exchange losses arising from the translation of the current portion of the long-term liabilities, while the remaining portion of the foreign exchange losses can be deferred in the balance sheet and allocated to the income statement within the subsequent five years.

The impact to the interim consolidated financial statements had the Group adopted the Circular 201 for the years beginning 1 January 2009 is not material to the interim consolidated financial statements taken as a whole.

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Net profit after tax is available for appropriation to shareholders after approval by the shareholders at the Annual General Meeting, and after making appropriation to reserve funds in accordance with the Company’s Charter and Vietnamese regulatory requirements.

Financial reserve fund Financial reserve fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside to protect the Company's normal operations from business risks or losses, or to prepare for unforeseen losses or damages and force majeure, such as fire, economic and financial turmoil of the country or elsewhere etc.

Investment and development fund Investment and development fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to approval by shareholders at the Annual General Meeting. This fund is set aside for use in the Company’s expansion of its operation or in-depth investments.


Bonus and welfare fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and improvement of the employees’ material and spiritual benefits.

During the period, the Company has reclassified and presented the balance of bonus and welfare fund as a liability in the interim consolidated balance sheet in accordance with the requirements of Circular No. 244/2009/TT-BTC dated 31 December 2009.



Sale of apartments For apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. For apartments sold before completion of construction where the Group has material obligations to complete the apartment project and where the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the revenue and associated costs are recognised as the related obligations are fulfilled by reference to the stage of completion at the interim balance sheet date. Cost of apartments sold before completion is determined based on actual land, land development and construction costs and estimated costs to complete the project. The estimated costs to complete the sold apartments are accrued in the interim balance sheet. Actual expenditures are charged to this accrual account as incurred. This revenue recognition policy which is a generally accepted accounting principle in Vietnam and other jurisdictions has been applied consistently with the previous periods.

Construction contracts Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

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Construction contracts Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

Sale of goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Rental income Rental income arising from operating leases is accounted for on a straight line basis over the lease terms on ongoing leases.

Rendering of services Revenue from rendering of services is recognized when the services are rendered and is stated net of discounts, allowances and non refundable taxes.

Interest Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.

3.22. Taxation

Current tax

Current 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 by the interim balance sheet date.

Deferred tax


Deferred tax liabilities are recognised for all taxable temporary differences, except: ► where the deferred tax liability arises from the initial recognition of an asset or liability in

a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

► in respect of taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.22 Taxation (continued)

Deferred tax

Deferred tax assets are recognised for all deductible temporary differences, carried forward of unused tax credit and unused tax losses, to the extent that it is probable that taxable profits will be available against which deductible temporary differences, carried forward of unused tax credit and unused tax losses can be utilised, except : ► where the deferred tax asset arises from the initial recognition of an asset or liability in

a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

► in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Previously unrecognised deferred income tax assets are re assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset 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 income statement, except when it relates to items recognised directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxable entity and the same taxation authority and the taxable entity intends to settle its current tax assets and liabilities on a net basis.

4. CASH

VND’000 Ending balance Beginning balance Cash in banks 2,184,562,129 1,938,118,707 Cash on hand 8,029,969 6,110,243

Total 2,192,592,098 1,944,228,950

5. SHORT-TERM INVESTMENTS Short-term investments at 30 September 2010 represent the net carrying value of Da Lat resort which has been agreed to be disposed to a third party, pending completion of the legal procedures. During the period, the Company completed the disposition of its Qui Nhon resort to a third party with total proceeds of VND’000 175,000,000 and recognised a gain of VND’000 99,212,030 (Note 27.2).

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VND’000 Ending balance Beginning balance

Receivables from sale of apartments 1,538,021,318 1,540,626,758 Trade and service receivables 301,268,422 139,319,364 Construction receivables 152,935,176 14,784,383

Total 1,992,224,916 1,694,730,505

Included in trade and service receivables were amounts receivable in connection with sale of land lots in Binh Hien project amounting to VND’000 137,000,000 (31 December 2009: nil). Included in construction receivables were amounts of VND’000 122,135,472 receivable for construction of the Giai Viet apartments project. Included in trade receivables were amounts due from related parties amounting to VND’000 44,412,160 at 30 September 2010 (Note 32).



Advances to contractors 803,591,276 773,468,674 Advances to suppliers of goods and services 187,466,283 68,574,355 Advances for acquisition of land and real estate projects 139,934,860 28,081,051 Advances for share acquisition 38,200,000 -

Total 1,169,192,419 870,124,080 Included in advances to contractors were amounts due from related parties amounting to VND’000 402,189,027 at 30 September 2010 (Note 32).



Receivables from employees (i) 188,730,383 74,971,330 Receivables from disposal of investments (ii) 149,121,774 128,000,000 Loans to other companies (iii) 76,519,086 57,385,399 Short-term loans to the employees (iv) 55,850,403 61,136,442 Accrued interest receivable on bank deposits 32,679,236 27,521,566 Others 54,073,885 43,808,490

Total 556,974,767 392,823,227

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8. OTHER RECEIVABLES (continued)

(i) This represents advances to employees for asset acquisitions and specific business

purposes of the Group.

(ii) Receivables from disposal of investment represent part of the proceeds from the disposal of the Company’s Qui Nhon resort (Notes 5 and 27.2) during the period and Thanh Da Real Estate Joint Stock Company in the prior year.

(iii) These loans are unsecured and bear interest which is based on the market rate and adjusted every six months.

(iv) These loans are unsecured, have term of repayments ranging from three to twelve months from the drawdown date and bear interest rates which are based on the market rate and adjusted every six months.

9. INVENTORIES

VND’000

Ending balance Beginning balance Apartments for sale under construction 2,338,898,312 1,806,305,701 Finished goods 118,640,953 96,183,765 Merchandise goods 46,047,893 49,131,285 Goods in transit 3,112 9,970,486 Work in process 209,740,694 119,973,449 Of which from:

Manufacturing 97,496,619 79,589,385 Construction contract 112,244,075 39,741,107 Rendered services - 642,957

Raw materials 207,787,432 129,034,391 Construction materials 10,528,140 91,694 Tools and supplies 11,453,981 2,972,434

Total 2,943,100,517 2,213,663,205 All the apartments for sale under construction including the associated land have been mortgaged to secure the Group’s outstanding borrowings. The Group has also pledged its wooden materials with the carrying value of VND’000 47,000,000 for security of the bank loans (Note 18).


VND’000

Ending balance Beginning balance Business advances to employees 84,855,318 47,785,437 Short-term deposits 172,392 8,757,210 Others 202,436 123,458

Total 85,230,146 56,666,105

Business advances to employees represent advances for business purposes and outstanding entertainment expenses.

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VND’000

Buildings and

structures Machinery and

equipment Motor

vehicles Office

equipment Perennial

trees Other assets Total Cost

Beginning balance 423,631,909 237,314,494 115,010,780 6,652,686 6,635,322 6,534,206 795,779,397 Additions 35,299,496 128,879,121 64,119,408 6,449,926 63,023 461,870 235,272,844

Newly purchase 9,730,446 128,879,121 64,119,408 6,449,926 63,023 461,870 209,703,794 Transfer from construction in progress (Note 13) 20,972,978 - - - - - 20,972,978 Other reclassifications 4,596,072 - - - - - 4,596,072

Disposal (25,042,026) (58,820,487) (15,153,147) (342,287) - (449,389) (99,807,336)

Ending balance 433,889,379 307,373,128 163,977,041 12,760,325 6,698,345 6,546,687 931,244,905 Accumulated depreciation

Beginning balance (36,015,307) (62,828,217) (20,317,343) (2,245,207) (773,523) (1,910,950) (124,090,547) Increase (11,319,556) (20,489,312) (12,313,506) (1,411,000) (126,192) (688,461) (46,348,027) Disposal 14,742,928 39,010,070 2,420,026 295,295 - 449,389 56,917,708

Ending balance (32,591,935) (44,307,459) (30,210,823) (3,360,912) (899,715) (2,150,022) (113,520,866) Net carrying amount


Ending balance 401,297,444 263,065,669 133,766,218 9,399,413 5,798,630 4,396,665 817,724,039

In which: Pledged/mortgaged as loan security (Notes 18 and 24) 401,297,444 263,065,669 - - - - 664,363,113

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VND’000 Land use rights Computer software Total Cost

Beginning balance 89,237,364 6,843,101 96,080,465 Addition 21,044,864 227,433 21,272,297 Disposal (778,751) (42,758) (821,509)

Ending balance 109,503,477 7,027,776 116,531,253 Accumulated amortisation

Beginning balance (1,352,594) (263,953) (1,616,547) Amortisation charge (152,103) (441,750) (593,853) Disposal - 42,758 42,758

Ending balance (1,504,697) (662,945) (2,167,642) Net carrying amount


Ending balance 107,998,780 6,364,831 114,363,611

In which:

Pledged/mortgaged as loan security (Note 24) 107,998,780 - 107,998,780


VND’000

Ending balance Beginning balance Rubber plantations 1,014,814,343 541,842,682 Hydro-power plants 954,008,060 445,607,334 Office for lease 695,337,058 663,550,389 Building and structures 127,073,842 82,011,839 Ore-sifting line 88,655,184 - Mining 9,470,879 3,899,585 Other construction works 25,269,153 14,244,891

Total 2,914,628,519 1,751,156,720 The movement of construction in progress is presented as follows:

VND’000 For the nine-month

period ended 30 September 2010


Beginning balance 1,751,156,720 1,145,368,811 Additions 1,211,666,928 393,696,631 Transfer to inventories (27,222,151) - Transfer to fixed assets (Note 11) (20,972,978) (77,202,439)

Ending balance 2,914,628,519 1,461,863,003

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14. CAPITALISED BORROWING COSTS

During the period, the Company has capitalised borrowing costs amounting to VND’000 192,523,207 (for the nine-month period ended 30 September 2009: VND’000 151,513,542). These are costs incurred on the bank loans used to finance the construction and development of fixed assets and apartment projects.

15. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES 15.1. Investments in subsidiaries

During the period, the Company has spun off its An Phu Construction Branch into a joint-stock company named An Phu Construction Joint Stock Company with the charter capital of VND 150 billion, of which the Group owns 87.83%.

During the period, the Group established new subsidiaries as follows:

► Hoang Anh Thanh Hoa Minerals Limited Company was established with registered capital of VND 200 billion, of which the Group owns 83.70%. This subsidiary’s principal activities are to mine iron ores, non-ferrous metals, precious metal ores and process iron, copper and lead ores.

► Hoang Anh Gia Lai Rubber Plantation Joint Stock Company was established with registered capital of VND 200 billion, of which the Group owns 99%. This sub-holding company’s principal activities are to develop and manage the rubber plantation operations of the Group.

► Furniture Materials One Member Co Ltd was established with registered capital of VND 50 billion, of which the Group owns 94.07%. This subsidiary’s principal activities are to trade materials and other construction equipment.

► Rattanakiri Co Ltd was established in Cambodia with registered capital of USD 16,000,000, of which the Group owns 83.70%. This subsidiary’s principal activities are to develop the mining operation in Cambodia.

► Hoang Anh Tona Hydro-power Joint Stock Company was established with registered capital of VND 150 billion, of which the Group owns 95%. This subsidiary’s principal activities are to generate, transmit and distribute electricity and to exploit stone, sand and clay.

► KBang Mining One Member Co Ltd was established with registered capital of VND 100 billion, of which the Group owns 46.04%. This subsidiary’s principal activities are to processing iron, bronze and leaden ores.

► Hoang Anh GL – Kontum Minerals Limited Company was established with chartered capital of VND 50 billion, of which the Group owns 83.70%. This sub-holding company’s principal activities are to mine iron ores, non-ferrous metals, precious metal ores and process iron, copper and lead ores.

► Hoang Anh Gia Lai Vientiane Co Ltd was established with registered capital of USD 20,000,000, of which the Group owns 100%. This subsidiary’s principal activities are to trade and develop real estate including construction of head quarters, office buildings, commercial centers, hotels and apartments for rent.

► Hoang Anh Sekong Co Ltd was established in Laos with registered capital of USD 5,300,000, of which the Group owns 83.70%. This subsidiary’s principal activities are search, explore and exploit iron ore.

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15.1. Investments in subsidiaries (continued) As part of the Group’s restructuring, the Company transferred during the period its entire equity in the following subsidiaries at cost and by way of cash as follows:

► The Company transferred its entire ownerships in Hoang Nguyen Investment Construction and Housing JSC, Hoang Anh Me Kong JSC, Hoang Phuc Investment, Construction and Housing JSC, An Phu Construction branch to Hoang Anh Construction and Housing Development JSC, a sub-holding company of the Group.

► The Company transferred its entire ownerships in Gia Lai Mineral JSC and Quang Ngai Mineral JSC to Hoang Anh Gia Lai Minerals JSC, a sub-holding company of the Group.

► The Company transferred its entire ownerships in Hoang Anh Thanh Hoa Hydro-power JSC to Hoang Anh Gia Lai Hydro-power JSC, a sub-holding company of the Group.

► The Company transferred its entire ownerships in Gia Lai Industrial Plantation JSC to Hoang Anh Gia Lai Rubber JSC, a sub-holding company of the Group.

The Company also contributed additional capital of VND’000 1,090,000,000 to Hoang Anh Construction and Housing Development (“HAH”) through the acquisition of additional 109,000,000 new shares by way of conversion of part of payables owed by HAH to the Company based on Capital Contribution Minute No. 17-06/BBGV dated 17 June 2010 between the Company and HAH. Subsequently, the Company disposed part of its equity interest in HAH of 11.75% to some investors for VND 1,167 billion and recognised a gain of VND 931 billion (Note 27.2). This resulted in reduction of the Company’s equity interest in HAH to 88.21% as at 30 September 2010. The Company’s subsidiary, Hoang Anh Construction and Housing Development, acquired 99.9% interest in Dong Nam Real Estate Joint Stock Company (“DNC”) from DNC’s existing shareholders for a total consideration of VND’000 1,108,890,000. The excess amounting to VND’000 809,190,000 of the purchase consideration over the net assets of DNC which comprised mainly of land at the acquisition date has been recognised in the interim consolidated balance sheet as part of the value of DNC’s land held for development (Note 16).

Details of the Company’s subsidiaries as at 30 September 2010 are as follows:

Name of subsidiaries Location Status of operation

Date of establishment or acquisition

% holding

Real estate

Hoang Anh Construction and Housing Development JSC HCMC, Vietnam Operating 04/06/2007 88.21

Phu Hoang Anh JSC HCMC, Vietnam Operating 15/01/2007 82.92

Hoang Nguyen Investment Construction and Housing JSC HCMC, Vietnam Operating 29/03/2007 78.51

Minh Tuan Company Limited HCMC, Vietnam Operating 22/06/2007 62.81

Hoang Anh Dak Lak JSC HCMC, Vietnam Operating 12/09/2007 68.61

Hoang Anh Me Kong Corporation HCMC, Vietnam Operating 24/10/2007 44.99

Hoang Viet Investment JSC HCMC, Vietnam Pre-operating 21/11/ 2007 44.99

Phuc Bao Minh Trading Construction Services Corporation HCMC, Vietnam Pre-operating 04/10/ 2008 86.45

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15.1. Investments in subsidiaries (continued)



% holding

Real estate

Minh Thanh Co Ltd HCMC, Vietnam Pre-operating 28/11/ 2008 43.64

Hoang Anh Incomex Co Ltd HCMC, Vietnam Pre-operating 2007 70.57

An Tien Co Ltd HCMC, Vietnam Pre-operating 10/01/ 2008 77.40

Hoang Phuc Investment Construction and Housing JSC HCMC, Vietnam Pre-operating 2009 44.99

Hoang Anh Gia Lai - Bangkok Co Ltd

Bangkok, Thailand Pre-operating 2009 41.46

Hoang Anh Real Estate Management Services JSC HCMC, Vietnam Operating 30/05/2007 44.99

Dong Nam Real Estate JSC HCMC, Vietnam Pre-operating 02/04/2010 88.12

An Phu Construction JSC Gia Lai, Vietnam Operating 9/2010 87.83

Rubber plantation

Hoang Anh Gia Lai Rubber Plantation JSC Gia Lai, Vietnam Pre-operating 26/05/2010 99.00

Gia Lai Industrial Plantation JSC Gia Lai, Vietnam Pre-operating 09/09/2008 98.76

Hoang Anh Attapeu Agricultural Development Co Ltd Attapeu, Laos Pre-operating 22/05/2008 83.70

Hoang Anh - Quang Minh Rubber JSC Gia Lai, Vietnam Operating 01/02/2007 57.50

Dai Lam Construction and Trade Co Ltd

Dak Lak, Vietnam Pre-operating 17/08/2009 68.61

Energy

Hoang Anh Gia Lai Hydropower JSC Gia Lai, Vietnam Pre-operating 05/06/2007 99.35

Hoang Anh - Thanh Hoa Hydropower JSC

Thanh Hoa, Vietnam Pre-operating 18/10/2007 77.49

Hoang Anh Dakbla Hydropower JSC

Kontum, Vietnam Pre-operating 30/05/2007 65.63

Hoang Anh Tona Hydropower Joint Stock Company Gia Lai, Vietnam Pre-operating 22/06/2010 95.00

Song Da Ban Me JSC Dak Lak, Vietnam Operating 06/2009 51.00

F-69


15. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES (continued) 15.1. Investments in subsidiaries (continued)



% holding

Mining Hoang Anh Gia Lai Minerals JSC Gia Lai, Vietnam Pre-operating 08/12/2007 83.70 Quang Ngai Mineral JSC Quang Ngai,

Vietnam Pre-operating 23/02/2008 71.15 Gia Lai Mineral JSC Gia Lai, Vietnam Pre-operating 12/04/2007 66.93

Hoang Anh - Thanh Hoa Mineral Co Ltd

Thanh Hoa, Vietnam Pre-operating 15/03/2010 83.70

Rattanakiri Co Ltd Rattanakiri, Cambodia Pre-operating 18/11/2009 83.70

KBang Mining One Member Co Ltd Gia Lai, Vietnam Pre-operating 28/07/2010 66.93

Hoang Anh GL - Kontum Minerals Limited Company Kontum, Vietnam Pre-operating 09/02/2010 83.70

Hoang Anh Sekong Co Ltd Attapeu, Laos Pre-operating 15/10/2009 83.70 Manufacturing Hoang Anh Gia Lai Furniture JSC Gia Lai, Vietnam Operating 28/09/2009 94.07

Furniture Materials One Member Co Ltd Gia Lai, Vietnam Operating 15/03/2010 94.07 Construction, trading and services

Hoang Anh Gia Lai Sport JSC Gia Lai, Vietnam Operating 12/01/2009 63.34

Central HAGL JSC Da Nang, Vietnam Operating 06/07/2007 51.85

Hoang Anh Far East Co Ltd HCMC, Vietnam Operating 03/10/2009 70.70

Hoang Anh Gia Lai Hospital JSC Gia Lai, Vietnam Pre-operating 07/05/ 2008 46.20

V&H Corporation (Lao) Co Ltd Attapeu, Laos Pre-operating 26/03/2009 80.00

Hoang Anh Gia Lai Road Construction JSC Gia Lai, Vietnam Pre-operating 22/12/2009 72.20

Hoang Anh Gia Lai Vientiane Co., Ltd Vientiane, Laos Pre-operating 06/05/2010 100.00

Pre-operating status means the subsidiary is still under investment stage and has not yet started its commercial operations as at 30 September 2010.

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Name of associates Business activities


% holding Carrying value

VND’000 % holding Carrying value

VND’000

Binh Dinh Constrexim JSC Construction of hydro-power plant 42.04 15,573,259 39.20

14,431,170

A Dong Investment and Construction Consultant JSC Electric design and consultancy 25.00 7,475,610 25.00 5,504,609

Hoang Anh Gia Dinh JSC Real estate 25.00 7,882,160 25.00 7,457,531

Hoang Anh – Mang Yang Rubber JSC Rubber plantation - - 40.00 41,705,588

Total 30,931,029 69,098,898

The Company has fully disposed its equity interest in Hoang Anh - Mang Yang Rubber JSC to General Rubber Corporation of Vietnam for VND’000 36,000,000 and recognised a loss of VND‘000 1,806,402 (Note 27.2).

F-71



VND’000

Ending balance Beginning balance Land held for development (i) 2,094,251,709 1,217,848,242 Investments in Business Cooperation Contracts (“BCC”) for development of real estate projects (ii) 293,904,811 492,991,756 Loans to the Laos Government (iii) 275,064,546 266,120,201 Investments in common stock 23,168,935 15,386,903

Total 2,686,390,001 1,992,347,102

(i) The movement of land held for development during the current period follows:

VND’000

Beginning balance 1,217,848,242 Increase from: Acquisition of subsidiary 996,462,479 Interest capitalisation 24,435,764

2,238,746,485 Decrease from: Disposal of land (144,494,776)

Ending balance 2,094,251,709 The increase from acquisition of subsidiary during the period includes additional land costs of VND’000 162,271,134 and the excess amounting to VND’000 809,190,000 of the purchase consideration over the net assets at the acquisition date of Dong Nam Real Estate JSC (Note 15.1). During the period, the Company sold 15,000 square meters of land lot in Binh Hien project to some parties for VND’000 396,000,000 and recognised a gain of VND’000 251,422,284 (Notes 27.1 and 28).

(ii) This balance represents the investments in BBC as follows:

- BCC between Hoang Anh Construction and Housing Development JSC, a subsidiary, and Dai Nhan Real Estate Investment and Trading JSC to develop a residential area of 332,023 square meters at Phuoc Loc Village, Nha Be District, Ho Chi Minh City. Each party will equally make the capital contribution and share the profit or products from the BCC.

- BCC between Hoang Anh Construction and Housing Development JSC, a subsidiary, and Tan Thuan Investment and Construction Co Ltd to develop an apartment building on an area of 28,127 square meters in District 7, Ho Chi Minh City. Under the BCC, the Company has 45% interest in the project.

(iii) Loans to the Laos Government represent the interest-free loans in accordance with the Memorandum of Understanding signed with the Laos Government on 4 April 2008. The loans will be settled in kind in the form of wood or wood products within three years.

F-72



VND’000



Beginning balance 141,963,630 331,880,376 Increase 60,553,715 75,771,994 Decrease from contract liquidations (115,551) (198,133,393) Amortisation charge for the period (60,180,558) (50,578,682)

Ending balance 142,221,236 158,940,295 18. SHORT-TERM LOANS AND BORROWINGS

VND’000

Ending balance Beginning balance Short-term loans Loans payable to banks 1,113,114,431 842,197,137 Loans payable to other entities and individuals - 57,000 Current portion of long-term bank loans (Note 24) 451,926,976 699,543,636

1,565,041,407 1,541,797,773 Convertible bonds 1,100,000,000 1,450,000,000

Total 2,665,041,407 2,991,797,773

18.1. Convertible bonds i. The Company’s shareholders on 19 March 2010 approved the conversion of HAG-CB09

bonds with total proceeds of VND’000 1,450,000,000 into ordinary shares. Subsequently, all of the bond holders registered to exercise the conversion of their respective HAG-CB09 bonds into HAG ordinary shares up to 14 May 2010. As a result, 22,055,239 new shares were issued to reflect the additional share capital at total par value of VND’000 220,552,390 and a share premium of VND’000 1,214,447,610 recognised after deducting the bond issuance costs (Note 25.1).

On 17 May 2010, the Company received Business Registration Certificate (fifteenth amendment) issued by the Planning and Investment Department of Gia Lai Province which approved the increase in the Company’s share capital to VND’000 2,925,206,970.

ii. On 19 August 2010, the Board of Management approved a detailed plan to execute the

issuance of the convertible bonds amounting to VND 1,100 billion to Northbrooks Investments (Mauritius) Pte Ltd, an affiliate of Temasek Holdings Pte Ltd of Singapore in accordance with the terms and conditions stipulated in the shareholders’ resolution dated 18 August 2010. On 31 August 2010, the Company issued VND 1,100 billion convertible bonds at par value of VND 1 million. The bonds have a term of one year and bear interest of zero percent if conversion option is excercised at a conversion price of VND 67,375 per share which is subject to adjustments of dilution. Otherwise, interest is charged at the average 12-month saving deposit rate applicable to individuals of four local banks plus (+) three percent per annum payable at maturity.

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18. SHORT-TERM LOANS AND BORROWINGS (continued)

18.2. Loans payable to banks

Short-term loans from banks comprise of the following:

VND’000 Ending balance Beginning balance Bank for Foreign Trade of Vietnam (Vietcombank) 402,761,743 239,461,533 Bank for Investment and Development of Vietnam (BIDV) 321,473,641 175,540,593 Saigon Thuong Tin Commercial Bank (Sacombank) 301,994,339 304,647,643 Vietnam International Commercial Bank (VIB) 56,346,888 38,146,995 Agriculture and Rural Development Bank of Vietnam (Agribank) 25,567,390 25,090,028 Bank for Investment and Development of Cambodia PLC (BIDC) 4,970,430 - Lao Viet Bank (LVB) - 59,310,345

Total 1,113,114,431 842,197,137

The Group obtained these loans to finance its working capital requirements. The terms and conditions of loans payable to banks follow: Interest rate Collateral assets

Vietcombank Interest is determined at each drawdown date as the interest rate declared by VCB Gia Lai, adjusted for each period

Plant and machinery at the furniture, rubber and granite factories, and 90,911,900 shares of the Company in Hoang Anh Construction and Development Housing JSC, a subsidiary.

BIDV 8.90% pa until 25 Jul 2010. From 26 Jul 2010, interest will be equal to BIDV Gia Lai's common deposit interest for 12 months plus 4.4% pa of bank charge.

Sale of goods batch refinanced by this loan; Deposit contract from Hoang Anh Gia Lai; Land use rights for this 2,522.5 square meters land at Tan Hung Ward, District 7, Ho Chi Minh City; Iron ore at Quy Nhon Warehouse; All assets associated with land leased under Certificate of land use right No.AN 567122; Offide building and hotel of Hoang Anh Gia Lai group

Sacombank Interest is 1.25% per month determined at the first drawdown, the interest rate for the following drawdown is determined at the drawdown date and not lower than the first drawdown

Drilling pile machine

VIB Interest rate at the drawdown time and adjusted once for every 3 months

Land use rights in Can Tho City and construction Tay Nguyen Plaza

Agribank 1% per month Houses at No. 303-305 Phan Dinh Phung Street, Phu Nhuan District, No. 5 Tran Cao Van, Phu Nhuan District and No. 8-10 Mai Van Vinh, District 7, Ho Chi Minh City

BIDC 10% per annum The cash deposit of the Company amounting to VND 40 billion

F-74


19. TRADE PAYABLES

VND’000 Ending balance Beginning balance Payable for purchase of land use rights 320,000,000 - Payable to contractors 41,504,763 100,974,258 Payable for reclaim forest operations 10,886,215 1,899,657 Payable for purchase of machines and equipments 7,060,210 5,087,065 Payable for purchase of goods and services 220,216,573 89,576,936

Total 599,667,761 197,537,916 Payable for purchase of land use rights represents payable to Thanh Binh Construction Investment and Consultant Limited Company for the acquisition of the Thanh Binh-Kenh Te apartment project with total purchase consideration of VND’000 640,000,000. Included in trade payables are payables to related parties amounting to VND’000 4,502,398 (Note 32).



Corporate income tax 325,862,016 133,031,368 Value-added tax 107,608,890 130,553,105 Personal income tax 2,376,565 943,412 Others 2,969,387 1,246,129

Total 438,816,858 265,774,014 21. ACCRUED EXPENSES

VND’000 Ending balance Beginning balance Accrued construction costs for completion of the sold units of apartment 619,804,954 548,643,141 Apartment warranty costs 24,090,572 28,994,252 Interest expense 19,144,506 35,503,544 Penalties for late delivery of apartments to customers 18,578,621 18,982,400 Others 11,287,075 12,860,609

Total 692,905,728 644,983,946

F-75


22. OTHER PAYABLES

VND’000

Ending balance Beginning balance Payable to other companies 113,884,966 53,188,942 Payable for purchase of shares (i) 39,533,029 - Payable to employees 35,161,549 23,441,156 Payable for land acquisition 18,259,456 18,259,456 Payable for late transfer of the ownership of apartments to customers 6,652,537 7,649,096 Others 51,716,711 30,001,365

Total 265,208,248 132,540,015

(i) This represents payable for purchase of shares of Gia Lai Mineral Joint Stock Company from the existing shareholders.


VND’000

Ending balance Beginning balance Advance from the sale of Certificate of Emission Reduction (“CER”) 19,757,878 19,757,878 Deposits received from tenants for office leases 4,613,684 4,234,515

Total 24,371,562 23,992,393 24. LONG-TERM LOANS AND DEBTS

VND’000

Ending balance Beginning balance Bonds 900,000,000 1,450,000,000 Long-term bank loans 1,973,292,500 1,498,250,799 Finance lease liabilities 6,645,599 -

Total 2,879,938,099 2,948,250,799

In which Current portion (Note 18) 451,926,976 699,543,636 Non-current portion 2,428,011,123 2,248,707,163

24.1. Bonds

Bonds outstanding comprised of bonds amounting to VND 1,000 billion and VND 450 billion issued by the Company and its subsidiaries, respectively, as follows: (i) In 2008, the Company issued VND straight bonds aggregating to VND 1,000 billion as

follows:

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24. LONG-TERM LOANS AND DEBTS (continued)

24.1. Bonds (continued)

u On 30 September 2008, the Company issued VND 550 billion and VND 100 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 30 September 2010 and 30 September 2011, respectively. The VND 550 billion bond bears interest rate which is equivalent to 20.50% p.a. in the first interest payment period which was paid on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam minus a margin of 0.5% p.a. in the following periods. The VND 100 billion bond bears interest rate which is equivalent to 21.00% p.a. in the first interest payment period was paid on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam in the following periods. Interest is payable on 31 March and 30 September annually. The proceeds were used to finance the ongoing real estate, hydropower and rubber plantation projects of the Group.

On 30 September 2010, the Company fully repaid the bonds due of VND 550 billion.

u In December 2008, the Company issued another VND 100 billion and VND 250 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 31 December 2010 and 31 December 2011, respectively. The VND 100 billion bond bears interest rate of 12.25% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate announced by the State Bank of Vietnam minus (-) a margin of 0.5% p.a. in the following periods. The VND 250 billion term bond bears interest rate of 12.75% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate per annum announced by the State Bank of Vietnam in the following periods. The interest is payable in semi-annual basis which on 30 June and 31 December. The proceeds were used to finance the working capital requirements and the ongoing real estate, hydropower and rubber plantation projects of the Group.

All bonds are secured by the land use rights of Hoang Anh River View and Kinh Te projects of the Group, and the apartments under construction at Hoang Anh River View project valued at VND’000 1,821,783,170. The arrangers of the bond issuance were The Bank for Investment and Development of Vietnam (“BIDV”) and BIDV Securities Company Limited.

(ii) Phu Hoang Anh Joint Stock Company (“PHA”), the subsidiary, issued VND straight

bonds aggregating to VND 450 billion solely to Housing Development Commercial Joint Stock Bank of Ho Chi Minh City (“HDBank”) in 2008. The bonds are secured by 37,624 square meters of land use rights at Lot 9, Nguyen Huu Tho Street, Phuoc Kien Ward, Nha Be District, Ho Chi Minh City and assets to be formed on this land. The proceeds were used to finance the ongoing real estate projects of the subsidiary. Details of these bonds are as follows:

u VND 200 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 22 May 2012. The bond bears interest rate of 11% p.a. in the first interest payment period and a floating rate equivalent to the average twelve-month term deposits plus (+) a margin of 3.5% p.a. of HDBank. The interest is payable on semi-annual basis.

u VND 250 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 31 December 2012 or at the time of repurchase by PHA. PHA has the right to repurchase these bonds before maturity after 2 years from the issuance date. The bond bears interest rate of 12% p.a. in the first interest payment period and a floating rate equivalent to the average twelve-month term deposits plus (+) a margin of 3.5% per annum of HDBank but not lower than 12% p.a. The interest is payable on semi-annual basis.

F-77


24. LONG-TERM LOANS AND DEBTS (continued) 24.2. Long-term bank loans

Details of the long-term bank loans are as follows: Ending balance Beginning balance Bank for Investment and Development of Vietnam (BIDV) 1,077,805,384 660,671,767 Bank for Foreign Trade of Vietnam (Vietcombank) 468,485,914 387,845,616 Saigon Thuong Tin Commercial Bank (Sacombank) 297,501,202 174,880,238 Agriculture and Rural Development Bank of Vietnam (Agribank) 100,000,000 100,000,000 Industrial and Commercial Bank of Vietnam (VietinBank) 29,500,000 35,500,000 Ho Chi Minh City Housing Development Bank (HDB) - 139,353,178

Total 1,973,292,500 1,498,250,799 The Group obtained these loans mainly to finance the construction and development of hydropower projects, rubber plantation, apartment projects, hotels and resorts and purchases of machinery and equipment. These loans bear interest at floating rates, have common terms ranging from 36 to 72 months and are secured by the Group’s land use rights, apartments, plants and buildings, machinery and equipment, shares of its subsidiaries, and inventories.

F-78




VND’000

Share capital

Share premium

Consolidation

reserve Treasury

shares

Foreign exchange

differences

Investment and

development fund

Financial reserve

fund Undistributed

earnings Total Beginning balance 2,704,654,580 1,223,971,061 (399,237,919) (30,091,699) 20,463,787 8,622,737 82,528,069 1,084,004,248 4,694,914,864 Issuance of new shares for conversion of bonds (Note 18.1) 220,552,390 1,214,447,610 - - - - - - 1,435,000,000 Net profit for the period - - - - - - - 1,492,645,946 1,492,645,946 Remuneration of the Board of Management and Supervisors - - - - - - - (6,903,257) (6,903,257) Dividend paid - - - - - - - (292,008,407) (292,008,407) Reversal of previously recognised share premium from pre-acquisition profits of a subsidiary - (54,068,925) - - - - - - (54,068,925) Foreign exchange differences - - - - 1,931,676 - - - 1,931,676 Appropriation to financial reserve fund - - - - - - 101,447,865 (101,447,865) - Appropriation to bonus and welfare fund - - - - - - - (96,432,617) (96,432,617) Consolidation reserve - - 7,104,084 - - - - - 7,104,084

Ending balance 2,925,206,970 2,384,349,746 (392,133,835) (30,091,699) 22,395,463 8,622,737 183,975,934 2,079,858,048 7,182,183,364

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25.2. Shares

Ending balance Beginning balance Shares Shares Shares authorised to be issued 292,520,697 270,465,458

Shares issued and fully paid 292,520,697 270,465,458 Ordinary shares 292,520,697 270,465,458

Treasury shares 512,290 512,290 Ordinary shares 512,290 512,290

Outstanding shares 292,008,407 269,953,168 Ordinary shares 292,008,407 269,953,168

26. BASIC EARNINGS PER SHARE

The following table shows the income and share data used in the basic and diluted earnings per share calculations:



Net profit attributable to ordinary equity holders of the parent (VND’000) 1,492,645,946 857,202,071 Interest on convertible bonds - - Net profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution (VND’000) 1,492,645,946 857,202,071 Weighted average number of ordinary shares during the period 280,980,788 177,023,711 Weighted average number of potential shares from convertible bonds 16,326,531 - Weighted average number of ordinary shares adjusted for the effect of dilution 297,307,319 177,023,711

Earnings per share Basic earnings per share 5,312 4,842 Diluted earnings per share 5.021 4,842

F-80


27. REVENUES


VND’000



Gross revenues 3,082,323,202 3,282,054,836 Of which:

Sale of apartments 1,793,230,561 2,572,117,035 Revenue from construction contracts 342,934,308 302,013,353 Sale of goods 804,432,861 298,903,946 Revenue from services 141,725,472 109,020,502

Less (1,503,110) (4,345,482) Sales returns (1,188,864) (4,293,868) Special consumption tax (55,485) (51,614) Sales discount (258,761) -

Net revenues 3,080,820,092 3,277,709,354

Of which: Sale of apartments 1,793,230,561 2,572,117,035 Revenue from construction contracts 342,934,308 298,481,878 Sale of goods 803,233,106 298,903,946 Rendering of services 141,422,117 108,206,495

Revenue from sale of goods includes proceeds of VND’000 396,000,000 from sale of 15,000 square meters of land lot in Binh Hien project to some parties during the period (Note 16).


VND’000





Gain on disposal of equity and other investments 987,825,128 - Interest income from deposits with banks 77,207,910 21,257,919 Foreign exchange gains 12,836,998 10,559,344 Others 3,723,123 8,652,633

Total 1,081,593,159 40,469,896

Gain on disposal of equity and other investments mainly includes gains from the partial disposal of the Company’s equity interest in Hoang Anh Construction and Housing Development JSC and the disposal of Qui Nhon resort amounting to VND’000 890,419,500 and VND’000 99,212,030, respectively (Notes 5, 8 and 15.1), and a loss on disposal of the Company’s entire equity interest in Hoang Anh - Mang Yang Rubber Plantation JSC, an associate, amounting to VND 1,806,402 (Note 15.2), during the period.

F-81



VND’000 For the nine-

month period ended 30

September 2010



Cost of apartments sold 902,088,293 1,290,799,822 Cost of goods sold 450,907,373 209,001,028 Cost of construction contracts 147,538,072 154,219,596 Cost of services rendered 79,356,036 70,700,111

Total 1,579,889,774 1,724,720,557

Cost of goods sold includes cost of 15,000 square meters of land lot amounting to VND’000 144,577,716 in Binh Hien project which was sold to some parties during the period (Note 16).


