KBC Annual Report 2010

2010 ANNUAL REPORT
KINH BAC CITY DEVELOPMENT HOLDING CORPORATION HEAD OFFICE: Plot B7 Que Vo industrial park Bac Ninh province Tel: (84-241) 3634034 - (84-241) 2214688 Fax: (84-241) 3634035 Email: kinhbaccity@hn.vnn.vn
www.kinhbaccity.com.vn
REPRESENTATIVE OFFICES Ha Noi: No 34 Phan Dinh Phung, Ba Dinh district, Ha Noi, Viet Nam Tel: (84 4) 37346889 Fax : (84 4) 37346891 Quang Ninh: Bac Dang Ward 1 Phuong Nam Ward, Uong Bi Town Quang Ninh Province Tel: 0982 523 188 Taiwan: 12F-1, No10, Sec1, Jilung Road Taipei, Taiwan, ROC Tel: (886 2) 27666317 Fax: (886 2) 27533377 Japan: Osaka: Lipponbashi Asahi Building 5F-5AB, 1-18-3 Lipponbashi, Chuo - ku, Osaka 542- 0073 Japan Tel: 06 6636 6868
OPPORTUNITY AT HAND
Cooperate to create superior value for investors
2010 ANNUAL REPORT

KINH BAC CITY DEVELOPMENT HOLDING CORPORATION STOCK CODE: KBC
KBC - Foundation for sustainable development
INDEX
FOREWORD HISTORY MESSAGE FROM THE CHAIRMAN CORPORATE VALUE OPERATING STATUS DEVELOPMENT STRATEGY REPORT OF THE BOARD OF DIRECTORS RISK MANAGEMENT STRATEGY BUSINESS OUTLOOK REPORT OF THE BOARD OF MANAGEMENT ORGANIZATIONAL STRUCTURE THE BOARD OF MANAGEMENT THE BOARD OF DIRECTORS THE BOARD OF SUPERVISORS SOCIAL RESPONSIBILITY SUBSIDIARIES AND ASSOCIATES INVESTOR RELATIONSHIP FINANCIAL STATEMENTS List of abbreviation: KBC: Kinh Bac City Development Holding Corporation IP: Industrial park 0 1 2 3 7 11 15 21 26 31 48 49 53 57 59 60 64
FOREWORD
2010 Annual Report succeeds the achievements that Kinh Bac City Development Holding Corporation is pleased to introduce to Shareholders, Investors and Customers. However, 2008 and 2009 Annual Reports posted on website kinhbaccity.com are non separated parts which help you understand more profoundly about the development history and the story of value creation of the Corporation that we will not focus on presenting again, etc. Therefore, in this report, we only focus on analyzing business results of 2010, significant events, things left undone and plans for future, etc.
www.kinhbaccity.com.vn
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MESSAGE FROM THE CHAIRMAN

Dear shareholders and investors! Foundation for the sustainable developmentis the guideline for the development of Kinhbaccity Group as well as the message we send to shareholders, investors, customers and partners. First and foremost, on behalf of the Board of directors and and employees of Kinh Bac City Development Holding Corporation, I would like to offer my sincere thanks to all concerned government agencies, shareholders, investors, customers for their trust, support and cooperation to develop Kinhbaccity sustainably. I wish you and your family happiness, health and prosperity. As you know, 2010 was a difficult year, financial market unfolded extraordinarily, specifically loan interest rate was up to 17% - 20%/year, FDI declined, stock market had no breakthough etc. These factors impacted considerably on the Corporations business. So, if we continue to share the difficulties together and contribute valuable ideas to the development plans in the years to come, I believe that our KBC will increasingly grow up and develop sustainably.
Mr. Dang Thanh Tam Chairman & Genral Director
HISTORY After 9 years of operation and development, KBC has been highly valued and granted 6 consecutive Competition Flags by Vietnamese Government. KBC has also been honored to received Third-class Labor Medal awared by President and many other prestigious in Vietnam and abroad. KBCs reputation has been well-known internationally and considered as an enterprise having high international integration capability.
Dear shareholders! I am delighted to report to you on critical success over the past year. First, being an IP investor, KBC mergered two more IPs and one big property project: (1) Acquired a large number of shares of Northwest Sai Gon City Development Corporation (investor of project Tan Phu Trung IP - HCM City, 590 ha) to become a subsidiary of KBC. This acquisition generated goodwill for KBC of about 395 billion dong (according to figure from Knight Frank - a prestigious global real estate agency and consultancy which revaluated Tan Phu Trung IP with the price increased 5 times as much as book value). This is an important step of KBC to HCM City. I believe that with the effort and lots of experiences of the Boards KBC will continue to become investor of big project in the Southern. (2) KBC acquired 100% Nam Son - Hap Linh IP project in Bac Ninh province with the area of 402.5 ha (of which 100 ha had been compensated). Second, we have reported to Ha Noi Peoples Committee, Ministry of Construction on the adjustment of the design of Lotus Hotel to become project Diamond Rice Flowers with the height of 400 meters and the shape of rice flowers and received the consensus from related departments and branches. This is a project of national stature, having political significance and magnitude of KBC. Third, we achieved satisfactory results in the context of general economic difficulty, maintained the profit growth speed sustainably over the years from 50% or more in according with capital growth speed. Maintaining sustainable growth speed over the years, especially the Boards has always been setting the top priority over the last difficult year and the coming years. Thus, if a sudden growth will not happen in a few years, I hope you will not give up. Because, the most difficult period has passed, KBC has had enough land and projects to develop in the next 10 to 20 years. Therefore, with its ability KBC will actively deploy projects by solely or have joint ventures with big international corporations to deploy projects for the target of sustainable growth. Hence, after 9 years of development, KBC has become a big corporation with 4 subsidiaries and over 20 associates and possess a series of IPs all over the countries and many urban area projects in golden location in Ha Noi, Hai Phong, Da Nang and HCM City. This success has more and more confirmed that KBC had the strategic vision, passion and built a professional management system along with a friendly cultural environment. To satisfy all the strict requirements for each customer, provide them with product and service packages, develop IPs to become hi-tech IPs specializing in industries with no chimney and no pollution to bring benefits for the communities and the Government. This is the mission of management team and employees of Kinh Bac City Development Holding Corporation, and also the commitment to shareholders. Finally, I wish you a successful year for investment!
Chairman of the Board General Director
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CORPORATE VALUE
FOUNDATION
Established on 27 March, 2002 Initial charter capital of 20 billion dong Starting from Que Vo IP - Bac Ninh Attracted over 50 foreign enterprise into Que Vo IP 80% of customers are foreign customers Now, KBC focuses on investment in provinces such as Bac Ninh, Bac Giang, Hai Phong, Quang Ninh, HCM City.
CORPORATE VALUE
ADVANTAGES OF KBC
KBC is one of the leading companies in attracting FDI in Vietnam KBC ensures enough land bank for development in 10 to 20 years Clean land accounts for 50-80% of each IP and compensation cost paid is much lower than current price. Meet all strict and specific requirements of each customer to convince them to sign contract.
DEVELOP LAND FUND

