GENERAL INFORMATION (continued)hoabinhcorporation.com.vn/.../pdf/report/20170728044919.docx · Web viewThe preparation and presentation of these interim consolidated financial statements

Hoa Binh Construction & Real Estate Corporation

Interim consolidated financial statements

30 June 2011


CONTENTS

Pages

General information 1 - 2

Report of management 3

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 - 43


GENERAL INFORMATION

THE COMPANY

Hoa Binh Construction & Real Estate Corporation (“the Company”) is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4103000229 issued by the Department of Planning and Investment of Ho Chi Minh City on 1 December 2000 and the following Amended Business Registration Certificates:

Amended Business Registration Certificates Date

1st amendment 8 August 20022nd amendment 25 March 20043rd amendment 2 March 20064th amendment 7 July 20065th amendment 4 September 20076th amendment 28 November 20087th amendment 16 September 20108th amendment 6 April 2011

The Company was listed on the Ho Chi Minh Stock Exchange in accordance with Decision No. 80/UBCK-GPNY issued by the State Stock Exchange on 22 November 2006.

The Company’s principal activities are to provide industrial and civil construction services; surface levelling; construction consulting services; manufacture and trade of construction materials; interior decoration products; house renovation and interior decoration services; and to trade real estate.

The Company’s registered head office is located at 235 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City, Vietnam.

BOARD OF DIRECTORS

The members of the Board of Directors during the period and at the date of this report are:

Mr Le Viet Hai ChairmanMr Tran Anh Hoang MemberMr Phan Ngoc Thanh MemberMr Truong Quang Nhat MemberMr Le Quoc Duy MemberMr Nguyen Le Tan MemberMr Ngo Ngoc Quang MemberMr Tan Kok Leong Member

BOARD OF SUPERVISION

The members of the Board of Supervision during the period and at the date of this report are:

Mr Nguyen Van Thang Head of the Board of SupervisionMs Le Thi Phuong Uyen MemberMr vo Dac Khoi Member

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GENERAL INFORMATION (continued)

MANAGEMENT

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

Mr Le Viet Hai General DirectorMr Le Viet Hung Advisor to the Board of ManagementMr Nguyen Van Tinh Deputy General DirectorMr Truong Quang Nhat Deputy General DirectorMr Nguyen Van An Deputy General DirectorMr Nguyen Tan Tho Deputy General DirectorMr Le Quoc Duy Deputy General Director

LEGAL REPRESENTATIVE

The legal representative of the Company during the period and at the date of this report is Mr Le Viet Hai.

AUDITORS

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

2


REPORT OF MANAGEMENT

Management of Hoa Binh Construction & Real Estate Corporation (“the Company”) is pleased to present its report and the interim consolidated financial statements of the Company and its subsidiaries (“the Group”) for the six-month period ended 30 June 2011.

MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the interim consolidated financial statements of the Group which give a true and fair view of the interim consolidated state of affairs of the Group and of the interim consolidated results of its operations and its 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 in business.

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.

Management confirmed that it has complied with the above requirements in preparing the accompanying interim consolidated financial statements.

STATEMENT BY MANAGEMENT

Management does hereby state that, in its opinion, the accompanying interim consolidated financial statements give a true and fair view of the interim consolidated financial position of the Group as at 30 June 2011 and of the interim consolidated results of its operations and its interim consolidated cash flows for the six-month period then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements.

For and on behalf of management:

Le Viet Hai General Director

29 August 2011

3

Reference: 60933601/15022738

REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS

To: The Shareholders of Hoa Binh Construction & Real Estate Corporation

We have reviewed the interim consolidated financial statements of Hoa Binh Construction & Real Estate Corporation (“the Company”) and its subsidiaries (“the Group”) as set out on pages 5 to 43 which comprise the interim consolidated balance sheet as at 30 June 2011, the interim consolidated income statement and the interim consolidated cash flow statement for the six-month period then ended and the notes thereto.

The preparation and presentation of these interim consolidated financial statements are the responsibility of management. Our responsibility is to issue a report on these interim consolidated financial statements based on our review.

The Group’s consolidated financial statements as at 31 December 2010 and for the year then ended were audited by another auditor whose report dated 7 April 2011 expressed an unqualified opinion on those statements. The Group’s interim consolidated income statement and the interim consolidated cash flow statement for the six-month period ended 30 June 2010 presented for comparative purpose were also reviewed by another auditor whose report dated 25 August 2010 expressed an unqualified opinion on those statements.

We conducted our review in accordance with Vietnamese Standard on Auditing No. 910 – Engagements to Review Financial Statements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim consolidated financial statements are free from 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 caused 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 June 2011, and of the interim consolidated results of its operations and its interim consolidated cash flows for the six-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 Le Quang MinhDeputy General Director AuditorCertificate No. N.0868/KTV Certificate No. 0426/KTV

Ho Chi Minh City, Vietnam

29 August 2011

Hoa Binh Construction & Real Estate Corporation B01a-DN/HN

INTERIM CONSOLIDATED BALANCE SHEETas at 30 June 2011

VND

Code ASSETS Notes 30 June 2011 31 December 2010

100 A. CURRENT ASSETS 2,150,421,553,112 1,273,080,987,731

110 I. Cash and cash equivalents 4 585,720,114,055 258,119,214,731111 1. Cash 33,789,087,675 58,218,393,113112 2. Cash equivalents 551,931,026,380 199,900,821,618

121 II. Short-term investments 5.1 35,777,354,473 1,394,493,283

130 III. Current accounts receivable 1,210,312,569,324 843,542,109,060131 1. Trade receivables 6 336,464,172,445 320,466,554,955132 2. Advances to suppliers 7 121,424,979,882 58,310,717,961134 3. Construction contractor

receivables based on agreed progress billings 8 721,937,401,210 457,375,504,727

135 4. Other receivables 9 31,420,140,752 7,961,723,953139 5. Provision for doubtful debts 6, 7 (934,124,965) (572,392,536)

141 IV. Inventories 10 273,002,503,638 150,351,557,408

150 V. Other current assets 45,609,011,622 19,673,613,249151 1. Short-term prepaid expenses 11 26,500,900,195 6,390,457,057152 2. Value-added tax deductible 9,758,399,672 4,078,115,785154 3. Tax and other receivables

from the State 11,536,499 206,388,129158 4. Other current assets 12 9,338,175,256 8,998,652,278

200 B. NON-CURRENT ASSETS 724,012,957,655 639,878,254,599

220 I. Fixed assets 489,554,706,141 478,888,451,543221 1. Tangible fixed assets 13 452,949,127,417 325,795,684,238222 Cost 566,026,927,366 409,760,064,229223 Accumulated depreciation (113,077,799,949) (83,964,379,991)227 2. Intangible fixed assets 14 6,073,465,544 6,213,449,131228 Cost 6,846,737,843 6,810,737,843229 Accumulated amortisation (773,272,299) (597,288,712)230 3. Construction in progress 15 30,532,113,180 146,879,318,174

250 II. Long-term investments 180,245,783,481 111,494,451,993252 1. Investments in associates

and joint ventures 5.2 141,760,901,977 73,925,940,489258 2. Other long-term investments 5.3 38,484,881,504 37,568,511,504

260 III. Other long-term assets 54,212,468,033 42,261,956,063261 1. Long-term prepaid expenses 16 50,548,091,152 40,521,909,065262 2. Deferred tax assets 29.3 1,645,422,081 183,092,198268 3. Other long-term assets 2,018,954,800 1,556,954,800

269 IV. Goodwill - 7,233,395,000

270 TOTAL ASSETS 2,874,434,510,767 1,912,959,242,330

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INTERIM CONSOLIDATED BALANCE SHEET (continued)as at 30 June 2011

VND

Code RESOURCES Notes 30 June 2011 31 December 2010

300 A. LIABILITIES 2,152,265,113,702 1,219,918,936,033

310 I. Current liabilities 2,101,499,133,996 1,179,214,188,438311 1. Short-term loans and

borrowings 17 940,052,821,563 531,811,018,166312 2. Trade payables 283,189,711,052 327,007,811,325313 3. Advances from customers 18 644,279,853,424 182,969,748,247314 4. Statutory obligations 19 20,849,031,297 44,125,022,062315 5. Payables to employees 37,891,323,886 55,370,608,615316 6. Accrued expenses 20 62,692,873,533 13,917,475,481319 7. Other payables 21 101,826,392,669 8,409,042,556323 8. Bonus and welfare fund 10,717,126,572 15,603,461,986