VND’000





Interest expense on bank loans and bonds issued 134,874,147 155,146,614 Foreign exchange loss 5,937,995 5,010,646 Others 27,727 2,750

Total 140,839,869 160,160,010 30. OTHER INCOME AND EXPENSES

VND’000





Other income 42,882,076 36,751,791 Proceeds from disposal of fixed assets 21,273,594 29,126,838 Scrap sales 4,119,993 1,500,125 Others 17,488,489 6,124,828 Other expenses (43,172,382) (20,329,483) Net carrying amounts of disposed assets (26,515,565) (19,107,999) Others (16,656,817) (1,221,484)

Other (loss) profit (290,306) 16,422,308

F-82



The Company and its subsidiaries have the obligation to pay separately corporate income tax ("CIT") at the rate of 25% of taxable profits. The tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the interim consolidated financial statements could be changed at a later date upon final determination by the tax authorities. The current tax payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the interim 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 never taxable or deductible. The Group’s liability for current tax is calculated using applicable tax rates that have been enacted by the interim balance sheet date. The CIT expense for the period comprised of:

VND’000





Current tax 316,393,977 6,409,779 Deferred tax 225,965,985 308,806,755

Total 542,359,962 315,216,534

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31. CORPORATE INCOME TAX (continued) 31.1. Current tax

VND’000 For the nine-

month period ended 30

September 2010



Profit before tax 2,217,055,024 1,252,037,707 Adjustments to increase (decrease) accounting profit

Adjustments to increase Revenue from sale of apartments recognised under stage of completion in prior periods and billed this period 1,497,800 68,538,629 Cost from sale of apartments recognised under stage of completion in the current period 875,707,134 1,394,449,736 Land development cost and rental expense amortisation 47,218,306 49,022,504 Loss from subsidiaries 142,242,416 52,613,504 Unused accruals 16,039,954 - Expenses without adequate supporting documents 1,477,165 627,907

Adjustments to decrease Revenue from sale of apartments recognised under stage of completion in the current period but not yet billed (1,783,703,258) (2,726,738,372) Cost from sale of apartments recognised under stage of completion in prior periods and billed this period (6,711,452) (66,701,886) Prior year accrued expenses paid in the current period (89,084,003) - Prior year’s intra-group unrealised profit which was realised in the current period (10,254,771) (89,501,405) Share of profit in associates (4,832,131) (6,589,910) Loss from disposal of treasury shares - (79,586,695) Dividend received (914,081) - Others (1,836,213) 1,115,094

Adjusted net profit (loss) before loss carry forward and tax

1,403,901,890

(106,575,606)

Tax loss carried forward (6,118,030) -

Estimated current taxable profit (loss) 1,397,783,860 (106,575,606)

CIT at flat rate of 25% 349,445,966 - Under provision of CIT in previous year 1,865,876 6,409,779 CIT reduction (34,917,865) -

Estimated current CIT for the period 316,393,977 6,409,779 CIT reduction represents 30% reduction on CIT payable of 2009 and the fourth quarter of 2008 of the Company’s subsidiary based on Circular No. 03/2009/TT-BTC issued by the Ministry of Finance on 13 January 2009 which provides guidance on CIT reduction and deferment for small and medium enterprises according to Resolution No. 30/2008/NQ-CP issued by the Government on 11 December 2009.

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31. CORPORATE INCOME TAX (continued) 31.2. Deferred tax

The following comprise the Group’s deferred tax assets and the movements thereon during the period.

VND’000

Interim consolidated balance sheet

Credit (charge) to interim

consolidated income

statement

Ending balance Beginning

balance

Deferred tax assets

Tax losses of subsidiaries 55,011,517 19,450,913 (35,560,604) Unrealised intra-group profit 2,563,693 3,910,600 1,346,907 Accrued expenses 4,009,989 45,876,026 41,866,037

61,585,199 69,237,539 Deferred tax liabilities

Negative goodwill credited to the interim consolidated income statement 61,439,435 61,439,435 - Profit from apartment sale recognised under stage of completion but not yet taxable 728,386,391 510,072,745 218,313,645

789,825,826 571,512,180

Advance CIT payable on advances from customers (109,387,459) (72,301,999)

680,438,367 499,210,181 Net deferred income tax charge to interim consolidated income statement 225,965,985

F-85


32. TRANSACTIONS WITH RELATED PARTIES Significant transactions with related parties during the nine-month period were as follows:

VND’000

Related parties Relationship Transactions Amounts Truc Thinh Trading and Services Company Limited

Related party Construction of apartments for the Group 41,026,925

Office rental paid to the Group 196,679


Related party Construction of apartments for the Group 26,798,364

Office rental paid to the Group 223,976

Amounts due to and due from related parties at 30 September 2010 were as follows:

VND’000

Related parties Relationship Transactions Receivable

(Payable)

Trade receivables


Related party Sale of goods 44,412,160

Total 44,412,160 Advances to suppliers


Related party Advances for construction work

245,189,027


Related party Advances for construction work

157,000,000

Total 402,189,027

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32. TRANSACTIONS WITH RELATED PARTIES

VND’000

Name Relationship Transactions Receivable

(Payable)

Trade payables


Related party Construction of apartments

(2,431,931)

A Dong Investment and Construction Consultant JSC

Associate Sale of goods (1,527,909)

Binh Dinh Constrexim Corp

Associate Construction of hydropower plants

(542,558)

Total (4,502,398)

Other receivables

Doan Nguyen Duc Chairman Temporary loan 8,239,637


Associate Dividends 9,500,000

Total 17,739,637

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33. COMMITMENTS

Operating lease commitments The Group leases parcels of land in Vietnam to build factories, football facilities, hotels and for rubber trees plantation. The minimum lease commitment as at 30 September 2010 under the operating lease agreements is as follows:

VND’000


Less than 1 year 318,370 310,350 From 1-5 years 1,273,479 1,241,399 More than 5 years 11,019,331 11,132,828

Total 12,611,180 12,684,577 Operating expenses commitments At 30 September 2010, the Group has contractual commitments for the construction work for its apartment and hydropower plant projects as follows:

VND’000

Contracted amount

Recognised amount

Remaining commitment

Apartments Golden house 329,541,918 69,470,388 260,071,530 Phu Hoang Anh 1,180,202,592 202,630,789 977,571,803 Hoang Anh Riverview 117,173,558 97,057,509 20,116,049 Tay Nguyen Plaza 21,068,972 18,979,549 2,089,423 Hydropower plants ` Ba Thuoc 1 4,298,220 20,377,580 16,079,360 Ba Thuoc 2 181,940,587 363,920,500 181,979,913 Dak Srong 2A 308,640,722 200,548,054 108,092,668

Total 2,142,866,569 972,984,369 1,566,000,746

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34. EVENTS AFTER THE BALANCE SHEET DATE

On 8 October 2010, the Company issued VND 530 billion straight bonds at par value of VND 1 billion per unit to some investors which will be redeemable at par value by 8 October 2013. The bonds bear interest rate of 15.2% per annum in the first interest payment period and an average 12-month saving deposit rate applicable to individuals of four local banks plus (+) a margin of 4.2% per annum in the following periods. The proceeds are used to finance the working capital requirements and the ongoing real estate, hydropower and rubber plantation projects of the Group. In October 2010, the Company has disposed its entire 512,290 treasury shares with total proceeds of VND’000 40,254,700. Mrs Ho Thi Kim Chi Mr Nguyen Van Su Chief Accountant General Director 12 November 2010

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Reviewed interim consolidated financial statements

30 September 2009

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CONTENTS

Pages

REVIEWED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Independent auditors’ review report 1

Interim consolidated balance sheet 2 - 3

Interim consolidated income statement 4 - 5

Interim consolidated cash flow statement 6 - 7

Notes to the interim consolidated financial statements 8 - 32

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Reference: 60752790/13688593

INDEPENDENT AUDITORS’ REVIEW REPORT

The Shareholders and the Board of Management

We have reviewed the accompanying interim balance sheet of Hoang Anh Gia Lai Joint Stock Company and its subsidiaries (collectively referred to as “the Group”) as at 30 September 2009 and the related interim income statements for the three-month and the nine-month periods then ended and interim cash flow statement for the nine-month period then ended, and the notes thereto (collectively referred to as “the interim consolidated financial statements”) as set out on pages 2 to 32. These interim consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to issue a report on these interim consolidated financial statements based on our review.

Scope of our review

We conducted our review in accordance with Vietnamese Standard on Auditing applicable to review engagements. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim consolidated financial statements are free of material misstatement. A review is limited primarily to inquiries of the Group’s personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit, and, accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim consolidated financial statements do not give a true and fair view of the financial position of the Group as at 30 September 2009, and of its result of operations for the three-month and nine-month periods then ended and its cash flows for the nine-month period then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements.

Ernst & Young Vietnam Limited

Narciso T. Torres Jr. Nguyen Xuan DaiDeputy General Director Auditor-in-chargeRegistered Auditor Registered AuditorCertificate No. N.0868/KTV Certificate No. 0452/KTV

Ho Chi Minh City, Vietnam

23 October 2009

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INTERIM CONSOLIDATED BALANCE SHEET B01-DN/HNas at 30 September 2009

VND’000

Code ASSETS Notes30 September

200931 December

2008

100 A. CURRENT ASSETS 5,340,035,352 4,524,792,761

110 I. Cash 597,202,369 531,085,394111 1. Cash 4 597,202,369 531,085,394

130 II. Current accounts receivable 2,483,114,203 1,984,810,093131 1. Trade receivables 5 1,925,966,415 719,302,322132 2. Advances to suppliers 6 360,741,585 658,867,521135 3. Other receivables 7 197,529,858 607,452,842139 4. Provision for doubtful debts (1,123,655) (812,592)

140 III. Inventories 2,109,678,817 1,852,154,407141 1. Inventories 8 2,109,979,297 1,852,454,887149 2. Provision for obsolete inventories (300,480) (300,480)

150 IV. Other current assets 150,039,963 156,742,867151 1. Short-term prepaid expenses 7,693,090 2,702,455 152 2. Value-added tax deductibles 81,242,843 109,255,090 154 3. Tax and other receivables 114,144 -158 4. Other current assets 9 60,989,886 44,785,322


220 I. Fixed assets 2,360,275,120 1,870,421,130221 1. Tangible fixed assets 10 811,439,909 613,167,958 222 Cost 939,281,500 706,975,264 223 Accumulated depreciation (127,841,591) (93,807,306)227 2. Intangible fixed assets 11 86,972,208 111,884,361 228 Cost 88,248,510 112,900,030 229 Accumulated amortisation (1,276,302) (1,015,669)230 3. Construction in progress 12 1,461,863,003 1,145,368,811

250 II. Long-term investments 2,316,649,466 2,090,737,140252 1. Investments in associates 14 222,157,351 199,067,441258 2. Other long-term investments 15 2,094,492,115 1,891,669,699

260 III. Other long-term assets 229,200,825 385,609,302261 1. Long-term prepaid expenses 16 158,940,295 331,880,376 262 2. Deferred tax assets 30.2 67,453,005 51,404,401268 3. Other long-term assets 2,807,525 2,324,525

270 TOTAL ASSETS 10,246,160,763 8,871,560,333

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INTERIM CONSOLIDATED BALANCE SHEET (continued) B01-DN/HNas at 30 September 2009

VND’000

Code RESOURCES Notes30 September

200931 December

2008

300 A. LIABILITIES 5,287,438,513 4,672,353,582

310 I. Current liabilities 2,769,147,608 2,535,177,690311 1. Short-term loans and borrowings 17 1,429,310,953 1,203,108,474312 2. Trade payables 296,305,246 373,885,772313 3. Advances from customers 18 52,187,685 98,426,140314 4. Statutory obligations 19 141,739,532 152,269,861315 5. Payables to employees 15,516,643 31,555,135316 6. Accrued expenses 20 625,089,554 367,849,188319 7. Other payables 21 208,997,995 308,083,120

330 II. Non-current liabilities 2,518,290,905 2,137,175,892333 1. Other long-term liabilities 22 12,784,909 4,318,682334 2. Long-term loans and debts 23 1,994,603,227 1,893,643,583335 3. Deferred tax liabilities 30.2 506,586,820 234,725,416336 4. Provision for severance allowance 4,315,949 4,488,211

400 B. OWNERS’ EQUITY 4,545,773,725 3,747,497,350

410 I. Capital 24 4,532,715,871 3,728,927,874411 1. Share capital 1,798,145,010 1,798,145,010412 2. Share premium 1,762,821,336 1,840,361,593 413 3. Consolidation reserve (287,054,990) (280,765,140)415 4. Treasury shares (30,091,699) (327,979,971)416 5. Foreign exchange differences 4,984,285 2,734,772 417 6. Investment and development fund 8,622,737 8,622,737 418 7. Financial reserve fund 22,528,069 22,528,069 420 8. Undistributed earnings 1,252,761,123 665,280,804

430 II. Other fund 24 13,057,854 18,569,476431 1. Bonus and welfare fund 13,057,854 18,569,476



Ms Ho Thi Kim Chi Mr Vo Truong SonChief Accountant Deputy General Director

23 October 2009

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INTERIM CONSOLIDATED INCOME STATEMENTS B02-DN/HNfor the three-month and nine-month periods ended 30 September 2009

VND’000

Code ITEMS Notes

2009 2008

Quarter III (July to

September)

Quarters I, II & III (January to September)


September)


01 1. Revenues from sale of goods and rendering of services 26.1 1,232,219,437 3,282,054,836 233,198,629 1,600,329,386

02 2. Deductions 26.1 (2,364,289) (4,345,482) (458,879) (4,394,419)

10 3. Net revenues from sale of goods and rendering of services 26.1 1,229,855,148 3,277,709,354 232,739,750 1,595,934,967

11 4. Costs of goods sold and services rendered 27 (631,352,838) (1,724,720,557) (57,968,044) (832,779,626)

20 5. Gross profit from sale of goods and rendering of services 598,502,310 1,552,988,797 174,771,706 763,155,341

21 6. Income from financial activities 26.2 11,500,520 47,059,806 5,553,677 433,807,835

22 7. Expenses from financial activities 28 (49,067,182) (160,160,010) (41,030,718) (69,934,221)23 In which: Interest expenses (47,386,420) (155,146,614) (37,502,887) (64,065,903)

24 8. Selling expenses (42,034,060) (88,266,842) (31,985,236) (61,986,875)

25 9. General and administration expenses (40,074,299) (116,006,352) (63,878,024) (98,164,347)

30 10. Operating profit 478,827,289 1,235,615,399 43,431,405 966,877,733

31 11. Other income 29 3,935,641 36,751,791 572,327 6,547,903

32 12. Other expenses 29 (2,215,680) (20,329,483) (26,691,578) (29,725,917)

40 13. Other gain (loss) 29 1,719,961 16,422,308 (26,119,251) (23,178,014)

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INTERIM CONSOLIDATED INCOME STATEMENTS (continued) B02-DN/HNfor the three-month and nine-month periods ended 30 September 2009

VND’000

Code ITEMS Notes

2009 2008


September)



September)


50 14. Profit before tax 480,547,250 1,252,037,707 17,312,154 943,699,719

51 15. Current corporate income tax expense 30.1 (5,688,454) (6,409,779) 16,757,301 (175,492,382)

52 16. Deferred corporate income tax expense 30.2 (132,198,923) (308,806,755) 4,696,948 (59,455,104)

60 17. Net profit for the period 342,659,873 936,821,173 38,766,403 708,752,233 Attributable to:18.1 Minority interest 22,185,671 79,619,102 2,092,597 51,151,33618.2 The Company's shareholders 320,474,202 857,202,071 36,673,806 657,600,897

70 18. Basic earnings per share (VND) 25 1,807 4,842 207 3,657


23 October 2009

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INTERIM CONSOLIDATED CASH FLOW STATEMENT B03-DN/HNfor the nine-month period ended 30 September 2009

VND’000

Code

ITEMS Notes

Quarters I, II & III (January to

September 2009)


September 2008)

I. CASH FLOWS FROM OPERATING ACTIVITIES

01 Net profit before tax 1,252,037,707 943,699,719Adjustments for:

02 Depreciation and amortisation 10, 11, 16 83,434,215 28,470,36903 Provisions 311,063 13,209,36504 Unrealised foreign exchange losses - 1,913,18805 Profits from investing activities (65,821,348) (406,453,588)06 Interest expense 28 155,146,614 64,065,903

08 Operating income before changes in working capital 1,425,108,251 644,904,956

09 Increase in receivables (442,601,568) (1,723,898,096)10 Increase in inventories (127,560,090) (864,550,137)11 Increase in payables 136,918,274 1,900,188,73912 Increase in prepaid expenses (4,990,635) (12,494,365)13 Interest paid (142,711,329) (114,228,924)14 Corporate income tax paid 30.1 (190,446,376) (147,304,374)16 Other cash outflows from operating

activities (5,511,622) (19,370,696)

20 Net cash from operating activities 648,204,905 (336,752,897)

II. CASH FLOWS FROM INVESTING ACTIVITIES

21

Purchases and construction of fixed assets and long-term prepaid expenses

10, 11, 12, 16 (421,392,567) (378,662,422)

22 Proceeds from disposals of fixed assets 29,124,481 2,137,771

25 Loans to other entities and payments for purchase of debt instruments of other entities (481,855,591) (849,749,943)

26 Collections from investments in other entities - 200,802,515

27 Interests and dividends received 16,293,799 7,050,386

30 Net cash used in investing activities (857,829,878) (1,018,421,693)

III. CASH FLOWS FROM FINANCING ACTIVITIES

31 Proceeds from disposal of treasury shares 248,393,276 -

32 Capital redemption (30,091,699) (263,836,901)33 Borrowings received 2,343,731,369 1,709,144,90234 Borrowings repaid (2,016,569,246) (657,224,539)36 Dividends paid 24.1 (269,721,752) (1,122)

40 Net cash from financing activities 275,741,948 788,082,340

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INTERIM CONSOLIDATED CASH FLOW STATEMENT (continued) B03-DN/HNfor the nine-month period ended 30 September 2009

VND’000

Code

ITEMS Notes


September 2009)


September 2008)

50 Net increase in cash during the period 66,116,975 (567,092,250)

60 Cash at beginning of year 531,085,394 1,290,907,575

61 Impact of exchange rate fluctuation - (1,456,864)

70 Cash at end of period 4 597,202,369 722,358,461

IV. NON-CASH TRANSACTIONLand held for development reclassified into inventories 15 306,434,133 -


23 October 2009

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS B09-DN/HNas at and for the three-month and nine-month periods ended 30 September 2009

8


Hoang Anh Gia Lai Joint Stock Company (“The Company”) is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments:

First amendment 5 August 2006Second amendment 20 December 2006Third amendment 10 January 2007Fourth amendment 7 March 2007Fifth amendment 1 June 2007Sixth amendment 19 June 2007Seventh amendment 20 December 2007Eighth amendment 29 August 2008Ninth amendment 24 November 2008Tenth amendment 13 May 2009Eleventh amendment 11 June 2009Twelfth amendment 15 September 2009

The Company has 27 subsidiaries and 5 associates (collectively referred to herein as “the Group”). The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sport and entertainment activities.

The Company’s head office is located at 15 Truong Chinh Street, Phu Dong Ward, Pleiku City, Gia Lai Province, Vietnam.

2. BASIS OF PREPARATION

2.1. Statement of compliance

The interim consolidated financial statements of the Group, expressed in thousands ofVietnam dong (“VND’000”), are prepared in accordance with Decision No. 15/2006/QD-BTC and the Vietnamese 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 Standards on Accounting (Series 1);



► Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and

► Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).

Accordingly, the accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and related notes, 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 financial position and results of operations and cash flows of the Group in accordance with accounting principles and practices generally accepted in countries other than Vietnam.

F-99

rk090128

Highlight


NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued) B09-DN/HNas at and for the three-month and nine-month periods ended 30 September 2009

9



The Company’s registered accounting documentation system is the General Journal system.



2.4. Fiscal year

The Company’s fiscal year starts on 1 January and ends on 31 December. The Company has also prepared its interim consolidated financial statements for the three-month and nine-month periods ended 30 September 2009.


The interim consolidated financial statements comprise the financial statements of theCompany and its subsidiaries (“the Group”) as at and for the three-month and nine-monthperiods ended 30 September 2009. The financial statements of the subsidiaries are prepared for the same period as the Company, using accounting policies consistent with the Company’s accounting policies. Adjustments are made for any difference in accounting policies that may exist to ensure consistency between the subsidiaries and the Company.


Minority interests represent the portion of profit or loss and net assets not held by the Company’s shareholders and are presented separately in the interim consolidated income statements and in the interim consolidated balance sheet.

The subsidiaries are consolidated from the date on which the Company obtains control and cease to be consolidated from the date on which the Company ceases to control. Where there is a loss of control over the subsidiaries, the consolidated financial statements still include results for the period of the reporting year during which the Company has control.

Except for subsidiaries acquired under common control which are accounted for under the pooling of interests method, other subsidiaries have been included in the interim consolidated financial statements using the purchase method of accounting that measures the subsidiaries’ assets and liabilities at their fair value at the acquisition date.


3.1. Investment in associates

Investments in associates are accounted for using the equity method of accounting. An associate is an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture.

Under the equity method, investments in associates are carried in the interim consolidated balance sheet at cost plus post acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to the associates is included in the carrying amount of the investments and is amortized over ten years. The interim consolidated income statement reflects the Group’s share of the results of operations of the associate. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes and discloses this, when applicable, in its equity. Unrealised profits and losses resulting from transactions between the Group and associates are eliminated to the extent of the interest in the associate.

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10


3.1 Investment in associates (continued)

The financial statements of the associates are prepared for the same accounting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

3.2. Investments in securities and other investments

Investments in securities and other investments are stated at their acquisition cost.Provision is made for any diminution in value of the marketable investments at the balance sheet date.

3.3. Cash


3.4. Receivables

Receivables are presented in the interim consolidated financial statements at the carrying amounts due from customers and other debtors, along with the provision for doubtful debts.

The provision for doubtful debts represents the estimated loss due to non-payment arising on receivables that were outstanding at the balance sheet date. Increases and decreases to the provision balance are recorded as general and administration expense in the interim consolidated income statement.

3.5. Inventories






- cost of direct materials and labour plus attributable overheads based on the normal level of activities

Apartments for sale under construction are carried at the lower of cost and net realizable value. Costs include all expenditures including borrowing costs, directly attributable to the development and construction of the apartments. Net realizable value represents current selling price less estimated cost to complete and estimated selling and marketing expenses.

Land held for development which is presented as part of “Other long-term investment” is carried at the lower of cost and net realizable value. Costs include all expenditures including borrowing costs directly related to the acquisition, site clearance, and land compensation.Net realizable value represents estimated current selling price less anticipated cost of disposal.


An inventory provision is created for the estimated loss arising due to the impairment (through diminution, damage, obsolescence, etc) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the interim consolidated income statement.

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11


3.7. Fixed assets


The costs of tangible fixed assets consist of their purchase prices and any directly attributable costs of bringing the tangible fixed assets to working condition for their intended use. Expenditures for additions, improvements and renewals are capitalised and expenditures for maintenance and repairs are charged to the interim consolidated income statement when incurred. When tangible fixed assets are sold or retired, their cost and accumulated depreciation are removed from the consolidated balance sheet and any gain or loss resulting from their disposal is included in the interim consolidated income statement.

3.8. Land use rights

Land use rights are recorded as intangible assets when the Group has the land use right certificates. The costs of land use rights comprise all directly attributable costs of bringing the land to the condition available for use.



Machinery and equipment 5 - 12 yearsBuildings and structures 10 - 50 yearsMotor vehicles 8 - 20 yearsOffice equipment 8 - 10 yearsPerennial trees 11 - 12 yearsLand use rights 45 yearsSoftware 5 yearsOther assets 8 - 15 years

3.10. Leased assets

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement coveys a right to use the asset.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.

Rentals under operating leases are charged to the interim consolidated income statementon a straight-line basis over the term of the lease.


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 a particular asset are capitalized as part of the cost of the asset.

3.12. Long-term prepaid expenses

Long-term prepaid expenses, which comprise mainly costs of tools and supplies issued for use for period of more than one year and prepaid land leases, are amortised over the period in which economic benefits are generated in relation to these expenses.

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12


3.13. Payable and accruals

Payable and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group.


The severance payment to employee is provided at the end of each reporting year for all employees who have more than one year in service at the rate of a half of monthly salary for each working year up to 31 December 2008 in accordance with the Labour Code and related implementing guidance.




Transactions in currencies other than the Company’s reporting currency of VND are recorded at the inter-bank exchange rates ruling at the date of the transaction. At period-end, monetary assets and liabilities denominated in foreign currencies are revalued at exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the interim consolidated income statement.

The assets and liabilities of foreign entities are translated into VND at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rates for the period. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.




Financial reserve fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside to protect the Company's normal operations from business risks or losses, or to prepare for unforeseen losses or damages and force majeure, such as fire, economic and financial turmoil of the country or elsewhere etc.


Investment and development fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to approval by shareholders at the Annual General Meeting. This fund is set aside for use in the Company’s expansion of its operation or in-depth investments.


Bonus and welfare fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and improvement of the employees’ material and spiritual benefits.

F-103



13




Sale of apartments

For apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. For apartments sold before completion of construction where the Group has material obligations to complete the apartment project and where the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the revenue and associated costs are recognised as the related obligations are fulfilled by reference to the stage of completion at the balance sheet date. Cost of apartments sold before completion is determined based on actual land, land development and construction costs and estimated costs to complete the project. The estimated costs to complete the sold apartments are accrued in the balance sheet. Actual expenditures are charged to this accrual account as incurred.

This revenue recognition policy which is a generally accepted accounting principle in Vietnam and other jurisdictions has been applied consistently with the previous year.


Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

Sale of goods


Rental income

Rental income arising from operating leases is accounted for on a straight line basis over the lease terms on ongoing leases.


Revenue from rendering of services is recognized when the services are rendered and is stated net of discounts, allowances and non refundable taxes.

Interest


3.19. Taxation

Current tax

Current tax assets and liabilities for the current and prior years 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 by the balance sheet date.

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14


3.19. Taxation (continued)

Deferred tax



► where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

► in respect of taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carried forward of unused tax credit and unused tax losses, to the extent that it is probable that taxable profits will be available against which deductible temporary differences, carried forward of unused tax credit and unused tax losses can be utilised, except :

► where the deferred tax asset arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

► in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Previously unrecognised deferred income tax assets are re assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date.



4. CASH

VND’000

30 September 2009 31 December 2008

Cash in banks 586,926,362 526,543,713 Cash on hand 10,238,871 4,533,050Cash in transit 37,136 8,631

TOTAL 597,202,369 531,085,394

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15


VND’000


Receivable from sale of apartments 1,644,035,498 270,484,995 Trade and service receivables 154,458,300 124,501,111Construction receivable 127,472,617 324,316,216

TOTAL 1,925,966,415 719,302,322


VND’000


Advances to contractors 188,177,394 419,196,572Advances to suppliers of goods and services 157,779,691 100,369,690 Advances for acquisition of land and real estate projects 14,784,500 139,301,259

TOTAL 360,741,585 658,867,521


VND’000


Short-term loans to the employees (i) 56,876,438 72,465,924Receivable from disposal of investments (ii) 18,650,602 383,650,602 Receivable from sales of land use rights 1,496,508 -Loan to a company - 59,800,000Advance to employee for establishment of a new subsidiary - 20,400,000 Dividend to BOM - 425,125Others 120,506,310 70,711,191

TOTAL 197,529,858 607,452,842

(i) These loans are unsecured, have term of repayments ranging from three to twelve months from the drawdown date and bear interest rates which are based on the market interest rate and adjusted every six months.

(ii) This represents the remaining receivable in connection with the disposal of investments in Giai Viet Joint Stock Company by a subsidiary of the Company in 2008.

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16

8. INVENTORIES

VND’000


Apartments for sale under construction 1,751,326,671 1,487,430,756 Finished goods 54,752,824 67,823,888 Merchandise goods 42,058,749 12,665,587 Goods in transit 163,723 3,024,409 Work in process 94,908,225 122,302,209Of which from:

Manufacturing 55,659,960 94,169,867Construction contract 31,276,171 24,762,309 Rendered services 7,972,094 3,370,033

Raw materials 148,567,332 101,747,945Construction materials 14,307,091 53,883,702Tools and supplies 3,894,682 3,576,391

TOTAL 2,109,979,297 1,852,454,887

Except for the Golden House apartment project with total carrying value of VND’000 145,872,532 as at 30 September 2009, all other apartments for sale under construction including the associated land have been mortgaged to secure the Group’s outstanding borrowings.


VND’000


Business advances to employees 43,555,668 44,291,924Short-term deposits 17,333,903 493,398Others 100,315 -

TOTAL 60,989,886 44,785,322

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VND’000

Machineriesand equipments

Buildings and structures

Motor vehicles

Office equipment

Perennial trees

Other assets Total

Cost

Balance, 31 December 2008 147,367,422 486,899,686 54,186,799 4,226,270 6,615,322 7,679,765 706,975,264

Additions 75,368,473 103,448,879 42,578,129 4,016,306 20,000 14,504,722 239,936,509

Disposal (1,448,699) (5,258,893) (922,681) - - - (7,630,273)

Balance, 30 September 2009 221,287,196 585,089,672 95,842,247 8,242,576 6,635,322 22,184,487 939,281,500

Accumulated depreciation

Balance, 31 December 2008 (39,659,530) (38,943,019) (11,408,273) (1,310,191) (604,901) (1,881,392) (93,807,306)Increase (17,145,114) (12,503,224) (5,950,110) (1,438,110) (124,872) (753,093) (37,914,523)

Disposal 199,016 2,704,014 826,189 6,002 - 145,017 3,880,238

Balance, 30 September 2009 (56,605,628) (48,742,229) (16,532,194) (2,742,299) (729,773) (2,489,468) (127,841,591)

Net carrying amount

Balance, 31 December 2008 107,707,892 447,956,667 42,778,526 2,916,079 6,010,421 5,798,373 613,167,958

Balance, 30 September 2009 164,681,568 536,347,443 79,310,053 5,500,277 5,905,549 19,695,019 811,439,909

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VND’000

Land use rightsComputer

software Total

Cost

Balance, 31 December 2008 107,789,386 5,110,644 112,900,030Addition 3,155,738 436,785 3,592,523

Disposal (28,221,644) (22,399) (28,244,043)

Balance, 30 September 2009 82,723,480 5,525,030 88,248,510

Accumulated amortisation

Balance, 31 December 2008 (829,247) (186,422) (1,015,669)

Amortisation charge for the period (136,778) (123,855) (260,633)

Balance, 30 September 2009 (966,025) (310,277) (1,276,302)

Net carrying amount

Balance, 31 December 2008 106,960,139 4,924,222 111,884,361

Balance, 30 September 2009 81,757,455 5,214,753 86,972,208

During the period, the Company’s subsidiary, Hoang Anh - Quang Minh Rubber JSC, has disposed a parcel of its land use rights for a total proceeds of VND’000 30,448,530 (refer to Note 29).


VND’000


Office for lease 658,645,817 636,040,265Rubber and acacia aneura plantations 457,090,953 98,808,467Hydro-power plants 269,964,233 84,170,201 Building and structures 31,866,026 315,577,805Other construction works 44,295,974 10,772,073

TOTAL 1,461,863,003 1,145,368,811

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13. INVESTMENTS IN SUBSIDIARIES

In Quarter I, the Company has spun off one of its branches, Hoang Anh Gia Lai Football Club Branch, and transformed into a joint-stock company named Hoang Anh Gia Lai Sport Joint Stock Company with charter capital of VND 115 billion, of which the Company owns70%.

The Company has also established V&H Corporation (Lao) Co Ltd with registered capital of USD 10 million, of which the Company owns 80%. This subsidiary’s business is to develop apartments, hotels and rubber plantation in Laos.

In Quarter II, the Company’s subsidiary, Hoang Anh Housing Construction and Development Joint Stock Company (“HAH”) has acquired the 24% minority interest in Phu Hoang Anh Joint Stock Company (“PHA”), a subsidiary, from Phu Long Company Limited for a consideration of VND’000 229,320,000. This acquisition has increased the ownership of HAH in PHA’s equity from 70% to 94%. The excess of the purchase consideration over the net assets of PHA of VND’000 108,674,941 at the acquisition date has been recognised in the consolidated balance sheet as part of the cost of HAH’s land currently under development.

In Quarter III, the Company has entered into the following business acquisitions:

► The Company has made capital contribution of VND’000 30,600,000 to acquire 51% interest in the charter capital of Song Da Ban Me Joint Stock Company, which is located in Daklak Province. The current principal business activities of Song Da Ban Me Joint Stock Company are to manufacture concrete and trading of cement. It is in process to start the construction and development of some hydro-power plants.

► The Company’s subsidiary, Hoang Anh Dak Lak Joint Stock Company, has acquired 50% interest in the charter capital of Dai Lam Construction and Trade Company Limited with total consideration of VND’000 1,500,000. The current principal business activity of Dai Lam Construction and Trade Company Limited is to develop rubber plantations.

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14. INVESTMENTS IN ASSOCIATES

Name of associate Business activities


Number of shares % holding

Carrying valueVND’000


Carrying value

VND’000

Thanh Da Investment Construction and Real Estate JSC

Real estate 24,000,000 24.00 162,192,563 24,000,000 24.00 155,528,079

Hoang Anh – Mang Yang Rubber JSC

Plantation 1,815,608 40.00 34,205,587 1,815,608 40.00 18,156,080


Electric design and consultancy

432,406 25.00 3,424,480 432,406 25.00 4,324,058

Binh Dinh Constrexim JSC Construction of hydro-power plant

1,000,000 39.20 14,881,408 1,000,000 39.20 13,601,693

Hoang Anh Gia Dinh JSC Real estate 750,000 25.00 7,453,313 750,000 25.00 7,457,531

TOTAL 222,157,351 199,067,441

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VND’000


Land held for development 1,386,814,396 1,376,784,678Investments in Business Cooperation Contracts for development of real estate projects 492,748,978 495,478,208Loans to the Laos Government 198,755,080 -Other investments 16,173,661 19,406,813

TOTAL 2,094,492,115 1,891,669,699

In Quarter II, certain land held for development costing VND’000 306,434,133 has been reclassified into the inventories upon the development and construction of apartments for sale on this land.

Loans to the Laos Government represent the interest-free loans in accordance with the Memorandum of Understanding signed with the Laos Government on 4 April 2008. The loans will be settled in kind in the form of wood or wood products within three years.


VND’000

Quarter I, II & III (January to

September 2009)

Quarter I, II & III (January to

September 2008)

Balance, 1 January 331,880,376 304,999,611Increase 75,771,994 46,592,782Decrease (198,133,393) -Amortisation charge for the period (50,578,682) (34,937,932)

Balance, 30 September 158,940,295 316,654,461

In June 2009, the Company’s subsidiary, Phu Hoang Anh Joint Stock Company, cancelled the lease of a parcel of land with Phu Long Company Limited, its former minority shareholder. Phu Long Company Limited has returned the unamortised portion of the prepaid land rentals.


VND’000


Short-term loans Loans payable to banks 823,100,201 1,138,294,093Loans payable to other entities and individuals 5,667,500 20,344,528

828,767,701 1,158,638,621Current portion of long-term bank loans (Note 23) 600,543,252 44,469,853

TOTAL 1,429,310,953 1,203,108,474

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VND’000


Advances from trade customers 47,187,685 16,659,795Deposits from customers for sale of land 5,000,000 -Deposits from customers for sale of apartments - 81,766,345

TOTAL 52,187,685 98,426,140


VND’000


Value-added tax payable 136,516,886 13,703,956 Corporate income tax (Note 30.1) 4,904,254 135,946,896

Personal income tax 276,159 166,781

Special sales tax 42,233 23,413

Others - 2,428,815

TOTAL 141,739,532 152,269,861

20. ACCRUED EXPENSES

VND’000


Subcontractor construction costs 520,242,782 300,624,735Apartment maintenance costs 49,731,159 5,284,365 Interest expense 41,470,152 53,905,437Penalties for late delivery of apartments to customers 607,133 4,006,514

Operating costs 13,038,328 4,028,137

TOTAL 625,089,554 367,849,188

21. OTHER PAYABLES

VND’000


Payables to related companies 105,863,708 86,594,225Payable to other companies 53,902,394 83,100,000Payable for land acquisition 24,941,456 106,020,495Payable for late transfer of the ownership of apartments to customers 11,661,090 16,696,006Remunerations payable to BOM members - 1,075,740

Others 12,629,347 14,596,654

TOTAL 208,997,995 308,083,120

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VND’000


Deposits received from selling Certified Emissions Reduction (CER) 8,695,590 -Deposits received from tenants for office leases 4,089,319 4,318,682

TOTAL 12,784,909 4,318,682


VND’000


Long-term bank loans 1,395,146,479 938,113,436Bonds 1,200,000,000 1,000,000,000

TOTAL 2,595,146,479 1,938,113,436

In whichCurrent portion (Note 17) 600,543,252 44,469,853 Non-current portion 1,994,603,227 1,893,643,583

23.1. Bonds

The Company has issued VND straight bonds aggregating to VND 1,000 billion in 2008. All bonds are secured by the land use rights of Hoang Anh River View and Kinh Te Bridge projects of the Group, and apartments under construction of Hoang Anh River View project of the Group valued at VND’000 1,821,783,170. The arrangers of the bond issuance are The Bank for Investment and Development of Vietnam (“BIDV”) and BIDV Security Company Limited. Details were as follows:

In September 2008, the Company issued VND 550 billion and VND 100 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 30 September 2010 and 30 September 2011, respectively. The VND 550 billion bond bears interest rate which is equivalent to 20.50% in the first interest payment periodwhich will fall on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam in the following periods. The VND 100 billion bond bears interest rate which is equivalent to 21.00% in the first interest payment period which will fall on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam in the following periods. Interest is payable on 30 March and 30 September annually. The proceeds are used to finance the ongoing real estate, hydropower and rubber plantation projects of the Group.

In December 2008, the Company issued another VND 100 billion and VND 250 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 31 December 2010 and 31 December 2011, respectively. The VND 100 billion bond bears interest rate of 12.25% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate announced by the State Bank of Vietnam minus (-) a margin of 0.5% p.a. The VND 250 billion term bond bears interest rate of 12.75% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate per annum announced by the State Bank of Vietnam. The interest is payable in semi-annual basis which on 30 June and 31 December. The proceeds are used to finance the working capital requirements and the ongoing real estate, hydropower and rubber plantation projects of the Group.

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23.1. Bonds (continued)

During the period, Phu Hoang Anh Joint Stock Company, the subsidiary, issued VND 200 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 22 May 2012. The bond bears interest rate of 11% p.a. in the first interest payment period and a floating rate equivalent to the average twelve-month term deposits plus a margin of 3.5% per annum of Housing Development Commercial Joint Stock Bank of Ho Chi Minh City. The interest is payable in semi-annual basis. The proceeds are used to finance the ongoing real estate projects of the subsidiary.

On 5 October 2009, the Company’s shareholders have passed a resolution to approve the issuance of 1,450,000 units of convertible bonds to some existing shareholders at face value of VND 1,000,000 per unit. The bonds are interest-free and will be convertible into the Company’s ordinary shares after one year or earlier at the option of the holders. The conversion price is discounted by 20% of the average closing market price of the Company’s shares within 15 continuous days before the last purchase registration date and will be adjusted according to the effect of the bonus shares issuance on 6 October 2009.Subsequently, the Company generated a total proceeds of VND’000 1,450,000,000 which will be used for the construction of apartments, development of rubber plantation, hydro-power plants and working capital requirements of the Group.

23.2. Long-term bank loans

Long-term bank loans represent borrowings from local banks, most of which bear interest at floating rates while the others bear interest rates ranging from 7.8% to 13.2% per annum. The loans are all secured largely by the Group’s inventories and fixed assets.