Build up prestige and image with local government and people Turn poor lands into rich IPs Establish subsidiaries, associates in strategic location all over the country Acquire potential and cheap projects in the context of economic decline Improve competitive capacity in all aspects to capture investment opportunities.
ATTRACT INVESTMENT
Understand corporate culture of countries; bring the image and investment policy of Vietnam to international investors through economic forums, promotion campaigns in Vietnam and abroad. Establish a large network of customers from Japan, Taiwan, South Korea, etc, and start doing business with big groups from Europe and the U.S. KBC is always the number-one choice when foreign customers invest in Vietnam.
EXECUTING PROJECTS
IPs: Que Vo 311.6 ha, Que Vo Expanded 300 ha, Nam Son Hap Linh 630 ha, Quang Chau 709 ha, Trang Due IP & Urban Area 402.5 ha, Phuong Nam 569 ha, Tan Phu Trung 590 ha; Urban areas: Phuc Ninh 146 ha, Quang Chau 120 ha, low income housing 6.3 ha etc. Projects are completed legal procedures: Trang Cat Hi-tech IP 860 ha in Hai Phong; Yen Phong IP 400 ha in Bac Ninh; Lotus Hotel 4ha; Diplomatic Corps project 2 ha; etc.
BUSINESS ACTIVITY
KBC has the ability to turn difficulties into opportunities: For example, create available product to catch the economic reform; diversified products such as land lease, warehouse for sales and lease, provide customers in IPs with full service like electricity, waste disposal, finance, telecommunication, etc; while, the prices are quite competitive. The business model likes centipede legs which easily creates pervasive effect.
SCALE OF ASSETS AND EQUITY (31/12/2010)

Total assets: 11,439 billion dong Equity: 4,379 billion dong Sales from operating activities: 1,664 billion dong Profit after tax: 1,109 billion dong IP and Urban area business plays the decisive role; besides, expand investment in the areas of supporting industries for IP such as Power industry and other related services.
ARRANGE CAPITAL
With regard to investment activity in IP, KBC always easily raises enough fund for IP project. In 2009, KBC arranged 2,700 billion dong though issuing corporate bonds at low fixed interest rates from 11.5% to 12.5%. Built prestige with banks such as Vietinbank, BIDV, Navibank, Westernbank and other credit institutions Focused on attracting capital from international partners by issuing convertible bond
KBC STOCK
On 18 December 2007, KBC officially became public company, listed on HNX with the charter capital of 880 billion dong. On 18 December r 2009, KBC move the listing to HOSE with the charter capital of 1,991,243,300,000 dong. KBC was rated Top 10 best stock in Vietnam stock exchange by Standard & Poor. One of favorite stocks of foreign investors Market capitalisation at 31/12/2010: nearly 10,000 billion dong.
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KBCS POSITION
Kinhbaccity has become a famous brand in the field of IP business in Vietnam and abroad. KBC and its subsidiaries and associates possess the land bank accounting for 20% of IP land of the country. It is hard to determine an adequate competitor of KBC in all aspects of KBC in IP development field All IPs of KBC have large area and are convenient for transportation.
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EVENTS
TYPICAL AWARDS
Be honor to receive third-class Labor Medal 2007 Received Competition Flag from the Government in 6 consecutive years; Continuously on Top enterprises awared Vietnamese Golden Star, Top 10 of 2009, Top 100 of 2010; Continuously awared Prestige Security Brand since 2008; Continuously archieved Best Annual Report award of 2008 and 2009; Granted Star Outstanding Enterprise Intergration Award of 2007; Received Typical Enterprise and Typical Businessman of three countries Laos - Cambodia - Vietnam; Awared Goden Globe Award for exellent enterprise since 2008; Received ISO Gold Cup; Received ASIAN Exellent Award; Received National Famous Brand Award of 2010, etc.
TYPICAL EVENTS IN 2010