330 II. Non-current liabilities 50,765,979,706 40,704,747,595334 1. Long-term loans 22 9,935,565,926 17,744,949,409336 2. Provision for severance

allowance 6,459,353,415 363,054,834337 3. Long-term provision 23 12,056,630,694 737,214,238338 4. Unearned revenues 22,314,429,671 21,859,529,114

400 B. OWNERS’ EQUITY 716,368,370,879 665,393,216,491

410 I. Capital 24 716,368,370,879 665,393,216,491411 1. Share capital 207,881,660,000 167,310,030,000412 2. Share premium 368,383,473,203 368,383,473,203414 3. Treasury shares (17,947,727,609) (17,947,727,609)416 4. Foreign exchange

difference - 153,861,723417 5. Investment and

development fund 32,354,987,840 32,066,340,578418 6. Financial reserve fund 11,458,225,129 11,361,009,041420 7. Undistributed earnings 114,237,752,316 104,066,229,555

439 C. MINORITY INTERESTS 5,801,026,186 27,647,089,806

440 TOTAL LIABILITIES AND OWNERS’ EQUITY 2,874,434,510,767 1,912,959,242,330

OFF BALANCE SHEET ITEM

ITEM 30 June 2011 31 December 2010

Foreign currencyUnited States Dollar (US$) 768.62 595.84

Nguyen Thi Nguyen Thuy Le Viet HaiChief Accountant General Director

29 August 2011

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INTERIM CONSOLIDATED INCOME STATEMENTfor the six-month period ended 30 June 2011

VND

Code ITEMS Notes

For the six-month period ended 30 June 2011


01 1. Revenue from sale of goods and rendering of services 26 1,326,057,736,640 746,515,721,415

02 2. Deductions 26 (633,092,437) -

10 3. Net revenue from sale of goods and rendering of services 26 1,325,424,644,203 746,515,721,415

11 4. Cost of goods sold and services rendered (1,148,645,089,624) (637,631,166,842)

20 5. Gross profit from sale of goods and rendering of services 176,779,554,579 108,884,554,573

21 6. Finance income 26.2 21,924,955,109 15,489,273,332

22 7. Finance expenses 27 (64,137,949,028) (20,935,127,942)23 In which: Interest expense (62,324,089,438) (20,549,185,755)

24 8. Selling expenses (3,328,613,199) (364,048,535)

25 9. General and administrative expenses (54,802,810,221) (31,938,673,949)

30 10. Operating profit 76,435,137,240 71,135,977,479

31 11. Other income 28 2,902,688,663 2,238,783,816

32 12. Other expenses 28 (422,914,061) (1,306,841,055)

40 13. Other profit 2,479,774,602 931,942,761

45 14. Shares of profit (loss) of associates and joint venture 10,209,022,437 (1,583,904,701)

50 15. Profit before tax 89,123,934,279 70,484,015,539

51 16. Current corporate income tax expense 29.1 (21,809,709,721) (17,678,107,148)

52 17. Deferred corporate income tax benefit 29.3 1,462,329,883 13,392,985

60 18. Net profit after tax 68,776,554,441 52,819,301,376Attributable to:18.1 Minority interests 245,749,013 129,902,06318.2 Equity holders of the

Company 68,530,805,428 52,689,399,313

70 19. Basic earnings per share 25 3,378 3,561


29 August 2011

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INTERIM CONSOLIDATED CASH FLOW STATEMENT for the six-month period ended 30 June 2011

VND

Code ITEMS Notes



I. CASH FLOWS FROM OPERATING ACTIVITIES

01 Profit before tax 89,123,934,279 70,484,015,539Adjustments for:

02 Depreciation and amortisation 29,187,032,384 16,548,978,502 03 Provisions 11,681,148,885 -04 Unrealised foreign exchange losses 1,198,416,825 -05 Profits from investing activities (31,179,888,312) (6,823,823,563)06 Interest expense 27 62,324,089,438 20,549,185,755

08 Operating profit before changes in working capital 162,334,733,499 100,758,356,233

09 Increase in receivables (360,088,179,754) (314,362,394,908)10 (Increase) decrease in inventories (122,650,946,230) 19,204,036,46111 Increase in payables 513,779,521,839 156,520,337,547 12 (Increase) decrease in prepaid

expenses (30,136,625,225) 6,315,765,91413 Interest paid (55,141,228,286) (20,321,688,525)14 Corporate income tax paid 29.2 (33,622,984,751) (3,181,108,986)16 Other cash outflows from operating

activities (5,605,917,332) (4,073,707,122)

20 Net cash flows from (used in) operating activities 68,868,373,760 (59,140,403,386)

II. CASH FLOWS FROM INVESTING ACTIVITIES

21 Purchase and construction of fixed assets (165,163,218,637) (41,419,166,009)

22 Proceeds from disposals of fixed assets - 70,000,000

23 Loans to other entities (33,523,456,878) (500,000,000)24 Collections from borrowers 1,030,376,588 5,000,00025 Payments for investments in

other entities (916,370,000) (1,084,230,000)26 Proceeds from sale of investments

in other entities 27,979,200,000 - 27 Interest and dividends received 18,275,469,853 1,757,627,392

30 Net cash flows used in investing activities (152,317,999,074) (41,170,768,617)

III. CASH FLOWS FROM FINANCING ACTIVITIES

31 Capital contribution - 500,000,00032 Capital redemption - (17,947,727,609) 33 Drawdown of borrowings 1,158,292,813,742 327,096,471,53834 Repayment of borrowings (747,250,970,496) (316,666,591,228)

40 Net cash flows from (used in) financing activities 411,041,843,246 (7,017,847,299)

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INTERIM CONSOLIDATED CASH FLOW STATEMENT (continued)for the six-month period ended 30 June 2011

VND

Code ITEMS Notes



50 Net increase (decrease) in cash and cash equivalents 327,592,217,932 (107,329,019,302)

60 Cash and cash equivalents at beginning of period 4 258,119,214,731 183,773,870,503

61 Impact of exchange rate fluctuation 8,681,392 47,389,335

70 Cash and cash equivalents at end of period 4 585,720,114,055 76,492,240,536


29 August 2011

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS as at and for the six-month period ended 30 June 2011

1. CORPORATE INFORMATION

Hoa Binh Construction & Real Estate Corporation (“the Company”) is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4103000229 issued by the Department of Planning and Investment (“DPI”) of Ho Chi Minh City on 1 December 2000 and the following Amended Business Registration Certificates:

Amended Business Registration Certificates Date

1st amendment 8 August 20022nd amendment 25 March 20043rd amendment 2 March 20064th amendment 7 July 20065th amendment 4 September 20076th amendment 28 November 20087th amendment 16 September 20108th amendment 6 April 2011

The Company was listed on the Ho Chi Minh Stock Exchange in accordance with Decision No. 80/UBCK-GPNY issued by the State Stock Exchange on 22 November 2006.

The principal activities of the Company and its subsidiaries (“Group”) are to provide industrial and civil construction services; surface levelling; construction consulting services; manufacture and trade of construction materials; interior decoration products; house renovation and interior decoration services; and to trade real estate.

The Company’s registered head office is located at 235 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City, Vietnam.

The number of the Group’s employees as at 30 June 2011 was 1,838 (31 December 2010: 1,549).

Corporate structure

The Company’s corporate structure includes 11 subsidiaries, in which:

Hoa Binh House Corporation (“HBH”), a shareholding company in which the Company holds 94% of ownership interest, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4103007228 issued by the DPI of Ho Chi Minh City on 7 July 2007, as amended. HBH’s registered office is located at 235/2 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City Vietnam. HBH’s principal activity is to invest in real estates.

Hoa Binh Wood Manufacturing and Decorating Joint Stock Company (“MHB”), a shareholding company in which the Company holds 90% of ownership interest, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4103010322 issued by the DPI of Ho Chi Minh City on 17 May 2008, as amended. MHB’s registered office is located at 2 Nguyen Oanh Street, Ward 7, Go Vap District, Ho Chi Minh City, Vietnam. MHB’s principal activity is to manufacture, sell, process and fit up household wooden and interior decoration products.