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VND’000

Share capital

Share premium

Consolidation reserve

Treasury shares

Foreign exchange

differences

Investment and

development fund

Financial reserve

fundUndistributed

earningsBonus and

welfare fund Total

Beginning balance, 31 December 2008 1,798,145,010 1,840,361,593 (280,765,140) (327,979,971) 2,734,772 8,622,737 22,528,069 665,280,804 18,569,476 3,747,497,350 Net profit for the period - - - - - - - 857,202,071 - 857,202,071Dividends paid - - - - - - - (269,721,752) - (269,721,752)Foreign exchange differences - - - - 2,249,513 - - - - 2,249,513 Payment of bonus and welfare funds - - - - - - - - (5,511,622) (5,511,622)Consolidation reserve - - (6,289,850) - - - - - - (6,289,850)Treasury shares purchased - - - (30,091,699) - - - - - (30,091,699)Treasury shares reissued - (77,540,257) - 327,979,971 - - - - - 250,439,714

Ending balance, 30 September 2009 1,798,145,010 1,762,821,336 (287,054,990) (30,091,699) 4,984,285 8,622,737 22,528,069 1,252,761,123 13,057,854 4,545,773,725

In April 2009, the Company distributed 1,500 VND/share dividend (aggregating to VND’000 269,721,752) from profit after tax in 2008.

In September 2009, the Company’s subsidiaries have disposed all of the Company’s shares purchased previously with total proceeds of VND’000 248,393,276 and recorded the associated loss against the share premium of the interim consolidated financial statements of the Group.

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24.1. Increase and decrease in owners’ equity (continued)

According to the Resolution of the Company’s shareholders dated 15 September 2009, the shareholders have approved the issuance of bonus shares to the existing shareholders at a ratio of 2:1 (2 existing shares will have 1 new share) using the 40% of the remaining 2008 undistributed earnings and 60% of the outstanding share premium, and the issuance of 1,000,000 bonus shares to its employees (equivalent to VND’000 10,000,000) using the bonus and welfare fund.

On 20 October 2009, the State Securities Commission announced its receipt of the complete documents for issuance of the bonus shares of the Company. Simultaneously, the Company has sent the notification to the Securities Custody Center and the Ho Chi Minh City Securities Exchange to inform the last registration date of 10 November 2009 to exercise the bonus share rights of the shareholders.

24.2. Shares


Shares Shares

Shares authorised to be issued 179,814,501 179,814,501

Shares issued and fully paid 179,814,501 179,814,501Ordinary shares 179,814,501 179,814,501

Treasury shares 512,290 2,792,135Ordinary shares 512,290 2,792,135

Outstanding shares 179,302,211 177,022,366Ordinary shares 179,302,211 177,022,366


During the period, the Company has repurchased its shares totalling 512,290 shares at an aggregate purchase price of VND’000 30,091,699.

25. BASIC EARNINGS PER SHARE


September)


September 2009)


September 2008)

Net profit attributable to ordinary equity holders of the parent (VND’000) 320,474,202 857,202,071 657,600,897

Weighted average number of ordinary shares during the period 177,338,513 177,023,711 179,814,501

Earnings per share (VND) 1,807 4,842 3,657

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27

26. REVENUES

26.1. Revenues from sale of goods and rendering of services

VND’000


September)


September 2009)


September 2008)

Gross revenues 1,232,219,437 3,282,054,836 1,600,329,386Of which:

Sale of apartments 985,338,714 2,572,117,035 941,817,156Sale of goods 125,066,796 302,013,353 233,431,510Revenue from construction contracts 79,946,165 298,903,946 239,156,160Revenue from services 41,867,762 109,020,502 185,924,560

LessSales returns (2,364,289) (4,293,868) (3,661,067)

Sales discount - (51,614) (733,352)

Net revenues 1,229,855,148 3,277,709,354 1,595,934,967

Of which:Sale of apartments 985,338,714 2,572,117,035 941,817,156Sale of goods 123,516,514 298,481,878 229,780,044Revenue from construction contracts 79,946,165 298,903,946 239,156,160Rendering of services 41,053,755 108,206,495 185,181,607

26.2. Income from financial activities

VND’000


September)


September 2009)


September 2008)

Interest income from deposits with banks 8,833,001 21,257,919 23,083,039Unrealised foreign exchange gains 1,475,208 1,475,208 -Realised foreign exchange gains 1,241,691 9,084,136 3,643,999Dividend income 241,028 566,096 3,474,618Interest income from loans to other companies 158,149 8,021,861 3,575,768Gain on disposal of investments in shares - - 400,000,045Share in net profit (loss) of associates (456,166) 6,589,910 -

Others 7,609 64,676 30,366

TOTAL 11,500,520 47,059,806 433,807,835

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28


VND’000


September)


September 2009)


September 2008)

Cost of apartments sold 486,959,080 1,290,799,822 420,871,158Cost of goods sold 72,033,703 209,001,028 174,102,111Cost of construction contracts 40,095,859 154,219,596 71,032,725Cost of services rendered 32,264,196 70,700,111 166,773,632

TOTAL 631,352,838 1,724,720,557 832,779,626


VND’000


September)


September 2009)


September 2008)

Interest expense on bank loans and bonds issued 47,386,420 155,146,614 64,065,903Realised foreign exchange loss 1,679,531 5,010,646 -

Others 1,231 2,750 5,868,318

TOTAL 49,067,182 160,160,010 69,934,221

29. OTHER INCOME AND EXPENSES

VND’000


September)


September 2009)


September 2008)

Other income 3,935,641 36,751,791 6,547,903Proceeds from disposal of fixed assets 490,973 493,330 2,137,771Sale of scrap materials 1,500,125 1,500,125 707,584Others 1,577,346 5,472,222 1,927,824Compensation received 367,197 652,606 1,774,724Gain on disposal of land - 28,633,508 -

Other expenses (2,215,680) (20,329,483) (29,725,917)Net carrying amounts of disposed assets (994,196) (19,107,999) (1,875,329)Others (887,524) (887,524) (3,228,631)Compensation paid (333,960) (333,960) (24,621,957)

OTHER GAIN (LOSS) 1,719,961 16,422,308 (23,178,014)

Gain on disposal of land pertains to the transfer during the period of land use rights by Phu Hoang Anh Joint Stock Company, the subsidiary, to Phu Long Company Limited, its former minority shareholder, and by Hoang Anh Quang Minh Rubber Joint Stock Company, the subsidiary, to a third party (refer to Note 11).

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29


The Group has the obligation to pay corporate income tax ("CIT") at the rate of 25% of taxable profits.

The Group’s tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the consolidated financial statements could be changed at a later date upon final determination by the tax authorities.

The current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using applicable tax rates that have been enacted by the balance sheet date.

The CIT expense for the period comprised of:

VND’000


September)


September 2009)


September 2008)

Deferred tax 132,198,923 308,806,755 175,492,382Current tax 5,688,454 6,409,779 59,455,104

TOTAL 137,887,377 315,216,534 234,947,486

30.1. Current tax

VND’000


September)


September 2009)


September 2008)

CIT payable at beginning of period 8,515,475 135,946,896 131,323,839CIT payable for the period 5,688,454 6,409,779 175,492,382Advance CIT payable on progress payments from customers (*) 11,325,352 52,993,955 -CIT paid during the period (20,625,027) (190,446,376) (147,304,374)

CIT payable at end of period 4,904,254 4,904,254 159,511,847

(*) This represents advance CIT payable computed 2% of cash advances received from customers in connection with sales of apartments during the period and in previous years in accordance with Circular No. 130/2008/TT-BTC dated 26 December 2008 issued by the Ministry of Finance.

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30


30.1. Current tax (continued)

The computation of current tax is as follows:

VND’000


September)


September 2009)


September 2008)

Profit before tax 480,547,250 1,252,037,707 943,699,719Adjustments to increase (decrease) accounting profitAdjustments to increase

Revenue from sale of apartments recognized under stage of completion in prior years and billed this period 14,454,922 68,538,629 -Cost from sale of apartments recognized under stage of completion in the current period 488,481,220 1,394,449,736 425,518,050Donations - - 16,749,340Land cost allocation 28,154,604 49,022,504 -Accrued expenses 78,874,645 44,137,581 111,213,705Expenses with inadequate supporting documents 64,150 627,907 7,775,280Loss from subsidiaries 14,875,005 52,613,504 68,649,710

Adjustments to decrease Revenue from sale of apartments recognized under stage of completion in the current period but not yet billed (982,583,754) (2,726,738,372) (941,817,156)Cost from sale of apartments recognized under stage of completion in prior years and billed this period (15,442,813) (66,701,886) -Dividend income - - (43,052)Share in loss (profit) of associates 456,166 (6,589,910) -Loss from disposal of treasury shares (79,586,695) (79,586,695) -Intra-group unrealised profit (27,238,724) (89,501,405) -

Others 2,204,228 1,115,094 (4,987,091)

Estimated taxable income (loss) 3,260,204 (106,575,606) 626,758,505

CIT at flat rate of 25% 815,051 815,051 175,492,382Under provision of CIT in previous year 4,873,403 5,594,728 -

Estimated current CIT for the period 5,688,454 6,409,779 175,492,382

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31


30.2. Deferred tax

The following comprise the Group’s deferred tax assets and the movements thereon, during the period.

VND’000

Interim consolidated balance sheet

Debit (credit) to consolidated

income statementQuarters I, II & III

(January to September 2009)

30 September 2009

31 December 2008

Deferred tax assetsTax losses of subsidiaries 49,999,052 8,345,259 (41,653,793)Unrealised intra-group profit (22,375,351) 30,458,774 52,834,125

Accrued expenses 39,829,304 12,600,368 (27,228,936)

67,453,005 51,404,401

Deferred tax liabilitiesNegative goodwill credited to the income statement 61,439,435 61,439,435Profit from apartment sale recognised under stage of completion but not yet taxable 498,141,340 173,285,981 324,855,359

559,580,775 234,725,416Advance CIT payable on advances from customers (Note 30.1) (52,993,955) -

506,586,820 234,725,416

Net deferred income tax debited to income 308,806,755


Significant transactions with related parties during the three-month period were as follows:

VND’000

Related parties Relationship Transactions Amount


Related company

Construction of apartments (50,992,025)Rental fee of Safomec building 117,091


Related company

Sales of goodsRental fee of Safomec building

43,883,94061,653

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32

31. TRANSACTIONS WITH RELATED PARTIES (continued)

Amounts due to and due from related parties at 30 September 2009 were as follows:

VND’000

Related parties Relationship TransactionsReceivables

(payables)

Trade receivables

Huynh De ConstructionCorporation

Related company

Subcontract work provided by the Group

79,343,673

Rental fee of Safomec building

40,817


Related company

Sales of goods 61,546,622

Other receivables


Related company

Temporary lending 5,445,627

Mr Doan Nguyen Duc Chairman Temporary lending 1,500,000

Advances to suppliers


Related company

Advances for construction work 13,432,717


Related company

Advances for construction work 5,445,627

Trade payables


Related company

Construction of apartments (102,524,609)

Other payables

Thanh Da Investment, Construction and Real Estates JSC

Associate company

Temporary loans (80,000,000)

32. COMMITMENTS

There have been no significant additional commitments arising during the three-month and nine-month periods ended 30 September 2009.

33. SUBSEQUENT EVENTS

There have been no significant events after the balance sheet date which would require adjustments or disclosures in the interim consolidated financial statements.


23 October 2009

F-123

Hoang Anh Gia Lai Joint Stock Company Report of the Board of Management and Audited consolidated financial statements 31 December 2009

F-124


CONTENTS Pages REPORT OF THE BOARD OF MANAGEMENT 1 - 3 AUDITED CONSOLIDATED FINANCIAL STATEMENTS Independent auditors’ report 4 Consolidated balance sheet 5 - 6 Consolidated income statement 7 Consolidated cash flow statement 8 - 9 Notes to the consolidated financial statements 10 – 49

F-125

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries REPORT OF THE BOARD OF MANAGEMENT

The Board of Management of Hoang Anh Gia Lai Joint Stock Company (“the Company”) presents its report and the consolidated financial statements of the Company and its subsidiaries (“the Group”) as at and for the year ended 31 December 2009. THE COMPANY The Company is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments: First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008 Ninth amendment 24 November 2008 Tenth amendment 13 May 2009 Eleventh amendment 11 June 2009 Twelfth amendment 15 September 2009 Thirteenth amendment 18 November 2009 Fourteenth amendment 23 December 2009 As at 31 December 2009, the Company has 32 subsidiaries and 4 associates (31 December 2008: 25 subsidiaries and 5 associates). The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sports and entertainment activities. The Company’s head office is located at No. 15 Truong Chinh Street, Phu Dong Commune, Pleiku City, Gia Lai Province, Vietnam. RESULTS AND DIVIDENDS

Current year Prior year VND’000 VND’000 Net profit for the year attributable to the Company’s shareholders 1,188,853,263 700,304,969 Cash and stock dividends declared and paid during the year 1,166,231,322 598,581,130 Retained earnings at the end of the year 1,084,004,248 665,280,804 EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events after the balance sheet date which would require adjustments or disclosures in the consolidated financial statements.

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THE BOARD OF MANAGEMENT The members of the Board of Management during the year and at the date of this report are:

Name Position Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Mr Doan Nguyen Thu Member Mr Le Hung Member Mr Nguyen Van Minh Member Ms Vo Thi Huyen Lan Member Mr Vu Huu Dien Member (appointed on 5 October 2009) Mr Tran Viet Anh Member (resigned on 5 October 2009) THE BOARD OF DIRECTORS The members of the Board of Directors during the year and at the date of this report are:

Name Position Mr Nguyen Van Su General Director Mr Doan Nguyen Thu Deputy General Director Mr Le Van Ro Deputy General Director Mr Tra Van Han Deputy General Director Mr Nguyen Van Minh Deputy General Director Mr Vo Truong Son Deputy General Director AUDITORS The auditors, Ernst & Young Vietnam Limited, have expressed their willingness to accept reappointment. STATEMENT OF MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the state of affairs of the Group and of its results and cash flows for the year. In preparing those consolidated financial statements, management is required to:

u select suitable accounting policies and then apply them consistently;

u make judgements and estimates that are reasonable and prudent;

u state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and

u prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

Management confirms that the Group has complied with the above requirements in preparing the consolidated financial statements. Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the financial position of the Group and to ensure that the accounting records comply with the Vietnamese Accounting Standards and 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.

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APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS We hereby approve the accompanying consolidated financial statements which give a true and fair view of the financial position of the Group as at 31 December 2009 and of the results of its operations and cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements. On behalf of the Board of Management: Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Pleiku City, Gia Lai Province, Vietnam 25 January 2010

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Reference: 60752790/13688593 INDEPENDENT AUDITORS’ REPORT The Shareholders and the Board of Management We have audited the accompanying consolidated balance sheet of Hoang Anh Gia Lai Joint Stock Company (“the Company”) and its subsidiaries (collectively referred to as “the Group”) as at 31 December 2009, and the related consolidated income statement and consolidated cash flow statement for the year then ended and the notes thereto (collectively called “the consolidated financial statements”) as set out on pages 5 to 49. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Basis of opinion We conducted our audit in accordance with Vietnamese and International Standards on Auditing applicable in Vietnam. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2009 and of the results of its operations and its cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with the relevant statutory requirements.

Ernst & Young Vietnam Limited

Maria Cristina M. Calimbas Nguyen Xuan Dai Deputy General Director Auditor-in-charge Registered Auditor Registered Auditor Certificate No. N.1073/KTV Certificate No. 0452/KTV Ho Chi Minh City, Vietnam 25 January 2010

F-129

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries CONSOLIDATED BALANCE SHEET B01-DN/HN as at 31 December 2009

VND’000

Code Assets Notes Ending

balance Beginning

balance

100 A. Current assets 7,403,555,092 4,524,792,761

110 I. Cash and cash equivalents 1,944,228,950 531,085,394 111 1. Cash 4 1,944,228,950 531,085,394

120 II. Short-term investments 157,571,210 - 121 1. Short-term investments 5 157,571,210 -

130 III. Current accounts receivable 2,956,113,887 1,984,810,093 131 1. Trade receivables 6 1,694,730,505 719,302,322 132 2. Advances to suppliers 7 870,124,080 658,867,521 135 3. Other receivables 8 392,823,227 607,452,842 139 4. Provision for doubtful debts (1,563,925) (812,592)


150 V. Other current assets 132,490,434 156,742,867 151 1. Short-term prepaid expenses 32,418,109 2,702,455 152 2. Value-added tax deductibles 43,369,234 109,255,090 154 3. Tax and other receivables from the

State 36,986 -

158 4. Other current assets 10 56,666,105 44,785,322

200 B. Non-current assets 4,792,656,182 4,346,767,572

220 I. Fixed assets 2,517,309,488 1,870,421,130 221 1. Tangible fixed assets 11 671,688,850 613,167,958 222 Cost 795,779,397 706,975,264 223 Accumulated depreciation (124,090,547) (93,807,306) 227 2. Intangible fixed assets 12 94,463,918 111,884,361 228 Cost 96,080,465 112,900,030 229 Accumulated amortisation (1,616,547) (1,015,669) 230 3. Construction in progress 13 1,751,156,720 1,145,368,811

250 II. Long-term investments 2,061,446,000 2,090,737,140 252 1. Investments in associates 15.1 69,098,898 199,067,441 258 2. Other long-term investments 16 1,992,347,102 1,891,669,699

260 III. Other long-term assets 213,900,694 385,609,302 261 1. Long-term prepaid expenses 17 141,963,630 331,880,376 262 2. Deferred tax assets 31.2 69,237,539 51,404,401 268 3. Other long-term assets 2,699,525 2,324,525

270 Total assets 12,196,211,274 8,871,560,333

F-130

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries CONSOLIDATED BALANCE SHEET (continued) B01-DN/HN as at 31 December 2009

VND’000

Code Resources Notes Ending

balance Beginning

balance

300 A. Liabilities 7,068,556,748 4,672,353,582

310 I. Current liabilities 4,294,842,290 2,535,177,690 311 1. Short-term loans and borrowings 18 2,991,797,773 1,203,108,474 312 2. Trade payables 197,537,916 373,885,772 313 3. Advances from customers 19 44,397,490 98,426,140 314 4. Statutory obligations 20 265,774,014 152,269,861 315 5. Payables to employees 17,811,136 31,555,135 316 6. Accrued expenses 21 644,983,946 367,849,188 319 7. Other payables 22 132,540,015 308,083,120

330 II. Non-current liabilities 2,773,714,458 2,137,175,892 333 1. Other long-term liabilities 23 23,992,393 4,318,682 334 2. Long-term loans and debts 24 2,248,707,163 1,893,643,583 335 3. Deferred tax liabilities 31.2 499,210,181 234,725,416 336 4. Provision for severance allowance 1,804,721 4,488,211

400 B. Owners’ equity 4,711,500,209 3,747,497,350

410 I. Capital 25 4,694,914,864 3,728,927,874 411 1. Share capital 2,704,654,580 1,798,145,010 412 2. Share premium 1,223,971,061 1,840,361,593 413 3. Consolidation reserve (399,237,919) (280,765,140) 415 4. Treasury shares (30,091,699) (327,979,971) 416 5. Foreign exchange differences 20,463,787 2,734,772 417 6. Investment and development fund 8,622,737 8,622,737 418 7. Financial reserve fund 82,528,069 22,528,069 420 8. Undistributed earnings 1,084,004,248 665,280,804

430 II. Other funds 25 16,585,345 18,569,476 431 1. Bonus and welfare fund 16,585,345 18,569,476

500 C. Minority interest 416,154,317 451,709,401

440 Total liabilities and owners’ equity 12,196,211,274 8,871,560,333

Ms Ho Thi Kim Chi Mr Nguyen Van Su Chief Accountant General Director 25 January 2010

F-131

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries CONSOLIDATED INCOME STATEMENT B02-DN/HN for the year ended 31 December 2009

VND’000

Code Items Notes Current year Prior year



02 2. Deductions 27.1 (4,943,033) (4,401,358)



rendered 28 (2,358,546,997) (990,631,593)

20 5. Gross profit from sale of goods and rendering of services 2,006,761,724 890,112,814

21 6. Income from financial activities 27.2 199,381,768 438,618,705




30 10. Operating profit 1,721,773,327 1,032,472,151

31 11. Other income 30 48,461,912 12,717,959

32 12. Other expenses 30 (26,730,915) (39,031,852)

40 13. Other profit/(loss) 30 21,730,997 (26,313,893)

50 14. Profit before tax 1,743,504,324 1,006,158,258

51 15. Current corporate income tax expense 31.1 (137,652,012) (153,680,790)

52 16. Deferred corporate income tax

expense 31.2 (318,953,626) (87,134,691)

60 17. Net profit after tax 1,286,898,686 765,342,778 Attributable to: 17.1 Minority interest 98,045,423 65,037,809 17.2 The Company's shareholders 1,188,853,263 700,304,969

70 18. Basic earnings per share (VND) 26 4,432 2,615


F-132

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries CONSOLIDATED CASH FLOW STATEMENT B03-DN/HN for the year ended 31 December 2009

VND’000


I. Cash flows from operating

activities 01 Net profit before tax 1,743,504,324 1,006,158,258 Adjustments for:

02 Depreciation and amortisation 11, 12, 17 159,105,686 108,998,192 03 Provisions 963,447 600,000 04 Unrealised foreign exchange losses - 2,082,336 05 Profits from investing activities (196,435,954) (422,377,729) 06 Interest expense 29 207,443,514 88,500,954

08 Operating income before changes in working capital 1,914,581,017 783,962,011

09 Increase in receivables (339,054,195) (520,253,236) 10 Increase in inventories (168,204,732) (482,062,946) 11 Increase in payables 37,845,131 150,486,873 12 Decrease/(increase) in prepaid

expenses 66,934,106 (96,993,404) 13 Interest paid (189,041,621) (195,474,116) 14 Corporate income tax paid 31.1 (212,869,539) (149,057,733) 16 Other cash outflows from operating

activities (26,879,395) (29,882,347)

20 Net cash from/(used in) operating activities 1,083,310,772 (539,274,898)

II. Cash flows from investing

activities 21 Purchases and construction of fixed

assets (1,357,528,506) (1,056,650,067) 22 Proceeds from disposals of fixed

assets and other long-term assets 32,965,491 127,905,319 25 Payments for investments in other

entities (568,353,883) (778,089,748) 26 Proceeds from disposal of

investments in other entities 134,000,000 - 27 Interest and dividends received 85,997,296 23,363,313

30 Net cash used in investing activities (1,672,919,602) (1,683,471,183) III. Cash flows from financing

activities 31 Capital contribution and issuance of

shares 25.3 248,393,276 - 32 Capital redemption 25.3 (30,091,699) (327,979,971) 33 Borrowings received 4,720,800,925 2,695,583,825 34 Borrowings repaid (2,577,048,046) (1,061,691,238) 36 Dividends paid (359,302,070) (1,122) 37 Capital contribution of minority

shareholders in subsidiaries - 154,357,651


F-133

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries CONSOLIDATED CASH FLOW STATEMENT (continued) B03-DN/HN for the year ended 31 December 2009

VND’000


50 Net increase/(decrease) in cash 1,413,143,556 (762,476,936)

60 Cash at beginning of year 531,085,394 1,290,907,575

61 Impact of exchange rate fluctuation - 2,654,755

70 Cash at end of year 4 1,944,228,950 531,085,394


F-134

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B09-DN/HN as at and for the year ended 31 December 2009


Hoang Anh Gia Lai Joint Stock Company (“The Company”) is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments: First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008 Ninth amendment 24 November 2008 Tenth amendment 13 May 2009 Eleventh amendment 11 June 2009 Twelfth amendment 15 September 2009 Thirteenth amendment 18 November 2009 Fourteenth amendment 23 December 2009

As at 31 December 2009, the Company has 32 subsidiaries and 4 associates (31 December 2008: 25 subsidiaries and 5 associates). The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sports and entertainment activities. The Company’s head office is located at No. 15 Truong Chinh Street, Phu Dong Commune, Pleiku City, Gia Lai Province, Vietnam.

2. BASIS FOR PREPARATION

2.1 Statement of compliance

The consolidated financial statements of the Group, expressed in thousands of Vietnam dong (“VND’000”), are prepared in accordance with the Vietnamese Accounting System and Vietnamese Accounting Standards issued by the Ministry of Finance as per: u Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and

Promulgation of Four Vietnamese Standards on Accounting (Series 1); u Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and

Promulgation of Six Vietnamese Standards on Accounting (Series 2); u Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and

Promulgation of Six Vietnamese Standards on Accounting (Series 3); u Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and

Promulgation of Six Vietnamese Standards on Accounting (Series 4); and u Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and

Promulgation of Four Vietnamese Standards on Accounting (Series 5). Accordingly, the accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and related notes, 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 financial position and results of operations and cash flows of the Group in accordance with accounting principles and practices generally accepted in countries other than Vietnam.

F-135

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) B09-DN/HN as at and for the year ended 31 December 2009

2. BASIS FOR PREPARATION (continued)

2.2 Registered accounting documentation system

The applicable accounting documentation system is the General Journal system.

2.3 Fiscal year

The Company’s fiscal year starts on 1 January and ends on 31 December.

2.4 Accounting currency


2.5 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries (“the Group”) as at 31 December each period. The financial statements of the subsidiaries are prepared for the same period as the Company, using accounting policies consistent with the Company’s accounting policies. Adjustments are made for any difference in accounting policies that may exist to ensure consistency between the subsidiaries and the Company.


Minority interests represent the portion of profit or loss and net assets not held by the Company’s shareholders and are presented separately in the consolidated income statement and in the consolidated balance sheet.


Except for subsidiaries acquired under common control which are accounted for under the pooling of interests method, other subsidiaries have been included in the consolidated financial statements using the purchase method of accounting that measures the subsidiaries’ assets and liabilities at their fair value at the acquisition date.


3.1 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash at banks and short-term, highly liquid investments with an original maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.

3.2 Receivables


The provision for doubtful debts represents the estimated loss due to non-payment arising on receivables that were outstanding at the balance sheet date. Increases and decreases to the provision balance are recorded as general and administration expense in the consolidated income statement.

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3.3 Inventories



Raw and construction materials, tools and supplies and merchandise goods


- actual cost on a weighted average basis.

- cost of direct materials and labour plus attributable overheads based on the normal level of activities.


Land held for development which is presented as part of “Other long-term investment” is carried at the lower of cost and net realizable value. Costs include all expenditures including borrowing costs directly related to the acquisition, site clearance, and land compensation. Net realizable value represents estimated current selling price less anticipated cost of disposal.

3.4 Provision for obsolete inventories

An inventories provision is created for the estimated loss arising due to the impairment (through diminution, damage, obsolescence, etc) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement.

3.5 Fixed assets

Tangible and intangible fixed assets are stated at cost less accumulated depreciation and amortization.

The costs of fixed assets consist of their purchase prices and any directly attributable costs of bringing the fixed assets to working condition for their intended use.

Expenditures for additions, improvements and renewals are capitalised and expenditures for maintenance and repairs are charged to the consolidated income statement when incurred.

When fixed assets are sold or retired, their cost and accumulated depreciation are removed from the consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement.

Land use rights

Land use rights are recorded as intangible fixed assets when the Group has the land use right certificates. The costs of land use rights comprise all directly attributable costs of bringing the land to the condition available for use.

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3.6 Depreciation and amortisation

Depreciation and amortisation of fixed assets are calculated on a straight-line basis over the estimated useful life of each asset as follows:

Machinery and equipment 5 - 12 years Buildings and structures 10 - 50 years Motor vehicles 8 - 20 years Office equipment 3 - 10 years Perennial trees 11 - 12 years Land use rights 45 years Accounting software 5 years Other assets 8 - 15 years

3.7 Construction in progress

Construction in progress represents costs attributable directly to the construction of the Group’s buildings, offices for lease, hydro-power plants and rubber plantation which have not yet been completed as at the date of these consolidated financial statements.

3.8 Prepaid expenses

Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated balance sheet which mainly include prepaid land rentals and costs of tools and supplies. They are amortised over the period for which the amount are paid or the period in which economic benefit are generated in relation to these expenses.

3.9 Leased assets



Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over the term of the lease.

3.10 Borrowing costs


Borrowing costs that are directly attributable to the acquisition, construction or production of a particular asset are capitalized as part of the cost of the asset. Capitalization of borrowing costs is suspended during extended periods in which active development of the asset is interrupted unless such interruption is considered necessary. Capitalization of borrowing costs is ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

F-138



3.11 Investment in associates


Under the equity method, investments in associates are carried in the balance sheet at cost plus post acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to the associates is included in the carrying amount of the investments and is amortized over ten years. The income statement reflects the Group’s share of the results of operations of the associate. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes and discloses this, when applicable, in its equity. Unrealised profits and losses resulting from transactions between the Group and associates are eliminated to the extent of the interest in the associate.

The financial statements of the associates are prepared for the same accounting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

3.12 Investments in securities and other investments

Investments in securities and other investments are stated at their acquisition cost. Provision is made for any diminution in value of the marketable investments at the balance sheet date representing the excess of the acquisition cost over the market value at that date. Increases and decreases to the provision balance are recorded as finance expense in the income statement.

3.13 Payable and accruals

Payable and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group.

3.14 Provision for severance allowance

The severance payment to employee is accrued at the end of each reporting year for all employees who have more than 12 months in service at the rate equal to one-half of the monthly salary for each working year up to 31 December 2008 in accordance with the Labour Code and related regulations. From 1 January 2009, the Company pays unemployment insurance in accordance with Decree No.127/2008/ND-CP dated 12 December 2008.

3.15 Foreign currency transactions

Transactions in currencies other than the Company’s reporting currency of VND are recorded at the inter-bank exchange rates ruling at the date of the transaction. At year-end, monetary assets and liabilities denominated in foreign currencies are revalued at exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the consolidated income statement.

The assets and liabilities of foreign entities are translated into VND at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

F-139



3.16 Revenue recognition


Sale of apartments For apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. For apartments sold before completion of construction where the Group has material obligations to complete the apartment project and where the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the revenue and associated costs are recognised as the related obligations are fulfilled by reference to the stage of completion at the balance sheet date. Cost of apartments sold before completion is determined based on actual land, land development and construction costs and estimated costs to complete the project. The estimated costs to complete the sold apartments are accrued in the balance sheet. Actual expenditures are charged to this accrual account as incurred. This revenue recognition policy has been applied consistently with the previous year which is a generally accepted accounting principle in Vietnam and other jurisdictions.

Construction contracts Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable to be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.



Rendering of services Revenue from rendering of services are recognized when the services are rendered and is stated net of discounts, allowances and non refundable taxes.

Interest


F-140



3.17 Taxation

Current corporate income tax


Deferred corporate income tax



u where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

u in respect of taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.


u where the deferred tax asset arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

u in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.





F-141



3.18 Appropriation of net profit




Bonus and welfare fund Bonus and welfare fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and improvement of the employees’ material and spiritual benefits.

3.19 Earnings per share

Basic earnings per share amount is computed by dividing net profit for the year attributable to ordinary shareholders before any appropriation of bonus and welfare fund by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the Company (after adjusting for any interest on convertible bonds, net of tax) 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 the conversion of all the dilutive potential ordinary shares into ordinary shares.

3.20 Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss upon purchase, sale, issue or cancellation of the Company’s own equity instruments.

4. CASH

VND’000 Ending balance Beginning balance Cash on hand 6,110,243 4,541,681 Cash in banks 1,938,118,707 526,543,713

TOTAL 1,944,228,950 531,085,394

5. SHORT-TERM INVESTMENTS Short-term investments represent the net carrying value of Da Lat and Quy Nhon resorts which have been agreed to be disposed to a third party, pending completion of the legal procedures.

F-142




Receivable from sale of apartments 1,540,626,758 270,484,995 Trade and service receivables 139,319,364 124,501,111 Construction receivable 14,784,383 324,316,216

TOTAL 1,694,730,505 719,302,322 7. ADVANCES TO SUPPLIERS

VND’000


Advances to contractors 773,468,674 419,196,572 Advances to suppliers of goods and services 68,574,355 100,369,690 Advances for acquisition of land and real estate projects 28,081,051 139,301,259

TOTAL 870,124,080 658,867,521

Advances to contractors represents advances for construction of the Group’s real estate and hydro-power projects, of which advances to related companies amounted to VND’000 355,209,466 as at 31 December 2009 (31 December 2008: VND’000 320,044,448).


VND’000


Receivable from disposal of investment (i) 128,000,000 - Receivables from employees (ii) 74,971,330 20,400,000 Short-term loans to the employees (iii) 61,136,442 72,465,924 Loans to other companies (iv) 57,385,399 59,800,000 Accrued interest receivable from bank deposits 27,521,566 - Receivable from disposal of investment in Giai Viet Joint Stock Company - 383,650,602 Dividends receivable - 2,500,000 Advance dividends to shareholders - 425,125 Others 43,808,490 68,211,191

TOTAL 392,823,227 607,452,842

(i) Receivable from disposal of investment represents part of the proceeds from the

disposal of the Company’s equity interest in Thanh Da Investment Construction and Real Estate Joint Stock Company, an associate, for VND 262 billion. A gain recognised from this transaction amounted to VND 103 billion (Note 15.1 and 27.2).

F-143


8. OTHER RECEIVABLES (continued)

(ii) This represents advances to employees for assets acquisition and specific business

purposes of the Group. (iii) These loans are unsecured, have repayments term ranging from three to twelve months

from the drawdown date and bear interest based on the Company’s borrowing rate.

(iv) This includes unsecured loans due from Dak Srong Hydropower Construction Joint Stock Company amounting to VND’000 24,096,006 and other companies which bear interest based on the Company’s borrowing rate.

9. INVENTORIES

VND’000

Ending balance Beginning balance Apartments for sale under construction 1,806,305,701 1,487,430,756 Finished goods 96,183,765 67,823,888 Merchandise goods 49,131,285 12,665,587 Goods in transit 9,970,486 3,024,409 Work in process 119,973,449 122,302,209 Of which from:

Manufacturing 79,589,385 94,169,867 Construction contract 39,741,107 24,762,309 Rendered service 642,957 3,370,033

Raw materials 129,034,391 101,747,945 Construction materials 91,694 53,883,702 Tools and supplies 2,972,434 3,576,391

TOTAL 2,213,663,205 1,852,454,887

Except for the Golden House apartment project with total carrying value of VND’000 182,800,213 as at 31 December 2009, all other apartments for sale under construction including the associated land have been mortgaged to secure the Group’s outstanding borrowings (Notes 18 and 24).


VND’000

Ending balance Beginning balance Business advances to employees 47,785,437 44,291,924 Short-term deposits 8,757,210 493,398 Others 123,458 -

TOTAL 56,666,105 44,785,322

F-144



VND’000

Machinery and

equipment Buildings and

structures Motor

vehicles Office

equipment Perennial

trees Other

assets Total Cost

Beginning balance 147,367,422 486,899,686 54,186,799 4,226,270 6,615,322 7,679,765 706,975,264 Additions 95,674,197 120,503,523 69,079,397 2,451,844 20,000 1,422,343 289,151,304 Decrease (5,727,125) (183,771,300) (8,255,416) (25,428) - (2,567,902) (200,347,171)


Beginning balance 39,659,530 38,943,019 11,408,273 1,310,191 604,901 1,881,392 93,807,306 Additions 24,365,448 31,726,539 9,913,040 2,000,467 168,622 970,857 69,144,973 Decrease (1,196,761) (34,654,251) (1,003,970) (1,065,451) - (941,299) (38,861,732)

Ending balance 62,828,217 36,015,307 20,317,343 2,245,207 773,523 1,910,950 124,090,547 Net carrying amount


Ending balance 174,486,277 387,616,602 94,693,437 4,407,479 5,861,799 4,623,256 671,688,850

In which: Pledged/ mortgaged as loan security (Notes 18 and 24) 174,486,277 387,616,602 - - - - 562,102,879

The decrease of fixed assets mainly pertains to reclassification of the net carrying value of the Company’s two resort properties, namely Da Lat and Quy Nhon which have already been approved to be sold to a third party buyer pending completion of legal procedures. As at the date of this report, the transaction has not yet been completed.

F-145



VND’000

Land use rights Accounting

software Total Cost

Beginning balance 107,789,386 5,110,644 112,900,030 Addition 9,669,622 1,754,856 11,424,478 Decrease (28,221,644) (22,399) (28,244,043)


Beginning balance 766,175 249,494 1,015,669 Increase 586,419 17,010 603,429 Decrease - (2,551) (2,551)

Ending balance 1,352,594 263,953 1,616,547 Net carrying amount


Ending balance 87,884,770 6,579,148 94,463,918

In which: Pledged/mortgaged as loan security (Note 24) 87,884,770 - 87,884,770

During the year, the Company’s subsidiary, Hoang Anh - Quang Minh Rubber JSC, disposed part of its land use rights for a total proceeds of VND’000 30,448,530 (Note 30).


VND’000

Ending balance Beginning balance Offices for lease 663,550,389 636,040,265 Rubber and acacia aneura plantations 541,842,682 98,808,467 Hydro-power plants 445,607,334 84,170,201 Buildings, plants and factories 82,011,839 315,577,805 Other construction work 18,144,476 10,772,073

TOTAL 1,751,156,720 1,145,368,811

14. CAPITALISED BORROWING COSTS During the year, the Group has capitalised borrowing costs amounting to VND’000 151,513,542 (2008: VND’000 152,112,294). These are costs incurred on the bank loans used to finance the construction and development of fixed assets, apartment projects and acquisition of land for development.

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15. INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES

15.1 Investments in associates




Carrying value VND’000


Carrying value

VND’000

Hoang Anh - Mang Yang Rubber JSC Plantation 1,815,608 40.00

41,705,588 675,000 40.00 18,156,080


Electric design and consultancy 500,000 25.00

5,504,609 500,000 25.00 4,324,058

Binh Dinh Constrexim JSC Construction of hydro-power plant 1,000,000 39.20

14,431,170 1,000,000 39.20 13,601,693


Thanh Da Investment Construction and Real Estate JSC (i) Real estate - - - 24,000,000 24.00 155,528,079

TOTAL 69,098,898 199,067,441

(i) The Company has fully disposed its equity interest in this entity to Dai Tin A Chau One Member Company Limited for VND 262 billion and recognised a gain of VND 103 billion (Note 8 and 27.2).

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15. INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES (continued)

15.2 Investments in subsidiaries

During the year, the Company has spun off some of its branches and transformed into its subsidiaries as follows:

► Hoang Anh Gia Lai Football Club Branch was transformed into a joint-stock company named Hoang Anh Gia Lai Sport Joint Stock Company with charter capital of VND 115 billion, of which the Company and its subsidiaries own 70% and 30%, respectively.

► Hoang Anh Gia Lai Domestic Furniture Factory Branch, Hoang Anh Gia Lai Export Furniture Factory Branch, Hoang Anh Quy Nhon Furniture Factory Branch and Hoang Anh Saigon Furniture Factory Branch were transformed into a joint-stock company named Hoang Anh Gia Lai Furniture Joint Stock Company with charter capital of VND 100 billion, of which the Company owns 87%.