On April 16, 2010, KBC was assigned to be investor of Nam Son - Hap Linh IP by the Peoples Committee of Bac Ninh province. On April 27, 2010, KBC inaugurated Phuong Nam IP in Uong Bi district, Quang Ninh province. On May 25, 2010, Prime Minister Nguyen Tan Dung visisted and worked with KBC in Que Vo IP. On May 27, 2010, Mr. Truong Tan Sang Politburo member and permanent member of the Party Secretariat visited and worked in Phuong Nam IP, Uong Bi Town, Quang Ninh province. On June 6, 2010, Mr. Dang Thanh Tam - Chairman of KBC was a speaker at World Economic Forum on East Asia (WEF East Asia) 19th organized by Vietnam Government and WEF in HCM City. On August 28, 2010, in Que Vo IP - Bac Ninh province, Mr. Dang Thanh Tam received national emulation title from the Prime Minister. Mrs. Nguyen Thi Thu Huong - Permanent Deputy Director received Third-class Labor Medal awarded by the President. September 2, 2010, KBC received Vietnam Gold Star 2010 September 12, 2010 KBC was awarded Prestige Security Brand for the third time September 9, 2010 KBC received "National Famous Brand and Vietnamese excellent entrepreneurs in 2010" On December 12, 2010, KBC signed land lease agreement with Wintex Group from Taiwan to lease land in Quang Chau IP.
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OPERATING STATUS
100%
INVESTMENT ATTRACTION SITUATION
ROAD TO SUCCESS
After 9 years of operation and development, KBC is well-known internationally and considered an enterprise with high integration capability. KBC has continuously received many honorable awards from the State, Provincial/City Peoples Committees and prestigious organizations. KBC has overcome many difficulties and challenges to build a big brand in real estate business, especially in the field of IP development. KBCs IPs are chosen as the first choice by foreign customers when they decide to invest in Vietnam. Hence, KBCs target customers are in the field of hi-tech and environment friendly. Up to now, KBCs IPs has been very successful with over 80% of customers are foreign investors. Thanks to the continuous efforts in promoting and participating in economic forums between Vietnam and other countries which have become familiar partners of KBC such as enterprises from Japan, Taiwan, Korea, etc. Currently, KBC is expanding to attract large corporations from Europe and The United States. This success increasingly confirms that KBC is one of the leading companies in Vietnam to attract foreign investment, which is one of the most important factors contributing to the success of business. Along with the success in attracting investment, KBC has also very successful in acquiring land bank. Currently, KBC has 7 IPs in operation with total area of 3,000 ha, of which clean land is accounting for 70% with compensation cost from 2008 2009 at cheap price equal to 50% of current price. This is a big advantage of KBC to make profit in the future. Besides, potential land bank of KBC may be up to 15,000 ha though gradually merging KBCs associates which are investors of IPs and urban areas all over the country. With this strategy, KBC has been implemented quite successfully, for example; in 2009, KBC raised its ownership to 90% of Sai Gon Hai Phong Industrial Park Corporation (investor of Trang Due IP in Hai Phong, 600 ha); in 2010, KBC raised its ownership to 60.52% of Northwest Saigon City Development Corporation (investor of Tan Phu Trung IP, 590 ha). Currently, KBC is often welcomed by foreign partners such as Foster, Foxconn, Kumho, Credit Suisse, Surbana, Aeon, DTZ, Marubeni, International Power, etc. to become their strategic partners in implementing big projects, funding, design consulting. So, looking back at 9 years of history, we can proudly to say that KBC has been very successful in overcoming many hardships and challenges, especially in taking advantage of opportunities such as acquiring cheap projects, raising fund of several thousand billion dong at low interest rates, creating low cost products to catch the economic recovery, etc. Thus, we can see that KBC is increasingly growing sustainably and will grow strongly when the economy has positive signs.
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
90% 91%
77% 70% 60.4% 55% 45% 39.6% 30% 23% 13% 10% 9% 39% 32% 14% 68% 61%
87% 86%
QUE VO Occupied area 2009
Expanded QUE VO
QUANG CHAU
TRANG DUE
TAN PHU TRUNG Remaining area 2010
Occupied area 2010
Remaining area 2009
Quang Chau IZ 426 ha Trang Due IZ - stage I 150 ha Tan Phu Trung IZ 590 ha Among, land area for commercial in IZs accounts for 60% - 65%
Note: Que Vo IZ 311,6 ha Expanded Que Vo IZ 300 ha
ASSESSMENT Despite many difficulties in attracting investment in recent years due to the world economic crisis since 2008, but with all its effort the situation in attracting investment in IPs of KBC is considered quite well in the difficult context. KBC annually puts new IPs into operation and attracts investment or mergers more potential IPs to become its subsidiaries. In any circumstances, we always try to turn difficulties to opportunities to sustain the growth of the Corporation in all aspects.
STRUCTURE OF CUSTOMERS
Other customer 1% Korea 7% China & HK 3% Malaysia 4% Philippines 1% Singapore 6% Viet Nam 14%
Japan 23%
Taiwan 41%
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KBC has still focused on potential markets such as Japan, South Korea, and Taiwan. We have initially attracted customers from the U.S such as Emerson Network Power Co., ltd.
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CHARTER CAPITAL GROWTH
2957
VISION Become the number one company in Vietnam and one of the leading company in the region in providing civilized and modern living and working space that develop sustainably.
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MISSION
1340.8 880
KBC supplies the society with better living and working environment by providing grounds, workshops in green modern industrial parks; building beautiful and smart buildings, shopping Vietnams and groups of dream houses in new urban areas. Through applying good customs on corporate administration and using modern corporate management systems, KBC brings maximum value to shareholders, creates harmonious working environment and encourages peoples creativeness.
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DEVELOPMENT OBJECTIVES
2002 2006 2007 2008 2009 2010
Growth objective: Maintain growth speed of the scales of annual capital, assets, income and profit. Product and market objective: Maintain the number 1 position in providing IPs accompanied convenient services in Vietnam; become one of top 5 civil real estate companies in Vietnam; continue to invest in related industries including energy and related services. Corporate customer objective: Be the first choice of foreign customers when they invest in Vietnam; focus on customers in the field of hi-tech and environment friendly. Individual customer objective: Create opportunities for individual investors to satisfy their demand of using houses and apartments in new urban areas that KBC develops, and manages.
The growth in size of charter capital has helped KBC strengthen financial capability; ensure adequate condition for the implementation large scale projects of thousands of billion dong.
CAPITAL GROW PROCESS
Private share issuing: 2006: to organizations and individuals 29,570,000 shares 2007: to existing shareholders 50,430,000 shares 2007: to strategic investors 8,000,000 shares 2008: to strategic investors 2,722,000 shares
Pay dividend in stock: 2008: 43% - 37,290,460 shares 2009: 20% - 26,016,532 shares 2010: 30% - 57,952,104 shares
Management system and human objective: Continuously improve management system systematically to advance the operating performance, attract and use high-quality human resources and build creative and environment-friendly working space.
31%
Bonus shares: 2008: 7% 6,070,540 shares 2009: 30% - 39,024,798 shares 2010: 20% - 38,634,736 shares
41%
28%
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DEVELOPMENT STRATEGY
GENERAL STRATEGY
KBC is currently the leading enterprise in developing industrial parks in Vietnam with many years of experience, focusing on developing IPs, implementing projects at good locations where the local authorities are calling for investment in industrial field and giving high incentives. Currently, along with developing IPs, KBC also focuses on developing real estate projects, commercial centers, and luxury hotels. In addition, KBC is expanding investment in the fields of support services for IPs; improving the products and services provided to IPs operation (e.g. KBC invests in energy sector to supply stable power for IPs; in present, KBC is offering free services such as infrastructure fees and advisory fees for investment license procedures). KBC have the most ability and experience in attracting FDI in Vietnam. Currently, over 80% of KBCs customers are foreign investors. Specially, because KBC concentrates on attracting hi-tech investors, the government always supports and creates incentives. Meanwhile, according to our estimates, FDI sources into Vietnam in the coming years are relatively positive that is a big advantage of KBC. KBC is ready to attract big and famous hi-tech corporations to invest into the IPs without aiming to maximize profit. Instead, KBC is received incentives from the Government such as tax policy, land use fees, lease fees and price support in many different forms. With this orientation, KBC has always been supported by the Government and the local authorities.
LAND BANK DEVELOPMENT