Hoa Binh Phu Yen Investment and Development Joint Stock Company (“HBY”), a shareholding company in which the Company holds 99.22% of ownership interest, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 3603000092 issued by the DPI of Phu Yen Province on 8 November 2007, as amended. HBY’s registered office is located at 169 Le Duan Street, Ward 6, Tuy Hoa City, Phu Yen Province, Vietnam. HBY’s principal activity is to provide engineering

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS as at and for the six-month period ended 30 June 2011

construction services.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)as at and for the six-month period ended 30 June 2011

1. CORPORATE INFORMATION (continued)

Corporate structure (continued)

Hoa Binh Mechanical Electrical Joint Stock Company (“HBE”), a shareholding company in which the Company holds 92.57% of ownership interest, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4103009338 issued by the DPI of Ho Chi Minh City on 2 February 2008. HBE’s registered office is located at 235/2 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City, Vietnam. HBE’s principal activity is to build and fit up construction equipments, electric and water systems, prevention and fighting fire systems, cold system.

Hoa Binh Paint Co., Ltd. (“HBP”), a one member limited liability company, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4104000032 issued by the DPI of Ho Chi Minh City on 24 December 2001, as amended. HBP’s registered office is located at Lot 37/5A, 5th Quarter, Phan Van Hon Street, Tan Thoi Nhat Ward, District 12, Ho Chi Minh City, Vietnam. HBP’s principal activities are to manufacture, sell construction materials and provide interior decoration services.

Anh Huy Co., Ltd. (“AHA”), a limited liability company with two or more members in which the Company holds 90% of ownership interest, was incorporated in Vietnam pursuant to Business Registration Certificate No. 0301453003 issued by the DPI of Ho Chi Minh City on 14 August 1993, as amended. AHA’s registered office is located at 1700/3C, Revenue 1A, An Phu Dong Ward, District 12, Ho Chi Minh City, Vietnam. AHA’s principal activities are to provide interior decoration services; to manufacture construction materials (aluminium windows); to provide surface levelling service; and to sell construction materials.

Hoa Binh Hanoi Construction & Read Estate Co., Ltd (“HB Hanoi”), a one member limited liability company, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 0104853362 issued by the DPI of Ha Noi City on 8 September 2010, as amended. HB Hanoi’s registered office is located at 8th Floor, San Nam Office, Dich Vong Hau Ward, Cau Giay District, Ha Noi City, Vietnam. HB Hanoi’s principal activities are to provide industrial and civil construction services; surface levelling service; to install sewage system service; house renovation and interior decoration services; and to trade real estate.

Hoa Binh Hue Development Joint Stock Company (“HBL”), a shareholding company in which the Company holds 95.49% of ownership interest, was incorporated under the Law on Enterprise of Vietnam pursuant to Investment Licence No. 312031000012 issued by the Board of Management of Chan May - Lang Co Economic Zone of Thua Thien Hue Province on 22 November 2007, as amended. HBL’s registered office is located at Phu Hai 2 village, Loc Vinh Commune, Phu Loc District, Thua Thien Hue Province, Vietnam. HBL’s principal activity is to invest in Le Royal An Nam Resort.

H.B.T Trading Co., Ltd. (“HBT”), a one member limited liability company, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4104000080 issued by the DPI of Ho Chi Minh City on 24 December 2003, as amended. HBT’s registered office is located at 235 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City, Vietnam. HBT’s principal activities are to sell construction materials, interior decoration products; provide trading promotion service, agency for goods consignment service, advertisement service, fitting up and processing interior decoration product services.

Hoa Binh Architecture Co., Ltd. (“HBA”), a one member limited liability company, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 4104000035 issued by the DPI of Ho Chi Minh City on 7 May 2002, as amended. HBA’s registered office is located at 235 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City, Vietnam. HBA’s principal activities are to provide construction consulting

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service; architectural, structural and technological designs services.

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1. CORPORATE INFORMATION (continued)

Corporate structure (continued)

Matec Construction Machinery Co., Ltd. (“MATEC”), a one member limited liability company, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 0310341578 issued by the DPI of Ho Chi Minh City on 27 September 2010. MATEC’s registered office is located at 37/8 Phan Van Hon Street, Tan Thoi Nhat Ward, District 12, Ho Chi Minh City, Vietnam. MATEC’s principal activities are to rent electrical machineries, construction equipments.

2. BASIS OF PREPARATION

2.1 Accounting standards and systemThe interim consolidated financial statements of the Group, expressed in Vietnam dong (“VND”), are prepared in accordance with the Vietnamese Accounting System and Vietnamese Accounting Standard (“VAS”) No. 27 - Interim Financial Reporting and other VAS 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. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2);

Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 3);

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 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.

2.2 Registered accounting documentation system The registered accounting documentation system is general journal system.

2.3 Fiscal yearThe Group’s fiscal year starts on 1 January and ends on 31 December.

2.4 Accounting currencyThe Group maintains its accounting records in VND.

2.5 Basis of consolidationThe interim consolidated financial statements comprise the interim financial statements of the Company and its subsidiaries for the six-month period ended 30 June 2011.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continued to be consolidated until the date that such control ceases.

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2. BASIS OF PREPARATION (continued)

2.5 Basis of consolidation (continued)

The interim financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies.

All intra-company balances, income and expenses and unrealised gains or losses resulting from intra-company transactions are eliminated in full.

Minority interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the interim consolidated income statement and within equity in the interim consolidated balance sheet, separately from the Group’s shareholders’ equity.

Acquisition of minority interests is accounted for using the parent entity extension method, whereby, the difference between the consideration and the fair value of the share of the net assets acquired is recognised in goodwill.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Change in accounting policies and disclosures The accounting policies adopted by the Group in preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2010 and the interim consolidated financial statements for the six-month period ended 30 June 2010 except for the change in the accounting policy in relation to the presentation and disclosure of financial instruments.

On 6 November 2009, the Ministry of Finance issued Circular No. 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments (“Circular 210”) with effectiveness from financial years beginning on or after 1 January 2011.

The adoption of Circular 210 results in new disclosures being added to the interim consolidated financial statements as shown in Notes 32 and 33.

Circular 210 also requires the Group to evaluate the terms of non-derivative financial instruments issued by the Group to determine whether it contains both a liability and an equity component. Such components are classified separately as financial liabilities, financial assets or equity instruments in the interim consolidated balance sheet. This requirement has no impact on the financial position or result of operation of the Group as the Group has not yet issued such non-derivative financial instrument.

3.2 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, cash in banks and short-term, highly liquid investments with an original maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.

3.3 InventoriesInventories 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 in the ordinary course of business less the estimated costs to complete and the estimated costs necessary to make the sale.

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

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16



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 Inventories (continued)

Raw materials - cost of purchase on a weighted average basis.

Work-in-process - cost of direct materials and labour plus attributable construction overheads.

Merchandise property - cost of purchase on a specific identification basis.

Provision for obsolete inventoriesAn inventory provision is created for the estimated loss arising due to the impairment of value (through diminution, damage, obsolescence, etc.) of raw materials, work-in-progress, and merchandise property 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.

3.4 ReceivablesReceivables 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 amounts of outstanding receivables at the balance sheet date which are doubtful of being recovered. Increases and decreases to the provision balance are recorded as general and administrative expense in the interim consolidated income statement.

3.5 Tangible fixed assetsTangible fixed assets are stated at cost less accumulated depreciation.

The cost of a tangible fixed asset comprises its purchase price and any directly attributable costs of bringing the tangible fixed asset to working condition for its intended use. Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and expenditures for maintenance and repairs are charged to the interim consolidated income statement as incurred.

When tangible fixed assets are sold or retired, their costs 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 Intangible fixed assetsIntangible fixed assets are stated at cost less accumulated amortisation.

The cost of an intangible fixed asset comprises its purchase price and any directly attributable costs of preparing the intangible fixed asset for its intended use. When intangible 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 right is recorded as an intangible asset on the balance sheet when the Group obtained the land use right certificates. The costs of land use right comprise all directly attributable costs of bringing the land to the condition available for intended use and is not amortised due to having indefinite useful life.