The Company also established during the year new subsidiaries as follows:

► Hoang Anh Gia Lai Road Construction Joint Stock Company was established with the charter capital of VND 6.48 billion, of which the Company owns 72.2%. The principal activities of this subsidiary are to build roads, houses, site clearance, exploitation of sand and stones, etc.

► V&H Corporation (Lao) Co Ltd was established with registered capital of USD 10 million, of which the Company owns 80%. This subsidiary’s business is to develop apartments, hotels and rubber plantations in Laos.

► Hoang Anh Far East Services Joint Stock Company was established with registered capital of VND’000 10,000,000, of which the Company owns 55%. The principal activities of this subsidiary are to provide real estate consultancy and management services.

The Company also undertook the following business acquisitions:

► The Company made capital contribution of VND 30.6 billion to acquire 51% interest in the charter capital of Song Da Ban Me Joint Stock Company, which is located in Daklak Province. The current principal business activities of Song Da Ban Me Joint Stock Company are to manufacture concrete and trading of cement. It is in process to start the construction and development of two hydro-power plants.

► The Company’s subsidiary, Hoang Anh Dak Lak Joint Stock Company, has acquired 50% interest in the charter capital of Dai Lam Construction and Trade Company Limited with total consideration of VND 1.5 billion. The current principal business activity of Dai Lam Construction and Trade Company Limited is to develop rubber plantations.

► The Company’s subsidiary, Hoang Anh Housing Construction and Development Joint Stock Company (“HAH”) acquired the 24% minority interest in Phu Hoang Anh Joint Stock Company (“PHA”), a subsidiary, from Phu Long Company Limited for a consideration of VND 229.32 billion. The acquisition increased the ownership of HAH in PHA’s equity from 70% to 94%. The excess of the purchase consideration over the net assets of PHA of VND 106 billion at the acquisition date has been recognised in the consolidated balance sheet as part of the cost of PHA’s land currently under development.

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15.2 Investments in subsidiaries (continued)

► The Company acquired additional 3,000,000 shares of Hoang Anh Gia Lai Hydropower Joint Stock Company (“HH”) and 1,200,000 shares of Hoang Anh Gia Lai Minerals Joint Stock Company (“HM”) from the existing shareholders of HH and HM for a consideration of VND 75 billion and VND 78 billion, respectively. These acquisitions have increased the Company’s ownership equity in these subsidiaries from 70% to 98.72% and from 75% to 99.13%, respectively. The excess of the purchase consideration over the net assets of HH and HM amounting to VND 45 billion and VND 67 billion at the acquisition dates, respectively, have been recognised as consolidation reserve in the consolidated balance sheet.

► The Company acquired additional 6% minority interest in Hoang Anh Me Kong Joint Stock Company (“MK”) from MK’s existing shareholders for a total consideration of VND 6 billion. This acquisition has increased the Company’s ownership in MK’s equity from 45% to 51%. The excess of the purchase consideration over the net assets of MK at the acquisition date has been recognised in the consolidated balance sheet as part of MK’s land currently under development.

► The Company’s subsidiary, Hoang Anh Housing Construction and Development Joint Stock (“HAH”) acquired additional 31% interest in Phuc Bao Minh Trading Construction Services Corporation (“PBM”), from an existing shareholder for a consideration of VND 60 billion. This acquisition has increased the ownership of HAH in PBM’s equity from 67% to 98%. The excess of the purchase consideration over the net assets of PBM at the acquisition date has been recognised in the consolidated balance sheet as part of the cost of PBM’s land currently under development.

Details of the Company’s subsidiaries as at 31 December 2009 are as follows:


Date of establishment or acquisition % holding

Real estate Hoang Anh Housing Construction and Development JSC

Ho Chi Minh City, Vietnam Operating 04/06/2007 99.90

Phu Hoang Anh JSC Ho Chi Minh City, Vietnam Operating 15/01/2007 94.00

Hoang Nguyen Investment Construction and Housing JSC

Ho Chi Minh City, Vietnam Operating 29/03/2007 89.00

Minh Tuan Company Limited Ho Chi Minh City, Vietnam Operating 22/06/2007 87.30

Hoang Anh Dak Lak JSC Dak Lak, Vietnam Operating 12/09/ 2007 61.13 Hoang Anh Me Kong Corporation Ho Chi Minh City,

Vietnam Operating 24/10/2007 51.00 Hoang Viet Investment JSC Ho Chi Minh City,

Vietnam Pre-operating 21/11/ 2007 100.00 Phuc Bao Minh Trading Construction Services Corporation

Ho Chi Minh City, Vietnam Pre-operating 04/10/ 2008 98.00

Minh Thanh Co Ltd Ho Chi Minh City, Vietnam Pre-operating 28/11/ 2008 97.00

Hoang Anh Incomex Co Ltd Ho Chi Minh City, Vietnam Pre-operating 2007 91.31

An Tien Co Ltd Ho Chi Minh City, Vietnam Pre-operating 10/01/ 2008 87.30

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15.2 Investments in subsidiaries (continued) Details of the Company’s subsidiaries as at 31 December 2009 are as follows:



Hoang Phuc Investment, Construction and Housing JSC

Ho Chi Minh City, Vietnam Pre-operating 03/10/ 2007 72.02

Hoang Anh Gia Lai (Bangkok) Co Ltd Bangkok, Thailand Pre-operating 2007 47.00 Energy Hoang Anh Dakbla Hydropower JSC Kontum, Vietnam Pre-operating 30/05/ 2007 100.00 Hoang Anh Gia Lai Hydropower JSC Gia Lai, Vietnam Pre-operating 05/06/ 2007 98.72 Hoang Anh - Phat Tai Hydroelectric JSC

Thanh Hoa, Vietnam Pre-operating 18/10/ 2007 88.64

Plantation Hoang Anh - Quang Minh Rubber JSC Gia Lai, Vietnam Operating 01/02/ 2007 57.50 Gia Lai Industrial Plantation JSC Gia Lai, Vietnam Pre-operating 09/09/ 2008 96.23 V&H Corporation (Lao) Co Ltd Attapeu, Laos Pre-operating 26/03/2009 80.00 Hoang Anh Attapeu Agricultural Development Co Ltd Attapeu, Laos Pre-operating 22/05/ 2008 80.00 Dai Lam Construction and Trade Co Ltd Dak Lak, Vietnam Pre-operating 17/08/2009 50.00 Mining HAGL Minerals JSC Gia Lai, Vietnam Pre-operating 08/12/ 2007 99.13 Quang Ngai Mineral JSC Quang Ngai,

Vietnam Pre-operating 23/02 2008 91.12 Gia Lai Mineral JSC Gia Lai, Vietnam Pre-operating 2007 61.48 Manufacturing Hoang Anh Gia Lai Furniture JSC Gia Lai, Vietnam Operating 28/09/2009 87.00 Song Da Ban Me JSC Dak Lak, Vietnam Operating 01/07/2009 51.00

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15.2 Investments in subsidiaries (continued)



Construction, trading and services Hoang Anh Gia Lai Sport JSC Gia Lai, Vietnam Operating 12/01/2009 100.00 Central HAGL JSC Da Nang, Vietnam Operating 06/07/ 2007 57.00 Hoang Anh Far East Co Ltd Ho Chi Minh City,

Vietnam Operating 03/10/2009 55.00 Hoang Anh Real Estate Management Services JSC

Ho Chi Minh City, Vietnam Operating 2007 51.00

HAGL Hospital JSC Gia Lai, Vietnam Pre-operating 07/05/ 2008 80.00 Hoang Anh Gia Lai Road Construction JSC Gia Lai, Vietnam Pre-operating 22/12/2009 72.20


VND’000

Ending balance Beginning balance Land held for development:

Minh Tuan project (i) 449,606,967 441,457,951 Binh Hien project (ii) 337,269,997 335,466,137 Phuc Bao Minh project (iii) 229,028,050 112,274,287 Hai Chau project (iv) 74,924,366 74,150,152 Minh Thanh project (v) 74,742,862 70,606,200 Thanh Khe project (vi) 48,276,000 - Phu Xuan project 4,000,000 - An Tien project - 309,390,348 Bangkok, Thailand - 33,439,603

Investments in (“BCC”)

Dai Nhan project (vii) 103,134,506 105,620,958 Tan Phong project (viii) 189,857,250 189,857,250 Hiep Binh Phuoc project (ix) 200,000,000 200,000,000

Loans to the Laos Government 266,120,201 - Investments in common shares 15,386,903 10,931,903 Other investments - 8,474,910

TOTAL 1,992,347,102 1,891,669,699

The land of Minh Tuan, Binh Hien, Hai Chau, Thanh Khe and Phu Xuan projects have been mortgaged to secure the Group’s outstanding borrowings (Notes 18 and 24).

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16. OTHER LONG-TERM INVESTMENTS (continued)

The Group acquired certain land for development of real estate projects in the future and entered into BCCs for real estate development as follows:

(i) This land will be used for construction of a complex including 150 villas and 150,000 square-meter high-class apartments in District 9, Ho Chi Minh City.

(ii) This land will be used to build a complex including 500,000 square-meter commercial centre, high-class apartments and office for lease at 2/9 Road, Da Nang City. The project has an area of land of 50,000 square meters.

(iii) The land will be used to construct an apartment building in Tan Phu District, Ho Chi Minh City.

(iv) The land will be used to construct an apartment building in Hai Chau District, Da Nang City.

(v) The land will be used to construct an apartment building in District 12, Ho Chi Minh City.

(vi) This land is under development as Thanh Khe Apartment project.

(vii) Hoang Anh Housing JSC, a subsidiary, and Dai Nhan Real Estate Investment and Trading JSC signed a BCC on 1 August 2007 to develop a Residential Area of 332,023 square meters at Phuoc Loc Village, Nha Be District, Ho Chi Minh City. Each party will equally make the capital contribution and share the profit or products from the BCC.

(viii) The Company has signed a BCC with Tan Thuan Investment and Construction Co., Ltd. to develop an apartment building on an area of 28,127 square meters in District 7, Ho Chi Minh City. Under the BCC, the Company has 45% interest in the project.

(ix) This investment has been contributed to the BCC between the Company and other parties including Van Phuc Real Estates Investment JSC, Dai Nhan Real Estates Investment and Trading JSC and Dong Nam Real Estates Investment and Trading JSC to develop Hiep Binh Phuoc Residential Area and Entertainment Park on an area of 170 hectares. In accordance with the BCC, a new entity will be established to manage the project in which the Company will hold 55% interest.

Loans to the Laos Government represent the interest-free loans in accordance with the Memorandum of Understanding signed with the Laos Government on 4 April 2008. The loans will be settled in kind in the form of wood or wood products within three years. Investments in common shares represent long-term investments of certain subsidiaries in common unlisted shares of entities where the Group does not have significant influence or control. These investments were previously made by the subsidiaries before being acquired by the Company.

F-152



VND’000 Current year Prior year Beginning balance 331,880,376 304,999,611 Addition 97,573,931 95,493,381 Decrease due to termination of land lease contract (198,133,393) - Amortization (89,357,284) (68,612,616)

Ending balance 141,963,630 331,880,376

In June 2009, the Company’s subsidiary, Phu Hoang Anh Joint Stock Company, terminated the lease of a parcel of land from Phu Long Company Limited, its former minority shareholder. Phu Long Company Limited has returned to the Company the unamortised portion of the prepaid land rentals.


VND’000


Convertible bonds 1,450,000,000 -

Short-term loans Loans payable to banks 842,197,137 1,138,294,093 Loans payable to other entities and individuals 57,000 20,344,528

842,254,137 1,158,638,621

Current portion of long-term bank loans (Note 24) 699,543,636 44,469,853

TOTAL 2,991,797,773 1,203,108,474

18.1 Convertible bonds On 5 October 2009, the Company’s shareholders approved the issuance of 1,450,000 units of convertible bonds to some investors at face value of VND 1,000,000 per unit. The bonds are interest-free and can be convertible into the Company’s ordinary shares after one year or earlier at the option of the holders. The conversion price was discounted by 20% of the average closing market price of the Company’s shares within 15 consecutive trading days before the last purchase registration date and will be adjusted according to the effect of any bonus shares issuance subsequently. The Company generated a total proceeds of VND’000 1,450,000,000 which will be used for the construction of apartments, development of rubber plantation, hydro-power plants and working capital requirements of the Group. As at 31 December 2009, no bond has been converted yet to ordinary shares.

F-153



18.2 Loans payable to banks


Saigon Thuong Tin Commercial Bank (Sacombank) 304,647,643 202,668,295 Bank for Foreign Trade of Vietnam (Vietcombank) 239,461,533 338,934,175 Bank for Investment and Development of Vietnam (BIDV) 175,540,593 534,604,426 Lao Viet Bank (LVB) 59,310,345 29,093,843 Vietnam International Commercial Bank (VIB) 38,146,995 - Agriculture and Rural Development Bank of Vietnam (Agribank) 25,090,028 25,000,000 Military Bank (MB) - 7,993,354

TOTAL 842,197,137 1,138,294,093

The Group obtained these loans to finance its working capital requirements. The terms and conditions of loans payable to banks follow: Interest rate (p.a.) Collateral assets

Sacombank 12.00% Unsecured

Vietcombank 12.00% Plant and machinery at the furniture, rubber and granite factories, and 90,911,900 shares of the Company in Hoang Anh

Construction and Development Housing JSC (a subsidiary)

BIDV 11.00%-12.00% Term deposits with BIDV of VND 100 billion and land use rights of 8,526 square meters

LVB 9.90% Unsecured

VIB 10.50% Land use rights in Can Tho City

Agribank 12.00% Houses at No. 303-305 Phan Dinh Phung Street, Phu Nhuan District, No. 5 Tran Cao Van, Phu Nhuan District and No. 8-10 Mai

Van Vinh, District 7, Ho Chi Minh City

F-154



VND’000 Ending balance Beginning balance Advances from trade customers 42,900,982 16,659,795 Deposits from customers for purchase of apartments

1,496,508 81,766,345

TOTAL 44,397,490 98,426,140



Corporate income tax (Note 31.1) 133,031,368 135,946,896 Value-added tax payable 130,553,105 13,703,956 Personal income tax 943,412 166,781 Other taxes 1,246,129 2,452,228

TOTAL 265,774,014 152,269,861 21. ACCRUED EXPENSES


Accrued construction costs for completion of the sold units of apartment 548,643,141 300,624,735 Interest expense 35,503,544 53,905,437 Apartment warranty costs 28,994,252 5,284,365 Penalties arising from late delivery of apartments to customers 18,982,400 4,006,514 Others 12,860,609 4,028,137

TOTAL 644,983,946 367,849,188 22. OTHER PAYABLES


Payable to other companies 53,188,942 83,100,000 Payables to employees 23,441,156 - Payable for land acquisition 18,259,456 106,020,495 Dividend payable 17,400,000 - Payable due to late transfer of the ownership of apartments to customers 7,649,096 16,696,006 Remunerations payable to BOM members - 1,075,740 Payable to related parties - 86,594,225 Others 12,601,365 14,596,654

TOTAL 132,540,015 308,083,120

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j 23. OTHER LONG-TERM LIABILITIES

VND’000


Deposits received from selling Certified Emissions Reduction (CER) 19,757,878 - Deposits received from tenants for office leases 4,234,515 4,318,682

TOTAL 23,992,393 4,318,682 24. LONG-TERM LOANS AND DEBTS

VND’000


Bonds 1,450,000,000 1,000,000,000 Long-term bank loans 1,498,250,799 938,113,436

TOTAL 2,948,250,799 1,938,113,436

In which Current portion (Note 18) 699,543,636 44,469,853 Non-current portion 2,248,707,163 1,893,643,583

24.1 Bonds

Bonds comprised of bonds amounting to VND 1,000 billion and VND 450 billion issued by the Company and its subsidiary, respectively, as follows: The Company issued VND straight bonds aggregating to VND 1,000 billion in 2008. All bonds are secured by the land use rights of Hoang Anh River View and Kinh Te projects of the Group, and apartments under construction of Hoang Anh River View project of the Group valued at VND’000 1,821,783,170. The arrangers of the bond issuance are The Bank for Investment and Development of Vietnam (“BIDV”) and BIDV Security Company Limited. Details were as follows:

u In September 2008, the Company issued VND 550 billion and VND 100 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 30 September 2010 and 30 September 2011, respectively. The VND 550 billion bond bears interest rate which is equivalent to 20.50% per annum (p.a.) in the first interest payment period which will fall on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam (“SBV”) minus (-) a margin of 0.5% p.a. in the following periods. The VND 100 billion bond bears interest rate which is equivalent to 21.00% p.a. in the first interest payment period which will fall on 30 March 2009 and 150% of the base rate announced by the SBV in the following periods. Interest is payable on semi-annual basis which on 30 March and 30 September. The proceeds are used to finance the ongoing real estate, hydropower and rubber plantation projects of the Group.

F-156



24.1 Bonds (continued) In December 2008, the Company issued another VND 100 billion and VND 250 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 31 December 2010 and 31 December 2011, respectively. The VND 100 billion bond bears interest rate of 12.25% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate announced by the SBV minus (-) a margin of 0.5% p.a in the following periods. The VND 250 billion term bond bears interest rate of 12.75% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate per annum announced by the SBV in the following periods. The interest is payable on semi-annual basis which on 30 June and 31 December. The proceeds are used to finance the ongoing real estate, hydropower and rubber plantation projects of the Group.

Phu Hoang Anh Joint Stock Company (“PHA”), the subsidiary, has issued VND straight bonds aggregating to VND 450 billion solely to Housing Development Commercial Joint Stock Bank of Ho Chi Minh City (“HDBank”) during the year. The bonds are secured by 37,624 square meters of land use rights at Lot 9, Nguyen Huu Tho Street, Phuoc Kien Ward, Nha Be District, Ho Chi Minh City and assets to be formed on this land. The proceeds are used to finance the ongoing real estate projects of the subsidiary. Details of these bonds are as follows: u VND 200 billion straight bonds at par value of VND 1 billion per unit which are

redeemable at par value by 22 May 2012. The bond bears interest rate of 11% p.a. in the first interest payment period and a floating rate equivalent to the average twelve-month term deposits plus (+) a margin of 3.5% p.a. of HDBank. The interest is payable on semi-annual basis.

u VND 250 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 31 December 2012 or at the time of repurchase by PHA. PHA has the right to repurchase these bonds before maturity after 2 years from the issuance date. The bond bears interest rate of 12% p.a. in the first interest payment period and a floating rate equivalent to the average twelve-month term deposits plus (+) a margin of 3.5% per annum of HDBank but not lower than 12% p.a. The interest is payable on semi-annual basis.

24.2 Long-term bank loans

Details are as follows:

VND’000 Ending balance Beginning balance Bank for Investment and Development of Vietnam (BIDV) 660,671,767 406,136,111 Bank for Foreign Trade of Vietnam (Vietcombank) 387,845,616 125,582,609 Saigon Thuong Tin Commercial Bank (Sacombank) 174,880,238 45,000,000 Ho Chi Minh City Housing Development Bank (HDB) 139,353,178 216,385,678 Agriculture and Rural Development Bank of Vietnam (Agribank) 100,000,000 100,000,000 Industrial and Commercial Bank of Vietnam (VietinBank) 35,500,000 41,500,000 Vietnam Development Bank (VDB) - 3,509,038 TOTAL 1,498,250,799 938,113,436

The Group obtained these loans mainly to finance the construction and development of hydropower projects, rubber plantation, apartment projects, hotels and resorts and purchases of machinery and equipment.

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24. LONG-TERM LOANS AND DEBTS (continued) 24.2 Long-term bank loans (continued)

The details of long-term bank loans follow:

VND’000

Name of banks Ending balance Term and

maturity date Interest rate Collateral

(Notes 9, 11 and 12)

BIDV, Gia Lai Branch

Loan Agreement No.01/2009/HDTD-DH, dated 28 October 2009

16,908,000 12 years 10.50% pa All assets formed from and financed by

this loan

Loan agreement No 01/2009/HDTD-DH dated 27 November 2009

14,800,000 Maturity by 27 September 2020

150% of base rate

All assets formed from and financed by

this loan

Loan Agreement No. 01/2008/HD, dated 5 September 2008

29,720,501

Repayment within 60 months from the

first drawdown including four

instalments commencing from

March 2010

150% of base rate

Machinery financed by this loan

Loan Agreement No. 01/2004/HD, dated 25 August 2004

24,864,573

108 months from the first drawdown,

comprising a 24-month grace period

and a 84-month repayment period

12-month deposit rate plus

2.40% p.a.

All assets of Hoang Anh Gia Lai Hotel

which were formed from and financed by

this loan

BIDV, Gia Dinh Branch

Loan Agreement No. 135/2007/0000294, dated 9 April 2007

442,855,000

A credit limit of VND 449 billion for

a term of 72 months from the

first drawdown

VND 12-month saving interest

+ 0.40% p.a.

Right to use land and the total assets

at New Saigon Apartment formed from and financed

by the loan BIDV, Binh Dinh branch

Loan Agreement No. 01/2005/HD

39,329,533 96 months from drawdown date,

maturity date

10.50% p.a Land use rights, construction

equipment & tools

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VND’000

Name of banks Ending balance

Term and maturity date Interest rate

Collateral (Notes 9, 11 and 12)

BIDV, Dak Lak branch Loan agreement No.01/2008/HĐTD, dated 12 August 2008

75,968,856

5 years from the contract date

VND 12-month saving interest +

4.00 % p.a.

Assets formed from and financed by this

loan Medium term Loan agreement No.01/2007/HĐTD, dated 8 August 2007

5,996,212 5 years 13.20% p.a. for 2007, and subject

to BIDV’s announcement

subsequently


loan

Medium term Loan agreement No.01/2009/HĐTD, dated 20 January 2009

5,285,000 5 years 12.75% p.a. until 30 June 2009, and subject to

BIDV’s announcement

subsequently


loan

Long term Loan agreement No.01/2009/HĐTD, date 6 August 2009

4,944,092 10 years 10.50% p.a. until 31 December

2009, and subject to BIDV’s

announcement subsequently


loan

Vietcombank, Gia Lai Branch

Loan Agreement No. 140/05/NHNT, dated 18 May 2005

3,047,894


comprising a 24-month grace period and a 96-

month repayment period

Effective rate at the drawdown

date

All assets of Da Nang Plaza Building

which were formed from and financed

by this loan and the attached land use

rights

Loan Agreement No. 45/08, dated 1 April 2008

80,897,812

36 months from signing date. The repayment will be

made annually and the first repayment

will be due on 1 Apr 2009.

9.00% p.a. and subject to

periodic adjustments

Machines and spare parts specified in

Contract No. 146/HAGL-PM/2007

between the Company and

Powermax Machinery Company

Loan Agreement No. 01/2009/HAGLH-HĐTD ,date 20 March 2009

202,380,642




Base rate plus 3% p.a.

All assets formed from DakSrong 2

Hydro-power project

Loan Agreement 02/2009/HAGLH-HĐTD, date 5 August 2009

69,400,763




Base rate plus 3.40% p.a.

All assets formed from DakSrong 2A

Hydro-power project

F-159



VND’000




Vietcombank, Quy Nhon Branch

Loan Agreement No.327/HDTD, dated 25 December 2003

19,250,000




Floating interest rate

All assets of Hoang Anh Quy Nhon

Resort which were formed from and

financed by this loan

Vietcombank, Phu Tai Branch

141/HĐTD (20 March 2009)

5,322,174 60 months from the first drawdown

10.50% p.a. Future assets with current carrying

value of VND’000 7,818,000

374/HĐTD (29 June 2009)



value of VND’000 1,950,000

283/HĐTD (16 September 2009)



value of VND’000 10,806,451

192/HĐTD (23 June 2008)

980,000 60 months from the first drawdown

10.50% p.a. Land lease rights

158/HĐTD (13 July 2006)


10.50% p.a. Fixed assets with carrying value of

VND’000 2,907,034 Sacombank, Da Nang Branch

Loan Agreement No. 7683, dated 6 August 2007

43,593,750

120 months, comprising 32


December 2009

13.20% p.a. for the six first

months; subsequently 13-

month deposit rate plus 0.45%

per month

All land area and assets associated

with the land at Hai Chau District, Da

Nang City

Loan Agreement No. 10270, dated 28 May 2009

76,774,037 Repayment within 72 months from the

drawdown date

0.875% per month for the first

six months; and subsequently 13-


per month

Certain land held for development in Binh

Hien Ward; Bau Thac Gian and Hao Hai Ward which are

all located in Da Nang City

Loan agreement LD 0931400065, dated 10 November 2009

45,000,000 96 months from the drawdown date

10.56% p.a. Land at No 2, Phan Lang buliding, Da

Nang City

Several loan agreements in June 2009


date

10.32% p.a. Vehicles financed by the loans

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VND’000

Name of banks Ending balance Term and

maturity date Interest rate Collateral

(Notes 9, 11 and 12) Vietinbank, Gia Lai Branch Loan Agreement No. 15/HDTD, dated 5 February 2005

35,500,000

96 months, comprising 32

quarterly instalments

commencing from 25 March

2007

12- month deposit rate plus 3% p.a.

All assets of Hoang Anh Da Lat Resort which were formed from and financed

by this loan

Agribank, District 9 Branch

Loan Agreement No. 01307055, dated 10 August 2007

100,000,000 A credit limit of VND 130 billion for

60 months from the drawdown

date

12.60% p.a. All assets of Phuoc Long B project

HDBank

Loan Agreement No. 639/07, dated 19 July 2007

139,353,178

A credit limit of VND 400 billion

for 60 months from the

drawdown date with a 24-month

grace period

Effective interest rate of HDBank

Land use rights at lot No. 9 Nguyen Huu Tho Street, Phuoc

Kien Commune, Nha Be District , Ho Chi

Minh City

Total 1,498,250,799

F-161


25. SHAREHOLDERS’ EQUITY

25.1 Increase and decrease in shareholders’ equity

VND’000

Share capital Share premium Consolidation

reserve Treasury

shares

Foreign exchange

differences

Investment and

development fund

Financial reserve

fund Undistributed

earnings Bonus and

welfare fund Total

Beginning balance 1,798,145,010 1,840,361,593 (280,765,140) (327,979,971) 2,734,772 8,622,737 22,528,069 665,280,804 18,569,476 3,747,497,350 Issuance of new shares by way of stock dividends during the year 896,509,570 (537,905,742) - - - - - (358,603,828) - - Bonus shares for employees 10,000,000 - - - - - - - (10,000,000) - Net profit for the year - - - - - - - 1,188,853,263 - 1,188,853,263 Transfer to funds - - - - - - 60,000,000 (90,000,000) 30,000,000 - Payment of bonus and welfare - - - - - - - (21,984,131) (21,984,131) Consolidation reserve - - (118,472,779) - - - - (46,908,975) - (165,381,754) Repurchases of shares - - - (30,091,699) - - - - - (30,091,699) Disposal of treasury shares - (78,484,790) - 327,979,971 - - - - - 249,495,181 Foreign exchange differences - - - - 17,729,015 - - - - 17,729,015 Cash dividend - - - - - - - (269,721,752) - (269,721,752) Remuneration for members of the Board of Management and the Audit Committee - - - - - - - (4,895,264) - (4,895,264)

Ending balance 2,704,654,580 1,223,971,061 (399,237,919) (30,091,699) 20,463,787 8,622,737 82,528,069 1,084,004,248 16,585,345 4,711,500,209

During the year, the Company declared and paid a cash dividend at 1,500 VND per share (total dividend amount was VND’000 269,721,752) from profit after tax of the year 2008. Based on the result of opinion collection from shareholders by letters summarized on 15 September 2009, the Company’s shareholders approved the issuance of bonus shares to existing shareholders at the ratio of 2:1 (2 existing shares for 1 new share), of which 40% would be funded from retained earnings of the year 2008 and the 60% would be taken from share premium fund. The shareholder also approved the issuance of 1,000,000 shares to employees funded from the bonus and welfare fund. Based on the allocation list from Vietnam Securities Depository, the Company issued a total of 89,650,957 shares to existing shareholders and 1,000,000 bonus shares to employees.

F-162


25. SHAREHOLDERS’ EQUITY (continued)

25.2 Shares

Current year Prior year Shares Shares Shares authorised to be issued 270,465,458 179,814,501


Treasury shares 512,290 2,792,141 Ordinary shares held by the Company 512,290 - Ordinary shares held by the subsidiaries - 2,792,141



In September 2009, the Company’s subsidiaries have disposed all of the Company’s shares purchased previously with total proceeds of VND’000 248,393,276 and recorded the associated loss against the share premium in the consolidated financial statements of the Group.

During the year, the Company has repurchased its shares totalling 512,290 shares at an aggregate purchase price of VND’000 30,091,699.

26. EARNINGS PER SHARE

The following table shows the income and share data used in the basic and diluted earnings per share calculations:

Current year Prior year (restated)

Net profit attributable to ordinary equity holders of the parent (VND’000) 1,188,853,263

700,304,969

Interest on convertible bond - - Net profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution (VND’000) 1,188,853,263

700,304,969

Weighted average number of ordinary shares during the year 268,250,552 267,783,507 Weighted average number of potential shares from convertible bonds 2,658,741 - Weighted average number of ordinary shares adjusted for the effect of dilution 270,909,293 267,783,507

Earnings per share Basic earnings per share 4,432 2,615 Diluted earnings per share 4,388 2,615 The basic earnings per share of the prior year was adjusted for the effect of the bonus shares issued at the ratio of 2:1 in November 2009.

F-163


27. REVENUES


VND’000

Current year Prior year


Sale of apartments 3,373,859,483 1,230,883,934 Sale of goods 543,253,583 439,220,045 Revenue from construction contracts 319,242,570 106,054,942 Revenue from services 133,896,118 108,986,844

Less (4,943,033) (4,401,358) Sales returns (4,943,033) (3,740,052) Sales discounts - (661,306)

Net revenues 4,365,308,721 1,880,744,407 Of which:

Sale of apartments 3,373,859,483 1,230,883,934 Sale of goods 538,519,063 435,479,993 Revenue from construction contracts 319,242,570 106,054,942 Rendering of services 133,687,605 108,325,538


VND’000


Gain on disposal of equity investment (Note 8 and 15.1) 102,889,197 400,000,045 Interest income from bank deposits 53,197,663 23,363,313 Income from trust investments 16,768,800 Interest income from loans to individuals 11,024,678 5,494,000 Foreign exchange gains 7,450,806 5,827,554 Share of net profit of associates 5,142,260 3,897,679 Dividend 1,916,715 - Others 991,649 36,114

TOTAL 199,381,768 438,618,705


VND’000 Current year Prior year

Cost of apartments sold 1,681,180,646 485,217,698 Cost of goods sold 384,391,396 348,113,820 Cost of construction contracts 171,498,379 62,906,502 Cost of services rendered 121,476,576 94,393,573 TOTAL 2,358,546,997 990,631,593

F-164



VND’000


Interest expense on loans 207,443,514 88,500,954 Foreign exchange loss 5,368,425 2,397,789 Others 618,566 4,899,200

TOTAL 213,430,505 95,797,943 30. OTHER INCOME AND EXPENSES

VND’000


Other income 48,461,912 12,717,959 Gain on disposal of land 28,633,508 - Sales of scrap materials 9,992,765 4,583,259 Proceeds from disposal of fixed assets 4,331,983 2,553,361 Compensation received 3,115,992 2,689,711 Contract transfer fee income - 1,673,636 Others 2,387,664 1,217,992 Other expenses 26,730,915 39,031,852 Net carrying amounts of disposed assets 16,459,788 8,071,883 Cost of scrap materials 4,143,431 1,498,001 Compensation paid 3,531,558 24,843,957 Loss of goods - 2,275,461 Others 2,596,138 2,342,550

Net profit/(loss) 21,730,997 (26,313,893)

Gain on disposal of land pertains to the transfers during the period of land use rights by Phu Hoang Anh Joint Stock Company, a subsidiary, to Phu Long Company Limited, its former minority shareholder, and by Hoang Anh Quang Minh Rubber Joint Stock Company, a subsidiary, to a third party (Note 12).

F-165



The Group has the obligation to pay corporate income tax ("CIT") at the rate of 25 percent of taxable profits. The Group’s tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the consolidated financial statements could be changed at a later date upon final determination by the tax authorities. The current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using applicable tax rates that have been enacted by the balance sheet date. The CIT expense for the year comprised of:


Current tax

CIT expense for the year (Note 31.1) 134,664,495 153,680,790 Additional CIT from prior year 2,987,517 -

137,652,012 153,680,790 Deferred tax (Note 31.2) 318,953,626 87,134,691

TOTAL 456,605,638 240,815,481

31.1 Current CIT


CIT payable at beginning of year 135,946,896 131,323,839 CIT payable for the year 137,652,012 153,680,790 Advance CIT payable on progress payments from customers (*)

72,301,999

-

CIT paid during the year (212,869,539) (149,057,733)

CIT payable at end of year 133,031,368 135,946,896

(*) This represents advance CIT payable computed at 2% of cash advances received from customers in connection with sales of apartments during the current and previous years in accordance with Circular No. 130/2008/TT-BTC dated 26 December 2008 issued by the Ministry of Finance.

F-166



31.1 Current CIT (continued)

The computation of CIT for the year is as follows:


Profit before tax 1,743,504,324 1,006,158,258 Adjustments to increase (decrease) accounting profit Adjustments to increase

Revenue from sale of apartments recognized under stage of completion in prior years but was taxable in the current year 1,031,956,167 361,017,359 Cost from sale of apartments recognized under stage of completion in the current year but was not yet taxable 1,695,652,999 745,104,564 Cost of non-taxable construction work rendered 164,920,172 - Land cost allocation at the consolidation level 76,259,873 - Intra-group unrealized profit (109,109,170) 121,835,095 Accrued expenses 183,504,104 50,401,470 Losses of subsidiaries 44,422,616 33,647,613 Non-deductible cost of disposal of an associate 9,110,803 - Non-deductible expenses 6,341,899 7,852,888 Donations - 2,515,000

Adjustments to decrease Revenue from sale of apartments recognized under stage of completion in the current year but was not yet taxable (3,343,133,037) (1,438,248,490) Cost from sale of apartments recognized under stage of completion in prior years and was taxable in the current year (658,205,379) (337,320,330) Non-taxable revenue of construction work rendered (241,748,669) - Share of profit in associates (5,142,260) (3,897,679) Dividend received (1,804,491) (42,962) Last year’s accrued expenses paid in the current year (45,741,081) - Minority interest’s share of loss on disposal of treasury shares (3,622,915) Others (8,507,974) (162,821)

Adjusted profit before loss carried forward 538,657,981 548,859,965 Tax loss brought forward - -

Estimated current taxable profit 538,657,981 548,859,965

Estimated current CIT at rate 25% 134,664,495 153,680,790

F-167



31.2 Deferred CIT

The following comprise the Group’s deferred tax assets and liabilites and the movements thereon, during the year and the previous year.

VND’000

Consolidated balance sheet Debit (credit) to current year consolidated

income statement Ending

balance Beginning

balance

Deferred tax assets

Tax losses of subsidiaries 19,450,913 8,345,259 (11,105,654) Unrealized intra-group profit 3,910,600 30,458,774 26,548,174 Accrued expenses 45,876,026 12,600,368 (33,275,658)


Negative goodwill credited to the consolidated income statement 61,439,435 61,439,435 - Profit from apartment sale recognised under stage of completion but was not yet taxable 510,072,745 173,285,981 336,786,764

571,512,180 234,725,416 Advance CIT payable on advances from customers (Note 31.1) (72,301,999) -

499,210,181 234,725,416


F-168



Significant transactions with related parties during the year were as follows:

VND’000

Related parties Relationship Transactions Amounts


Related company

Construction of New Saigon and River View apartments

for the Group 130,831,744 Subcontract work provided by

the Company’s An Phu Branch 72,046,294

Sale of goods from the Group 32,471,828 Truc Thinh Trading and Services Company Limited

Related company

Construction of New Saigon apartments for the Group

130,823,162

Advances received for construction of Phu Hoang

Anh apartments for the Group 150,000,000 Sale of goods from the Group 85,936,083


Associate Construction of hydro-power plants and hospital for the Group 54,416,628

Amounts due to and due from related parties at the balance sheet date were as follows:

VND’000

Related parties Relationship Transactions Receivables

(Payables)

Trade receivables Huynh De Construction Corporation

Related company Subcontract work provided by the Group 3,906,766


Related company Sale of goods 51,798,518

Advances to suppliers Huynh De Construction Corporation

Related company Advances for construction work 201,037,747


Related company Advances for construction work 153,000,000

Binh Dinh Constrexim JSC Associate Advances for

construction work 1,171,719

F-169



VND’000


(Payables)

Other receivables

Truc Thinh Trading and Service Company Limited

Associate company

Disposal of wood 5,445,627

Mr Doan Nguyen Duc Chairman Reimbursements of

expenses 3,668,719

Hoang Anh Gia Dinh JSC Associate

company Capital overpayment 2,500,000 Trade payables Huynh De Construction Corporation

Related company


(35,070,158)

Truc Thinh Trading and Service Company Limited

Related company


(1,022,635)


Associate Design fee (8,027,909)


Associate Purchase of goods (5,161,060)

Remunerations for the members of Board of Directors (“BOD”), Board of Management (“BOM”) and the Board of Control (“BOC”) and the Board’s secretary are as follows:

VND’000


Amount expensed during the year 4,895,264 3,266,093

F-170


33. COMMITMENTS

Operating lease commitment The Group leases Safomec building for its offices in Ho Chi Minh City. The minimum future lease commitments as at 31 December 2009 were as follows:

VND’000

Within

one year

More than one year

to five years More than five years Total

Office lease 3,033,660 13,348,104 92,829,996 109,211,760

The Group also leases parcels of land in Vietnam to build factories, football facilities, hotels and for perennial trees plantation. However, as at the date of these consolidated financial statements, the Group has not been able to obtain the lease rates of these parcels of land from the relevant authorities. Accordingly, it is not possible to estimate the minimum future lease payable for these parcels of land. The details of these lands are as follows:

Project / branch Location

Surface (square meter)

Contract Number

Contract date

Lease term

(years)

Domestic furniture factory

Gia Lai province, Vietnam

20,000 192/HĐ-TĐ 17/4/2001 30

Domestic furniture factory


43,438 65/HĐTĐ 20/12/2006 36

Granite factory and Football Club


44,559 67/HĐTĐ 20/12/2006 46

Granite factory Gia Lai province, Vietnam

35,919 64/HĐTĐ 20/12/2006 40

Rubber plantation Gia Lai province, Vietnam

1,449,822 60/HĐTĐ 20/12/2006 36

Acacia aneura plantation


1,465,800 61/HĐTĐ 20/12/2006 36

Exporting furniture factory


34,020 63/HĐTĐ 24/10/2006 37

Hoang Anh Gia Lai Hotel


14,165 68/HĐTĐ 20/12/2006 48

F-171


33. COMMITMENTS (continued) Construction and development commitments At 31 December 2009, the Group has contractual commitments for the construction work for its apartment projects as follows:

VND’000

Contracted amount

Recognized amount


New Saigon Apartments 49,402,125 22,924,381 26,477,744 Hoang Anh Riverview Apartments 93,217,423 27,285,644 65,931,779 Phu Hoang Anh Apartments 1,248,752,339 198,475,148 1,050,277,191

Total 1,391,371,887 248,685,173 1,142,686,714

34. SEGMENT INFORMATION For management purposes, the Group is organized into business units based on their products and services, and has seven reportable operating segments as follows:

• Real estate • Production • Trading and services • Construction • Hospitality • Football club • Power • Plantation Management monitors the operating results of its business units separately for the purposes of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain aspects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing, including finance costs and finance revenue, and income taxes are managed on a Group basis and are not allocated to operating segments.