In the past years, KBC has taken advantages of opportunities in crisis to take over some big projects with clean land at low costs such as Trang Due IP, Nam Son Hap Linh IP (100ha has already been compensated at old price while current compensation price is more than doubled). KBCs strategy is to create a land fund enough to develop in 10 20 years.
METHOD OF INVESTMENT
KBC often executes projects by successive construction method in which the land compensation ranks at highest priority), then funds are disbursed according to schedules of attracting investment in order to use capital from investors to continue constructing infrastructure. Thus, capital investment turns faster. However, depending on the macro-economic situation, the execution of the strategy was flexible. For instance, KBC has arranged large amounts of capital at low interest rates, to build warehouses with low cost to make available products for later sales when the economy was showing positive signs.
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DEVELOPMENT STRATEGY
PRODUCT DEVELOPMENT
In term of product development: However, because of limited land fund KBCs strategy is to often spend 50% of the land bank for lease and 50% to construct warehouses for sales and lease. This strategy, on the other hand, maintains a stable source of revenue for many years and creates more value for the Group in the longterm. For example, in the circumstance when the land bank has become increasingly scare, the lease price of warehouses has increased from USD 2.5/m2/month to USD6/m2/month within recent 3 years, meaning incomes from KBCs operating IPs is more and more increasing. KBC has been constantly expanding and promoting its vigor in developing urban areas and industrial parks in the Modern Green - Clean model. KBC constructs urban areas alongside industrial parks to provide highend houses to foreign experts working in the IPs and local people. This strategy create added value not only for the company but also for provinces and cities where KBC is developing industrial parks. In addition, KBC established good relationships with big foreign customers in IPs such as: Foxconn, Canon, Panasonic, Lucky Gold Stars, etc. They are bridges between KBC and new customers. For instance, the can bring their satellite companies into KBCs IPs; simultaneously, they also become KBCs partners together with KBC to develop large-scale projects such as: KBC will establish a joint venture with Foxconn to invest in Trang Cat-Hai Phong Complex project. The project is located at the end of Hanoi Hai Phong highway on the area of 860 ha (including hi-tech park, Urban Area- Park and recreational area - Beach villas); KBC along with Aeon develop trade center projects, etc.
PLAN WITHIN THE NEXT 3 YEARS