17




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

Machinery & equipment 5 - 12 yearsBuilding & structure 44 - 50 yearsMotor vehicles 8 - 10 yearsOffice equipment 5 - 6 yearsComputer software 5- 16 yearsOther intangible fixed assets 5 - 10 years

The useful life of the fixed assets and depreciation rates are reviewed periodically to ensure that the method and the period of the depreciation and amortisation are consistent with the expected pattern of economic benefits that will be derived from the use of fixed assets.

3.8 Borrowing costs Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds and are recorded as expenses when incurred.

3.9 Prepaid expensesPrepaid 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 amounts are paid or the period in which economic benefits are generated in relation to these expenses.

Tools and supplies used for construction are amortised to the interim consolidated income statement over the period of 2 – 3 years on the straight-line basis.

3.10 Business combinations and goodwillBusiness 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 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 recognized directly in the interim consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortization. Goodwill is amortized over 10 year period on a straight-line basis.

3.11 Investment in associatesThe Group’s investment in its associates is accounted for using the equity method of accounting. An associate is an entity in which the Group has significant influence that is 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 associates is included in the carrying amount of the investment and is amortized over a period of ten (10) years.

18




3.11 Investment in associates (continued)

The share of post-acquisition profit (loss) of the associates is presented on the face of the interim consolidated income statement. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of the change and discloses this, where applicable, in the equity section of the interim consolidated balance sheet. 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 interim financial statements of the associates are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

3.12 Investment in securities and other investmentsInvestments in securities and other investments are stated at their acquisition costs. 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 in accordance with the guidance under Circular No. 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.

3.13 Payables and accrualsPayables 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 allowanceThe severance allowance to employees is provided at the end of each reporting period for all employees who have more than 12 months in service at the rate of one-half of the average monthly salary of the latest six months up to the balance sheet date for each year of service up to 31 December 2008 in accordance with the Labour Code 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 balance sheet date. Any changes to the accrued amount will be taken to the interim consolidated income statement. From 1 January 2009, the Group pays unemployment insurance in accordance with Decree No. 127/2008/ND-CP dated 12 December 2008.

3.15 ProvisionsProvisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

3.16 Foreign currency transactionsThe Group adopted the Circular No. 201/2009/TT-BTC issued by the Ministry of Finance on 15 October 2009 providing guidance for the treatments of foreign exchange differences (the “Circular 201”) in relation to foreign currency transactions from the year 2009.

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

19



extent that they are deferred as explained in the following paragraphs.

20




3.16 Foreign currency transactions (continued)

All unrealised foreign exchange differences arising from the translation of short-term monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are taken to the “Foreign exchange differences reserve” account in the equity section of the interim consolidated balance sheet and reversed in the following period.

All unrealised foreign exchange losses arising from the translation of long-term monetary liabilities denominated in foreign currencies as at balances sheet date are charged to the interim consolidated income statement. However, if the charging of all foreign exchange losses results in the net loss before tax for the Group, such exchange losses exceeding the foreign exchange losses arising from the translation of the current portion of the long-term liabilities is deferred in the “Foreign exchange differences reserve” account in the equity section of the interim consolidated balance sheet and allocated to interim consolidated income statement within the subsequent five years.

The above guidance related to unrealized foreign exchange differences provided by the Circular 201 is different from those stipulated Vietnamese Accounting Standard No. 10, Effects of Changes in Foreign Exchange Rates (the “VAS 10”) relating to the recognition of unrealised foreign exchange differences 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 interim consolidated income statement.

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

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

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

- All unrealized 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 interim consolidated income statement within the subsequent 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 interim consolidated balance sheet and allocated to the interim consolidated income statement within the subsequent five years.

21



The impact to the interim consolidated financial statements had the Group adopted VAS 10 for the six-month period ended 30 June 2011 is not material as a whole.

22




3.17 Treasury sharesOwn 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 Group’s own equity instruments.

3.18 Earnings per shareBasic earnings per share amount is computed by dividing net profit for the period attributable to ordinary shareholders, before appropriation for bonus and welfare fund, by the weighted average number of ordinary shares outstanding during the period, where applicable.

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 preference shares) 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.

3.19 Appropriation of net profitNet profit after tax is available for appropriation to shareholders after approval in the annual general meeting, and after making appropriation to reserve funds in accordance with the Company’s Charter and Vietnam’s regulatory requirements.

The Group maintains the following reserve funds which are appropriated from the Group’s net profit as proposed by the Board of Directors and subject to approval by shareholders at the annual general meeting:

Financial reserve fund

This fund is set aside to protect the Group's normal operations from business risks or losses, or to prepare for unforeseen losses or damages for objective reasons and force majeure, such as fire, economic and financial turmoil of the country or elsewhere.

Investment and development fund

This fund is set aside for use in the Group’s expansion of its operation or in-depth investments.

Bonus and welfare fund

This fund is set aside for the purpose of pecuniary rewarding and encouraging, common benefits and improvement of the employees’ material and spiritual benefits and it is recognised as a liability.

3.20 Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding trade discount, rebate and sales return. The following specific recognition criteria must also be met before revenue is recognised:

Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the interim balance sheet date, as measured as the proportion of contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Difference between the cumulative revenue of a construction contract recognised to date and the cumulative amount of progress billings of that contract is presented as construction

23



contractor receivable based on agreed progress billings in the interim consolidated balance sheet.

24




3.20 Revenue recognition (continued)

Rental income

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

Rendering of services

Revenue is recognised when services have been rendered.

Interest

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

Dividends

Revenue is recognised when the Group is entitled to receive dividends.

3.21 TaxationCurrent income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted as at the balance sheet date.

Current income tax is charged or credited to the interim consolidated income statement, except when it relates to items recognised directly to equity, in which case the deferred current income tax is also dealt with in equity.

Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to set off current tax assets against current tax liabilities and when the Group intends to settle its current tax assets and liabilities on a net basis.

Deferred tax

Deferred tax is provided using the 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 purposes.

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

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

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

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Previously unrecognised deferred income tax assets are re-assessed at each balance sheet date and

25



are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.


3.22 Financial instrumentsFinancial instruments – initial recognition and presentation

Financial assets

Financial assets within the scope of Circular 210 are classified, for disclosures in the notes to the interim consolidated financial statements, as financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables or available-for-sale financial assets as appropriate. The Group determines the classification of its financial assets at initial recognition.

All financial assets are recognised initially at cost plus directly attributable transaction costs.

The Group’s financial assets include cash and short-term deposits, trade and other receivables, and loan receivables.

Financial liabilities

Financial liabilities within the scope of Circular 210 are classified, for disclosures in the notes to the interim consolidated financial statements, as financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at cost plus directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings.

Financial instruments – subsequent measurement

No subsequent measure of financial instruments is currently required.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the interim separate balance sheet if, and only if, there is a currently enforceable legal right to offset the consolidated amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

4. CASH AND CASH EQUIVALENTS

VND30 June 2011 31 December 2010

Cash in banks 29,884,460,396 54,937,349,706Cash on hand 3,904,627,279 3,281,043,407Cash equivalents 551,931,026,380 199,900,821,618

TOTAL 585,720,114,055 258,119,214,731

Cash equivalents represent two-week deposit, one-month term deposits and two-month term deposit and earn interest at the applicable rates.

26



5. INVESTMENTS

5.1 Short-term investments


Short-term loans to related parties (Note 30) 23,180,714,473 1,394,493,283Short-term deposits 12,596,640,000 -

NET 35,777,354,473 1,394,493,283

Short-term loans to related parties represent loans with maturity of one year and earn interest at rates ranging from 14% to 20% per annum.

Short-term deposits represent term deposits at banks and earn interest at rate of 14% per annum.