F-172


34. SEGMENT INFORMATION (continued)

VND’000

Real estate Production Trading

and services Construction Hospitality Football club Power Plantation Eliminations Total

For the year ended 31 December 2009 Revenue External customers 3,373,859,483 538,519,063 11,305,919 319,242,570 83,481,977 38,899,709 - - - 4,365,308,721 Inter-segment - 376,581,714 30,038,033 340,959,495 1,155,207 - - - (748,734,449) -

Total 3,373,859,483 915,100,777 41,343,952 660,202,065 84,637,184 38,899,709 - - (748,734,449) 4,365,308,721 Results Segment results 1,692,678,837 154,127,667 10,951,397 147,744,191 (7,492,195) 8,751,827 2,006,761,724

Unallocated expenses (249,208,663) Profit before income tax, financial revenue and financial costs 1,757,553,061 Financial revenue 199,381,768 Financial costs (213,430,505)

Profit before income tax 1,743,504,324 Income tax expense (456,605,638)

Net profit after tax for the year 1,286,898,686 As at 31 December 2009 Assets and liabilities

Segment assets 5,398,806,818 720,114,262 83,342,811 129,880,443 247,051,866 62,544,243 794,418,821 954,377,060 - 8,390,536,324 Cash of the Group 1,944,228,950 Investments in associates 69,098,898 Unallocated assets 1,792,347,102

Total assets 12,196,211,274

Segment liabilities (1,468,245,598) (216,990,363) (2,922,241) (94,557,914) (4,402,673) (3,444,257) (38,150,518) (5,251,071) - (1,833,964,635) Unallocated liabilities (5,234,592,113)

Total liabilities (7,068,556,748)

F-173


35. SUBSEQUENT EVENTS

There have been no significant events after the balance sheet date which would require adjustments or disclosures in the consolidated financial statements. Ms Ho Thi Kim Chi Mr Nguyen Van Su Chief Accountant General Director 25 January 2010

F-174

Hoang Anh Gia Lai Joint Stock Company Audited consolidated financial statements 31 December 2008 with report of the Board of Management

F-175


Contents Pages Report of the Board of Management 1 - 3 Independent auditors’ report 4 Audited consolidated financial statements Consolidated balance sheet 5 - 6 Consolidated income statement 7 Consolidated cash flow statement 8 Notes to the consolidated financial statements 9 – 42

F-176

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Report of the Board of Management

The Board of Management of Hoang Anh Gia Lai Joint Stock Company (“the Company”) presents its report and the consolidated financial statements of the Company and its subsidiaries (“the Group”) as at and for the year ended 31 December 2008. The Company The Company is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments: First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008 The Company has 25 subsidiaries and 5 associates. The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sport and entertainment activities. The Company’s head office is located at Chu H’drong Commune, Pleiku City, Gia Lai Province, Vietnam. Results and dividends The consolidated net profit after tax for the year ended 31 December 2008 was VND’000 765,342,778 (Net profit for the year ended 31 December 2007: VND’000 622,343,873) The Company distributed stock dividends of VND’000 598,581,130 during the year. Events after the balance sheet date

There have been no significant events after the balance sheet date which would require adjustments or disclosures in the financial statements other than the matter described below and those already disclosed in relevant Notes to the consolidated financial statements. On 10 January 2009, the Company signed with Bank for Investment and Development of Vietnam(“BIDV”) a General Cooperation Contract, whereby BIDV, during the period from 2009 to 2011, will provide a credit package to the Company totalling to VND 5,650 billion for its real estate, rubber plantation, minerals and hydropower project. The Board of Management The members of the Board of Management during the year and at the date of this report are:

Name Position Date of appointment/resignation Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Mr Doan Nguyen Thu Member Mr Le Hung Member Mr Nguyen Van Minh Member Appointed on 1 January 2008 Mr Tran Viet Anh Member Appointed on 7 February 2008 Ms Vo Thi Huyen Lan Member Appointed on 7 February 2008

F-177

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Report of the Board of Management (continued)

The Board of Directors The members of the Board of Directors during the year and at the date of this report are:

Name Position Date of appointment/resignation Mr Nguyen Van Su General Director Mr Doan Nguyen Thu Deputy General Director Mr Le Van Ro Deputy General Director Mr Tra Van Han Deputy General Director Mr Nguyen Van Minh Deputy General Director Appointed on 1 January 2008 Mr Vo Truong Son Deputy General Director Appointed on 1 December 2008 Auditors The auditors, Ernst & Young, have expressed their willingness to accept reappointment. Statement of management’s responsibility in respect of the consolidated financial statements Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the state of affairs of the Group and of its results and cash flows for the year. In preparing those consolidated financial statements, management is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and

• prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

Management confirms that the Group has complied with the above requirements in preparing the consolidated financial statements. Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the financial position of the Group and to ensure that the accounting records comply with the Vietnamese Accounting Standards and 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.

F-178

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Report of the Board of Management (continued)

Approval of the consolidated financial statements We hereby approve the accompanying consolidated financial statements which give a true and fair view of the financial position of the Group as at 31 December 2008 and of the results of its operations and cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements. On behalf of the Board of Management: Doan Nguyen Duc Chairman Nguyen Van Su Member Pleiku City, Gia Lai Province, Vietnam 9 February 2009

F-179

Reference: 11355/11108 Independent auditors’ report on the consolidated financial statements of Hoang Anh Gia Lai Joint Stock Company and Subsidiaries as at and for the year ended 31 December 2008 To: The Shareholders and the Board of Management We have audited the consolidated balance sheet of Hoang Anh Gia Lai Joint Stock Company (“the Company”) and its subsidiaries (“the Group”) as at 31 December 2008, and the related consolidated income statement and consolidated cash flow statement for the year then ended and the notes thereto (“the consolidated financial statements”) as set out on pages 5 to 42. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Basis of opinion We conducted our audit in accordance with Vietnamese and International Standards on Auditing applicable in Vietnam. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2008 and of the results of its operations and its cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with the relevant statutory requirements.

Narciso T. Torres Jr. Mai Viet Hung Tran Deputy General Director Auditor-in-charge Registered Auditor Registered Auditor Certificate No. N.0868/KTV Certificate No. D.0048/KTV Ho Chi Minh City, Vietnam 9 February 2009

F-180

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Consolidated balance sheet B01-DN/HN as at 31 December 2008

VND’000

Code Assets Notes Ending

balance Beginning

balance

100 A. Current assets 4,524,792,761 4,011,680,725

110 I. Cash 531,085,394 1,290,907,575 111 1. Cash 3 531,085,394 1,290,907,575

120 II. Short-term investments - 115,202,515 121 1. Short-term investments - 115,202,515

130 III. Current accounts receivable 1,984,810,093 1,117,125,828 131 1. Trade receivables 4 719,302,322 325,765,251 132 2. Advances to suppliers 5 658,867,521 448,036,718 135 3. Other receivables 6 607,452,842 343,536,451 139 4. Provision for doubtful debts (812,592) (212,592)


150 V. Other current assets 156,742,867 118,353,346 151 1. Short-term prepaid expenses 2,702,455 1,202,432 152 2. Value-added tax deductibles 109,255,090 47,720,744 154 3. Tax and other receivables from the State - 102,048 158 4. Other current assets 8 44,785,322 69,328,122

200 B. Non-current assets 4,346,767,572 2,323,140,479

210 I. Long-term receivables - 1,800,000 218 1. Other long-term receivables - 1,800,000

220 II. Fixed assets 1,870,421,130 705,583,335 221 1. Tangible fixed assets 9 613,167,958 551,494,264 222 Cost 706,975,264 606,892,952 223 Accumulated depreciation (93,807,306) (55,398,688) 227 2. Intangible fixed assets 10 111,884,361 71,329,308 228 Cost 112,900,030 72,087,915 229 Accumulated amortisation (1,015,669) (758,607) 230 3. Construction in progress 11 1,145,368,811 82,759,763

250 III. Long-term investments 2,090,737,140 1,306,447,392 252 1. Investments in associates 13.1 199,067,441 270,519,762 258 2. Other long-term investments 14 1,891,669,699 1,035,927,630

260 IV. Other long-term assets 385,609,302 309,309,752 261 1. Long-term prepaid expenses 15 331,880,376 304,999,611 262 2. Deferred tax assets 29.2 51,404,401 2,515,691 268 3. Other long-term assets 2,324,525 1,794,450

270 Total assets 8,871,560,333 6,334,821,204

F-181

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Consolidated balance sheet (continued) B01-DN/HN as at 31 December 2008

VND’000

Code Resources Notes Ending

balance Beginning

balance

300 A. Liabilities 4,672,353,582 2,700,106,197

310 I. Current liabilities 2,535,177,690 1,776,243,032 311 1. Short-term loans and borrowings 16 1,203,108,474 649,474,370 312 2. Trade payables 373,885,772 98,828,933 313 3. Advances from customers 17 98,426,140 512,816,168 314 4. Statutory obligations 18 152,269,861 142,704,393 315 5. Payables to employees 31,555,135 9,238,377 316 6. Accrued expenses 19 367,849,188 286,059,744 319 7. Other payables 20 308,083,120 77,121,047

330 II. Non-current liabilities 2,137,175,892 923,863,165 333 1. Other long-term liabilities 21 4,318,682 10,178,715 334 2. Long-term loans and debts 22 1,893,643,583 813,385,100 335 3. Deferred tax liabilities 29.2 234,725,416 98,702,016 336 4. Provision for severance allowance 4,488,211 1,597,334

400 B. Owners’ equity 3,747,497,350 3,402,401,066

410 I. Capital 23 3,728,927,874 3,389,054,490 411 1. Share capital 1,798,145,010 1,199,563,880 412 2. Share premium 1,559,596,453 1,559,596,453 415 3. Treasury shares (327,979,971) - 416 4. Foreign exchange differences 2,734,772 80,017 417 5. Investment and development fund 8,622,737 8,622,737 418 6. Financial reserve fund 22,528,069 22,528,069 420 7. Undistributed earnings 665,280,804 598,663,334

430 II. Other funds 23 18,569,476 13,346,576 431 1. Bonus and welfare fund 18,569,476 13,346,576

500 C. Minority interest 451,709,401 232,313,941

440 Total liabilities and owners’ equity 8,871,560,333 6,334,821,204

Ho Thi Kim Chi Nguyen Van Su Chief Accountant General Director 9 February 2009

F-182

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Consolidated income statement B02-DN/HN for the year ended 31 December 2008

VND’000




02 2. Deductions 25.1 (4,401,358) (1,398,947)



rendered 26 (990,631,593) (991,085,747)

20 5. Gross profit from sale of goods and rendering of services 890,112,814 596,945,311





30 10. Operating profit 1,032,472,151 864,565,006

31 11. Other income 28 12,717,959 29,462,915

32 12. Other expenses 28 (39,031,852) (24,313,703)

40 13. Other (loss)/profit 28 (26,313,893) 5,149,212

50 14. Profit before tax 1,006,158,258 869,714,218

51 15. Current corporate income tax expense 29.1 (153,680,790) (165,592,015)

52 16. Deferred corporate income tax expense 29.2 (87,134,691) (81,778,330)

60 17. Net profit after tax 765,342,778 622,343,873 Attributable to: 18.1 Minority interest 65,037,809 22,559,772 18.2 The Company's shareholders 700,304,969 599,784,101

70 18. Basic earnings per share (VND) (par value of VND 10,000 per share) 24 3,923

4,782


F-183

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Consolidated cash flow statement B03-DN/HN for the year ended 31 December 2008

VND’000


I. Cash flows from operating activities

01 Net profit before tax 1,006,158,258 869,714,218 Adjustments for:

02 Depreciation and amortisation 9, 10, 15 108,998,192 24,067,305 03 Provisions 600,000 246,996 04 Unrealised foreign exchange losses (gains) 2,082,336 (142,792) 05 Profits from investing activities (422,377,729) (407,745,427) 06 Interest expense 27 88,500,954 49,800,958

08 Operating income before changes in working capital 783,962,011 535,941,258

09 Increase in receivables (520,253,236) (857,271,213) 10 Increase in inventories and real estate costs (482,062,946) (1,538,647,042) 11 Increase in payables 150,486,873 714,704,785 12 Increase in prepaid expenses (96,993,404) (281,086,632) 13 Interest paid (195,474,116) (41,362,653) 14 Corporate income tax paid 29.1 (149,057,733) (49,793,125) 16 Other cash outflows from operating activities (29,882,347) (8,902,502)

20 Net cash used in operating activities (539,274,898) (1,526,417,124) II. Cash flows from investing activities

21 Purchases and construction of fixed assets 9, 10, 11 (1,056,650,067) (146,782,646) 22 Proceeds from disposals of fixed assets and

other long-term assets 127,905,319 - 25 Payments for investments in other entities (778,089,748) (397,475,300) 27 Interest and dividends received 23,363,313 144,852,812

30 Net cash used in investing activities (1,683,471,183) (399,405,134) III. Cash flows from financing activities

31 Capital contribution and issuance of shares - 2,594,120,729 32 Capital redemption (327,979,971) (221,650,000) 33 Borrowings received 2,695,583,825 1,411,390,219 34 Borrowings repaid (1,061,691,238) (663,124,559) 36 Dividends paid (1,122) (36,231,774) 37 Capital contribution of minority shareholders

in subsidiaries 154,357,651 -


50 Net (decrease) increase in cash (762,476,936) 1,158,110,357

60 Cash at beginning of year 1,290,907,575 132,797,218

61 Impact of exchange rate fluctuation 2,654,755 -

70 Cash at end of year 3 531,085,394 1,290,907,575


F-184

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Notes to the consolidated financial statements B09-DN/HN as at and for the year ended 31 December 2008

1. Corporate information

Hoang Anh Gia Lai Joint Stock Company (“The Company”) is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments: First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007 Eighth amendment 29 August 2008

The Company has 25 subsidiaries and 5 associates. The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sport and entertainment activities. The Company’s head office is located at Chu H’drong Commune, Pleiku City, Gia Lai Province, Vietnam.

2. Summary of significant accounting policies Basis for preparation

The consolidated financial statements of the Group, expressed in thousands of Vietnam dong (“VND’000”), are prepared in accordance with the Vietnamese 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 Standards on Accounting (Series 1);

• Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2);


• Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and

• Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).

Accordingly, the accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and related notes, 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 financial position and results of operations and cash flows of the Group in accordance with accounting principles and practices generally accepted in countries other than Vietnam.

The Company maintains its accounting records in VND. Registered accounting documentation system

The applicable accounting documentation system is the General Journal system. Fiscal year


F-185

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries Notes to the consolidated financial statements (continued) B09-DN/HN as at and for the year ended 31 December 2008

2. Summary of significant accounting policies (continued) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries (“the Group”) as at 31 December each period. The financial statements of the subsidiaries are prepared for the same period as the Company, using accounting policies consistent with the Company’s accounting policies. Adjustments are made for any difference in accounting policies that may exist to ensure consistency between the subsidiaries and the Company.




Except for subsidiaries acquired under common control which are accounted for under the pooling of interests method, other subsidiaries have been included in the consolidated financial statements using the purchase method of accounting that measures the subsidiaries’ assets and liabilities at their fair value at the acquisition date. Investment in associates



The financial statements of the associates are prepared for the same accounting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company. Investments in securities and other investments

Investments in securities and other investments are stated at their acquisition cost. Provision is made for any diminution in value of the marketable investments at the balance sheet date. Cash

Cash comprise cash on hand, cash in banks and demand deposits. Receivables



F-186


2. Summary of significant accounting policies (continued) Inventories








Land held for development which is presented as part of “Other long-term investment” is carried at the lower of cost and net realizable value. Costs include all expenditures including borrowing costs directly related to the acquisition, site clearance, and land compensation. Net realizable value represents estimated current selling price less anticipated cost of disposal. Provision for obsolete inventories

An inventories provision is created for the estimated loss arising due to the impairment (through diminution, damage, obsolescence, etc) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement. Fixed assets


The costs of tangible fixed assets consist of their purchase prices and any directly attributable costs of bringing the tangible fixed assets to working condition for their intended use. Expenditures for additions, improvements and renewals are capitalised and expenditures for maintenance and repairs are charged to the consolidated income statement when incurred. When tangible fixed assets are sold or retired, their cost and accumulated depreciation are removed from the consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement. Land use rights

Land use rights are recorded as intangible assets when the Group has the land use right certificates. The costs of land use rights comprise all directly attributable costs of bringing the land to the condition available for use. Depreciation and amortisation


Machinery and equipment 5 - 12 years Buildings and structures 10 - 50 years Motor vehicles 8 - 20 years Office equipment 8 - 10 years Perennial trees 11 - 12 years Land use rights 45 years Software 5 years Other assets 8 - 15 years

F-187


2. Summary of significant accounting policies (continued) Leased assets



Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over the term of the lease. Borrowing costs


Borrowing costs that are directly attributable to the acquisition, construction or production of a particular asset are capitalized as part of the cost of the asset. Deferred expenses

Deferred expenses, which comprise mainly costs of tools and supplies issued for use for period of more than one year and prepaid land leases, are amortised over the period in which economic benefits are generated in relation to these expenses. Payable and accruals

Payable and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group. Provision for severance allowance

The severance payment to employee is provided at the end of each reporting year for all employees who have more than one year in service at the rate of a half of monthly salary for each working year. Foreign currency transactions

Transactions in currencies other than the Company’s reporting currency of VND are recorded at the inter-bank exchange rates ruling at the date of the transaction. At year-end, monetary assets and liabilities denominated in foreign currencies are revalued at exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the consolidated income statement.

The assets and liabilities of foreign entities are translated into VND at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

F-188


2. Summary of significant accounting policies (continued) Appropriation of net profit




Bonus and welfare fund Bonus and welfare fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and improvement of the employees’ material and spiritual benefits. Revenue recognition


Sale of apartments For apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. For apartments sold before completion of construction where the Group has material obligations to complete the apartment project and where the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the revenue and associated costs are recognised as the related obligations are fulfilled by reference to the stage of completion at the balance sheet date. Cost of apartments sold before completion is determined based on actual land, land development and construction costs and estimated costs to complete the project. The estimated costs to complete the sold apartments are accrued in the balance sheet. Actual expenditures are charged to this accrual account as incurred. This revenue recognition policy has been applied consistently with the previous year which is a generally accepted accounting principle in Vietnam and other jurisdictions.

Construction contracts Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

Sale of goods



F-189


2. Summary of significant accounting policies (continued)

Revenue recognition (continued)


Revenue from rendering of services are recognized when the services are rendered and is stated net of discounts, allowances and non refundable taxes.

Interest

Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectibility is in doubt. Taxation

Current tax


Deferred tax



• where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.


• where the deferred tax asset arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

• in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.





F-190


2. Summary of significant accounting policies (continued)

Earnings per share

Basic earnings per share amount is computed by dividing net profit for the year attributable to ordinary shareholders before any appropriation of bonus and welfare fund by the weighted average number of ordinary shares outstanding during the period.

3. Cash

VND’000 Ending balance Beginning balance Cash in banks 526,543,713 1,283,893,049 Cash on hand 4,533,050 7,014,526 Cash in transit 8,631 -

Total 531,085,394 1,290,907,575

4. Trade receivables


Construction receivable 324,316,216 9,900,164 Receivable from sale of apartments 270,484,995 113,412,803 Trade and service receivables 124,501,111 202,452,284

Total 719,302,322 325,765,251 5. Advances to suppliers

VND’000


Advances to contractors 419,196,572 - Advances for acquisition of land and real estate projects 139,301,259 366,955,449 Advances to suppliers of goods and services 100,369,690 81,081,269

Total 658,867,521 448,036,718

Advances to contractors represents advances for construction of the Group’s real estate projects which mainly included advances to Huynh De Construction Corporation and Truc Thinh Trading & Services Co Ltd, the related companies, amounting to VND’000 244,438,604 and VND’000 75,605,844, respectively, as at 31 December 2008 (2007: nil).

F-191


6. Other receivables


Receivable from disposal of investments (i) 383,650,602 - Short-term loans to the employees (ii) 72,465,924 189,147,119 Loan to a company (iii) 59,800,000 - Advance to Mr. Do Hoang Hung for establishment of

a new subsidiary (Note 30) 20,400,000 20,400,000 Dividends receivable (Note 30) 2,500,000 2,500,000 Advance dividends to shareholders 425,125 - Receivable from Mr Nguyen Anh Hoa for disposal of shares - 35,324,677 Advance to Mr Lam Ba Tong for land acquisition - 15,385,750 Interest receivable - 8,834,932 Receivable from the People’s Committee of Da Nang

Province related to full prepayment of land acquisition - 31,500,000 Others 68,211,191 40,443,973

Total 607,452,842 343,536,451

(i) In February 2008, the Company’s subsidiary, Hoang Anh Housing Joint Stock Company, sold its

remaining 40% equity interest (960,000 shares) in Giai Viet Joint Stock Company to Mr. Lam Ba Tong (one of the Company’s shareholders) for VND 509 billion and realised a gain from the transaction of VND 400 billion (Note 25.2). Giai Viet Joint Stock Company has a land lot of 43,732 square meters at Ho Chi Minh City which was approved by the local authorities for development of apartments for sales and lease. Under the Share Sale and Purchase Contract dated 25 February 2008, Mr. Tong has obligations to pay in full the contract amount to the Company within four months from the signing date of the Contract. The Company has received an amount of VND 125 billion as at 31 December 2008 and VND 180 billion on 8 January 2009, and the remaining receivable will be collected in 2009.

(ii) This represents short-term loans to the Group’s employees as follows:

VND’000


Mr. Tran Van Hung 22,684,000 21,730,667 Mr. Nguyen Xuan Hoa 15,341,000 15,000,000 Mr. Luu Nguyen Ngoc Duy 10,000,000 - Mr. Nguyen Van Xuan 7,740,500 - Ms. Nguyen Thanh Nha Uyen 6,700,424 - Mr. Doan Khanh Vu 5,000,000 - Ms. Tran Thi Thuy Van 3,200,000 - Mr. Pham Hong Thanh 1,800,000 - Mr. Tran Dinh Lap - 100,000,000 Mr. Doan Nguyen Duc - 52,416,452

Total 72,465,924 189,147,119

These loans are unsecured, have term of repayments ranging from three to twelve months from the drawdown date and bear interest rates ranging from 12% to 21% per annum, except for loans receivable from Ms Nguyen Thanh Nha Uyen with interest-free and no definite term of repayment.

(iii) This represents unsecured loans to Dak Srong Hydropower Construction JSC with interest rate of 21% per annum.

F-192


7. Inventories

VND’000 Ending balance Beginning balance Apartments for sale under construction 1,487,430,756 1,186,882,871 Finished goods 67,823,888 28,203,226 Merchandise goods 12,665,587 20,709,530 Goods in transit 3,024,409 10,842,505 Work in process 122,302,209 64,103,201 Of which from:

Manufacturing 94,169,867 58,287,456 Construction contract 24,762,309 5,815,745 Rendered service 3,370,033 -

Raw materials 101,747,945 42,979,467 Construction materials 53,883,702 12,795,545 Tools and supplies 3,576,391 3,875,596

Total 1,852,454,887 1,370,391,941

All the apartments for sale under construction including the associated land have been mortgaged to secure the Group’s outstanding borrowings (Notes 16 and 22).

8. Other current assets

VND’000

Ending balance Beginning balance Business advances to employees 44,291,924 69,210,891 Short-term deposits 493,398 117,231

Total 44,785,322 69,328,122

F-193


9. Tangible fixed assets

VND’000

Machinery and


structures Motor

vehicles Office

equipment Other

assets Perennial

trees Total Cost

Beginning balance 95,198,136 460,170,297 35,366,787 2,904,683 6,637,727 6,615,322 606,892,952 Additions 53,500,955 27,425,680 21,357,267 1,427,498 1,629,798 - 105,341,198 Decreases – disposed (1,331,669) (696,291) (2,537,255) (105,911) (587,760) - (5,258,886)


Beginning balance 24,227,340 24,202,797 5,053,574 431,628 1,043,831 439,518 55,398,688 Increase 15,776,351 14,740,222 7,723,815 885,182 837,561 165,383 40,128,514 Decreases – disposed (344,161) - (1,369,116) (6,619) - - (1,719,896)

Ending balance 39,659,530 38,943,019 11,408,273 1,310,191 1,881,392 604,901 93,807,306 Net carrying amount


Ending balance 107,707,892 447,956,667 42,778,526 2,916,079 5,798,373 6,010,421 613,167,958

In which: Pledged/ mortgaged as loan

security (Notes 16 and 22) 107,707,892 447,956,667 - - - - 555,664,559

F-194

Hoang Anh Gia Lai Joint Stock Company B09-DN/HN and Subsidiaries Notes to the consolidated financial statements (continued) as at and for the year ended 31 December 2008

10. Intangible fixed assets

VND’000 Land use rights Computer software Total Cost

Beginning balance 71,576,494 511,421 72,087,915 Addition 36,212,892 4,599,223 40,812,115 In which:

Newly acquired 36,212,892 4,599,223 40,812,115


Beginning balance 679,438 79,169 758,607 Increase 86,737 170,325 257,062 In which:

Amortization 86,737 170,325 257,062

Ending balance 766,175 249,494 1,015,669 Net carrying amount

Beginning balance 70,897,056 432,252 71,329,308

Ending balance 107,023,211 4,861,150 111,884,361

In which: Pledged/ mortgaged as loan security (Note 22) 107,023,211 - 107,023,211

11. Construction in progress

VND’000

Ending balance Beginning balance Office for lease 636,040,265 - Building and structures 166,004,401 8,252,629 Plants and factories 149,573,404 32,131,973 Rubber and acacia aneura plantations 98,808,467 35,566,602 Hydro-power plants 84,170,201 - Other construction works 10,772,073 6,808,559

Total 1,145,368,811 82,759,763

Rubber and acacia aneura plantation includes accumulated costs directly attributable to the development of the plantation.

12. Capitalised borrowing costs During the year, the Group has capitalised borrowing costs amounting to VND’000 152,112,294. These are costs incurred on the bank loans used to finance the construction and development of fixed assets, apartment projects and acquisition of land for development.

F-195

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B09-DN/HN Notes to the consolidated financial statements (continued) as at and for the year ended 31 December 2008

13. Investments in associates and subsidiaries



Ending balance Beginning balance Number of

shares % holding Carrying value

VND’000 Number of

shares % holding Carrying value

VND’000

Thanh Da Investment Construction and Real Estate JSC

Real estate 24,000,000 24.00 155,528,079 24,000,000 24.00 150,000,000

Hoang Anh - Mang Yang Rubber JSC Plantation 1,815,608 40.00 18,156,080 675,000 22.50 9,750,000


Electric design and consultancy 432,406 25% 4,324,058 500,000 25.00 5,000,000

Binh Dinh Constrexim JSC Construction of hydro-power plant

1,000,000 39.20 13,601,693 1,000,000 39.20 12,669,762


An Tien Company Limited (i) Real estate - - - - 30.00 85,600,000

Total 199,067,441 270,519,762

(i) This entity has become a subsidiary during the year.

F-196


13. Investments in associates and subsidiaries (continued) 13.2 Investments in subsidiaries



Real estate Hoang Anh Housing Construction

and Development JSC Ho Chi Minh City

– Vietnam Operating 2007 99.90

Hoang Nguyen Investment Construction and Housing JSC

Ho Chi Minh City – Vietnam

Operating 2007 89.00

Hoang Anh Me Kong JSC Ho Chi Minh City – Vietnam


Minh Tuan Company Limited Ho Chi Minh City – Vietnam


Hoang Anh Dak Lak JSC Dak Lak – Vietnam Pre-operating 12 Sep 2007 55.00 Hoang Phuc Investment,

Construction and Housing JSC Ho Chi Minh City

– Vietnam Pre-operating 3 Oct 2007 51.00

Phu Hoang Anh JSC Ho Chi Minh City – Vietnam


Hoang Anh Incomex Co Ltd Ho Chi Minh City – Vietnam

Pre-operating 2007 80.00

Hoang Anh Gia Lai (Bangkok) Co Ltd

Bangkok – Thailand Pre-operating 2007 47.00

Hoang Anh Real Estate Management Services JSC



An Tien Co Ltd Ho Chi Minh City – Vietnam

Pre-operating 10 Jan 2008 78.54

Hoang Viet Investment JSC Ho Chi Minh City – Vietnam

Pre-operating 21 Nov 2007 51.00

Phuc Bao Minh Trading Construction Services Corporation


Operating 4 Oct 2008 67.00

Minh Thanh Co Ltd Ho Chi Minh City – Vietnam

Pre-operating 28 Nov 2008 97.00

Energy Hoang Anh - Phat Tai

Hydroelectric JSC Thanh Hoa

– Vietnam Pre-operating 18 Oct 2007 75.00

Hoang Anh Dakbla Hydropower JSC Kontum – Vietnam Pre-operating 30 May 2007 70.00 Hoang Anh Gia Lai Hydropower JSC Gia Lai – Vietnam Pre-operating 5 Jun 2007 70.00 Plantation Hoang Anh - Quang Minh

Rubber JSC Gia Lai – Vietnam Operating 1 Feb 2007 57.50

Gia Lai Industrial Plantation JSC Gia Lai – Vietnam Pre-operating 9 Sep 2008 96.23 Hoang Anh Attapeu Agricultural

Development Co Ltd Attapeu – Laos Pre-operating 22 May 2008 80.00

Mining HAGL Minerals JSC Gia Lai – Vietnam Pre-operating 8 Dec 2007 75.00 Quang Ngai Mineral JSC Quang Ngai

– Vietnam Pre-operating 23 Feb 2008 80.00

Gia Lai Mineral JSC Gia Lai – Vietnam Pre-operating 2007 51.00 Construction and trading

Central HAGL JSC Da Nang – Vietnam Operating 6 July 2007 57.00 Services HAGL Hospital JSC Gia Lai – Vietnam Pre-operating 7 May 2008 80.00

F-197


14. Other long-term investments

VND’000 Ending balance Beginning balance Land held for development:

Minh Tuan project (i) 441,457,951 413,810,270 Binh Hien Ward (ii) 335,466,137 318,318,667 An Tien project (iii) 309,390,348 - Phuc Bao Minh project (iv) 112,274,287 - Hai Chau project (v) 74,150,152 67,648,443 Minh Thanh project (vi) 70,606,200 - Bangkok, Thailand (vii) 33,439,603 30,841,571 Thac Gian Lake, Thanh Khe District, Da Nang City - 33,000,000 District 7, Ho Chi Minh City - 153,406,775

Investments in Business Cooperation Contracts (“BCC”)

Dai Nhan project (viii) 105,620,958 12,217,904 Tan Phong project (ix) 189,857,250 - Hiep Binh Phuoc project (x) 200,000,000 -

Investment in common shares (xi) 10,931,903 1,594,000 Other investments 8,474,910 5,090,000

Total 1,891,669,699 1,035,927,630

The foregoing parcels of land have been mortgaged to secure the Group’s outstanding borrowings (Notes 16 and 22). The Group has acquired certain land for development of real estate projects in the future as follows:

(i) This land will be used for construction of a complex including 150 villas and 150,000 square-meter high-class apartments in District 9, Ho Chi Minh City. The construction is now planned to commence in 2009 and expected to be completed in 2012.

(ii) This land will be used to build a complex including 500,000 square-meter commercial centre, high-class apartments and office for lease at 2/9 Road, Da Nang City. The project has an area of land of 50,000 square meters. The construction is now planned to commence in 2009 and expected to be completed in 2011-2012.

(iii) This land has an area of 40,000 square meters and will be used for construction of 1,500 apartments with 200,000 floor square meters. The construction is now planned to commence in 2009 and expected to be completed in 2010.

(iv) The land will be used to construct an apartment building in Tan Phu District, Ho Chi Minh City.

(v) The land will be used to construct an apartment building in Hai Chau District, Da Nang City.

(vi) The land will be used to construct an apartment building in District 12, Ho Chi Minh City.

(vii) This land is under development as Hoang Anh Gia Lai (Bangkok) Apartment project.

(viii) Hoang Anh Housing JSC, a subsidiary, and Dai Nhan Real Estate Investment and Trading JSC signed a BCC on 1 August 2007 to develop a Residential Area of 332,023 square meters at Phuoc Loc Village, Nha Be District, Ho Chi Minh City. Each party will equally make the capital contribution and share the profit or products from the BCC.

(ix) The Company has signed a BCC with Tan Thuan Investment and Construction Co., Ltd. to develop an apartment building on an area of 28,127 square meters in District 7, Ho Chi Minh City. Under BCC, the Company has 45% interest.

F-198


14. Other long-term investments (continued)

(x) This investment has been contributed to the BCC between the Company and other parties including Van Phuc Real Estates Investment JSC, Dai Nhan Real Estates Investment and Trading JSC and Dong Nam Real Estates Investment and Trading JSC to develop Hiep Binh Phuoc Residential Area and Entertainment Park on an area of 170 hectares. In accordance with BCC, a new entity will be established to manage the project in which the Company will hold 55% interest.

(xi) This represents long-term investments of certain subsidiaries in common unlisted shares in entities where the Group does not have significant influence or control.

15. Long-term prepaid expenses

VND’000 Current year Prior year Beginning balance 304,999,611 24,619,036 Addition 95,493,381 304,967,729 Amortization (68,612,616) (24,587,154)

Ending balance 331,880,376 304,999,611

Long-term prepaid expenses primarily include prepaid land and office rentals and hotels’ deferred

expenses which are being amortised on the straight-line basis over the lease term. 16. Short-term loans and borrowings

VND’000

Ending

balance Beginning

balance Short-term loans Loans payable to banks (i) 1,138,294,093 558,673,527 Loans payable to other entities and individuals (ii) 20,344,528 -

1,158,638,621 558,673,527 Current portion of long-term bank loans (Note 22) 44,469,853 90,800,843

Total 1,203,108,474 649,474,370

F-199


16. Short-term loans and borrowings (continued)

i) Short-term loans from banks comprised of:

Currency Interest rate (per annum)

Description of collateral (Notes 7, 9 and 10 )

Ending balance VND’000

Bank for Foreign Trade of Vietnam, Phu Tai Branch

VND 15.84% - 21.00% Unsecured 8,897,615 VND 15.84% - 21.00% Warehouse at Quy Nhon factory 29,382,826

Bank for Foreign Trade of Vietnam, Gia Lai Branch

VND 16.80% - 21.00% Plant and machinery at the furniture and granite factories; Properties and facilities at Hoang Anh Quy Nhon Resort ; 90,911,900

shares of the Group in Hoang Anh Construction and Housing Development JSC

296,853,701

VND 10.56% Unsecured 3,800,033 Bank for Investment and Development of Vietnam, Gia Lai Branch

VND 21.00% Unsecured 9,636,293 VND 12.00% - 19.50% Sale of goods 44,039,841 USD 7.90% Sale of goods 4,959,860 USD 8.20% Unsecured 3,475,348 VND 18.50% Corporate guarrantee from

Chu Pah Rubber Company 5,000,000

VND 13.00% Corporate guarrantee from Chu Pah Rubber Company

10,000,000

Bank for Investment and Development of Vietnam, Ho Chi Minh City Branch

VND 17.00% Unsecured 100,000,000 VND 15.00% Unsecured 85,000,000 USD 6.50% - 9.50% Sale of goods 11,588,332 VND 10.50% - 16.00% Sale of goods 3,404,752

Bank for Investment and Development of Vietnam, Gia Dinh branch

VND 17.40% 8 apartments in Tan Hung Ward, District 7 and assets financed by the loan

82,500,000

Military Bank, Ho Chi Minh Branch

VND 14.70% - 20.80% Land use right No.9, Nguyen Huu Tho street, Phuc Kieng Commune, Nha Be

District, Ho Chi Minh City

7,993,354

Bank for Investment and Development of Vietnam, Transaction Office II

VND 16.50% Unsecured 25,000,000 VND 15.00% 65,000,000 shares of the Group in Hoang

Nguyen Investment Construction and Housing Development JSC

150,000,000

Lao Viet Bank

USD 9.00% Unsecured 29,093,843

Vietnam Bank for Agriculture and Rural Development VND 12.00% 4 houses in Phu Nhuan District and District

7, Ho Chi Minh City 25,000,000

Saigon Thuong Tin Commercial Joint Stock Bank, Da Nang Branch

VND 21.00% Bored pilings machine amounting to VND'000 5,000,000

703,714

VND 16.5% - 21% Land use rights at Binh Hien and Binh Thuan Ward 201,964,581

Total 1,138,294,093

F-200


16. Short-term loans and borrowings (continued)

ii) Short-term loans from corporate and individuals comprised of:

Currency Interest rate (per annum)

Description of collateral (Notes 7, 9 and 10 )

Ending balance VND’000

Dak Srong Hydropower Construction JSC

VND Interest free Unsecured 20,000,000

Phat Tai Company Limited VND Interest free Unsecured 344,528

Total 20,344,528

The Group obtained these loans to finance its working capital requirements.