Focus on attracting cash flow into Phuc Ninh IP and Urban area project. Especially, if the project is sold at market price, it could be sold at any time, ensuring stable cash flow. In case there is no advanced from customers or it is too hard to issue bond or share, we still can cooperate with foreign partners to develop the project. Presently, there are some big foreign real eastate groups from Singapore, Taiwan and Japan are ready to participate if invited. Why attracts more investment: Vietnam is merging as an attractive investment environment for foreign investors; thus, IPs and urban areas are continuing to grow and companies operating in IPs are also wishing to expand their factories. KBCs developing projects which will generate income for the enterprise in the next few years including 7 IPs: Que Vo IP 311.6 ha, Que Vo Expanded 300 ha, Nam Son Hap Linh IP 402.5 ha, Quang Chau IP 426 ha, Trang Due IP & Urban area 600 ha, Phuong Nam IP 709 ha, Tan Phu Trung IP 590 ha; and 3 urban areas : Phuc Ninh Urban area 146 ha, Quang Chau Urban area 120 ha, low-income housing project 6.3ha etc. In addition, new projects on the process of planning 1/2000, 1/5000 or completing investment procedures are promising to create thousands of hectares of land. For example, Yen Phong IP & Urban area 400 ha, Trang Cat Hai Phong Complex 860 ha, Lotus Hotel in Hanoi 4 ha, Diplomatic Corps Project in Hanoi 2 ha, etc.
OBJECTIVES AND BENEFITS

Development strategy of KBC not only brings profits for the enterprise but also for the benefits of the Government and local communities. KBC receive consensus and supports from the Government and the localities; in return, KBC indirectly create employment in IPs for local people, contributing to the local budget. Thus, KBC has achieved high value urban area projects with low cost.
PR STRATEGY
Cluster all projects to have enough land for 10 to 20 year development, and then estimate each project to determine potential projects to develop before PR for the project. Thus, at present, KBC has many less wellknown projects. The potential projects attract attention gradually so that there will be millions of people know when the projects are marketed.
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REPORT OF THE BOARD OF DIRECTORS

REPORT OF THE BOARD OF DIRECTORS
Currently, there are 255 industrial zones all over the country with the total area of 69,253 hectares, of which the industrial area for lease is 45,000 hectares. There are 171 operating IPs and 83 IPs in compensation and clearance phases. The average occupancy rate reached 51%, only approximately 30 IPs with 100% filled, about nearly 40 IPs with 80% filled. (Source: Summarized from the Internet). On the other hand, because of the impact of the global economic crisis and the national economic slowdown from the end of 2008 up to now, FDI inflows to Vietnam declined sharply and many FDI projects were not in IPs. Therefore, IP for leasing supply is higher than demand. However, from our point of view the land bank will become increasingly limited, Vietnams economy will still grow, and international cooperation will develop in the coming years. Within the next 10 years, the IP for leasing supply is expected to decrease. Thus, the competitive advantage belongs to companies who are having large land bank and able to attract investment. Therefore, IP for leasing supply is higher than demand. However, from our point of view the land bank will become increasingly limited, Vietnams economy will still grow, and international cooperation will develop in the coming years. Within the next 10 years, the IP for leasing supply is expected to decrease. Thus, the competitive advantage belongs to companies who are having large land bank and able to attract investment. KBC has all the above advantages. According to our statistics, of 254 IPs all over the country, there are only about 90 IPs with the area of 300 hectares and above, total area of about 30,000 hectares. KBCs IPs all have the area of 300 hectares and above, total land area put in to operation of about 3,400 hectares. Therefore, the land bank of the Group put into operation is accounting for 10% of the total area of IPs with the area of 300 hectares or more. In addition, we have not included potential land bank that KBC may gain from new projects being completed legal process and from the land bank of associates and joint ventures which could become subsidiaries of KBC in the future. Additionally, the development and business of industrial zones often depends on the development cycle of the economy and even develops a year earlier than the time of the economys reform. Thus, the company is currently not less difficult, but we still maintain the activities of attracting investment opportunities, supplying available properties to be ready to meet customers demand whenever the economy has positive signs.
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Nam Son Hap Linh IP Phuong Nam IP
ASSESS BUSINESS PERFORMANCE IN 2010