5.2 Investments in associates and joint ventureDetails of investments in associates and joint venture are as follows:

30 June 2011 31 December 2010% of

interest Cost VND

% of interest

Cost VND

Investments in associates

Hoa Binh Infrastructure Construction Investment Joint Stock Company 46.69 57,625,939,051 - -Hoa Binh Phuoc Loc Tho Corporation 47.94 50,485,170,000 47.94 50,485,170,000Golden Lotus Securities Corporation 21.95 29,635,000,000 21.95 29,635,000,000

Investments in joint ventureNhan Hung Construction Corporation 54.00 648,000,000 54.00 648,000,000

TOTAL 138,394,109,051 80,768,170,000

VNDFor the six-month period ended 30

June 2011

For the six-month period ended 30

June 2010

Cost of investment in associates and joint venture 138,394,109,051 80,768,170,000Accumulated amortization of goodwill (110,023,477) -Accumulated share in post-acquisition profit (losses) of the associates and joint venture 3,476,816,403 (6,842,229,511)

NET 141,760,901,977 73,925,940,489

Hoa Binh Infrastructure Construction Investment Joint Stock Company (“HBI”), a shareholding company, was incorporated under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 5003000324 issued by the DPI of Long An Province on 19 March 2008, as amended. HBI’s registered office is located at Village 7, Nhi Thanh Commune, Thu Thua District, Long An Province, Vietnam. HBI’s principal activity is to construct and develop industrial zones.

On 20 April 2011, the Group disposed 3,886,000 shares of investment in HBI. Accordingly, 27



the Group lost of control in HBI and decreased the Group’s ownership interest in HBI from 80.78% to 46.69%.

5. INVESTMENTS (continued)

5.2 Investments in associates and joint venture (continued)

Hoa Binh Phuoc Loc Tho Corporation (“HB Phuoc Loc Tho”), a shareholding company, was incorporated in accordance with Business Registration Certificate No. 0309478144 issued by the DPI of Ho Chi Minh City on 1 October 2009. HB Phuoc Loc Tho’s registered office is located at 235 Vo Thi Sau Street, Ward 7, District 3, Ho Chi Minh City, Vietnam. HB Phuoc Loc Tho’s principal activity is to provide construction services.

Golden Lotus Securities Corporation (“Golden Lotus”), a shareholding company, was incorporated in accordance with Establishment License No 74/UBCKOGPHDDKD issued by the State Stock Exchange on 21 December 2007. Golden Lotus’s registered office is located at 27 Nguyen Dinh Chieu Street, Da Kao Ward, District 3, Ho Chi Minh City, Vietnam. Golden Lotus’s principal activities are to trade securities and to provide services on brokerage and investment advisory.

Nhan Hung Construction Corporation ("Nhan Hung"), a shareholding company, was incorporated in accordance with Investment License No. 411032000067 issued by the People’s Committee of Ho Chi Minh City on 30 March 2009. Nhan Hung’s registered office is located at 210/25/2/5 Nguyen Thuong Hien Street, Ward 1, Go Vap District, Ho Chi Minh City, Vietnam. Nhan Hung’s principal activities are to construct civilian and industrial constructions, bridges and roads, traffic structures, underground constructions.

5.3 Other long-term investments


Binh An Plaza project (i) 23,666,260,000 22,749,890,000Binh Chieu Tower project (ii) 10,686,800,000 10,686,800,000Phuoc Kien Apartment project (iii) 4,131,821,504 4,131,821,504

NET 38,484,881,504 37,568,511,504

(i) This represents the Group’s investment to develop Binh An Plaza apartment project at Ward 7, District 8, Ho Chi Minh City in accordance with the Business Corporation Contract dated 19 December 2007.

(ii) This represents the Group’s investment to develop Thu Duc House – Binh Chieu Building project at Binh Chieu New City, Binh Chieu Ward, Thu Duc District, Ho Chi Minh City in accordance with agreement dated 20 November 2007.

(iii) This represents the Group’s investment to develop Phuoc Kien apartment and complex trade centre project at Lot 516, Phuoc Kien Commune, Nha Be District, Ho Chi Minh City in accordance with agreement dated 11 March 2008.

28



6. TRADE RECEIVABLES


Amounts due from third parties 336,415,887,670 320,403,324,562Amounts due from related parties (Note 30) 48,284,775 63,230,393

336,464,172,445 320,466,554,955Provision for doubtful debts (409,124,965) (47,392,536)

NET 336,055,047,480 320,419,162,419

Included in trade receivables is VND 286,659,497,904 which was pledged as collateral for loans obtained from commercial banks (Notes 17 and 22).

7. ADVANCE TO SUPPLIERS


Advance to third parties 121,424,979,882 57,992,200,993Advance to related parties - 318,516,968

121,424,979,882 58,310,717,961Provision for doubtful debts (525,000,000) (525,000,000)

NET 120,899,979,882 57,785,717,961

8. CONSTRUCTION CONTRACTOR RECEIVABLES BASED ON AGREED PROGRESS BILLINGS


Amounts due from third parties 691,080,108,603 445,095,434,306Amounts due from related parties (Note 30) 30,857,292,607 12,280,070,421

TOTAL 721,937,401,210 457,375,504,727

9. OTHER RECEIVABLES


Receivable from disposal of investment in a subsidiary 18,652,800,000 -Interest receivable 3,558,221,048 534,065,045Amounts due from related parties (Note 30) 5,292,491,053 4,573,282,050Others 3,916,628,651 2,854,376,858

29



TOTAL 31,420,140,752 7,961,723,953

30



10. INVENTORIES


Real estate 105,334,532,110 20,773,600,000Raw materials 79,464,121,105 53,374,888,531Property for sale 67,253,805,254 67,231,077,981 Work in process 17,255,121,911 5,594,569,949Merchandise goods 2,745,331,917 2,948,343,701Goods in transit 558,367,444 32,126,020Tools and supplies 220,719,716 261,444,241Finished goods 170,504,181 135,506,985

TOTAL 273,002,503,638 150,351,557,408

Included in inventories is VND 12,169,435,304 which was pledged as collateral for the short-term loans obtained from commercial banks (Note 17).

11. SHORT-TERM PREPAID EXPENSES


Tools and supplies 24,122,527,266 5,160,579,695Guarantee fees 1,452,647,766 680,303,245Others 925,725,163 549,574,117

TOTAL 26,500,900,195 6,390,457,057

12. OTHER CURRENT ASSETS


Advances to employees 7,032,476,129 6,588,038,725Deposits for construction contracts 2,135,099,127 2,410,613,553Others 170,600,000 -

TOTAL 9,338,175,256 8,998,652,278

31


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)as at and for the six-month period ended 30 June 2011

13. TANGIBLE FIXED ASSETS

VNDMachinery & equipment Building & structure Motor vehicles Office equipment Total

Cost:As at 31 December 2010 392,453,051,961 1,951,288,862 9,723,995,937 5,631,727,469 409,760,064,229 Newly purchased 152,405,879,868 - 1,363,194,091 1,043,362,719 154,812,436,678 Transferred from construction in progress 332,138,000 - - 1,631,304,359 1,963,442,359 Increase due to disposal of investments in subsidiary - - (498,565,900) (10,450,000) (509,015,900)

As at 30 June 2011 545,191,069,829 1,951,288,862 10,588,624,128 8,295,944,547 566,026,927,366

In which:Fully depreciated 469,955,845 - - 254,350,047 724,305,892

Accumulated depreciation:As at 31 December 2010 (78,643,464,644) (718,937,250) (2,799,068,380) (1,802,909,717) (83,964,379,991)Depreciation for the period (27,773,616,916) (142,914,362) (567,187,930) (845,113,510) (29,328,832,718)Increase due to disposal of investments in subsidiary - - 213,671,092 1,741,668 215,412,760

As at 30 June 2011 (106,417,081,560) (861,851,612) (3,152,585,218) (2,646,281,559) (113,077,799,949)

Net carrying amount:As at 31 December 2010 313,809,587,317 1,232,351,612 6,924,927,557 3,828,817,752 325,795,684,238

As at 30 June 2011 438,773,988,269 1,089,437,250 7,436,038,910 5,649,662,988 452,949,127,417

In which:Pledged as loan security (Notes 17 and 22) 77,060,576,024 407,117,130 440,901,109 - 77,908,594,263

32



14. INTANGIBLE FIXED ASSETS

VNDLand use rights Computer software Others Total

Cost:As at 31 December 2010 4,950,924,600 1,536,160,385 323,652,858 6,810,737,843Newly purchased - 36,000,000 - 36,000,000