17. Advances from customers

VND’000 Ending

balance Beginning

balance Deposits from customers for apartments for sale 81,766,345 507,672,232 Advances from trade customers 16,659,795 5,143,936

Total 98,426,140 512,816,168

18. Statutory obligations

VND’000 Ending

balance Beginning

balance Corporate income tax (Note 29.1) 135,946,896 131,323,839 Value-added tax payable 13,703,956 10,533,593 Personal income tax 166,781 765,893 Special sales tax 23,413 48,124 Other 2,428,815 32,944

Total 152,269,861 142,704,393 19. Accrued expenses

VND’000 Ending

balance Beginning

balance Subcontractor construction costs 300,624,735 271,999,044 Interest expense 53,905,437 8,766,305 Apartment warranty costs 5,284,365 - Penalties arising from late delivery of Tran Xuan Soan

Apartments to customers 4,006,514 - Others 4,028,137 5,294,395

Total 367,849,188 286,059,744

F-201


20. Other payables

VND’000 Ending

balance Beginning

balance

Payable for land acquisition 106,020,495 - Payable to related parties (Note 30) 86,594,225 50,475,225 Payable to Phu Long Real Estate Co., Ltd. 50,000,000 - Payable to Dak Srong Hydropower Construction JSC 33,100,000 - Payable due to late transfer of the ownership of Tran

Xuan Soan apartments to customers 16,696,006 - Remunerations payable to BOM members 1,075,740 2,625,113 Payable to Hoang Lien JSC for acquisition of shares - 11,632,702 Deposits received - 2,854,563 Others 14,596,654 9,533,444

Total 308,083,120 77,121,047 21. Other long-term liabilities

VND’000

Ending balance

Beginning balance

Deposits received from tenants for office leases 4,318,682 678,715 Cash advances from Quoc Cuong Gia Lai JSC

for a project in Da Nang - 9,500,000

Total 4,318,682 10,178,715

22. Long-term loans and debts

VND’000


Bonds (i) 1,000,000,000 - Long-term bank loans (ii) 938,113,436 904,185,943

Total 1,938,113,436 904,185,943

In which Current portion (Note 16) 44,469,853 90,800,843 Non-current portion 1,893,643,583 813,385,100

(i) During the year, the Company issued VND straight bonds aggregating to VND 1,000 billion. Details

were as follows:

− On 30 September 2008, the Company issued VND 550 billion and VND 100 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 30 September 2010 and 30 September 2011, respectively. The VND 550 billion bond bears interest rate which is equivalent to 20.50% in the first interest payment period which will fall on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam in the following periods. The VND 100 billion bond bears interest rate which is equivalent to 21.00% in the first interest payment period which will fall on 30 March 2009 and 150% of the base rate announced by the State Bank of Vietnam in the following periods. Interest is payable on 30 March and 30 September annually. The proceeds will be used to finance the ongoing real estate, hydropower and rubber plantation projects of the Group.

F-202


22. Long-term loans and debts (continued)

− In December 2008, the Company issued another VND 100 billion and VND 250 billion straight bonds at par value of VND 1 billion per unit which are redeemable at par value by 31 December 2010 and 31 December 2011, respectively. The VND 100 billion bond bears interest rate of 12.25% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate announced by the State Bank of Vietnam minus (-) a margin of 0.5% p.a. The VND 250 billion term bond bears interest rate of 12.75% p.a. in the first interest payment period and a floating rate equivalent to 150% of the base rate per annum announced by the State Bank of Vietnam. The interest is payable in semi-annual basis which on 30 June and 31 December. The proceeds will be used to finance the working capital requirements and the ongoing real estate, hydropower and rubber plantation projects of the Group. All bonds are secured by the land use rights of Hoang Anh River View and Kinh Te Bridge projects of the Group, and apartments under construction of Hoang Anh River View project of the Group. Value at VND’000 1,821,783,170. The arrangers of the bond issuance are The Bank for Investment and Development of Vietnam (“BIDV”) and BIDV Security Company Limited.

(ii) Details of the long-term bank loans are as follows:


Bank for Investment and Development of Vietnam (“BIDV”) 406,136,111 343,048,769 Ho Chi Minh City Housing Development Bank (“HDB”) 216,385,678 - Bank for Foreign Trade of Vietnam (“Vietcombank”) 125,582,609 126,637,174 Agriculture and Rural Development Bank of Vietnam

(“Agribank”) 100,000,000 100,000,000 Saigon Thuong Tin Commercial Bank (“Sacombank”) 45,000,000 45,000,000 Industrial and Commercial Bank of Vietnam (“Vietinbank”) 41,500,000 44,500,000 Vietnam Development Bank (“VDB”) 3,509,038 - Mekong Housing Development Bank (“MHB”) - 160,000,000 Nam A Commercial Joint Stock Bank (“NAB”) - 85,000,000

Total 938,113,436 904,185,943

Details of loans as at 31 December 2008 were as follows: VND’000





Loan Agreement No. 140/05/NHNT, dated 18 May 2005

88,897,812 120 months from the first drawdown,

comprising a 24-month grace period and a 96-

month repayment period

Rate effective at the drawdown

date

All assets at the Da Nang Plaza Building


by the loan, and the land use right

Loan Agreement No. 45/08, dated 1 April 2008

3,813,330 36 months from signing date. The repayment will be



9.00% p.a. and subject to

periodic adjustments

Machines and spare parts specified in

Contract No. 146/HAGL-PM/2007

between the Company and

Powermax Machinery Company

F-203






Vietcombank, Quy Nhon Branch Loan Agreement No.327/HDTD, dated 25 December 2003




Floating interest rates, being

adjusted twice per annum, on

1st January and 1st July

All assets at Hoang Anh Quy Nhon

resort which were formed from and

financed by the loan

Loan Agreement No. 158/NHNT, dated 13 July 2006


date which was 13 July 2006

Floating interest rates, being adjusted in

accordance with Vietcombank interest rate

Unsecured

Loan Agreement No. 192/NHNT, dated 23 June 2008

1,260,000 60 months from the first drawdown date which was 23 June

2008



Land use rights at lot B3, B8a, B8b,

B9 and A26 at Phu Tai Industrial Park, Binh Dinh Province

Loan Agreement No. 283/NHNT, dated 16 September 2008

6,452,104 60 months from the first drawdown date

which was 19 September 2008



Building and infrastructure

attached to land, machinery and

equipment of wood processing,

transportation BIDV, Gia Lai Branch Loan Agreement No. 01/2004/HD, dated 25 August 2004




12-month deposit rate plus 2.4%

per annum and adjusted twice per year on 1 February and

1 August

All assets at Hoang Anh Gia Lai Hotel

which were formed from and financed by

the loan

Loan Agreement No. 02/2006/HD, dated 27 December 2006

6,713,706 Repayment within 38 months from the first drawdown including

three instalments commencing from

December 2007

13- month deposit rate plus

3.84% p.a.

All assets at Hoang Van Thu Apartment Building which were

formed from and financed by the loan

Loan Agreement No. 01/2008/HD, dated 5 September 2008


four instalments commencing from

March 2010

Base rate plus 150% p.a. and

adjusted each month

Machinery financed by the loan

BIDV, Quy Nhon Branch Loan Agreement No. 01/2005/HD, dated 14 July 2005

26,470,537

60 months from the first drawdown date

which was 13 July 2006

11.28% p.a. Warehouse at Quy Nhon factory


Loan Agreement No. 91/HDTD, dated 11 May 2007


which was 27 December 2006

11.76% p.a. Warehouse at Quy Nhon factory


F-204



VND’000



Collateral (Notes 7, 9 and 10 )

BIDV, Gia Dinh Branch

Loan agreement No. 135/2006/0000209, 4 April 2008


first drawdown

VND 12-month saving interest + margin, revised

monthly

Land use right of 8.525 sqm at 783 Tran Xuan Soan street, District 7,

HCMC and value of unsold units of Tran

Xuan Soan Apartments project

BIDV, Gia Dinh Branch Loan Agreement No. 135/2007/0000294, dated 9 April 2007

268,346,901 A credit limit of VND 269 billion for a term

of 72 months from the first drawdown


0.4% p.a.



by the loan BIDV, Dak Lak branch Loan agreement No.01/2008/HĐTD, dated 12 Aug 2008

41,036,830 5 years from the contract date


4 % p.a., being adjusted each 6

months

Assets financed by the loan

Sacombank, Da Nang Branch Loan Agreement No. 7683, dated 6 August 2007

45,000,000 120 months, comprising 32


December 2009

13.20% p.a. for the 6 first months; subsequently 13-

month deposit rate plus 0.45% per

month and adjusted twice

annually

All land area and assets associated

with the land at Hai Chau District, Da

Nang City

Vietinbank, Gia Lai Branch Loan Agreement No. 15/HDTD, dated 5 February 2005


quarterly instalments commencing

from 25 March 2007

12- month deposit rate plus 3% per

annum and adjusted twice per annum on

1 February and 1 August

All assets at Hoang Anh Da Lat resort


by the loan

Agribank, District 9 branch Loan Agreement No. 01307055, dated 10 August 2007

100,000,000 A credit limit of VND 130 billion for 60 months from the drawdown date

12.60% p.a. All assets at the Phuoc Long B

construction project

Housing Development Bank Loan Agreement No. 639/07, dated 19 July 2007

216,385,678 A credit limit of VND 400 billion for 60 months from the

drawdown date with a 24-month grace

period

Effective interest rate of HDB

Right to use land at lot No. 9 Nguyen Huu Tho Street,

Phuoc Kien Commune, Nha Be

District , Ho Chi Minh City

F-205



VND’000



Collateral (Notes 7, 9 and 10 )

VDB, Gia Lai branch Loan Agreement No. 01/2006/HDTD, dated 15 June 2006


first drawdown

7.80% p.a. Land use right and assets as per

collateral agreement No. 01/2006/HDTCQ-SDD-TL dated 15 Jun

2006

Total 938,113,436

The Group obtained these loans mainly to finance the construction and development of the hotels and resorts, apartment projects and purchases of machinery and equipment.

F-206


23. Shareholders’ equity

23.1. Increase and decrease in shareholders’ equity

VND’000

Share capital

Share premium

Treasury shares

Foreign exchange

differences

Investment and

development fund

Financial reserve

fund Undistributed

earnings Bonus and

welfare fund Total

Beginning balance 1,199,563,880 1,559,596,453 - 80,017 8,622,737 22,528,069 598,663,334 13,346,576 3,402,401,066 Issuance of new shares by way

of stock dividends during the year 598,581,130 - - - - - (598,581,130) - -

Foreign exchange differences - - - 2,654,755 - - - - 2,654,755 Net profit for the year - - - - - - 700,304,969 - 700,304,969 Transfer to bonus and welfare

fund - - - - - (35,015,247) 35,015,247 - Payment of bonus and welfare - - - - - - - (29,792,347) (29,792,347) Repurchases of shares - - (327,979,971) - - - (327,979,971) Cash dividend - - - - - - (1,122) - (1,122) Remuneration for members of

the Audit Committee - - - - - - (90,000) - (90,000)

Ending balance 1,798,145,010 1,559,596,453 (327,979,971) 2,734,772 8,622,737 22,528,069 665,280,804 18,569,476 3,747,497,350

Based on the Annual General Meeting dated 29 February 2008, the Company’s shareholders approved the Company to pay stock dividend at the ratio of 50% (2 for 1). On 14 May 2008, the State Securities Commission of Vietnam issued Official Letter No. 879/UBCK-QLPH requiring the Company to adjust the ratio of stock dividend to match with the Company’s balance of undistributed earnings. Accordingly, on 4 June 2008 the Company’s Board of Management passed a resolution to adjust the ratio of stock dividend to 49.9% (1,000 existing shares for 499 new shares). On 29 August 2008, the Planning and Investment Department of Gia Lai Province issued the eighth amendment to the Investment Licence No. 3903000083 approving the new registered charter capital of the Company amounting to VND’000 1,798,145,010, which was divided into 179,814,501 shares with par value of VND 10,000 per share.

F-207


23. Shareholders’ equity (continued)

23.2 Shares

Current year Previous year Shares Shares Shares authorised to be issued 179,814,501 119,956,388


Treasury shares 2,792,141 - Ordinary shares 2,792,141 -



During the period, the Company’s subsidiaries including Hoang Anh Housing Construction & Development JSC and Hoang Nguyen Investment Construction & Housing JSC, have purchased shares of the Company totalling 1,862,666 shares at an aggregate purchase price of VND’000 327,979,971. Subsequently, these subsidiaries have received additional 929,475 shares by way of stock dividend from the Company. The Company’s shares held by these subsidiaries as at 31 December 2008 totalled to 2,792,141 shares which have been presented as treasury shares at cost in the consolidated financial statements of the Group as at 31 December 2008.

24. Basic earnings per share


(restated)

Net profit attributable to ordinary equity holders

of the parent (VND’000) 700,304,968 599,784,101

Weighted average number of ordinary shares during the year 178,522,338 125,431,970

Earnings per share (VND) (par value of VND 10,000 per share) 3,923 4,782

The basic earnings per share of the prior year was adjusted due to the effect of the stock dividend issued in 2008 in conformity with the current year’s presentation.

F-208


25. Revenues


VND’000



Sale of apartments 1,230,883,934 771,240,478 Sale of goods 439,220,045 720,258,258 Revenue from construction contracts 106,054,942 17,051,995 Revenue from services 108,986,844 80,879,274

Less (4,401,358) (1,398,947) Sales returns (3,740,052) (1,045,634) Special sales tax (661,306) (353,313)

Net revenues 1,880,744,407 1,588,031,058 Of which:

Sale of apartments 1,230,883,934 771,240,478 Sale of goods 435,479,993 719,212,624 Revenue from construction contracts 106,054,942 17,051,995 Rendering of services 108,325,538 80,525,961


VND’000


Gain on disposal of investments in shares (i) 400,000,045 104,000,160 Interest income 23,363,313 46,387,584 Realised foreign exchange gains 5,512,101 - Interest from loans to individuals 5,494,000 - Share of net profit of associates 3,897,679 669,762 Unrealised foreign exchange gains 315,453 - Dividend - 2,500,000 Negative goodwill from business combination - 219,426,558 Discounts earned from prepaying long-term rental obligation - 34,800,000 Others 36,114 1,561,554

Total 438,618,705 409,345,618

(i) This represents gain on disposal of investments in Giai Viet JSC during the year (Note 6 (i)).

26. Costs of goods sold and services rendered


Cost of apartments sold 485,217,698 397,286,527 Cost of goods sold 348,113,820 505,028,323 Cost of services rendered 94,393,573 78,900,833 Cost of construction contracts 62,906,502 9,870,064

Total 990,631,593 991,085,747

F-209


27. Expenses from financial activities

VND’000


Interest expense on bank loans 88,500,954 49,800,958 Unrealised foreign exchange loss 2,397,789 - Others 4,899,200 2,757,016

Total 95,797,943 52,557,974 28. Other income and expenses

VND’000


Other income 12,717,959 29,462,915 Sales of scrap materials 4,583,259 19,427,976 Compensation received 2,689,711 10,034,939 Proceeds from disposal of fixed assets 2,553,361 - Contract transfer fee income 1,673,636 - Others 1,217,992 - Other expenses 39,031,852 24,313,703 Net carrying amounts of disposed assets 8,071,883 - Compensation paid 24,843,957 4,002,749 Cost of scrap materials 1,498,001 20,310,954 Loss of goods 2,275,461 - Others 2,342,550 -

Net (loss) profit (26,313,893) 5,149,212 29. Corporate income tax

The Group has the obligation to pay corporate income tax ("CIT") at the rate of 28 percent of taxable profits. The CIT rate has been changed to 25% from 1 January 2009 in accordance with the new CIT regulations. The Group’s tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the consolidated financial statements could be changed at a later date upon final determination by the tax authorities. The current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using applicable tax rates that have been enacted by the balance sheet date. The CIT expense for the year comprised of:


Current tax 153,680,790 165,959,334 Deferred tax 87,134,691 81,778,330

240,815,481 247,737,664

The effective tax rate for the year ended 31 December 2008 was 23.93% (2007: 28.42%).

F-210


29. Corporate income tax (continued)

29.1 Current CIT


Profit before tax 1,006,158,258 869,714,218 Adjustments to increase (decrease) accounting profit Adjustments to increase

Revenue from sale of apartments recognized under stage of completion in prior years and billed this year 361,017,359 286,933,923

Cost from sale of apartments recognized under stage of completion in the current year 745,104,564 413,866,310

Taxable intra-group unrealised profit 121,835,095 672,302 Accrued expenses 50,401,470 756,548 Losses of subsidiaries 33,647,613 7,083,238 Expenses with inadequate supporting documents 7,852,888 4,895,513 Donations 2,515,000 - Taxable unearned income – apartment sale already

billed but not yet earned -

8,271,797 Profit from treasury shares trading by subsidiaries - 1,311,852 Unrealised foreign exchange loss - 1,305,546

Adjustments to decrease Revenue from sale of apartments recognized under

stage of completion in the current year but not yet billed (1,438,248,490) (547,219,321)

Cost from sale of apartments recognized under stage of completion in prior years and billed this year (337,320,330) (227,843,110)

Share of profit in associates (3,897,679) (669,762) Dividend received (42,962) - Negative goodwill credited to the income statement - (219,426,558) Last year accrued expenses paid in the current year - (6,070,428) Unbilled service revenue - (137,616) Others (162,821) -

Adjusted profit before loss carried forward 548,859,965 593,444,452 Tax loss brought forward - (5,686,932)


Current CIT at flat rate of 28% 153,680,790 164,572,104 Surcharge on land transfer due to progressive tax rate - 1,387,230

Estimated current CIT 153,680,790 165,959,334 CIT payable at beginning of year 131,323,839 15,157,630 CIT paid during the year (149,057,733) (49,793,125)

CIT payable at end of year 135,946,896 131,323,839

The current CIT was charged into:


The income statement 153,680,790 165,592,015 Directly to share premium account - 367,319

Total 153,680,790 165,959,334

F-211


29. Corporate income tax (continued)

29.2 Deferred CIT

The following comprise the Group’s deferred tax assets and the movements thereon, during the year and the previous year.

VND’000

Consolidated balance sheet Debit (credit) to current period

consolidated income statement

Ending balance

Beginning balance

Deferred tax assets

Tax losses of subsidiaries 8,345,259 2,327,446 (6,017,813) Unrealised intra-group profit 30,458,774 188,245 (30,270,529) Accrued expenses 12,600,368 - (12,600,368)


Negative goodwill credited to the income statement 61,439,435 61,439,435 -

Profit from apartment sale recognised under stage of completion but not yet taxable 173,285,981 39,751,984 133,533,997

Taxable unearned income - (2,277,570) 211,833 Accrued expenses - (211,833) 2,277,570

234,725,416 98,702,016


30. Transactions with related parties


VND’000



Related company

Construction of New Saigon and Tran Xuan Soan

apartments for the Group

339,072,463

Subcontract work provided by the Company’s An Phu

Branch

286,232,400

Sales of apartments 187,323,500 Offsetting receivables from sales

of apartments against construction costs due to

Huynh De

29,900,000


Related company

Construction of New Saigon, River View and Tran Xuan

Soan apartments for the Group

278,307,338

Subcontract work provided by the Company’s An Phu

Branch

239,156,160

Sale of goods 3,545,756

F-212


30. Transactions with related parties (continued) Significant transactions with related parties during the year were as follows:

VND’000


Hoang Anh Mang Yang Rubber

JSC Associate Rendering construction works 695,717

Sales of goods 1,860,704 Binh Dinh Constrexim JSC Associate Sales of goods 4,819,909 Thanh Da Construction

and Real Estates Investment JSC

Associate Loan lending to the Group 60,000,000

Mr. Nguyen Ngoc An Shareholder of

the Company Loan lending to the Group 120,000,000


VND’000


(Payables)

Trade receivables Huynh De Construction

Corporation Related

company Subcontract work

provided by the Group 106,859,076

Sale of goods 3,404,317 Office rental 228,931 Truc Thinh Trading and

Services Company Limited Related



Sale of goods 20,939,074 Office rental 73,712 Binh Dinh Constrexim JSC Associate

company Sale of goods 4,354,758

Subcontract work provided by the Group 6,796,912

A Dong Construction JSC Associate


provided by the Group 3,361,791 Sale of apartments 116,175

Advances to suppliers Huynh De Construction

Corporation Related

company Advances for construction work 244,438,604

Truc Thinh Trading and

Services Company Limited Related

company Advances for construction work 75,605,844

F-213


30. Transactions with related parties (continued) Amounts due to and due from related parties at the balance sheet date were as follows:

VND’000


(Payables)

Other receivables

Truc Thinh Trading and Service

Company Limited Associate company Disposal of wood 9,405,627

Hoang Anh Gia Dinh JSC Associate company Capital overpayment 2,500,000

Trade payables Huynh De Construction Corporation Related company Purchase of goods (19,791,869) Truc Thinh Trading and Service

Company Limited Related company Purchase of goods (44,029,583)

Hoang Anh Mang Yang Rubber JSC Associate company Purchase of goods (281,727)

Other payables Thanh Da Investment, Construction

and Real Estates JSC Associate company Temporary loans (80,000,000)

Mr. Doan Nguyen Duc BOM Chairman Reimbursement of

acquiring new subsidiary (6,594,225)

(86,594,225)


VND’000


Salaries for the BOD 3,176,093 2,750,000 Accrued remunerations for members of the BOM and BOC 90,000 990,000

Total 3,266,093 3,740,000

F-214


31. Commitments

Operating lease commitment The Company leases the buildings and land to develop resorts at Quy Nhon and Da Lat and leases Safomec building which houses the Company’s offices in Ho Chi Min City. The minimum future lease payables as at 31 December 2008 were as follows:

VND’000

Within

one year

More than one year

to five years More than five years Total

29,543.2 square meters of land at

Quy Nhon resort 657,685 2,630,741 25,320,879 28,609,305 45,882.75 square meters of land

at Da Lat resort 337,238 1,348,953 14,164,005 15,850,196 Lease of buildings from Xuan Huong

Tourism Company 196,591 848,402 11,411,747 12,456,740 Lease of Safomec Building from

Lam Nghiep Mechanical Joint Stock Company 2,705,455 10,821,818 86,574,545 100,101,818

Total 3,896,969 15,649,914 137,471,176 157,018,059

The Group also leases parcels of land in Vietnam and Laos to build factories, football facilities, hotels and for perennial trees plantation. However, as at the date of these consolidated financial statements, the Company has not been able to obtain the lease rates of these parcels of land from the relevant authorities. Accordingly, it is not possible to estimate the minimum future lease payable for these parcels of land. The details of these lands are as follows:

Project / branch Location


Contract Number

Contract date

Lease term

(years)

Domestic furniture factory Gia Lai province

- Vietnam 20,000 192/HĐ-TĐ 17/4/2001 30

Domestic furniture factory Gia Lai province - Vietnam

43,438 65/HĐTĐ 20/12/2006 36

Granite factory and Football Club Gia Lai province - Vietnam

44,559 67/HĐTĐ 20/12/2006 46

Granite factory Gia Lai province - Vietnam

35,919 64/HĐTĐ 20/12/2006 40

Rubber plantation Gia Lai province - Vietnam

1,449,822 60/HĐTĐ 20/12/2006 36

Acacia aneura plantation Gia Lai province - Vietnam

1,465,800 61/HĐTĐ 20/12/2006 36

Exporting furniture factory Gia Lai province - Vietnam

34,020 63/HĐTĐ 24/10/2006 37

Hoang Anh Gia Lai Hotel Gia Lai province - Vietnam

14,165 68/HĐTĐ 20/12/2006 48

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31. Commitments (continued) Operating expenses commitments At 31 December 2008, the Group has contractual commitments for the construction work for its apartment projects as follows:

VND’000

Contracted amount

Recognized amount


New Saigon Apartments 1,247,192,133 705,286,942 541,905,191 Hoang Anh Riverview Apartments 809,962,802 525,501,895 284,460,907 Phu Hoang Anh Apartments 193,338,854 101,342,968 91,995,886

Total 2,250,493,789 1,332,131,805 918,361,984

Other commitments On 4 April 2008, the Company signed a Memorandum of Understanding (“MOU”) with the Laos Government. According to MOU, the Company will make sponsorship to the Laos Government amounting to USD 14,000,000, of which a non-refundable amount is USD 4,000,000 and the balance is in the form of interest-free loans which will be settled in kind in the form of wood or wood products within three years. The purpose of this sponsorship is to finance the construction of housing facilities for the athletes participating in the 25th SEA Games to be held in Laos in 2009. The Laos Government will provide favourable conditions to the Company for acquiring a land area of 10,000 ha for rubber plantation and other business activities including exploration of minerals and construction of hotels in Laos. On 10 November 2008, the Company signed an official agreement with the Laos Government in accordance with the above MOU. The total value of the sponsorship was accordingly increased to USD 19,056,006 under the newly signed official agreement. On 11 November 2008, the Company and the Laos Government signed an agreement to permit the Company to use 10,000 ha land in Attapeu province for rubber plantation and construction of the rubber processing factory. The term is for 35 years from the signing date of this contract. The Company also commits to sponsor the development of the infrastructure in the area amounting to USD 1,060,000 within seven years during the plantation’s development period.

32. Segment information For management purposes, the Group is organised into business units based on their products and services, and has seven reportable operating segments as follows:

• Real estate • Production • Trading and services • Construction • Hospitality • Football club • Power • Plantation Management monitors the operating results of its business units separately for the purposes of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain aspects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing, including finance costs and finance revenue, and income taxes are managed on a Group basis and are not allocated to operating segments.

F-216


32. Segment information (continued)

VND’000

Real estate Production Trading

and services Construction Hospitality Football club Power Plantation Eliminations Total

For the year ended 31 December 2008 Revenue External customers 1,230,883,934 435,479,993 42,084,740 106,054,942 63,581,574 2,659,224 - - - 1,880,744,407 Inter-segment 233,864,391 300,032,650 4,280,851 623,878,087 583,159 - - - (1,162,639,138) -

Total 1,464,748,325 735,512,643 46,365,591 729,933,029 64,164,733 2,659,224 - - (1,162,639,138) 1,880,744,407 Results Segment results 745,666,236 109,173,206 11,942,766 164,983,536 (1,441,643) (18,376,191) - - (121,835,096) 890,112,814

Unallocated expenses (226,775,318) Profit before income tax,

financial revenue and financial costs 663,337,496

Financial revenue 434,721,026 Financial costs (95,797,943) Share of profit of

associates 3,897,679

Profit before income tax 1,006,158,258 Income tax expense (240,815,481)

Net profit after tax for the year 765,342,777 As at 31 December 2008 Assets and liabilities Segment assets 5,213,193,969 828,519,160 59,063,279 460,549,960 441,150,009 22,504,477 163,796,875 232,133,924 - 7,420,911,653 Investments in associates 199,067,441 Unallocated assets 1,251,581,239

Total assets 8,871,560,333

Segment liabilities (1,190,990,730) (196,591,916) (2,339,880) (151,601,376) (10,244,723) (2,758,304) (5,343,820) (15,730,776) - (1,575,601,525) Unallocated liabilities (3,096,752,057)


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33. Subsequent events

There have been no significant events after the balance sheet date which would require adjustments or disclosures in the financial statements other than the matter described below and those already disclosed in relevant Notes to the consolidated financial statements. On 10 January 2009, the Company signed with BIDV a General Cooperation Contract, whereby BIDV, during the period from 2009 to 2011, will provide a credit package to the Company totalling to VND 5,650 billion for its real estate, rubber plantation, minerals and hydropower project.

34. Approval for issue The consolidated financial statements as at and for the year ended 31 December 2008 were authorised for issue by the Company’s Board of Management on 9 February 2009. Ho Thi Kim Chi Nguyen Van Su Chief Accountant General Director 9 February 2009

F-218


Audited Consolidated Financial Statements 31 December 2007

with Report of the Board of Management

F-219


CONTENTS Pages REPORT OF THE BOARD OF MANAGEMENT 1 - 2 AUDITORS’ REPORT 3 AUDITED CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheet 4 - 6 Consolidated Income Statement 7 Consolidated Cash Flow Statement 8 - 9 Notes to the Consolidated Financial Statements 10 - 39

F-220

Hoang Anh Gia Lai Joint Stock Company REPORT OF THE BOARD OF MANAGEMENT

1

The Board of Management of Hoang Anh Gia Lai Joint Stock Company (“the Company”) presents its report and the consolidated financial statements of the Company and its subsidiaries (“the Group”) as at and for the year ended 31 December 2007. THE COMPANY The Company is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments: First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007

The Company has 16 subsidiaries and 6 associates as disclosed in Note 14 to the consolidated financial statements. The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sport and entertainment activities. The Company’s head office is located at Chuhdrong Commune, Pleiku City, Gia Lai Province, Vietnam. RESULTS AND DIVIDENDS The consolidated net profit for the year ended 31 December 2007, after taxation, was VND’000 622,343,873 (2006: VND’000 81,860,089). During the year, the Company paid total dividends of VND’000 36,231,774 over the number of 32,683,634 shares, or VND 1,109 per share. EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events occurring after the balance sheet date which would require adjustments or disclosures to be made in the consolidated financial statements. THE BOARD OF MANAGEMENT AND THE BOARD OF DIRECTORS The members of the Board of Management and the Board of Directors during the year and at the date of this report are:

Board of Management Mr Doan Nguyen Duc Chairman Mr Nguyen Van Su Member Mr Doan Nguyen Thu Member Mr Le Hung Member Mr Nguyen Van Minh Member Appointed on 1 January 2008 Mr Huynh Ngoc Dinh Member Resigned on 31 December 2007

Board of Directors Mr Nguyen Van Su General Director Mr Doan Nguyen Thu Deputy General Director Mr Le Van Ro Deputy General Director Mr Tra Van Han Deputy General Director Mr Nguyen Van Minh Deputy General Director Appointed on 1 January 2008 Mr Do Thai Co Deputy General Director Resigned on 30 May 2007

F-221

Hoang Anh Gia Lai Joint Stock Company REPORT OF THE BOARD OF MANAGEMENT (continued)

AUDITORS The auditors, Ernst & Young, have expressed their willingness to accept reappointment. STATEMENT OF BOARD OF MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS Board of Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the state of affairs of the Group and of its results and cash flows for the year. In preparing those consolidated financial statements, management is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and

• prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

Board of Management confirms that the Group has complied with the above requirements in preparing the consolidated financial statements. Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the financial position of the Group and to ensure that the accounting records comply with the Vietnamese Accounting Standards and 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. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS We hereby approve the accompanying consolidated financial statements which give a true and fair view of the financial position of the Group as at 31 December 2007 and of the results of its operations and cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements. On behalf of the Board of Management: Doan Nguyen Duc Chairman Nguyen Van Su Member 15 February 2008

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Reference: 11355/11107

AUDITORS’ REPORT on the consolidated financial statements of Hoang Anh Gia Lai Joint Stock Company

and its subsidiaries as at and for the year ended 31 December 2007

To: The Shareholders and the Board of Management We have audited the consolidated balance sheet of Hoang Anh Gia Lai Joint Stock Company (“the Company”) and its subsidiaries (“the Group”) as at 31 December 2007, and the related consolidated income statement and consolidated cash flow statement for the year then ended and the notes thereto (“the consolidated financial statements”) as set out on pages 4 to 39. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Basis of opinion We conducted our audit in accordance with Vietnamese and International Standards on Auditing applicable in Vietnam. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Company as at 31 December 2007 and of the results of its operations and its cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with the relevant statutory requirements. Narciso T. Torres Jr. Vo Truong Son Deputy General Director Auditor-in-charge Registered Auditor Registered Auditor Certificate No. N.0868/KTV Certificate No. 0328/KTV Ho Chi Minh City, Vietnam 15 February 2008

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Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B01-DN/HN CONSOLIDATED BALANCE SHEET as at 31 December 2007

VND’000

Code ASSETS Notes Ending

balance Beginning

balance

100 A. CURRENT ASSETS 4,011,680,725 804,711,089

110 I. Cash 1,290,907,575 132,797,218 111 1. Cash 3 1,290,907,575 132,797,218

120 II. Short-term investments 115,202,515 - 121 1. Short-term investments 4 115,202,515 -

130 III. Current account receivables 1,117,125,828 227,591,328 131 1. Trade receivables 5 325,765,251 99,883,763 132 2. Advances to suppliers 6 448,036,718 121,596,639 135 3. Other receivables 7 343,536,451 6,323,518 139 4. Provision for doubtful debts (212,592) (212,592)

140 IV. Inventories 1,370,091,461 426,899,776 141 1. Inventories 8 1,370,391,941 426,899,776 149 2. Provision for obsolete inventories (300,480) -

150 V. Other current assets 118,353,346 17,422,767 151 1. Short-term prepaid expenses 1,202,432 69,837 152 2. VAT deductibles 47,720,744 10,275,115 154 3. Tax and other receivables from the State 102,048 65,577 158 4. Other current assets 9 69,328,122 7,012,238

200 B. NON-CURRENT ASSETS 2,323,140,479 545,696,619

210 I. Long-term receivable 1,800,000 - 218 1. Other long-term receivables 1,800,000 -

220 II. Fixed assets 705,583,335 511,381,041 221 1. Tangible fixed assets 10 551,494,264 334,630,047 222 Cost 606,892,952 351,109,033 223 Accumulated depreciation (55,398,688) (16,478,986) 227 2. Intangible fixed assets 11 71,329,308 56,418,765 228 Cost 72,087,915 56,441,317 229 Accumulated amortisation (758,607) (22,552) 230 3. Construction in progress 12 82,759,763 120,332,229

250 III. Long-term investments 1,306,447,392 6,030,000 252 1. Investments in associates 14.1 270,519,762 6,000,000 258 2. Other long-term investments 15 1,035,927,630 30,000

260 IV. Other long-term assets 309,309,752 28,285,578 261 1. Long-term prepaid expenses 16 304,999,611 24,619,036 262 2. Deferred tax assets 29.2 2,515,691 2,055,042 268 3. Other long-term asset 1,794,450 1,611,500

270 TOTAL ASSETS 6,334,821,204 1,350,407,708

F-224

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B01-DN/HN CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2007

VND’000

Code RESOURCES Notes Ending

balance Beginning

balance

300 A. LIABILITIES 2,700,106,197 805,183,240

310 I. Current liabilities 1,776,243,032 542,272,516 311 1. Short-term loans and borrowings 17 649,474,370 278,788,563 312 2. Trade payables 98,828,933 15,303,241 313 3. Advances from customers 18 512,816,168 4,943,050 314 4. Statutory obligations 19 142,704,393 16,507,052 315 5. Payables to employees 9,238,377 5,331,952 316 6. Accrued expenses 20 286,059,744 114,012,390 319 7. Other payables 21 77,121,047 107,386,268

330 II. Non-current liabilities 923,863,165 262,910,724 333 1. Other long-term liabilities 22 10,178,715 15,860,000 334 2. Long-term loans and debts 23 813,385,100 230,001,552 335 3. Deferred tax liabilities 29.2 98,702,016 16,463,037 336 4. Provision for termination allowance 1,597,334 586,135

400 B. OWNERS’ EQUITY 24 3,402,401,066 509,764,344

410 I. Capital 3,389,054,490 508,382,474 411 1. Share capital 1,199,563,880 387,486,340 412 2. Share premium 1,559,596,453 - 413 3. Other capital - 31,142,000 416 4. Foreign exchange differences 80,017 - 417 5. Investment and development fund 8,622,737 - 418 6. Financial reserve fund 22,528,069 2,528,069 420 7. Undistributed earnings 598,663,334 87,226,065

430 II. Other fund 13,346,576 1,381,870 431 1. Bonus and welfare fund 13,346,576 1,381,870



F-225

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B01-DN/HN CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2007

OFF BALANCE SHEET ITEM

ITEM Ending balance Beginning balance

Foreign currency (US$) 1,775,191 517,829


F-226

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B02-DN/HN CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2007

VND’000

Code ITEMS Notes Current year Previous year

01 1. Revenues from sale of goods and rendering

of services 25.1 1,589,430,005 517,945,728

02 2. Deductions 25.1 (1,398,947) (806,720)

10 3. Net revenues from sale of goods and rendering of services 25.1 1,588,031,058 517,139,008

11 4. Costs of goods sold and services rendered 26 (991,085,747) (361,674,253)

20 5. Gross profit from sale of goods and rendering

of services 596,945,311 155,464,755


22 7. Expenses from financial activities 27 (52,557,974) (16,018,288) 23 - In which: Interest expenses (49,800,958) (14,763,272)



30 10. Operating profit 864,565,006 116,472,288

31 11. Other income 28 29,462,915 1,370,910

32 12. Other expenses 28 (24,313,703) (3,436,656)

40 13. Other profit (loss) 28 5,149,212 (2,065,746)

50 14. Profit before tax 869,714,218 114,406,542

51 15. Current enterprise income tax expense 29.1 (165,592,015) (21,691,580)

52 16. Deferred income tax expenses 29.2 (81,778,330) (10,854,873)

60 17. Net profit after tax 622,343,873 81,860,089

Attributable to: 17.1 Minority interest 22,559,772 - 17.2 The Company's shareholders 599,784,101 81,860,089

70 18. Basic earnings per share 24.3 7.17 2.11


F-227

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B03-DN/HN CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2007

VND’000


I. CASH FLOWS FROM OPERATING

ACTIVITIES

01 Net profit before tax 869,714,218 114,406,542 Adjustments for:

02 Depreciation and amortisation 10, 11 24,067,305 10,359,729 03 Provisions 246,996 246,897 04 Unrealised foreign exchange (gains) losses (142,792) 859,019 05 Profits from investing activities (407,745,427) (84,286) 06 Interest expense 27 49,800,958 14,763,272

08 Operating income before changes in working

capital 535,941,258 140,551,173

09 Increase in receivables (857,271,213) (161,987,386) 10 Increase in inventories and real estate costs (1,538,647,042) (151,747,675) 11 Increase in payables 714,704,785 76,156,736 12 Increase in prepaid expenses (281,086,632) (112,232) 13 Interest paid (41,362,653) (16,699,441) 14 Enterprise income tax paid 29.1 (49,793,125) (7,274,087) 16 Other cash outflows from operating activities (8,902,502) (1,146,199)

20 Net cash used in operating activities (1,526,417,124) (122,259,111)

II. CASH FLOWS FROM INVESTING

ACTIVITIES

21 Purchases and construction of fixed assets 10, 11, 12 (146,782,646) (73,556,205) 22 Proceeds from disposals of fixed assets - 1,123,810 25 Payments for investments in other entities (397,475,300) (7,220,000) 27 Interest and dividends received 144,852,812 -

30 Net cash used in investing activities (399,405,134) (79,652,395)

III. CASH FLOWS FROM FINANCING

ACTIVITIES

31 Capital contribution and issuance of shares 2,594,120,729 191,615,881 32 Capital redemption (221,650,000) - 33 Borrowings received 1,410,818,219 235,245,916 34 Borrowings repaid (663,124,559) (106,368,369) 36 Dividends paid 24 (36,231,774) -

40 Net cash from financing activities 3,083,932,615 320,493,428

F-228

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B03-DN/HN CONSOLIDATED CASH FLOW STATEMENT (continued) for the year ended 31 December 2007

VND’000


50 Net increase in cash 1,158,110,357 118,581,922

60 Cash at beginning of year 132,797,218 14,115,450

61 Impact of exchange rate fluctuation - 99,846

70 Cash at end of year 3 1,290,907,575 132,797,218


F-229

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B09-DN/HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS as at and for the year ended 31 December 2007


Hoang Anh Gia Lai joint Stock Company (”the Company”) is a joint stock company established in Vietnam in accordance with Business Registration Certificate No. 3903000083 dated 1 June 2006 issued by the People’s Committee of Gia Lai Province and the following amendments: First amendment 5 August 2006 Second amendment 20 December 2006 Third amendment 10 January 2007 Fourth amendment 7 March 2007 Fifth amendment 1 June 2007 Sixth amendment 19 June 2007 Seventh amendment 20 December 2007

The Company has 16 subsidiaries and six associates as disclosed in Note 14 to the consolidated financial statements. The Group, through the parent company and its subsidiaries and associates, is principally engaged in producing and trading of furniture and granite products; planting rubber and other trees, processing and trading rubber latex and rubber wood; construction services; mining; developing apartments for sale and lease; building and operating hotels and resorts; and sport and entertainment activities. The Company’s head office is located at Chuhdrong Commune, Pleiku City, Gia Lai Province, Vietnam.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of the Group, which are expressed in thousands of Vietnam dong (“VND’000”), are prepared in accordance with the Vietnamese Accounting System and Vietnamese Accounting Standards issued by the Ministry of Finance as per the:

• Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 1);



• Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and

• Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).