Maintain sustainable growth in the general context of economic difficulty.
Income and profit after tax of 2010 against 2009 See map of IPs of KBC and its subsidiaries Indexes Income from operating activity Profit after tax of Parent Company EPS (dong) Dividendand bonus share 2010 1.664 1.095 3.780 15% 2009* 1.160 600,6 2.063 50%
Unit: billion dong Changes 143% 182% 183% -
Income and profit after tax of 2010 against 2009 Indexes Income from operating activity Profit after tax of Parent Company Implemented 1.664 1.095 plan 2.300 1.200
Unit: billion dong Changes 72% 91%
In the general context of difficult economy, the factors such as fluctuation in financial market, high interest rates and inflation, decline in the speed of FDI attraction, etc have largely affected the business of the Company. However, the business results still ensure growth objective, profit from main operating activities accounting for about 70% of total profit. Total income and total profit after tax equaled to 143% and 182% compared with 2009 respectively; however, Total income and total profit after tax only equaled to 72% and 91% compared with plan, equivalent to 1,664 billion dong and 1,095 billion dong respectively.
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INVESTMENT ACTIVITY
HOAT ONG AU T
THE LAND - MAPS OF USE PLANNING INDUSTRIAL PARK SOUTH TOTAL AREA 709,01HA
NAM SON HAP LINH IP BAC NINH PROVINCE (402.5 ha)

Nam Son Hap Linh IP with the area of 402.5 ha invested by KBC is in the master plan of IP development approved by the Prime Minister. The IP is located in a strategic position next to Que Vo IP which is invested very successfully and has many advantages to attract large global corporation. This project was completed more than 100 hectares of compensation and 10 hectares of clearance at cheap cost. Our current objective is to attract hi-tech groups from South Korea and Japan.
Parent Company only:
1. Merger and acquisition

In 2010, Parent Company has made successful acquisition of Northwest Saigon City Development Corporation investor of Tan Phu Trung IP project. The percentage of ownership of the Parent Company in the Corporation was 60.52% and total investment capital in the Corporation was 662 billion dong at 31/12/2010. Tan Phu Trung IP is 19km far from HCM City, convenient for transportation: North South direction: (HCM City Tay Ninh Moc Bai International Border Gate Cambodia); Along Trans-Asia road (Highway 22); East West direction: (Long An HCM City Binh Duong). Tan Phu Trung IP has begun to attract investment and had big partners such as Viettel, Fujifilm, Cadivi, etc. This is an important strategy to mark that KBC has officially arrived in HCM City. More importantly, this project has great potential and advantages to bring profit for KBC in the future. The project was revalued by prestigious agency Knight Frank with 5 times more than book value.
THE LAND - MAP OF NAM SON - HAPLINH INDUSTRIAL PARK TOTAL AREA 402,5HA
About the Corporation:

Investment activities mainly focus on basic construction, clearance, compensation and continue to complete legal procedures.
1. Structure of investment by sector accumulated as at 31/12/2010

OTHER 1% MINERAL (SQC) 6% LISTED STOCKS (SGT) 7% COMMERCIAL REAL ESTATE 6%
2. Invest in new projects
PHUONG NAM IP QUANG NINH PROVINCE (709 ha)

This big project is the first project of KBC in Phuong Dong Phuong Nam Commune of Uong Bi Town, Quang Ninh province, located in convenient position in the northern key economic triangle of Hanoi Hai Phong Quang Ninh. Phuong Nam IP is expected to attract 1-2 billion USD of foreign investment and create over 50,000 jobs for local working people. These are favourable conditions for fomestic and foreign enterprises to continue to invest in key economic areas of Quang Ninh province. The project was inaugurated on 27/4/2010. Total investment value of the Corporation in 2010 increased by 2,760 billion dong in comparison with 2009 according to 2010 consolidated financial statement. However, in reality, the value was only 703 billion dong (if excluding the goodwill from revaluation of Trang Due IP and Tan Phu Trung IP). Thus, such investment in 2010 primarily focused on building infrastructure for IPs and the initial cost for Lotus Hotel project. In term of total investment, accumulated value was up to 5,438 billion dong of which investment in IP was largest accounting for 71%, other sectors such as energy accounting for 9%, SGT shares of 7%, SQC shares of 6%, commercial real estate of 6% of the total investment of the Corpora
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INDUSTRIAL PARK 71% ENERGY 9%
tion. KBC still maintain investment in IP and Urban area as the core business and investment in support area such as energy to provide IPs with a stable source of energy in the future, or telecommunication technology to provide IPs with utility services like media, telecommunication, internet, etc; besides, SGT also has property projects related to the core business of KBC.
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1. Structure of investment by sector accumulated as at 31/12/2010 (continued)