As at 30 June 2011 4,950,924,600 1,572,160,385 323,652,858 6,846,737,843

Accumulated amortisation:As at 31 December 2010 - (463,158,951) (134,129,761) (597,288,712)Amortisation for the period - (153,129,543) (22,854,044) (175,983,587)

As at 30 June 2011 - (616,288,494) (156,983,805) (773,272,299)

Net carrying amount:

As at 31 December 2010 4,950,924,600 1,073,001,434 189,523,097 6,213,449,131

As at 30 June 2011 4,950,924,600 955,871,891 166,669,053 6,073,465,544

In which:Pledged as loan security (Note 17) 4,500,924,600 - - 4,500,924,600

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15. CONSTRUCTION IN PROGRESS


An Hai bridge project 20,379,925,891 14,724,316,256Le Royal An Nam resort project 5,107,719,605 4,884,738,389Equipment under installation and EPR software 4,397,346,620 3,708,452,357Nhi Thanh industry park and resettlement area and workers’ house projects - 123,475,174,684Others 647,121,064 86,636,488

TOTAL 30,532,113,180 146,879,318,174

16. LONG-TERM PREPAID EXPENSES


Tools and equipment used for construction works 46,506,060,793 33,844,546,173Guarantee fees 3,394,291,719 -Others 647,738,640 6,677,362,892

TOTAL 50,548,091,152 40,521,909,065

17. SHORT-TERM LOANS AND BORROWINGS


Loans from banks 914,766,746,279 508,445,707,361Loans from individuals 7,425,463,145 6,017,177,226Current portion of long-term loans (Note 22) 17,860,612,139 17,348,133,579

TOTAL 940,052,821,563 531,811,018,166

Short-term loans from banks comprised:

Name of bank 30 June 2011Term and

maturity dateInterest

rate

Description of collateral

(Notes 6, 10, 13 and 14)

VND (%/pa)

Standard Chartered Bank- Hanoi branch

311,158,818,813 From 1 July 2011 to 18

October 2011

16.67 - 18.48

Trade receivables

Bank for Investment and Development of Vietnam - Ho Chi Minh branch

251,063,765,694 From 7 July 2011 to 20 December

2011

16.50 - 20.00

Land use rights; building & structure;

cash in banks and cash equivalents;

trade receivables and guaranteed by

individuals

34



17. SHORT-TERM LOANS AND BORROWINGS (continued)

Short-term loans from banks comprised: (continued)



rate


(Notes 6, 10, 13 and 14)

VND (%/pa)

Vietnam Joint Stock Commercial Bank for Industry and Trade - District 1 branch

240,538,242,280 6 months and from 6 July 2011 to 24

December 2011

16.50 - 19.37

Unsecured

HSBC bank (Vietnam) Ltd. – Ho Chi Minh branch

38,571,919,763 4 months and from 28 July

2011 to 3 October 2011

17.00 Trade receivables

Lien Viet Joint Stock Commercial Bank - Hanoi branch

17,793,159,933 From 14 September 2011 to 27

January 2012

20.00 - 22.50

Unsecured

Bank for Investment and Development of Vietnam - Hoan Kiem branch

15,090,491,126 3 months and from 25 July

2011 to 27 September

2011

19.00 - 20.50

Cash in banks and cash equivalents; trade receivables

and guaranteed by individuals

Bank for Investment and Development of Vietnam – Ho Chi Minh branch

13,230,498,999 6 months and from 6 July 2011 to 21

December 2011

16.50 - 20.00

Machinery & equipment; motor

vehicles; inventories; cash in banks and cash equivalents; trade receivables

An Binh Commercial Joint Stock Bank – Ho Chi Minh branch

8,627,184,843 6 months and from 17

September 2011 to 29

December 2011

20.50 – 22.00

Cash in banks and cash equivalents; inventories; trade

receivables

Sai Gon Thuong Tin Commercial Joint Stock Bank – Vo Thi Sau branch

8,539,512,250 6 months and from 24

December 2011 to 30 December

2011

19.50 Trade receivables


In whichVND 2,938,346,481 4 months and

from 3 October 2011 to 31

October 2011

19.00 - 20.00

Cash in banks and cash equivalents

US$ 2,852,517,632 4 months and from 15 August

2011 to 24 October 2011

6.50 - 7.00

Cash in banks and cash equivalents

35



17. SHORT-TERM LOANS AND BORROWINGS (continued)

Short-term loans from banks comprised: (continued)



rate


(Notes 6, 10, 13 and 14)

VND (%/pa)

An Binh Commercial Joint Stock Bank – Saigon branch

In whichLoan 1 2,862,288,465 6 months and from 14

October 2011 to 20 June 2012

22.00 Unsecured

Loan 2 1,500,000,000 4 months and from 11 October 2011 to 15

October 2011

22.00 Inventories and trade

receivables

TOTAL 914,766,746,279

Short-term loans from individuals comprised:

30 June 2011Term and


rateDescription of

collateral

VND (%/pa)

Individuals

Loan 1 3,028,200,000 From 2 April 2012 to 22 June 2012

12.60 - 20

Unsecured

Loan 2 2,500,000,000 Undefined 20.00 Unsecured

Employees’ investment fund

1,897,263,145 Undefined 12.50 Unsecured

TOTAL 7,425,463,145

The Group obtained these loans to finance for its working capital requirements.

18. ADVANCES FROM CUSTOMERS


Amounts due to third parties 631,645,040,754 182,969,748,247Amounts due to related parties (Note 30) 12,634,812,670 -

TOTAL 644,279,853,424 182,969,748,247

36



19. STATUTORY OBLIGATIONS


Corporate income tax (Note 29.2) 13,519,461,424 25,332,736,454Value-added tax 6,233,352,123 15,638,760,675Others 1,096,217,750 3,153,524,933

TOTAL 20,849,031,297 44,125,022,062

20. ACCRUED EXPENSES


Construction costs due to sub-contractors 51,517,622,830 11,074,041,666Interest expenses 10,064,204,228 1,603,032,718Others 1,111,046,475 1,240,401,097

TOTAL 62,692,873,533 13,917,475,481

21. OTHER PAYABLES


Deposits 82,267,691,202 6,136,610,392Dividends payable 12,172,899,600 -Allowance to members of the Board of Directors and the Board of Supervision 4,579,183,400 -Others 2,806,618,467 2,272,432,164

TOTAL 101,826,392,669 8,409,042,556

22. LONG-TERM LOANS


Loans from banks 27,796,178,065 35,093,082,988

TOTAL 27,796,178,065 35,093,082,988

In which:Current portion (Note 17) 17,860,612,139 17,348,133,579Non-current portion 9,935,565,926 17,744,949,409

37



22. LONG-TERM LOANS (continued)

Long-term loans from banks comprised:

Loan Contract No. 30 June 2011 Term and maturity dateInterest

rate


(Notes 6 and 13)

VND (%/pa)


38/2009/101285 (US$)

14,655,372,773 36 months and from 14 August 2011 to 14

August 2012

7.80 Machinery & equipment;

cash in banks and cash

equivalents and trade

receivables

22/2009/101285 (VND)

2,325,258,000 36 months and from 22 September 2011 to

22 June 2012

21.50

Sai Gon Thuong Tin Commercial Joint Stock Bank – Vo Thi Sau branch

LD1024400184 10,011,802,250 48 months and from 3 September 2014 to 30

November 2014

17.60 – 19.65

Machinery & equipment

Bank for Investment and Development of Vietnam – Phu Yen branch

01/08/HD 803,745,042 60 months and from 19 August 2011 to 19

May 2012

22.00 Unsecured

TOTAL 27,796,178,065

The Group obtained these loans to finance for its purchase of machinery and equipments used for construction works.

23. LONG-TERM PROVISION

This represents the warranty provision for construction projects.