The Company maintains its accounting records in VND. The accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and related notes, 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 financial position and results of operations and cash flows of the Group in accordance with accounting principles and practices generally accepted in countries other than Vietnam. Registered accounting documentation system

The applicable accounting documentation system is the General Journal system. Fiscal year


F-230

Hoang Anh Gia Lai Joint Stock Company and Subsidiaries B09-DN/HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2007

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Basis of consolidation

The consolidated financial statements comprise the financial statements of Hoang Anh Gia Lai Joint Stock Company and its subsidiaries (“the Group”) as at 31 December each year. The financial statements of the subsidiaries are prepared for the same year as the Company, using accounting policies consistent with the Company’s accounting policies. Adjustments are made for any difference in accounting policies that may exist to ensure consistency between the subsidiary and the Company.




Except for subsidiaries acquired under common control which are accounted for under the pooling of interests method, other subsidiaries have been included in the consolidated financial statements using the purchase method of accounting that measures the subsidiaries’ assets and liabilities at their fair value at the acquisition date. Investment in associates

Investments in associates are accounted for using the equity method of accounting. An associate is an entity in which the Company has significant influence and which is neither a subsidiary nor a joint venture.


The financial statements of the associates are prepared for the same accounting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company. Investments in securities and other investments Investments in securities and other investments are stated at their acquisition cost. Provision is made for any diminution in value of the marketable investments at the balance sheet date. Cash

Cash comprise cash on hand, cash in banks and demand deposits.

Receivables



F-231



Inventories


The perpetual method is used to record inventories, which are valued as follows.






Land held for development which is presented as part of “Other long-term investment” is carried at the lower of cost and net realizable value. Costs include all expenditures including borrowing costs directly related to the acquisition, site clearance, and land compensation. Net realizable value represents estimated current selling price less anticipated cost of disposal.

Provision for obsolete inventories

An inventories provision is created for the estimated loss arising due to the impairment (through diminution, damage, obsolescence, etc) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement. Fixed assets


The costs of tangible fixed assets consist of their purchase prices and any directly attributable costs of bringing the tangible fixed assets to working condition for their intended use. Expenditures for additions, improvements and renewals are capitalised and expenditures for maintenance and repairs are charged to the consolidated income statement when incurred. When tangible fixed assets are sold or retired, their cost and accumulated depreciation are removed from the consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement. Land use rights

Land use rights are recorded as intangible assets when the Group obtained the land use right certificates. The costs of land use rights comprise all directly attributable costs of bringing the land to the condition available for use. Depreciation and amortisation


Machinery and equipment 5 - 12 years Buildings and structures 10 - 50 years Motor vehicles 8 - 20 years Office equipment 8 - 10 years Other assets 8 - 15 years Perennial trees 11 - 12 years Land use rights 45 years Software 5 years

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Leased assets



Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over the term of the lease. Borrowing costs


Borrowing costs that are directly attributable to the acquisition, construction or production of a particular asset are capitalized as part of the cost of the asset. Deferred expenses

Deferred expenses, which comprise mainly cost of tools and supplies issued for use for longer period and prepaid land lease, are amortised over the period in which economic benefits are generated in relation to these expenses. Payable and accruals

Payable and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group. Provision for termination allowance

The termination payment to employee is provided at the end of each reporting year for all employees who have more than one year in service at the rate of a half of monthly salary for each working year. Foreign currency transactions

Transactions in currencies other than the Company’s reporting currency of VND are recorded at the inter-bank exchange rates ruling at the date of the transaction. At year-end, monetary assets and liabilities denominated in foreign currencies are revalued at exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the consolidated income statement. The assets and liabilities of foreign entities are translated into VND at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss. Appropriation of net profit


F-233


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Appropriation of net profit (continued)

Financial reserve fund Financial reserve fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. The Fund is set aside to protect the Company's normal operations from business risks or losses, or to prepare for unforeseen losses or damages and force majeure, such as fire, economic and financial turmoil of the country or elsewhere etc.


Bonus and welfare fund Bonus and welfare fund is appropriated from the Company’s net profit as proposed by the Board of Management and subject to shareholders’ approval at the Annual General Meeting. This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and improvement of the employees’ material and spiritual benefits. Revenue recognition


Sale of apartments For apartments sold after completion of construction, the revenue and associated costs are recognised when the significant risks and rewards of ownership of the apartments have passed to the buyers. For apartments sold before completion of construction where the Group has material obligations to complete the apartment project and where the buyers make payments in line with the progress of construction and effectively assume market risks and rewards, the revenue and associated costs are recognised as the related obligations are fulfilled by reference to the stage of completion at the balance sheet date. Cost of apartments sold before completion is determined based on actual land, land development and construction costs and estimated costs to complete the project. The estimated costs to complete the sold apartments are accrued in the balance sheet. Actual expenditures are charged to this accrual account as incurred.


Construction contracts Where the outcome of a construction contract can be estimated reliably and certified by customers, revenue and costs are recognised by reference to the amount of work completed at the balance sheet date. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the year in which they are incurred.

Rendering of services Revenue from rendering of services are recognized when the services are rendered and is stated net of discounts, allowances and non refundable taxes.

Interest Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.

F-234



Taxation

Current tax Current tax assets and liabilities for the current and prior years 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 by the balance sheet date.

Deferred tax



• where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.


• where the deferred tax asset arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and

• in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.




Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxable entity and the same taxation authority and the taxable entity intends to settle its current tax assets and liabilities on a net basis. Earnings per share

Basic earnings per share amount is computed by dividing net profit for the year attributable to ordinary shareholders before any appropriation of bonus and welfare fund by the weighted average number of ordinary shares outstanding during the year.

F-235


3. CASH


Cash on hand 7,014,526 1,738,569 Cash in banks 1,283,893,049 131,058,649

TOTAL 1,290,907,575 132,797,218

4. SHORT-TERM INVESTMENTS

Number of shares

Unit cost VND per share

Total cost VND’000

Giai Viet Joint Stock Company 960,000 113,544 109,002,515 Thanh Nien Media Corporation 20,000 310,000 6,200,000

TOTAL 115,202,515



Trade and service receivables 202,452,284 63,682,123 Sale of apartments (Note 30) 113,412,803 27,841,877 Contract receivable 9,900,164 8,359,763

TOTAL 325,765,251 99,883,763 6. ADVANCES TO SUPPLIERS

VND’000


Advances for acquisition of land and real estate projects 366,955,449 99,409,261 Advances to suppliers of goods and services 81,081,269 16,284,067 Advances to contractors - 5,903,311

TOTAL 448,036,718 121,596,639

F-236




Short - term loans to:

Mr Tran Dinh Lap – interest at 1% per month, repayment within 3 months from drawdown date 100,000,000 -

Mr Doan Nguyen Duc – the Chairman (Note 30) 52,416,452 2,449,977 Mr Tran Van Hung – interest at 1.1% per month,

repayment within 5 months from drawdown date 21,730,667 - Mr Nguyen Xuan Hoa – interest at 1.1% per month,

repayment 3 months from drawdown date 15,000,000 - -

Receivable from Mr Nguyen Anh Hoa - disposal of shares 35,324,677 - Pre-payment discount receivable from The People

Committee of Da Nang Province – relating to land acquisition 31,500,000 -

Advance to Mr Do Hoang Hung - for establishment of a subsidiary in Hanoi 20,400,000 -

Advance to Mr Lam Ba Tong for land acquisition 15,385,750 Advance to Thanh Viet Fund Management Company - for

investment 10,000,000 - Interest receivable 8,834,932 - Advance to Saigon Import Export Company Limited - for

investment 5,000,000 - Dividend receivable 2,500,000 - Others 25,443,973 3,873,541

TOTAL 343,536,451 6,323,518 8. INVENTORIES

VND’000


Apartments for sale under construction 1,186,882,871 267,874,112 Finished goods 28,203,226 9,535,211 Merchandise goods 20,709,530 258,030 Goods in transit 10,842,505 3,586,321 Work in process 64,103,201 21,887,599 Of which from:

Manufacturing 58,287,456 20,563,280 Construction contract 5,815,745 1,324,319

Raw materials 42,979,467 71,240,231 Construction materials 12,795,545 52,342,362 Tools and supplies 3,875,596 175,910

TOTAL 1,370,391,941 426,899,776

All the apartments for sale under construction including the associated land have been mortgaged to secure the Group’s outstanding borrowings (Notes 17 and 23).

F-237



VND’000


Advances to:

Mr Doan Nguyen Duc – the Chairman (Note 30) 59,050,451 2,980,000 Employees 9,739,601 2,921,711 Mr Le Hung - BOM member (Note 30) 420,839 481,254

Short-term deposits 117,231 629,273

TOTAL 69,328,122 7,012,238

F-238



VND’000

Machinery and


structures Motor vehicles Office

equipment Other assets Perennial trees Total

Cost:

Beginning balance 45,801,358 286,220,473 8,976,920 548,481 2,946,479 6,615,322 351,109,033 Additions 49,396,778 173,949,824 26,519,082 2,356,202 3,691,248 - 255,913,134 In which:

Purchased and constructed 36,034,919 158,954,046 23,969,003 2,175,117 3,467,353 - 224,600,438 Received from merger 13,361,859 14,995,778 2,550,079 181,085 223,895 - 31,312,696

Decreases – disposed - - (129,215) - - - (129,215)

Ending balance 95,198,136 460,170,297 35,366,787 2,904,683 6,637,727 6,615,322 606,892,952 Accumulated depreciation:

Beginning balance (7,034,036) (7,199,238) (1,586,238) (62,854) (322,485) (274,135) (16,478,986) Increase (17,193,304) (17,003,559) (3,557,914) (368,774) (721,346) (165,383) (39,010,280) In which:

Depreciation for the year (9,968,696) (10,256,449) (2,753,372) (239,940) (578,182) (165,383) (23,962,022) Received from merger (7,224,608) (6,747,110) (804,542) (128,834) (143,164) - (15,048,258)

Decreases – disposed - - 90,578 - - - 90,578

Ending balance (24,227,340) (24,202,797) (5,053,574) (431,628) (1,043,831) (439,518) (55,398,688) Net carrying amount:

Beginning balance 38,767,322 279,021,235 7,390,682 485,627 2,623,994 6,341,187 334,630,047

Ending balance 70,970,796 435,967,500 30,313,213 2,473,055 5,593,896 6,175,804 551,494,264

In which: Pledged/ mortgaged as loan

security (Notes 17 and 23) 70,970,796 435,967,500 - - - - 506,938,296

F-239



VND’000 Land use rights Computer software Total

Cost:

Beginning balance 56,227,658 213,659 56,441,317 Addition 15,348,836 297,762 15,646,598 In which:

Newly acquired 11,445,680 270,746 11,716,426 Received from merger 3,903,156 27,016 3,930,172

Ending balance 71,576,494 511,421 72,087,915 Accumulated amortisation:

Beginning balance - (22,552) (22,552) Increase (679,438) (56,617) (736,055) In which:

Amortization (50,596) (54,687) (105,283) Received from merger (628,842) (1,930) (630,772)

Ending balance (679,438) (79,169) (758,607) Net carrying amount:

Beginning balance 56,227,658 191,107 56,418,765

Ending balance 70,897,056 432,252 71,329,308

In which: Pledged/ mortgaged as loan security (Note 23) 70,897,056 - 70,897,056


VND’000

Ending balance Beginning balance Rubber and acassia aneura plantation 35,566,602 10,597,358 Construction of plants and factories 32,131,973 - Construction of building and structures 8,252,629 107,105,643 Other construction works 6,808,559 2,629,228

TOTAL 82,759,763 120,332,229

Rubber and acassia aneura plantation includes accumulated costs directly attributable to the development of the plantation.

13. CAPITALIZED BORROWING COSTS During the year, the Group capitalized borrowing costs amounting to VND’000 29,312,662 (2006: VND’000 17,491,937). These are costs in connection with the loans that were entered into to finance the construction and development of fixed assets, apartment projects and acquisition of land for development.

F-240


14. INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES


Ending balance

Name of associates Number of shares

% holding

Cost VND’000 Business

Thanh Da Investment Construction

And Real Estate JSC 24,000,000 24.00 150,000,000 Real estate

An Tien Company Limited 1,308,000 30.00 85,600,000 Real estate Binh Dinh Constrexim JSC 1,000,000 39.20 12,669,762 Construction Hoang Anh - Mang Yang Rubber JSC 675,000 22.50 9,750,000 Plantation Hoang Anh Gia Dinh JSC 750,000 25.00 7,500,000 Real estate East Asia Investment And Construction

Consultant 500,000 25.00 5,000,000

Consultant

TOTAL 270,519,762

14.2 Investments in subsidiaries

Name of subsidiaries Location Business %

holding

Acquired under common control Hoang Anh Housing Construction and

Development JSC (*) Ho Chi Minh City – Vietnam Real estate 99.90

Hoang Nguyen Investment Construction and Housing JSC (*)

Ho Chi Minh City – Vietnam Real estate 89.00

Hoang Anh Me Kong JSC (**) Ho Chi Minh City – Vietnam Real estate 45.00 Acquired from unrelated parties Minh Tuan Company Limited (*) Ho Chi Minh City – Vietnam Real estate 80.00 Newly established Hoang Anh Dak Lak JSC (**) Dak Lak – Vietnam Real estate 55.00 Hoang Phuc Investment, Construction and

Housing JSC (**) Ho Chi Minh City – Vietnam Real estate 51.00

Phu Hoang Anh JSC (**) Ho Chi Minh City – Vietnam Real estate 65.00 Hoang Anh Incomex Company Limited Ho Chi Minh City – Vietnam Real estate 80.00 Hoang Anh Gia Lai (Bangkok) Co., Ltd. (**) Bangkok – Thailand Real estate 47.00 Hoang Anh Real Estate Management Services

JSC (*) Ho Chi Minh City – Vietnam Real estate

management 51.00

Hoang Anh Phat – Tai Hydroelectric JSC (**) Thanh Hoa – Vietnam Power 75.00 Hoang Anh Dakbla Hydropower JSC (**) Kontum – Vietnam Power 70.00 Hoang Anh Gia Lai Hydropower JSC (**) Gia Lai – Vietnam Power 70.00 Central HAGL JSC (**) Da Nang – Vietnam Construction

and trading 42.00

Hoang Anh – Quang Minh Rubber JSC (*) Gia Lai – Vietnam Plantation 57.50 HAGL Minerals Joint Stock Company (**) Gia Lai – Vietnam Plantation

and mining 75.00

(*) operating subsidiaries (**) pre-operating subsidiaries

F-241




Land held for development:

Phuoc Long B - Lot B project 413,810,270 - Binh Hien District, Da Nang City 318,318,667 - District 9, Ho Chi Minh City 153,406,775 - Hai Chau District, Da Nang City 67,648,443 - Thac Gian Lake, Da Nang City 33,000,000 - Bangkok, Thailand 30,841,571 - Nha Be District, Ho Chi Minh City - share from BCC

with Dai Nhan Company 12,217,904 - Investment in a forestry project 5,000,000 - Investment in common shares 1,594,000 - Investment in Government bonds 90,000 30,000

1,035,927,630 30,000

The foregoing parcels of land have been mortgaged to secure the Group’s outstanding borrowings (Notes 17 and 23).


VND’000

Beginning balance 24,619,036 Addition 304,967,729 Amortization (24,587,154)

Ending balance 304,999,611

Long-term prepared expenses primarily includes prepaid land and office rentals and hotels’ deferred

expenses. 17. SHORT-TERM LOANS AND BORROWINGS

VND’000


Short-term bank loans 558,673,527 179,071,643 Current portion of long-term bank loans (Note 23) 90,800,843 99,716,920

TOTAL 649,474,370 278,788,563

F-242



Short-term loans from banks

VND’000

Name of banks Ending balance Term Interest rate

Description of collateral

(Notes 10, 11 and 12)


Loan Agreement No. 207/HDTD, dated 14 September 2007


contract date

0.825% per month

Unsecured



contract date

0.825% per month

Unsecured

BIDV, Ho Chi Minh City Branch

Loan Agreement No. 240/2007/HD, dated 31 August 2007

15,952,023 Repayment within 12 months from

the drawdown date

0.61 % per month

Unsecured


Loan Agreement No. 162/07/NHNT, dated 12/07/2007


drawdown date; the drawdown

period shall not be longer than 12

months

determined at each drawdown

date, varying from 0.65% to

0.88% per month

Plant and machinery at the furniture and granite factories;

properties and facilities at Hoang Anh

Quy Nhon Resort


200,000,000 Repayment within 12 months from

the drawdown date

determined at the drawdown

date, 0.89% per month

51,200,000 shares of Hoang Anh

Construction and Development Housing Joint Stock Company


Bank credit on purchases of latex for trading


drawdown date

0.89% per month

Unsecured

Loan Agreement No. 16/2007/HD, dated 06/09/2007


drawdown date

7% per annum Unsecured

Loan Agreement No. 370863, dated 15/05/2007

148,000,000

Repayment within 12 months from

the drawdown date

0.7% per month

Savings books for the 12-month deposits

aggregating to VND'000 148,000,000

TOTAL 558,673,527

The Group obtained these loans to finance its working capital requirements.

F-243



VND’000


Deposits from customers for apartments for sale 507,672,232 - Advances from trade customers 5,143,936 4,943,050

TOTAL 512,816,168 4,943,050 19. STATUTORY OBLIGATIONS

VND’000


Enterprise income tax (Note 29.1) 131,323,839 15,157,630 VAT payable 10,533,593 1,306,038 Personal income tax 765,893 3,963 Special sales tax 48,124 37,921 Other fees and obligations 32,944 1,500

TOTAL 142,704,393 16,507,052 20. ACCRUED EXPENSES


Subcontractors costs 271,999,044 112,779,779 Interest expense 8,766,305 328,000 Others 5,294,395 904,611

TOTAL 286,059,744 114,012,390 21. OTHER PAYABLES


Payable to Mr Le Hung – BOM member (Note 30) 42,208,000 - Payable to Hoang Lien JSC – acquisition of shares 11,632,702 - Payable to Mr Doan Nguyen Duc – the Chairman

(Note 30) 8,267,225 1,000,000 Remunerations payable to BOM members 2,625,113 - Deposits received 2,854,563 - Others 9,533,444 12,370,387 Cash received for the subsequent issuance of the

Company’s shares to:

- Saigon Security Incorporation - 85,000,000 - Xuyen Thai Binh Joint Stock Company - 9,015,881

TOTAL 77,121,047 107,386,268

F-244


22. OTHER LONG-TERM LIABILTIES

VND’000


Cash advance from Quoc Cuong Gia Lai Joint Stock

Company for a project in Da Nang 9,500,000 9,500,000 Land use right fee payable to the People's Committee of

Gia Lai Province - 6,360,000 Deposits received from tenants 678,715 -

TOTAL 10,178,715 15,860,000



Long-term bank loans 904,185,943 329,718,472 In which

Current portion (Note 17) 90,800,843 99,716,920 Non-current portion 813,385,100 230,001,552

Details of the long-term bank loans are as follows:

VND’000




(Notes 10, 11 and 12)






determined for each drawdown

based on the rate effective at the drawdown date

All assets at the Da Nang Plaza Building


by the loan, and the land use right






determined based on the 12-month deposit rate plus 2.4% per annum

and adjusted twice per annum on 1st February and 1st August

All assets at Hoang Anh Gia Lai Hotel


by the loan

F-245



VND’000




(Notes 10, 11 and 12)

BIDV, Gia Lai Branch (continued)




December 2007

determined based on the 13-


per annum

All assets at Hoang Van Thu Apartment

Building which were formed from

and financed by the loan




December 2007

Determined based on the 13-


per annum

Machinery financed by the loan


Loan Agreement No.327/HDTD, dated 25/12/2003




Floating interest rates, being

adjusted twice per annum, on

1st January and 1st July

All assets at Hoang Anh Quy Nhon

resort which were formed from and


Loan Agreement No. 158/NHNT, dated 13 July 2006


which was 13 July 2006

0.95% per month

Unsecured

Incombank,Gia Lai Branch

Loan Agreement No. 15/HDTD, dated 05/02/2005


quarterly instalments commencing from

25 March 2007

determined based on the 12- month deposit rate plus

3% per annum and adjusted

twice per annum on 1st February and 1st August

All assets at Hoang Anh Da Lat resort


by the loan

Sacombank, Da Nang Branch




December 2009

1.1% per month for the 6 first months; then

determined based on the 13-month deposit rate plus

0.45% per month and adjusted

twice per annum

All land area and asset associated with the land at Hai Chau

District, Da Nang City

F-246



VND’000




(Notes 10, 11 and 12)

BIDV, Quy Nhon Branch

Loan Agreement No. 01/2005/HD, dated 14 July 2005

23,051,595 60 months from the first

drawdown date which was 13

July 2006

0.94% per month Warehouse at Quy Nhon factory




drawdown date which was 27

December 2006

0.98% per month Warehouse at Quy Nhon factory


BIDV Gia Dinh Branch

Loan Agreement No. 135/2007/0000294, dated 09/04/07

176,579,775 A credit limit of VND 200 billion

for a term of 72 months from the

first drawdown

0.95% per month from the first

drawdown date to 31 December 2007;

from 1 January 2008, determined at

the 12-month deposit rate plus 0.3% per

month, and subject to adjustment twice a

year at 1 Jan and 1 July but shall not be

lower than 0.95%



by the loan

BIDV Gia Dinh Branch



for a term of 36 months from

the first drawdown

0.975% per month from the first

drawdown date to 31 Dec 2006; from 1 Jan

2007, determined at the 12-month deposit

rate plus 3.3% per annum, and subject to

adjustment twice a year at 1 Jan and 1

July

Right to use 8,525 square meters of land at 783 Tran Xuan Soan, Tan

Hung Ward, District 7; and total value of

un-sold apartment units which shall

cover 1.5 times of the outstanding

principal balance Nam A Bank

Loan Agreement No. 7872/2007/HDTD-NHNA, dated 14/06/07


drawdown

1.1% per month Right to use 5,329 square meters of

land located at Thao Dien Ward,

District 2 Ho Chi Minh City

F-247



VND’000



Description of collateral (Notes

10, 11 and 12)

BIDV Ho Chi Minh City Branch


9,900,000 A credit limit of VND 15 billion for a term of 54

months from the first drawdown

Determined at 12-month deposit rate

plus 0.22% per month, and subject to adjustment after

each six months since the first

drawdown date

Right to use land at: - 35/7 Tan Quy

Tay, Nha Be - 36/1 Tran Xuan

Soan, Nha Be - 36/7A, Tan Quy

Tay, District 7 - 36/7B Tan Hung

ward, District 7 - 18/8F Tan Hung

Ward, District 7 Ho Chi Minh City


21,016,983 A credit facility of VND 31.512

billion for a sixty-month period since the first

drawdown date

Determined at 12-month deposit rate

plus 3.9% per annum, and subject to

adjustment after each six months since the first drawdown date

Land use right and total assets formed from and financed

by the loan

Housing Development Bank

Loan Agreement No. 639/07, dated 19/07/07



drawdown date with a 24-month

grace period

Determined at effective interest

rate of HDB

Right to use land at lot No. 9

Nguyen Huu Tho Street, Phuoc Kien Commune, Nha Be

District , Ho Chi Minh City

Agribank


100,000,000

A credit limit of VND 130 billion


drawdown date

1.05% per month for each drawdown

All assets at the Phuoc Long B

construction project

TOTAL 904,185,943

The Group obtained these loans mainly to finance the construction and development of the hotels and resorts, apartment projects and purchases of machinery and equipment. .

F-248



24.1 Increase and decrease in owners’ equity

VND’000

Share

capital Share

premium Other

capital

Foreign exchange

differences

Investment & development

fund Financial

reserve fund Undistributed

earnings Bonus and

welfare fund Total

Beginning balance 387,486,340 - 31,142,000 - - 2,528,069 87,226,065 1,381,870 509,764,344 Issuance of new shares during the year

arising from: New cash subscriptions 213,163,660 1,772,387,771 - - - - - - 1,985,551,431 Last year deposits for subscriptions 30,000,000 1,142,000 (31,142,000) - - - - - - Mergers and acquisitions under

common control 568,913,880 5,795,048 - - - - - - 574,708,928 Negative reserves from cash acquisition

of entities under common control - (227,640,299) - - - - - - (227,640,299) Foreign exchange differences - - - 80,017 - - - - 80,017 Net profit after tax during the year - - - - - - 599,784,101 - 599,784,101 Gain from trading treasury shares

net of tax - 7,911,933 - - - - - - 7,911,933 Dividends paid - - - - - - (36,231,774) - (36,231,774) Transfer to:

Investment and development fund - - - - 8,622,737 - (8,622,737) - - Financial reserve fund - - - - - 20,000,000 (20,000,000) - - Bonus and welfare fund - - - - - - (20,799,071) 20,799,071 -

Payment of bonus and welfare benefit - - - - - - - (8,834,365) (8,834,365) Remuneration for BOM - - - - - - (2,693,250) - (2,693,250)

Ending balance 1,199,563,880 1,559,596,453 - 80,017 8,622,737 22,528,069 598,663,334 13,346,576 3,402,401,066

F-249



24.1 Increase and decrease in owners’ equity (continued) During the year, the Company issued 56,891,388 shares at a total par value of VND’000 568,913,880 in a one for one share swap transactions between the Company and certain entities. The said transactions were determined to be business combinations under common control because the Chairman of the Company and his family, as a group, effectively controls both the Company, as the acquirer, and the merged and acquired entities. Accordingly, such transactions were accounted for under pooling-of-interest method. Under this method, net assets of acquired and merged entities were consolidated at their net carrying values with no gain or loss recognised. The resulting share premium of VND’000 5,795,048 represents the excess of the book values versus the per value of the total Company’s shares issued. The foregoing mergers and acquisitions as required by the Company’s shareholders, were undertaken to eliminate potential conflicts of interest that may arise due to the substantial equity ownerships of the Chairman and his family in both the Company and the merged and acquired entities. The Company also acquired substantially for cash consideration controls in certain entities from the Chairman and his certain family members. The said transactions were also determined to be business combination under common control. Accordingly, the net assets acquired were consolidated at their carrying values and the resulting excess of VND’000 227,640,299 of the acquisition costs versus the net carrying values of assets acquired was charged directly to equity as a deduction from share premium account in the consolidated balance sheet. According to the Business Registration Certificate No. 3903000083 – seventh amendment dated 20 December 2007, the Company’s approved chartered capital amounted to VND’000 1,199,563,880, divided into 119,956,388 shares with par value of VND 10,000 per share. As at 31 December 2007, the Company has temporarily appropriated part of the year’s consolidated profit after tax into three different funds – Financial Reserve Fund, Investment and Development Fund and Bonus and Welfare Fund. The final amounts of appropriations will be determined and approved by the shareholders in their next annual meeting. On 30 January 2007, the Company paid total dividends of VND’000 36,231,774 over the number of 32,683,634 shares, or VND 1,109 per share.

24.2 Shares

Current year Previous year Shares Shares Shares authorised to be issued 119,956,388 38,748,634 Shares issued and fully paid 119,956,388 38,748,634

Ordinary shares 119,956,388 38,748,634 Preference shares - -

Outstanding shares 119,956,388 38,748,634 Ordinary shares 119,956,388 38,748,634 Preference shares - -

24.3 Basic earnings per share


Net profit attributable to ordinary equity holders of the parent (VND’000) 599,784,101 81,860,089 Weighted average number of ordinary shares 83,677,098 38,748,634 Earnings per share (VND’000) 7.17 2.11

F-250


25. REVENUES


VND’000

Current year Previous year Gross revenues 1,589,430,005 517,945,728 Of which:

Sale of goods 720,258,258 172,565,543 Sale of apartment 771,240,478 300,267,883 Revenue from construction contracts 17,051,995 23,152,417 Revenue from services 80,879,274 21,959,885

Less (1,398,947) (806,720) Sales returns (1,045,634) (544,089) Special sales tax (353,313) (262,631)

Net revenues 1,588,031,058 517,139,008 Of which:

Sale of goods 719,212,624 172,021,454 Sale of apartment 771,240,478 300,267,883 Revenue from construction contracts 17,051,995 23,152,417 Rendering of services 80,525,961 21,697,254


VND’000

Current year Previous year Negative goodwill from business combination 219,426,558 - Gain on disposal of investments in shares 104,000,160 - Interest income 46,387,584 667,641 Discounts earned from prepaying long-term rental obligation 34,800,000 - Dividend 2,500,000 - Share of profit of associates 669,762 - Others 1,561,554 1,024,193

TOTAL 409,345,618 1,691,834

On 22 June 2007, the Group acquired 80% equity interest in Minh Tuan Company Limited (“Minh

Tuan”) for a total consideration of VND’000 30,761,115. The Group’s share of Minh Tuan’s fair value of net assets at the acquisition date was VND’000 249,937,491. This business combination generated a negative goodwill for the Group of VND’000 219,426,558. The negative goodwill primarily resulted from the higher fair market value of the land held by Minh Tuan as valued by Hoang Gia Security Company at acquisition date as compared to its carrying book value. Details of Minh Tuan’s fair value of net assets and the Group’s share at the acquisition date are as follows:

VND’000 Cash 56,613 Other current assets 1,655,028 Advances to employees 21,373,817 Fixed assets 108,000 Land use right 472,394,000

Total fair value of assets 495,587,458 Less: fair value of liabilities (183,159,502)

Fair value of net assets at acquisition date 312,427,956

F-251


26. COST OF GOODS SOLD AND SERVICES RENDERED

VND’000 Current year Previous year

Cost of goods sold 505,028,323 87,882,330 Costs of apartments sold 397,286,527 230,014,959 Cost of services rendered 78,900,833 30,418,171 Cost of construction contracts 9,870,064 13,358,793

TOTAL 991,085,747 361,674,253 27. EXPENSES FROM FINANCIAL ACTIVITIES

VND’000


Loan interests 49,800,958 14,763,272 Others 2,757,016 1,076,449

TOTAL 52,557,974 16,018,288 28. OTHER INCOME AND EXPENSES

VND’000


Other income 29,462,915 1,370,910 Sales of scrap 19,427,976 1,123,810 Penalty received and others 10,034,939 247,100 Other expenses 24,313,703 3,436,656 Cost of scrap 20,310,954 1,039,524 Penalty paid and others 4,002,749 2,397,132

NET 5,149,212 (2,065,746) 29. ENTERPRISE INCOME TAX

The Group has the obligation to pay Enterprise Income Tax ("EIT") at the rate of 28 percent of taxable profits. The Group’s tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the consolidated financial statements could be changed at a later date upon final determination by the tax authorities.

29.1 Current EIT

The current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date.

F-252


29. ENTERPRISE INCOME TAX (continued)

29.1 Current EIT (continued)

VND’000


Profit before tax 869,714,218 114,406,542 Adjustments to increase (decrease) accounting profit Adjustments to increase

Revenue from sale of apartments recognized under stage of completion in prior years and billed this year 286,933,923 -

Cost from sale of apartments recognized under stage of completion in the current year 413,866,310 247,589,047

Taxable unearned income – apartment sale already billed but not yet earned

8,271,797 -

Losses of subsidiaries 7,083,238 6,362,879 Profit from treasury shares trading by subsidiaries 1,311,852 - Unrealised foreign exchange loss 1,305,546 1,076,449 Accrued expenses 756,548 6,070,428 Taxable inter-group unrealised profit 672,302 - Other permanent differences 4,895,513 1,974,274

Adjustments to decrease

Revenue from sale of apartments recognized under stage of completion in the current year but not yet billed (547,219,321) (299,342,883)

Cost from sale of apartments recognized under stage of completion in prior years and billed this year (227,843,110) -

Negative goodwill credited to the income statement (219,426,558) - Last year accrued expenses paid in the current year (6,070,428) - Share of profit in associates (669,762) - Unbilled service revenue (137,616) - Revenue previously taxed - (666,806)

Adjusted profit before loss carried forward 593,444,452 77,469,930 Tax loss carried forward (of subsidiaries) (5,686,932) -


Current EIT at flat rate of 28% 164,572,104 21,691,580 Surcharge on land transfer due to progressive tax rate 1,387,230 -

Estimated current EIT 165,959,334 21,691,580 EIT payable at beginning of year 15,157,630 740,137 EIT paid during the year (49,793,125) (7,274,087)

EIT payable at end of year 131,323,839 15,157,630

The current EIT was charged into:

VND’000


The income statement 165,592,015 21,691,580 Directly to share premium account 367,319 -

TOTAL 165,959,334 21,691,580

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29. ENTERPRISE INCOME TAX (continued)

29.2 Deferred EIT

The following comprise the Group’s deferred tax assets and the movements thereon, during the year and the previous year.

VND’000

Consolidated balance sheet Credit (debit) to income Ending

balance Beginning

balance Current

year Previous

year

Deferred tax assets

Tax losses of subsidiaries 2,327,446 355,322 1,972,124 355,322 Unrealised inter-group profit 188,245 - 188,245 - Accrued expenses - 1,699,720 (1,699,720) 1,699,720

2,515,691 2,055,042 Deferred tax liability

Negative goodwill credited to the income statement 61,439,435 - (61,439,435) -

Profit from apartment sale recognised under stage of completion but not yet taxable 39,751,984 18,044,196 (21,707,788) (14,491,074)

Taxable unearned income (2,277,570) - 2,277,570 - Accrued expenses (211,833) - 211,833 - Tax losses of subsidiaries - (1,581,159) (1,581,159) 1,581,159

98,702,016 16,463,037 Net deferred income tax debited to income

(81,778,330) (10,854,873)



VND’000


Mr Doan Nguyen Duc Chairman Personal loan (i) 200,000,000 Mr Le Hung BOM member Buying shares (ii) 109,000,000 Huynh De Construction Company

Limited Affiliate company Construction of

apartment for the Group 288,574,798 Subcontract works

provided by the Group 268,603,870 Sale of goods 97,483,200 Lam Tay Nguyen Investment

Company Limited Affiliate company Sale of apartment 65,149,421

Gia Bang Company Affiliate company Sale of apartment 39,861,094

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VND’000

Related parties Relationship Transactions Receivable (Payable)

Trade receivable

Gia Bang Company Affiliate company Sale of apartment 32,778,458 Lam Tay Nguyen Investment

Company Limited Affiliate company Sale of apartment 25,000,000

Huynh De Construction Company

Limited Affiliate company Subcontract works


Sale of goods 47,692,072 Other receivable

Mr Doan Nguyen Duc Chairman Personal loan (i) 52,416,452 Advances

Mr Doan Nguyen Duc Chairman Advance 59,050,451 Mr Le Hung BOM member Advance 420,839 Other payable

Mr Doan Nguyen Duc Chairman Borrowing money (8,267,225) Mr Le Hung BOM member Buying shares (ii) (42,208,000)

(i) 12-month loan which bears interest at 0.88% per month. (ii) On 2 May 2007, Mr Le Hung sold 1,000,000 HAGL JSC shares to Hoang Anh Housing

Construction and Development JSC at VND’000 109,000,000 or VND’000 109 per share. Hoang Anh Housing Construction and Development JSC already settled VND’000 66,792,000, leaving a balance of VND’000 42,208,000 as at 31 December 2007. These shares were already subsequently sold in the market as at 31 December 2007.


VND’000


Accrued remunerations for members of the BOM, BOC and

the Board’s secretary 2,750,000 505,614 Salaries for the BOD 990,000 396,200

TOTAL 3,740,000 901,814

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31. COMMITMENTS

Operating lease commitment The Company leases the buildings and land to develop resorts at Quy Nhon and Da Lat and leases Safomex building which houses the Company’s offices in Ho Chi Min City. The minimum future lease payables as at 31 December 2007 are follows:

VND’000

Within one

year

More than one year to

five years More than five years Total

29,543.2 square meters of land at

Quy Nhon resort 657,685 2,630,741 25,978,564 29,266,990 45,882.75 square meters of land

at Da Lat resort 337,238 1,348,953 14,501,243 16,187,434 Lease of buildings from Xuan Huong

Tourism Company 196,591 848,402 11,608,338 12,653,331 Lease of Safomec Building from

Lam Nghiep Mechanical Joint Stock Company 2,705,455 10,821,818 89,280,000 102,807,273

TOTAL 3,896,969 15,649,914 141,368,145 160,915,028

The Group also leases parcels of land in Gia Lai Province to build factories, football facilities, hotels and for perennial trees plantation. However, as at the date of these consolidated financial statements, the Company has not been able to obtain the lease rates of these parcels of land from the relevant authorities. Accordingly, it is not possible to estimate the minimum future lease payable for these parcels of land. The details of these lands are as follows:

Location/building District


Contract Number

Contract date

Lease term

(years)

Domestic furniture factory Chuprong 20,000 192/HĐ-TĐ 17/4/2001 30 Domestic furniture factory Chuprong 43,438 65/HĐTĐ 20/12/2006 36 Granite factory and Football Club Đak Doa 44,559 67/HĐTĐ 20/12/2006 46 Granite factory Đak Doa 35,919 64/HĐTĐ 20/12/2006 40 Rubber plantation Chuprong 1,449,822 60/HĐTĐ 20/12/2006 36 Acassia aneura plantation Chuprong 1,465,800 61/HĐTĐ 20/12/2006 36 Exporting furniture factory Chuhdrong 34,020 63/HĐTĐ 24/10/2006 37 Hoang Anh Gia Lai Hotel Chuprong 14,165 68/HĐTĐ 20/12/2006 48

F-256


31. COMMITMENTS (continued)

Operating expenses commitments At 31 December 2007, the Group has contractual commitments for the construction works for its apartment projects as follows:

VND’000

Contracted amount

Recognized amount


New Saigon Apartment 793,399,400 276,843,880 516,555,520 Tran Xuan Soan Apartment 207,093,167 108,794,540 98,298,627 Quy Nhon Apartment 117,248,000 39,759,000 77,489,000 Phu Hoang Anh Aparrtment 23,214,102 432,868 22,781,234

TOTAL 1,140,954,669 425,830,288 715,124,381 32. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services, and has seven reportable operating segments as follows:

Real estate Production and trading Construction Hospitality Football club Power Plantation Management monitors the operating results of its business units separately for the purposes of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain aspects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing, including finance costs and finance revenue, and income taxes are managed on a Group basis and are not allocated to operating segments.