In addition, with respect to the investment in SQC, although it has not created profit for KBC, it is assessed as a potential project by the Board because we are investing in the largest titanium slag manufacture plant in Vietnam. SQC met some difficulties in 2010 due to large amount of inventory not yet export because of high export tax of 15%/year 18%/year. However, according to Circular No. 184/2010/TT-BCT dated November 15, 2010 of the Ministry of Finance prescribes that commencing on January 01, 2011, item titanium slag (TiO2 # 85%) has export tax rate of 10%. Moreover, current titanium slag price increased about 50% against 2010. So, we forecast SQCs business will be better and bring profit for KBC in 2011. Thus, investment strategy of KBC over the past years is to concentrate on IP investment along with continuing to develop urban area projects such as Phuc Ninh and Quang Chau urban areas, to focus on developing super-luxury project such as Lotus Hotel in Hanoi. Currently, investment in property projects only occupies a small portion of the total investment of the Corporation because in 2010 the Corporation mainly focused on completing legal procedures, master planning 1/500, basic desig, etc.
90% 62% Phuc Ninh, Lotus Hotel, Accommodation for low - income
PORTFOLIO DETAIL CHART
Commercial Real State Commercial Center Office for lease
KBC
Industrial Park
Que Vo, Expaneded Que Vo Nam Son Hap Linh, Phuong Nam
SUBSIDIARIES Sai Gon Bac Giang Industrial Park JSC Quang Chau IZ & UZ Khanh An IZ
AFFILIATES Sai Gon Ca Mau Infrastructure JSC 20%
Binh Phuoc IZ Sai Gon Hai Phong Industrial Park JSC Trang Due IZ & UZ
Sai Gon Binh Phuoc Industrial Park JSC Sai Gon Dung Quat Investment Development JSC
20%
Sai Gon Quang Ngai IZ
40%
2. Portfolios
The data of investment accounts in financial statements may cause concern for investors. So, hereafter we describe the portfolios in detail to help investors understand better. In addition to investments in subsidiaries and associates demonstrated quite clearly above, we would go into the detail of long-term financial investments of total 3,103 billion dong, of which there was actually 1,775 billion dong of term deposits and loans provided to related parties. (Related parties are mainly associates who are investors of potential real estate projects and are companies that KBC can easily increase the percentage of ownership to merge those companies when necessary). Therefore, in reality, total investment in long-term portfolios was only disbursed 1,328 billion dong, mainly invested in real estate and a small portion in energy, mining and infrastructure sectors. Of which, energy and mining sectors were analyzed above. With respect to investment in infrastructure, we invested in Vietnam Infrastructure Development and finance investment JSC. (Vidifi) Investor of Hanoi Hai Phong Highway project. According to a report of the Government, this project will be put into operation in 2013. Besides the implementation of the BOT project, the investor is granted other projects such as Gia Lam Urban Area, 5 IPs in Hung Yen province, 3 IPs in Hai Duong province and some urban areas and industrial clusters in Hai Phong. This is the advantage of Vidifi as well as KBC.
60.52%
Ho Chi Minh City High - Tech Zone Sai Gon Tay Bac Urban Development JSC Tan Phu Trung IZ & UZ Invest in and supply real estate services
Sai Gon High-Tech Infrastructure Development JSC
27.44%
Sai Gon Binh Phuoc Industrial Park JSC
20%
51%
Bac Giang Thermal Power JSC
Bac Giang Thermal Power Plant
Supply telecom services & invest in real estate projects
Sai Gon Telecommunication Technology JSC (SGT)
21.5%
OTHER LONG TERM INVESTMENT (3.103 BILLION DONG) IZ & UZ (60%)
Sai Gon Can Tho (Hung Phu IZ)
Sai Gon Hue (Chan May Non tariff Zone)
Sai Gon Quy Nhon Mineral (Manufacture titanium slag)
Other (Telecom,Financial investment 99 billion dong ~ 3%)
Sai Gon Nhon Hoi (Sai Gon Nhon Hoi IZ)
Sai Gon Da Nang (Hoa Khanh Lien Chieu IZ)
(See portfolio detail Chart)
Mineral (Binh Dinh Thermal Power Center)
Sai Gon Constructrion Material (Phu Huu IZ)
Tan Ky Cement (Sai Gon Tan Ky IZ) Term deposits Loan for related parties (1.775 billion dong ~ 57% of long term investment value)
Sai Gon Ham Tan (Resort Lagi Ham Tan,...)
Lang Ha Investment (Lang Ha Project)
Infrastructure Development (Ha Noi Hai Phong High - way)
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RISK MANAGEMENT STRATEGY