38



24. OWNERS’ EQUITY

24.1 Increase and decrease in owners’ equity

VND

Share capital Share premium Treasury shares

Foreign exchange difference

Investment and development fund

Financial reserve fund

Undistributed earnings Total

For the six-month period ended 30 June 2010:

As at 31 December 2009 151,195,400,000 368,383,473,203 - (435,508,826) 12,580,855,178 4,865,847,240 38,916,520,174 575,506,586,969 Treasury shares purchased during the period - - (17,947,727,609) - - - - (17,947,727,609)Net profit for the period - - - - - - 52,689,399,313 52,689,399,313 Profit appropriation - - - - 7,721,936,042 2,573,978,682 (10,295,914,724) - Transferred to bonus and welfare fund - - - - - - (5,650,224,862) (5,650,224,862)Allowance for the Board of Directors - - - - - - (2,070,000,000) (2,070,000,000)Foreign exchange difference - - - 435,508,826 - - - 435,508,826

As at 30 June 2010 151,195,400,000 368,383,473,203 (17,947,727,609) - 20,302,791,220 7,439,825,922 73,589,779,901 602,963,542,637

For the six-month period ended 30 June 2011:

As at 31 December 2010 167,310,030,000 368,383,473,203 (17,947,727,609) 153,861,723 32,066,340,578 11,361,009,041 104,066,229,555 665,393,216,491 Net profit for the period - - - - - - 68,530,805,428 68,530,805,428Stock dividends 40,571,630,000 - - - - - (40,571,630,000) -Dividends declared - - - - - - (12,172,899,600) (12,172,899,600)Profit appropriation - - - - 291,647,262 97,216,088 (388,863,350) -Transferred to bonus and welfare fund - - - - - - (639,769,285) (639,769,285)Utilization of fund - - - - (3,000,000) - - (3,000,000)Allowance for the Board of Directors - - - - - - (4,586,120,432) (4,586,120,432)Foreign exchange difference - - - (153,861,723) - - - (153,861,723)

As at 30 June 2011 207,881,660,000 368,383,473,203 (17,947,727,609) - 32,354,987,840 11,458,225,129 114,237,752,316 716,368,370,879

39



24. OWNERS’ EQUITY (continued)

24.1 Increase and decrease in owners’ equity (continued)

During the period, the Group issued 4,057,163 new shares to its existing shareholders under the form of stock dividends via usage of undistributed earnings to increase its charter capital to VND 207,881,660,000 in accordance with the Shareholder’s Resolution on 27 April 2011. This issuance was approved by the State Securities Commission and the DPI of Ho Chi Minh City through the issuance of the amended Business Registration Certificate dated 6 April 2011.

24.2 Capital transactions with owners and distribution of dividends

VNDFor the six-month period

ended 30 June 2011

For the six-month period ended

30 June 2010

Contributed capital Beginning balance 167,310,030,000 151,195,400,000Increase 40,571,630,000 -

Ending balance 207,881,660,000 151,195,400,000

Dividends Dividends declared 12,172,899,600 -Dividends paid - -

24.3 Share capital – ordinary share

30 June 2011 31 December 2010Shares Par value

(VND)Shares Par value

(VND)

Authorised shares 20,788,166 207,881,660,000 16,731,030 167,310,300,000

Shares issued and fully paidOrdinary shares 20,788,166 207,881,660,000 16,731,030 167,310,300,000

Treasury sharesOrdinary shares (500,000) (5,000,000,000) (500,000) (5,000,000,000)

Shares in circulationOrdinary shares 20,288,166 202,881,660,000 16,231,030 162,310,300,000

40



25. BASIC EARNINGS PER SHARE

Basic earnings per share are calculated as follows:


30 June 2011


30 June 2010

Net profit for the period attributable to the Company’s shareholders (VND) 68,530,805,428 52,689,399,313

Weighted average number of shares 20,288,166 14,794,540Basic earnings per share (VND) 3,378 3,561

There have been no dilutive potential ordinary shares during the period and up to the date of these interim consolidated financial statements.

26. REVENUE

26.1 Revenue from sale of goods and rendering of services


ended 30 June 2011

For the six-month period ended 30 June

2010

Gross revenue 1,326,057,736,640 746,515,721,415Of which:

Sale from construction contracts 1,270,419,318,156 746,515,721,415Sales of real estate 22,284,958,887 -Sale of merchandised goods 17,338,570,862 -Others 16,014,888,735 -

Sales returns of merchandised goods (633,092,437) -

Net revenue 1,325,424,644,203 746,515,721,415

Of which:Sale from construction contracts 1,270,419,318,156 746,515,721,415Sales of real estate 22,284,958,887 -Sale of merchandised goods 16,705,478,425 -Others 16,014,888,735 -

26.2 Finance income VND


2011


2010

Interest income 15,840,969,324 7,788,669,837 Gains from disposal of investments 5,129,896,551 7,614,100,000Others 954,089,234 86,503,495

TOTAL 21,924,955,109 15,489,273,332

41



27. FINANCE EXPENSES


ended 30 June 2011


2010

Loan interest 62,324,089,438 20,549,185,755Unrealised foreign exchange losses 1,198,416,825 -Others 615,442,765 385,942,187

TOTAL 64,137,949,028 20,935,127,942

28. OTHER INCOME AND EXPENSES


ended 30 June 2011


2010

Other income 2,902,688,663 2,238,783,816Insurance compensation 2,294,568,280 -Rental income - 977,397,955Others 608,120,383 1,261,385,861

Other expenses (422,914,061) (1,306,841,055)Rental expenses - (880,781,128)Others (422,914,061) (426,059,927)

2,479,774,602 931,942,761

29. CORPORATE INCOME TAXThe statutory corporate income tax (“CIT”) rate applicable to the Group is 25% of taxable profits except for Hoa Binh Hue Development Joint Stock Company (“HBL”) as explained in the following paragraph.

HBL has the obligation to pay CIT at the rate of 15% of taxable profits for first fifteen (15) years and 25% of taxable profits for the years thereafter. HBL is entitled to an exemption from CIT for four (4) years from the first profit making year, and a 50% reduction for the following nine (9) years.

The tax returns filed by Group are subject to examination by the tax authorities. As the application of tax laws and regulations is susceptible to varying interpretations, the amounts reported in the interim consolidated financial statements could change at a later date upon final determination by the tax authorities.

29.1 Current CIT expensesVND


30 June 2011


30 June 2010

Current CIT expenses 21,809,709,721 17,678,107,148

42



29. CORPORATE INCOME TAX (continued)

29.2 Current CIT

The current tax payable is based on taxable profits for the period. The taxable profits of the Group for the six-month period differs from the 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 not taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted at balance sheet date.

A reconciliation between the taxable profits and profit before tax is presented below:


ended 30 June 2011


30 June 2010

Profit before tax 89,123,934,279 70,484,015,539Adjustments to increase (decrease) in

accounting profitsUnrealised profit (losses) 4,993,039,667 (1,449,605,402)Provision for severance allowance 3,670,561,084 -Losses of subsidiaries 278,477,649 500,807,952Non-deductible expenses 143,910,763 50,329,914Share of profits (loss) from associates and joint

venture (10,209,022,437) 1,583,904,701

Estimated current taxable profit 88,000,901,005 71,169,452,704

Estimated current CIT at flat rate of 25% 22,000,225,253 17,792,363,176CIT exemption (190,515,532) (114,256,028)

Estimated current CIT after exemption 21,809,709,721 17,678,107,148CIT payable at beginning of period 25,332,736,454 12,977,870,521 CIT paid during the period (33,622,984,751) (3,181,108,986)

CIT payable at end of period 13,519,461,424 27,474,868,683

43



29. CORPORATE INCOME TAX (continued)

29.3 Deferred corporate income tax

The following are the deferred tax assets recognized by the Group, and the movements thereon, during the current and prior reporting period.