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32. SEGMENT INFORMATION (continued)

VND’000

Real estate Production and trading Construction Hospitability Football club Power Plantation Eliminations Total

For the year ended 31 December 2007 Revenue External customers 789,152,493 719,325,374 24,050,453 52,864,897 2,637,841 - - - 1,588,031,058 Inter-segment - 13,954,383 388,860,543 - - - - (402,814,926) -

Total 789,152,493 733,279,757 412,910,996 52,864,897 2,637,841 - - (402,814,926) 1,588,031,058 Results Segment results 390,633,392 214,297,051 8,511,669 (1,894,837) (13,929,662) - - (672,302) 596,945,311 Unallocated expenses (84,018,737) Profit before income tax, financial

revenue and financial costs 512,926,574 Financial revenue 410,015,380 Financial costs (52,557,974) Share of profit of associates (669,762)

Profit before income tax 869,714,218 Income tax expense (247,370,345)

Net profit after tax for the year 622,343,873 As at 31 December 2007 Assets and liabilities Segment assets 3,005,585,935 2,342,471,754 79,410,754 453,235,085 20,629,937 21,032,151 53,818,389 (33,769,078) 5,942,414,927 Investments in associates 270,519,762 Unallocated assets 121,886,515

Total assets 6,334,821,204 Segment liabilities (1,070,461,179) (168,372,134) (19,563,668) (8,594,465) (1,140,539) (743,125) (2,140,695) 33,769,078 (1,237,246,727) Unallocated liabilities (1,462,859,470)


F-258


33. APPROVAL FOR ISSUE

The consolidated financial statements as at and for the year ended 31 December 2007 were authorised for issue by the Company’s Board of Management on 15 February 2008. Ho Thi Kim Chi Nguyen Van Su Chief Accountant General Director 15 February 2008

F-259

ECONOMIC COMMISSION FOR EUROPE

United Nations Framework Classification

for Fossil Energy and Mineral Reserves

and Resources 2009

ECE ENERGY SERIES No.39

UNITED NATIONS

New York and Geneva, 2010

UN-1

NOTE

The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of any firm, licensed process or commercial products does not imply endorsement by the United Nations.

UNITED NATIONS PUBLICATION

Sales No.

ISBN ISSN 1014‐7225

Copyright © United Nations, 2010

All rights reserved worldwide

ECE/ENERGY/85

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FOREWORD

Establishing a complete picture of the current and future supply base of fossil energy and minerals is necessary for effective resources management. Accurate and consistent estimates of fossil energy and mineral reserves and resources, coherent with other scientific and social/ economic information, are the foundation for such assessments. A number of different standards have evolved over time in response to local requirements, but we are now called to serve the needs that arise in a globalized economy. As a result, there has been growing interest in re‐expressing earlier work in the form of common and universally applicable standards.

During the 1990s, ECE took the initiative to develop a simple, user‐friendly and uniform system for classifying and reporting reserves and resources of solid fuels and mineral commodities in response to the wishes of member countries to develop a standard reporting system. The result of these efforts was the creation of the United Nations Framework Classification for Reserves and Resources of Solid Fuels and Mineral Commodities (UNFC‐1997) which was endorsed by the United Nations Economic and Social Council (ECOSOC) in 1997. In 2004, the Classification was extended to also apply to petroleum (oil and natural gas) and uranium and renamed the UNFC for Fossil Energy and Mineral Resources 2004 (UNFC‐2004), following which ECOSOC in its Resolution 2004/233 invited the Member States of the United Nations, international organizations and the United Nations regional commissions to consider taking appropriate measures for ensuring its worldwide application. This Resolution offered an opportunity to harmonize existing reserves and resources classifications, in response to the integration of financial and extractive activities worldwide.

In order to facilitate worldwide application of the Classification, the ECE Committee on Sustainable Energy directed the Ad Hoc Group of Experts on Harmonization of Fossil Energy and Mineral Resources Terminology (now the Expert Group on Resource Classification) to prepare and submit a revised United Nations Framework Classification for Fossil Energy and Mineral Resources (UNFC) for consideration by the Extended Bureau of the Committee. In response to that request a stronger, but also a simpler version of the Classification – United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC‐2009) – was prepared.

I am encouraged to note that UNFC‐2009 was developed by ECE, under the global mandate given by ECOSOC, and through the cooperation and collaboration of both ECE and non‐ECE member countries, other United Nations agencies and international organizations, intergovernmental bodies, professional associations, the private sector and many individual experts. The rigorous revision process, which included a public consultation, has resulted in a generic, intuitive and user‐friendly Framework Classification as outlined in this publication. Sustainable energy development is dependent on careful management of the world’s non‐renewable energy resources i.e. oil, natural gas, coal and uranium. UNFC‐2009 has an important role to play in this process. The availability of these non‐renewable energy resources over the longer term is of crucial importance to both energy consumers and producers, particularly as a large and growing population is coming out of poverty. UNFC‐2009 will significantly facilitate

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the availability of relevant and reliable information on energy reserves and resources in support of international and national resources management, of industry’s management of exploration and production processes, of management of the associated international financial resources and for public awareness. It fills essential needs in our endeavours to build sustainable civilizations. It is my pleasure to bring UNFC‐2009 to your attention and to pay tribute to all those who have contributed to its development.

Ján Kubiš Executive Secretary

United Nations Economic Commission for Europe

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CONTENTS

Preface ........................................................................................................................... 1

Acknowledgements ........................................................................................................ 2

Acronyms and abbreviations ......................................................................................... 3

Introduction.................................................................................................................... 4

I. Application ............................................................................................................ 4

II. Categories and Sub‐Categories ............................................................................. 4

III. Classes ................................................................................................................... 5

IV. Sub‐Classes............................................................................................................. 8

V. Harmonization of Resource Inventories ............................................................... 8

VI. Adapting to National or Local Needs .................................................................... 8

Bibliography ................................................................................................................... 19

Annexes

I. Definitions of Categories and Supporting Explanations ....................................... 10

II. Definitions of Sub‐Categories ............................................................................... 13

III. Explanatory Note to United Nations Framework Classification for Fossil Energy

and Mineral Reserves and Resources 2009 (UNFC‐2009) .................................... 14

Figures

1 UNFC‐2009 categories and examples of classes ................................................... 5

2 Abbreviated version of UNFC‐2009, showing primary classes ............................. 6

3 UNFC‐2009 classes and sub‐classes defined by sub‐categories ........................... 9

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PREFACE

The United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC‐2009) is a universally acceptable and internationally applicable scheme for the classification and reporting of fossil energy and mineral reserves and resources and is currently the only classification in the world to do so. As with extractive activities, UNFC‐2009 reflects conditions in the economic and social domain, including markets and government framework conditions, technological and industrial maturity and the ever present uncertainties. It provides a single framework on which to build international energy and mineral studies, analyze government resource management policies, plan industrial processes and allocate capital efficiently.

UNFC‐2009 is a generic principle‐based system in which quantities are classified on the basis of the three fundamental criteria of economic and social viability (E), field project status and feasibility (F), and geological knowledge (G), using a numerical and language independent coding scheme. Combinations of these criteria create a three‐dimensional system. UNFC‐2009, which can either be applied directly or used as a harmonizing tool, is the successor to the UNFC of 2004. The revision process has resulted in a simplified and user‐friendly version of the Classification with generic high‐level definitions. These are designed to ensure alignment with other widely used systems in the extractive industries – such as the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) Template and the Society of Petroleum Engineers (SPE)/World Petroleum Council (WPC)/American Association of Petroleum Geologists (AAPG)/Society of Petroleum Evaluation Engineers (SPEE) Petroleum Resource Management System (SPE‐PRMS) – and to facilitate mapping with other classification systems. The definitions of the UNFC‐2009 categories and sub‐categories have been simplified and the most commonly‐used classes are defined using plain language, providing harmonized generic terminology at a level suitable for global communications. The use of commonly‐used words that are widely misunderstood by non‐experts and which do not have a unique meaning is avoided; most importantly, the word “reserves” is not used other than in a general sense ‐ “reserves” is a concept with different meanings and usage, even within the extractive industries, where the term is carefully defined and applied by technical experts.

Today’s globalized world has resulted in an increasing number of multi‐resource companies operating in many different countries and jurisdictions. In addition, the development of new types of resources, such as the mining of bitumen to produce synthetic crude oil, demonstrates that the historic boundaries between the minerals and petroleum sectors, which are reflected in different resource classification systems, public reporting requirements and accounting rules, is no longer sustainable. By covering all extractive activities, UNFC‐2009 captures the common principles and provides a tool for consistent reporting for these activities, regardless of the commodity. UNFC‐2009 is a strong code, offering simplicity without sacrificing completeness or flexibility. It paves the way for improved global communications which will aid stability and security of supplies, governed by fewer and more widely understood rules and guidelines. The efficiencies to be gained through the use of UNFC‐2009 are substantial.

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ACKNOWLEDGEMENTS

UNFC‐2009 has been developed through the cooperation and collaboration of ECE and non‐ECE member countries, other United Nations agencies and international organizations, intergovernmental bodies, professional associations and the private sector.

This document builds on the work of a Task Force that mapped key classifications to one another, the UNFC Mapping Task Force. The Task Force was led by Mücella Ersoy (Turkish Coal Enterprises) and Per Blystad (Norwegian Petroleum Directorate) with Niall Weatherstone (CRIRSCO), Ferdinando Camisani‐Calzolari (CRIRSCO), John Etherington (SPE Oil and Gas Reserves Committee), Kirill Kavun (Research Institute for Economics of Mineral Resources and Use of the Subsoil (VIEMS) Russian Federation), James Ross (Ross Petroleum Limited), and Andrej Subelj (Slovenia).

The diligent efforts made in preparing the ground for the revision of the UNFC have been commendable and are greatly appreciated, in particular the work of the UNFC Revision Task Force, which consisted of the Extended Bureau of the Ad Hoc Group of Experts, plus selected experts.

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ACRONYMS AND ABBREVIATIONS

AAPG American Association of Petroleum Geologists

Ad Hoc Group of Experts ECE Ad Hoc Group of Experts on the Harmonization of Fossil Energy and Mineral Resources Terminology

CMMI Council of Mining and Metallurgical Institutions

CRIRSCO Committee for Mineral Reserves International Reporting Standards

ECE United Nations Economic Commission for Europe

IAEA International Atomic Energy Agency

IEC International Electrotechnical Commission

ISO International Organization for Standardization

NEA Nuclear Energy Agency of OECD

OECD Organisation for Economic Co‐operation and Development

SPE Society of Petroleum Engineers

SPEE Society of Petroleum Evaluation Engineers

UNFC United Nations Framework Classification for Fossil Energy and Mineral Resources

UNFC‐2009 United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009

VIEMS Institute for Economics of Mineral Resources and the use of the Subsoil, Russian Federation

WPC World Petroleum Council

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INTRODUCTION

At its sixteenth session in November 2007, the Committee on Sustainable Energy of the Economic Commission for Europe directed the Ad Hoc Group of Experts on Harmonization of Fossil Energy and Mineral Resources Terminology (now the Expert Group on Resource Classification) to submit any revised United Nations Framework Classification for Fossil Energy and Mineral Resources (UNFC) for consideration by the Extended Bureau of the Committee on Sustainable Energy in 2008 in order to facilitate worldwide application of the UNFC. In response to that request a simplified revised version of the Classification (United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC‐2009)) was prepared by the UNFC Revision Task Force, which consisted of the Extended Bureau of the Ad Hoc Group of Experts, plus selected experts. The Explanatory Note annexed to UNFC‐2009 (Annex III) explains in some detail the issues contained in the revised Classification, but does not form part of the Classification itself.

The programme of work for 2009/10 of the Ad Hoc Group of Experts (ECE/ENERGY/GE.3/2009/2), as agreed at its sixth session, notes that the text of the revised draft UNFC‐2009 should be prepared for its seventh session.

I. APPLICATION

UNFC‐2009 applies to fossil energy and mineral reserves and resources located on or below the Earth’s surface. It has been designed to meet, to the extent possible, the needs of applications pertaining to energy and mineral studies, resources management functions, corporate business processes and financial reporting standards.

II. CATEGORIES AND SUB‐CATEGORIES

UNFC‐2009 is a generic principle‐based system in which quantities are classified on the basis of the three fundamental criteria of economic and social viability (E), field project status and feasibility (F), and geological knowledge (G), using a numerical coding system. Combinations of these criteria create a three‐dimensional system. Categories (e.g. E1, E2, E3) and, in some cases, sub‐categories (e.g. E1.1) are defined for each of the three criteria as set out and defined in Annexes I and II.

The first set of categories (the E axis) designates the degree of favourability of social and economic conditions in establishing the commercial viability of the project, including consideration of market prices and relevant legal, regulatory, environmental and contractual conditions. The second set (the F axis) designates the maturity of studies and commitments necessary to implement mining plans or development projects. These extend from early exploration efforts before a deposit or accumulation has been confirmed to exist through to a project that is extracting and selling a commodity, and reflect standard value chain

UN-9

management principles. The third set of categories (the G axis) designates the level of confidence in the geological knowledge and potential recoverability of the quantities.

The categories and sub‐categories are the building blocks of the system, and are combined in the form of “classes”. UNFC‐2009 can be visualized in three dimensions, as shown in Figure 1, or represented in a practical two‐dimensional abbreviated version as shown in Figure 2.

III. CLASSES

A class is uniquely defined by selecting from each of the three criteria a particular combination of a category or a sub‐category (or groups of categories/sub‐categories). Since the codes are always quoted in the same sequence (i.e. E; F; G), the letters may be dropped and just the numbers retained. The numerical code defining a class is then identical in all languages using Arabic numerals.

Figure 1

UNFC‐2009 categories and examples of classes

UN-10

Figure 2

Abbreviated version of UNFC‐2009, showing primary classes

Sales Production Extracted

Non‐Sales Productiona

Categories Class

E F Gb

Future recovery by commercial

development projects or mining operations

Commercial Projectsc

1 1 1, 2, 3

Potentially CommercialProjectsd

2e 2 1, 2, 3 Potential future recovery by contingent

development projects or mining operations

Non‐Commercial Projectsf

3 2 1, 2, 3

Additional quantities in place associated with known depositsg

3 4 1, 2, 3

Potential future recovery by successful exploration

activities

Exploration Projects

3 3 4

Total Com

mod

ity Initially in

Place

Additional quantities in place associated with potential depositsg

3 4 4

a Future non‐sales production is categorized as E3.1. Resources that will be extracted but not sold can exist for all classes of recoverable quantities. They are not shown in the figure.

b G categories may be used discretely, particularly when classifying solid minerals and quantities in place, or in cumulative form (e.g. G1+G2), as is commonly applied for recoverable fluids.

c Commercial Projects have been confirmed to be technically, economically and socially feasible. Recoverable quantities associated with Commercial Projects are defined in many classification systems as Reserves, but there are some material differences between the specific definitions that are applied within the extractive industries and hence the term is not used here.

d Potentially Commercial Projects are expected to be developed in the foreseeable future, in that the quantities are assessed to have reasonable prospects for eventual economic extraction, but technical and/or commercial feasibility has not yet been confirmed. Consequently, not all Potentially Commercial Projects may be developed.

e Potentially Commercial Projects may satisfy the requirements for E1. f Non‐Commercial Projects include those that are at an early stage of evaluation in addition to

those that are considered unlikely to become commercially feasible developments within the foreseeable future.

g A portion of these quantities may become recoverable in the future as technological developments occur. Depending on the commodity type and recovery technology (if any) that has already been applied, some or all of these quantities may never be recovered due to physical and/or chemical constraints.

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While there are no explicit restrictions on the possible combinations of E, F and G categories or sub‐categories, only a limited number will generally be applicable. For the more important combinations (classes and sub‐classes), specific labels are provided as a support to the numerical code, as illustrated in Figure 2.

As shown in Figure 2, the total commodity initially in place is classified at a given date in terms of the following:

(a) Extracted quantities that have been sold – Sales Production.

(b) Extracted quantities that have not been sold – Non‐sales Production.

(c) Quantities associated with a known deposit that may be recovered in the future by extractive activities. Technical and commercial evaluation studies based on defined development projects or mining operations constitute the basis for the classification.

(d) Additional quantities in place associated with a known deposit that will not be recovered by any currently defined development project or mining operation.

(e) Quantities associated with a potential deposit that may be recovered in the future provided that the deposit is confirmed.

(f) Additional quantities in place associated with a potential deposit that would not be expected to be recovered even if the deposit is confirmed.

Material balance of total quantities can be maintained by full application of the classification. For this purpose a reference point shall be established where the quantity, quality and sales (or transfer1) price of recovered quantities are determined.

With the exception of past production that may be measured, quantities are always estimated. There will be a degree of uncertainty associated with the estimates. The uncertainty is communicated either by quoting discrete quantities of decreasing levels of confidence (high, moderate, low) or by generating three specific scenarios or outcomes (low, best and high estimates). The former approach is typically applied for solid minerals, while the latter method is commonly used in petroleum. A low estimate scenario is directly equivalent to a high confidence estimate (i.e. G1), whereas a best estimate scenario is equivalent to the combination of the high confidence and moderate confidence estimates (G1+G2). A high estimate scenario is equivalent to the combination of high, moderate and low confidence estimates (G1+G2+G3). Quantities may be estimated using deterministic or probabilistic methods.

1 In large integrated projects, it may be necessary to determine an internal “transfer” price between “upstream” operations and “midstream” or “downstream” operations based on a netback calculation.

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Where relevant, discovered quantities that may be recovered in the future are subdivided into quantities that are forecast to be sold and quantities that are forecast to be extracted but not sold.

Potentially recoverable quantities may be recovered in the future through projects that are contingent on one or more conditions yet to be fulfilled. Contingent projects are classified into projects for which the social and economic conditions are expected to be acceptable for implementation and those where they are not. In the former case, contingency is caused by the recovery project not being sufficiently matured to confirm technical and/or commercial feasibility, which can then provide the basis for a commitment to extract and sell the commodity at a commercial scale. In the latter case, neither the project nor the economic and social conditions are sufficiently matured to indicate a reasonable potential for commercial recovery and sale in the foreseeable future. A deposit or an accumulation may give rise to several projects with different status.

IV. SUB‐CLASSES

For further clarity in global communications, additional generic UNFC‐2009 sub‐classes are defined based on the full granularity provided by the sub‐categories included in Annex II. These are illustrated in Figure 3.

V. HARMONIZATION OF RESOURCE INVENTORIES

Classifications other than the one shown in Figure 2 can be generated by choosing appropriate combinations of categories, or by grouping or further subdividing the categories. This permits the harmonization of resource inventories that are developed on the basis of different classification systems.

Conversely, when the unabbreviated UNFC‐2009 is used to build a resource inventory, this can be converted to inventories developed on other harmonized classifications without going back to the basic resource information.

VI. ADAPTING TO NATIONAL OR LOCAL NEEDS

Classifications often need to be adapted to national or local needs. Modifications of this nature should be checked for consistency with the unabbreviated UNFC‐2009 and other applications in use.

UN-13

Figure 3

UNFC‐2009 classes and sub‐classes defined by sub‐categoriesa

UNFC Classes Defined by Categories and Sub‐categories

Sales Production Extracted

Non‐sales Production

Categories Class Sub‐class

E F G On

Production 1 1.1 1, 2, 3

Approved for Development

1 1.2 1, 2, 3 Commercial Projects

Justified for Development

1 1.3 1, 2, 3

Development Pending

2b 2.1 1, 2, 3 Potentially Commercial Projects Development

On Hold 2 2.2 1, 2, 3

Development Unclarified

3.2 2.2 1, 2, 3 Non‐Commercial

Projects Development Not Viable

3.3 2.3 1, 2, 3

Know

n Dep

osit

Additional Quantities in Place 3.3 4 1, 2, 3

Exploration Projects

[No sub‐classes defined]c

3.2 3 4

Total Com

mod

ity Initially in

Place

Potential

Dep

osit

Additional Quantities in Place 3.3 4 4

a Refer also to the notes for Figure 2. b Development Pending Projects may satisfy the requirements for E1. c Generic sub‐classes have not been defined here, but it is noted that in petroleum the

terms Prospect, Lead and Play are commonly adopted.

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ANNEX Ia

DEFINITION OF CATEGORIES AND SUPPORTING EXPLANATIONS

Category Definitionb Supporting Explanationc

E1

Extraction and sale has been confirmed to be economically viable.d

Extraction and sale is economic on the basis of current market conditions and realistic assumptions of future market conditions. All necessary approvals/contracts have been confirmed or there are reasonable expectations that all such approvals/contracts will be obtained within a reasonable timeframe. Economic viability is not affected by short‐term adverse market conditions provided that longer‐term forecasts remain positive.

E2

Extraction and sale is expected to become economically viable in the foreseeable future.d

Extraction and sale has not yet been confirmed to be economic but, on the basis of realistic assumptions of future market conditions, there are reasonable prospects for economic extraction and sale in the foreseeable future.

E3

Extraction and sale is not expected to become economically viable in the foreseeable future or evaluation is at too early a stage to determine economic viability.d

On the basis of realistic assumptions of future market conditions, it is currently considered that there are not reasonable prospects for economic extraction and sale in the foreseeable future; or, economic viability of extraction cannot yet be determined due to insufficient information (e.g. during the exploration phase).Also included are quantities that are forecast to be extracted, but which will not be available for sale.

a Annex I forms an integral part of UNFC‐2009. b The term “extraction” is equivalent to “production” when applied to petroleum. c The term “deposit” is equivalent to “accumulation” or “pool” when applied to petroleum. d The phrase “economically viable” encompasses economic (in the narrow sense) plus

other relevant “market conditions”, and includes consideration of prices, costs, legal/fiscal framework, environmental, social and all other non‐technical factors that could directly impact the viability of a development project.

UN-15

Category Definition Supporting Explanation

F1

Feasibility of extraction by a defined development project or mining operation has been confirmed.

Extraction is currently taking place; or, implementation of the development project or mining operation is underway; or, sufficiently detailed studies have been completed to demonstrate the feasibility of extraction by implementing a defined development project or mining operation.

F2

Feasibility of extraction by a defined development project or mining operation is subject to further evaluation.

Preliminary studies demonstrate the existence of a deposit in such form, quality and quantity that the feasibility of extraction by a defined (at least in broad terms) development project or mining operation can be evaluated. Further data acquisition and/or studies may be required to confirm the feasibility of extraction.

F3

Feasibility of extraction by a defined development project or mining operation cannot be evaluated due to limited technical data.

Very preliminary studies (e.g. during the exploration phase), which may be based on a defined (at least in conceptual terms) development project or mining operation, indicate the need for further data acquisition in order to confirm the existence of a deposit in such form, quality and quantity that the feasibility of extraction can be evaluated.

F4

No development project or mining operation has been identified.

In situ (in‐place) quantities that will not be extracted by any currently defined development project or mining operation.

G1

Quantities associated with a known deposit that can be estimated with a high level of confidence.

G2

Quantities associated with a known deposit that can be estimated with a moderate level of confidence.

G3

Quantities associated with a known deposit that can be estimated with a low level of confidence.

For in situ (in‐place) quantities, and for recoverable estimates of fossil energy and mineral resources that are extracted as solids, quantities are typically categorised discretely, where each discrete estimate reflects the level of geological knowledge and confidence associated with a specific part of the deposit. The estimates are categorised as G1, G2 and/or G3 as appropriate. For recoverable estimates of fossil energy and mineral resources that are extracted as fluids, their mobile nature generally precludes assigning recoverable quantities to discrete parts of an accumulation. Recoverable quantities should be evaluated on the basis of the impact of the development scheme on the accumulation as a whole and are usually categorised on the basis of three scenarios or outcomes that are equivalent to G1, G1+G2 and G1+G2+G3.

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Category Definition Supporting Explanation

G4

Estimated quantities associated with a potential deposit, based primarily on indirect evidence.

Quantities that are estimated during the exploration phase are subject to a substantial range of uncertainty as well as a major risk that no development project or mining operation may subsequently be implemented to extract the estimated quantities. Where a single estimate is provided, it should be the expected outcome but, where possible, a full range of uncertainty in the size of the potential deposit should be documented (e.g. in the form of a probability distribution). In addition, it is recommended that the chance (probability) that the potential deposit will become a deposit of any commercial significance is also documented.

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Annex IIa

DEFINITION OF SUB‐CATEGORIES

Category Sub‐Category Sub‐Category Definition

E1.1

Extraction and sale is economic on the basis of current market conditions and realistic assumptions of future market conditions.

E1

E1.2

Extraction and sale is not economic on the basis of current market conditions and realistic assumptions of future market conditions, but is made viable through government subsidies and/or other considerations.

E2 No sub‐categories defined

E3.1 Quantities that are forecast to be extracted, but which will not be available for sale.

E3.2 Economic viability of extraction cannot yet be determined due to insufficient information (e.g. during the exploration phase). E3

E3.3

On the basis of realistic assumptions of future market conditions, it is currently considered that there are not reasonable prospects for economic extraction and sale in the foreseeable future.

F1.1 Extraction is currently taking place.

F1.2 Capital funds have been committed and implementation of the development project or mining operation is underway. F1

F1.3 Sufficiently detailed studies have been completed to demonstrate the feasibility of extraction by implementing a defined development project or mining operation.

F2.1 Project activities are ongoing to justify development in the foreseeable future.

F2.2 Project activities are on hold and/or where justification as a commercial development may be subject to significant delay.

F2

F2.3 There are no current plans to develop or to acquire additional data at the time due to limited potential.

a Annex II forms an integral part of UNFC‐2009.

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ANNEX IIIa

EXPLANATORY NOTE TO UNITED NATIONS FRAMEWORK CLASSIFICATION FOR FOSSIL ENERGY AND MINERAL RESERVES

AND RESOURCES 2009 (UNFC‐2009)

INTRODUCTION By 2004, the Economic Commission for Europe (ECE)b had developed the United Nations Framework Classification for Fossil Energy and Mineral Resources (UNFC) and submitted it to the United Nations Economic and Social Council for its consideration.

At its 42nd Plenary Meeting, on 16 July 2004, the Economic and Social Councilc, recalling its decision 1997/226 of 18 July 1997, welcomed the endorsement by ECE of the United Nations Framework Classification for Fossil Energy and Mineral Resources and decided to invite the Member States of the United Nations, international organizations and the regional commissions to consider taking appropriate measures for ensuring worldwide application of the Framework Classification. The Council noted that that the new classification for fossil energy and mineral resources, which now included energy commodities (for example, natural gas, oil and uranium), was an extension of the earlier framework developed for solid fuels and mineral commodities, on which the Council had taken similar action in 1997 upon endorsement and recommendation by ECE.

The ECE Committee on Sustainable Energy has been assisted by the Ad Hoc Group of Experts on the Harmonization of Fossil Energy and Mineral Resources Terminology (Ad Hoc Group of Experts) in dealing with this matter.

At its sixteenth session in November 2007, the Committee on Sustainable Energy directed the Ad Hoc Group of Experts to submit any revised UNFC for consideration by the Extended Bureau of the Committee on Sustainable Energy in 2008 in order to facilitate worldwide application of the UNFC. A simplified revised version of the classification (UNFC‐2009) was prepared in response to that request. This Explanatory Note explains in some detail the issues contained in the revised classification, but does not form part of the classification itself.

a Explanatory Note accompanies, but does not form part of, UNFC‐2009. b ECE is one of the five regional commissions of the United Nations. It represents Europe, Central Asia, North America and Israel. c Resolution 2004/233 of the United Nations Economic and Social Council pertaining to the United Nations Framework Classification for Fossil Energy and Mineral Resources.

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The UNFC Revision Task Force that prepared the UNFC‐2009 proposal consisted of the Extended Bureau of the Ad Hoc Group of Experts, plus selected experts.

I. RELATIONSHIP TO OTHER CLASSIFICATIONS

Throughout the twentieth century, many different systems were developed for resource classification, reflecting the different physical characteristics of the resources as well the geographic and socio‐economic diversity of the producing areas. Although there was always a certain desire and will, there was no particular requirement to harmonize terminology or to agree to common classification systems. More recently, as the globalization of commodity trading and financial markets has become firmly established, a view developed that a harmonized framework classification system would be extremely beneficial. Development work on the UNFC began in 1992 and led to a three dimensional classification system to which most other solid minerals systems were able to relate.

By 2004, the UNFC had been further developed in order to address all fossil energy and mineral resources. Since then, other important classifications have been developed or significantly updated. These include the New Russian Classification of 2005, the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) Template of 2006 and the Society of Petroleum Engineers (SPE)/World Petroleum Council (WPC)/American Association of Petroleum Geologists (AAPG)/Society of Petroleum Evaluation Engineers (SPEE) Petroleum Resource Management System (SPE‐PRMS) of 2007. In 2007 and 2008, the Ad Hoc Group of Experts, in cooperation with experts representing these professional bodies, undertook an extensive mapping exercise, under the UNFC Mapping Task Force. The work showed that the CRIRSCO Template and SPE‐PRMS could be aligned with the UNFC. The Report of the Mapping Task Force (ECE ENERGY SERIES No. 33 and ECE/ENERGY/71) recommended making some modifications to the UNFC to facilitate this.

UNFC‐2009 reflects the recommendations of the Mapping Task Force by providing a high‐level framework classification under which commodity‐specific guidelines, such as reflected in the CRIRSCO Template and SPE‐PRMS, can coexist. The generic high‐level definitions have been developed to ensure maximum potential for alignment with other systems and to facilitate mapping with them. The definitions of the UNFC categories and sub‐categories have been simplified and the most commonly‐used classes are defined using plain language, providing harmonized generic terminology at a level suitable for global communications.

II. MAINTENANCE OF THE CLASSIFICATION

The resulting classification(s) will need to meet requirements of relevance, materiality, reliability and comparability with respect to the principal needs they aim to serve. This may require complementary texts to be developed in dialogue with all the stakeholders.

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III. NORMATIVE REFERENCES

The International Organization for Standardization (ISO) normative reference document ISO 1000:1992, SI Units (Système International d’Unités) and recommendations for the use of their multiples and certain other units, contains provisions which, through reference in this text, constitute provisions for this document. For dated references, subsequent amendments to or revisions of the publication do not apply. However, Parties to agreements based on this document are encouraged to investigate the possibility of applying the most recent edition of the normative document indicated previously. For undated references, the latest edition of the normative document referred to applies. The members of ISO and the International Electrotechnical Commission (IEC) maintain registers of currently valid International Standards.

IV. COMMENTS TO UNFC‐2009

The following comments refer to specific sections of the Classification. They are appended to the Classification for ease of reference.

To Section I (UNFC‐2009)

This section states that the UNFC‐2009 is an inclusive classification with respect to fossil energy and mineral resources. However, it does not make reference to energy resources contained in physical fields (of pressure and temperature). It also does not make reference to groundwater resources, although it is applicable to projects that are extracting non‐renewable groundwater.

Application of the UNFC‐2009 to recipient reservoirs for permanent storage or for temporary inventory is not addressed in the classification.

The classification aims to serve the four principal needs mentioned in Section I.

To Section II (UNFC‐2009)

The text establishes how conditions in the economic and social domain, the industrial domain (project/mine feasibility) and the geological domain are reflected in the categories used to define classes of in‐place and recoverable quantities.

To Section III (UNFC‐2009)

Classes of in‐place and recoverable quantities are here defined in terms of the categories of Section II.

The recoverable quantities are those that are estimated to eventually be produced. An important aspect of the classification is the definition of a reference point for produced quantities where production is measured directly or estimated from indirect measurements,

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whether it is sales production or non‐sales production. This allows quantities, qualities and values to be defined.

Simple language is used throughout, avoiding the use of key words that do not have a unique meaning. Most importantly, the word “reserves” is not used other than in a general sense.

In existing classifications, the term “reserves” is for the most part used to describe the quantities that commercial recovery projects are forecast to produce. Classifications relating to the recovery of solid minerals often add the additional restriction that the quantity is known with a high level of confidence where used in the context of “proved” or “proven” [mineral] reserves. Recovery projects producing or using fluids will typically have a much broader range of uncertainty with respect to recoverable quantities that result from a given recovery effort. Here, the term “proved” or “proven” reserves is applied to the outcome that has a high probability of being exceeded. UNFC‐2009 is fully compatible with both these practices.

However, “reserves” is a concept with different meanings and usage. Even within the extractive industries, where the term is carefully defined and applied, there are some material differences between the specific definitions that are used in different sectors. In the public domain, many will use it to describe quantities that are recoverable from discovered deposits or accumulations, regardless of whether they are recoverable by commercial projects or by projects that are not (yet) commercial, or where they are thought to be technically recoverable without any consideration of possible recovery projects that would be required to actually recover the quantities. Others use expressions like “recoverable reserves” implying that for them, some reserves are not recoverable, and also phrases such as “undiscovered reserves” and even “in‐place reserves”. While all of these usages are clearly incorrect when considered in the light of certain widely‐used definitions, such as those of CRIRSCO and SPE, the fact that the term has materially different meanings within the extractive industries indicates that it is not ideal as a basis for global communication of such an important quantity. This is the situation also in languages other than English.

This view is further supported by the observation that other common uses of the word “reserves” in English actually have a diametrically opposed meaning to the one most frequently used in the extractive activities. It is not used to describe quantities that are ready to be produced, but rather quantities of soldiers, wines etc. that are being kept “in reserve” – that is, not to be produced until later, or perhaps not at all.

“Commercial” is a key concept in the classification. It is used in its original sense to reflect what is prepared for buying and selling at scale.

Uncertainty is communicated in three complementary ways:

(a) The oldest, emanating from best practices in geologic analysis, is to communicate what has been “observed” or “measured”, what has been estimated with, or is indicated by, reasonably good geological control, and what has been extrapolated or inferred from observations, but with less or lacking geological control. This method of discrete estimates is well‐suited to the characterization of quantities in place in a deposit/accumulation and is also appropriate where estimated potentially

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recoverable quantities are based directly on those discrete in place estimates, as in the case of solid minerals;

(b) The later industrial and commercial approach is to communicate the quantities that may be recovered by a given project. This may be dependent on a number of factors in addition to the quantities in place in the deposit/accumulation. The tradition in this scenario‐based method is to communicate a probability that a project will produce at least the estimated quantity;

(c) Except in the case of commercial projects, there may be a chance that development and production projects will not be realized. This is clearly the case in the exploration phase, where best practice is to communicate a probability that a discovery will be made of sufficient size to have the potential to lead to a commercial project, and then the probability distribution of the forecast recoverable quantities from that commercial project. The probability that potentially commercial projects associated with known deposits will actually be undertaken in the foreseeable future can likewise be communicated if the information is available. Alternatively, the information may be communicated by assigning the quantities to subclasses. For any single exploration prospect or development project, it may be constructive to communicate both the chance that it will lead to a commercial project and the range of quantities that may be produced from the project. When working with portfolios these quantities are generally discounted for the probability that they will materialize.

The UNFC is consistent with these three best practices of communicating uncertainty.

To Sections IV and V (UNFC‐2009)

While the UNFC is a classification in its own right, its generic category definitions make it very suitable for comparing with other classifications through mapping modules, and thus it can be used to facilitate their harmonization through highlighting changes that could be implemented to remove material differences between them. Both the application of the UNFC as a classification and the use of it for comparing to other classifications are facilitated by the subdivision or aggregation of categories to define classes which reflect the primary quantities that are generally and most usefully reported.

To Section VI (UNFC‐2009)

The same procedure of either subdividing or aggregating categories may be applied at the national or local level to meet specific needs arising for instance from national legislation, corporate decision procedures or needs not foreseen when issuing the classification initially. In order to ensure that problems of this nature are solved in a consistent way by different users of the classification, it is important to check the different adaptations for consistency with the basic UNFC and other national or local adaptations.

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BIBLIOGRAPHY

This bibliography refers to selected publications that have been important in the evolution of classifications up to today.

(a) Society of Petroleum Engineers, World Petroleum Council and American Association of Petroleum Geologists (2000) Petroleum Resources Classification and Definitions, approved by SPE, WPC and AAPG, February 2000, published by SPE.

(b) IAEA‐NEA/OECD, (2002), Uranium: Resources, Production and Demand, The IAEA Red Book.

(c) ECE, (2000), Report on Joint Meeting of the ECE Task Force and CMMI International Mineral Reserves Committee (November 1999), ENERGY/2000/11, ECE Committee on Sustainable Energy, tenth session, November 2000.

(d) ECE, (1997), United Nations International Framework Classification for Reserves/Resources ‐ Solid Fuels and Mineral Commodities, ENERGY/WP.1/R.70, ECE Committee on Sustainable Energy, seventh session, November 1997, 21 p.

(e) KELTER, D., (1991), Classification Systems for Coal Resources‐ A Review of the Existing Systems and Suggestions for Improvements, Geol.Jb. A 127; 347‐359.

(f) ECE, (2002), ECE/ENERGY/47, ECE Committee on Sustainable Energy, Report of its eleventh session, November 2001.

(g) ECE, (2004), ECE/ENERGY/53 and Corr. 1 including Annex II Programme of Work, ECE Committee on Sustainable Energy, Report of its thirteenth session, November 2003.

(h) ECE, (2004), E/2004/37‐ E/ECE/1416, United Nations Economic Commission for Europe, Report of its fifty‐ninth session, February 2004.

(i) Petroleum Classification of the Soviet Union (1928).

(j) V.E. McKelvey, (1972), Mineral Resource Estimates and Public Policy: American Scientist, V.60, No.1, p.32‐40.

(k) United States Bureau of Mines and United States Geological Survey, (1980), Principles of a Resource/Reserve Classification for Minerals, United States Geological Survey, Circular 831, 5 p.

(l) United Nations Framework Classification for Fossil Energy and Mineral Resources (2004) http://www.unece.org/energy/se/reserves.html.

(m) Classification of Reserves and Prognostic Resources of Oil and Combustible Gases. Russian Federation Ministry of Natural Resources, Instruction N 298, November 1, 2005.

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(n) International Reporting Template for the Public Reporting of Exploration Results, Mineral Resources and Mineral Reserves. Committee for Mineral Reserves International Reporting Standards, July 2006 http://www.crirsco.com/template.asp.

(o) Petroleum Resource Management System. Society of Petroleum Engineers, World Petroleum Council, American Association of Petroleum Geologists, Society of Petroleum Evaluation Engineers, 2007 http://www.spe.org/spe‐app/spe/industry/reserves/prms.htm.

(p) Report of the Task Force on Mapping of the United Nations Framework Classification for Fossil Energy and Mineral Resources. ECE Ad Hoc Group of Experts on the Harmonization of Fossil Energy and Mineral Resources Terminology, 2008. http://www.unece.org/energy/se/reserves.html.

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