VND

Interim consolidated balance sheetInterim consolidated income

statement30 June 201131 December 2010For the six-month

period ended 30

June 2011


Provision for severance allowance 930,410,479 73,816,916 856,593,563 -Unrealised profit 687,993,660 82,257,340 605,736,320 13,392,985Accruals 16,946,792 16,946,792 - -Provision for doubtful debts 10,071,150 10,071,150 - -

Deferred tax assets 1,645,422,081 183,092,198

Deferred income tax credit to the interim consolidated income statement 1,462,329,883 13,392,985

30. TRANSACTIONS WITH RELATED PARTIES

Significant transactions with related parties during the period were as follows:

Related parties Relationship Transaction Amount

VND

Construction Corporation No.1 Company Limited

Related party Construction works rendered by the

Group 67,466,117,131

Hoa Binh Infrastructure Construction Investment Joint Stock Company

Associate Loans 7,097,000,000Interest income 1,777,980,663

Nhan Hung Construction Corporation Joint venture Interest income 26,032,725Capital contribution 648,000,000

44



30. TRANSACTIONS WITH RELATED PARTIES (continued)

Amounts due to and due from related parties at the balance sheet date were as follows:

Relationship

Transaction

Receivable (payable)

VND

Short term investmentsHoa Binh Infrastructure Investment and Construction Joint Stock Company

Associate Loans 20,704,856,717

Vietnam - Korean Housing Project & Development Company Limited

Related party

Loans 2,000,000,000

Tam Hoang Tan Trading and Technical Service Company

Related party

Loans 475,857,756

23,180,714,473

Trade receivable

Golden Lotus Securities Corporation

Associate Rental income

48,284,775

Other receivablesMr Pham Dieu Director of

HBEBorrowin

g 2,504,447,382

Mr Le Quoc Duy Member of the Board of Directors

Borrowing

1,520,211,896

Mr Le Viet Hung Member of the Management

Borrowing

679,884,430

Mr Pham Nguyen Cuong Director of AHA Borrowing 500,000,000

Mr Phan Minh Phuc Director of HBL Borrowing 49,447,345

Hoa Binh Infrastructure Investment and Construction Joint Stock Company

Associate Loan interest

38,500,000

5,292,491,053

Construction contractor receivables based on agreed progress billingsConstruction Corporation No.1- Company Limited

Related party

Construction

works rendered

to related

party 30,857,292,607

Advance from customers

45



Construction Corporation No.1- Company Limited

Related party

Construction

works rendered

to related

party (12,634,812,670)

46



31. COMMITMENTS

Operating lease commitments

Operating lease commitments represent committed amounts relating to office rental under the operating lease agreements. Future rental amounts due as at 30 June 2011 are as follows:

VND

30 June 2011

31 December

2010

Less than 1 year3,591,985,4

883,582,171,3

20From 1 - 5 years 2,698,896,200 4,485,074,776

TOTAL 6,290,881,688 8,067,246,096

Capital obligation commitmentsThe total capital obligation commitments that the Group has entered into in relation to its other long-term investments as at 30 June 2011 was VND 167,380,838,496 (31 December 2010: VND 168,297,208,496).

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial liabilities are loans and borrowings. The main purpose of these financial liabilities is to finance the Group’s working capital requirements and purchase of machinery and equipments used for construction works. The Group has loan receivable, trade and other receivables, trade and other payable and cash and short-term deposits that arise directly from its operations. The Group does not hold or issue any derivative financial instruments.

The Group is exposed to market risk, credit risk and liquidity risk.

Management reviews and agrees policies for managing each of these risks which are summarized below.

Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analyses in the following sections relate to the position as at 30 June 2011 and 31 December 2010.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt are all constant.

In calculating the sensitivity analyses, management assumed that the statement of the balance sheet relates to available-for-sale debt instrument; the sensitivity of the relevant income statement item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at 30 June 2011 and 31 December 2010.

47



32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

Market risk (continued)

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to market risk for changes in interest rate relates primarily to the Group’s long-term debt obligations with floating interest rates.

The Group manages interest rate risk by looking at the competitive structure of the market to obtain rates which are favorable for its purposes within its risk management limits.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings.

With all other variables held constant, the Group’s profit before tax is affected through the impact on floating rate borrowings as follows:

VNDIncrease/decrease in basis

points

Effect on profit

before tax


VND 300(833,885,3

42)

VND -300833,885,34

2For the six-month period ended 30 June 2010

VND 300(1,052,792,

490)

VND -3001,052,792,

490

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities.

The Group does not manage its foreign currency risk, as the Group's exposure to foreign currency risk is minimal at reporting date.

Credit riskCredit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities primarily for trade receivables and from its financing activities primarily for deposit with banks.

Trade receivables

Customer credit risk is managed by the Group based on its established policy, procedures and control relating to customer credit risk management.

Outstanding customer receivables are regularly monitored. The requirement for impairment is analyzed at each reporting date on an individual basis for major clients. The Group seeks to maintain strict control over its outstanding receivables to minimize credit risk.

48



49



32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

Credit risk (continued)

Bank deposits

The Group's bank balances are mainly maintained with well-known banks in Vietnam. Credit risk from balances with banks is managed in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties.

The Group’s maximum exposure to credit risk for the components of the balance sheet at each reporting dates are the carrying amounts as illustrated in Note 4. The Group evaluates the concentration of credit risk in respect to bank deposit is as low.

Liquidity riskThe liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligation due to shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of maturities of financial assets and liabilities.

The Group monitors its liquidity risk by maintain a level of cash and cash equivalents and bank loans deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments:

VNDLess than 1

yearFrom 1 to

5 years Total

30 June 2011

Loans and borrowings940,052,82

1,563 9,935,565,926 949,988,387,489

Trade payables283,189,71

1,052 -283,189,71

1,052Other payables and accrued expenses

223,259,621,385

40,830,413,780

264,090,035,165

1,446,502,154,000

50,765,979,706

1,497,268,133,706

31 December 2010

Loans and borrowings531,811,01

8,16617,744,9

49,409549,555,96

7,575

Trade payables327,007,81

1,325 - 327,007,81

1,325Other payables and accrued expenses

121,822,148,714

22,959,798,186

144,781,946,900

980,640,978,205

40,704,747,595

1,021,345,725,800

The Group assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders.

CollateralThe Group has pledged its cash in banks and cash equivalents, trade receivables, inventories, machinery & equipments, building & structure and land use rights in order to fulfil the collateral requirements for the short-term loans and long-term loans obtained from banks (Notes 16 and 21). The Bank has an obligation to return these collateral to the Group. There are no other significant terms and conditions associated with the use of collateral.

The Group did not hold any collateral from third parties at 30 June 2011 and 31 December 2010.

50



33. FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Set out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments that are carried in the interim consolidated financial statements.

51


NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS (continued)as at and for the six-month period ended 30 June 2011

33. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)VND

Carrying amount Fair value

30 June 2011 31 December 2010 30 June 201131 December

2010

CostProvisi

on CostProvisi

on

Financial assets

Short term deposits 35,777,354,473 - 1,394,493,283 -35,777,354,4

731,394,493,28

3

Trade receivables 336,415,887,670 (409,124,965) 320,403,324,562 (47,392,536)336,006,762,

705320,355,932,

026

Receivable from related parties 36,198,068,435 - 16,916,582,864 - 36,198,0

68,435 16,916,5

82,864

Other receivables 717,207,758,302 - 448,483,876,209 - 717,207,7

58,302 448,483,8

76,209 Cash and cash equivalents 585,720,114,055 - 258,119,214,731 - 585,720,114,055 258,119,214,731

Total 1,711,319,182,935 (409,124,965) 1,045,317,491,649 (47,392,536) 1,710,910,057,970 1,045,270,099,113

VNDCarrying amount Fair value

30 June 2011 31 December 2010 30 June 2011 31 December 2010

Financial liabilitiesLoans and borrowings 949,988,387,489 549,555,967,575 949,988,387,489 549,555,967,575Payable to related parties - 318,516,968 - 318,516,968Trade payables 283,189,711,052 326,689,294,357 283,189,711,052 326,689,294,357Other current liabilities 223,259,621,385 121,822,148,714 223,259,621,385 121,822,148,714

Total 1,456,437,719,926 998,385,927,614 1,456,437,719,926 998,385,927,614

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following method and assumption were used to estimate the fair values:

Cash, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these

52


NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS (continued)as at and for the six-month period ended 30 June 2011

instruments.

The fair value of borrowings is estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities. As at 30 June 2011, the carrying amounts of such borrowings, are not materially different from their calculated fair values.

53



34. EVENT AFTER THE BALANCE SHEET DATE

There has no any matter or circumstance that has arisen since the balance date that has affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent periods.


29 August 2011

54

GENERAL INFORMATION (continued)hoabinhcorporation.com.vn/.../pdf/report/20170728044919.docx · Web viewThe preparation and presentation of these interim consolidated financial statements

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