BIGGEST RISKS TO THE CORPORATIONS BUSINESS AND PERFORMANCE
SYSTEMATIC RISKS DECLINE IN FDI ATTRACTION Business activity of the Company in IP development field depends on Vietnams FDI attraction because target customers of
GENERAL STRATEGY
Risk management of the Corporation focuses on controlling business operation risks and financial risks. Therefore, relevant functions are responsible for controlling and identifying the types of risk including systematic risk (market risk, interest rate risk, purchasing power risk) and non-systematic risks (business risk, financial risk, etc.). With regard to business activities: risk management focuses on negotiation with customers and drafting terms of economic contract. Normally, this work is combined with Legal Department to draft contract terms to ensure the coherence without causing damage to consumers and the Corporation. With respec to financial management: Following the guiding of the Boards, depending on real situations relevant funtional divisions together create plans of using and arranging capital: Each project are budgeted based on the progress of the approved plans, capital structure is normally 30% of equity and 70% of loans. So, the Corporation always maximize opportunities to raise capital at low interest rates, and try to negotiate with credit institutions to archieve lowest fixed interest rates (KBC was very successful in 2009 in arranging 2,700 billion dong bonds, of which 2,200 billion dong with fixed interest rates from 11.5% to 12.5%). To guarantee maximum profit from loans, KBC prioritize investment in activities that bring early profit such as constructing available warehouses for sales and lease, etc. Also, the amount of cash every week and month is maintained at minimum level based on expenses reported from departments and held in payment deposit or savings deposit with original flexible withdrawal and high interest rate at various banks. Financial risk management of KBC always stick to the complex changes of financial market that affect the operation of enterprises such as interest rates, exchange rates, lending and mobiling capital of credit institutions, etc.
KBC are foreign investors. FDI attraction of Vietnam in 2010 was estimated at 18.1 billion USD, registered capital was about 11 billion dong. The structure of FDI mainly shifted to commercial real estate accounting for 74.5%. Meanwhile, KBCs IP mainly attract hi-tech corporations. Thus, besides the risk of FDI decline, shifting FDI from industrial real estate to commercial real estate is also a risk to the business activities of KBC. However, FDI of 2010 actually disbursed mainly in factories in IPs. Thus, we has not seen any serious problem and still believe that Vietnam is still an attractive place to invest. The more the economy develops, the more FDI goes in IPs to construct plants. In case FDI becomes servere, KBC will be the last enterprise in the field of IP development to be affected.
HIGH LOAN INTEREST RATE Loan interest rate in 2010 was higher than in 2009, especially in non-production industries, depending on each bank the interest rate was up to 17% - 20% per year. Such high interest rate created many difficulties to enterprises. In the long-run, over high interest rate in the context of gloomy economy will make enterprise narrow production and stop expansion. New enterprises also reconsider establishment and even some stop operation. This trend is expected to cause major problems to the Company in attracting customers, particularly domestic customers. The Company itself will encounter many difficulties in continuing to execute projects to expand operation scale. INSTABILITY OF REAL ESTATE MARKET Real estate market may experience periods of strong fluctuation (sometimes stronger than the fluctuation of the economy) and sometimes not coincident with the cycle of economic development. Besides periods of economic crisis and recession, there exists natural oscillation cycle with slower response of real estate market compared with common economic cycle. Similarly, when the economy grows strongly, the growth of real estate market is more slowly. This intatbility has considerable influnce on business activities of most of real estate enterprises in general and of KBC in particular. With respect to urban area development, a new business area of KBC, we forcast that biggest risk to KBC will happen when Vietnam real estate market freezes
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RISK MANAGEMENT STRATEGY

Enterprise income tax policy: LEGAL CHANGES Policies in process of improvement, not comprehensive legal framework are factors having direct or indirect impact on investment attraction activities of the Corporation. Specifically: 1. Direct impact Land policy: Compensation for ground clearance under State policy trends to increase more and more (According to Decree No. 69/2009/N-CP dated August 13, 2009 of the Government, compensation of agricultural land increases about 4 times since the decree has validity), so rental rates in IPs of the Group also increase remarkably. This causes considerable effect on investment attraction activities of the Corporation. Policy of real estate business: As stipulated in Point C, Clause 1, Article 20 of Circular No. 16/2010/TT-BXD dated 1/9/2010, real estate enterprises that are investors of new urban zones are responsible for signing in documents certifying the transfer of contract then handing over the document to assignor, investor shall not collect any fee from this transfer. Therefore, customer has right to transfer houses formed in the future with unlimited number of times as well as number of assignee. This cause many problems in organizing of human resources and time to implement the transfer procedures upon request of customer. In estimate, the workload is too much. Inconsistent policies and regulations happened unexpectedly: For example, in June 2010 high-rise building projects in 4 internal districts of Hanoi were stopped to issue construction permits, and then in December 2010 feasible projects are permitted. 1A Lang Ha project of KBC had affected by the risk. It changed the implementation progress and investment plan of the project. 2. Indirect impact: According to trends from 2005 to the present, policy of tax exemption and reduction is gradually eliminated from legal documents of Viet Nam. This has indirect effect on investment attraction activities of the Group. Specifically: Import/Export tax policy: According to regulations of Decree No. 149/2005/N-CP dated 06/12/2005, imported machines and equipments to create fixed assets will be exempted from import tax. Imported materials to manufacture exported products will be exempted from import tax. However, according to regulations of Decree No. 87/2010/N-CP dated 13/8/2010, only details of machines and equipments to create fixed assets that have not yet been manufactured in Viet Nam are exempted from import tax and only materials which have not yet been manufactured are exempted from import tax. This has affected business activities of Companies operating in KBCs IPs. According to regulations of Decree No. 124/2008/N-CP dated 11/12/2008 detailing and guiding the implementation of a number of articles of the Law on enterprise income tax No. 14/2008/QH12 dated 03/6/2008, enterprises operating in socialized domains in geographical areas with socio-economic difficulties or extreme socio-economic difficulties, investment incentive fields shall be exempted from corporate income tax within a specified period. However, according to Resolution No. 54/NQ-CP dated 11/11/2009, the Government has proposed measures to reduce State budget deficit in 2010 by increasing State budget collection and establish legal policies towards "stopping the implementation of tax exemption policy applied in 2009. Although this measure is built on the basis of proposal and not yet applied, it can be seen that trend of establishing legal policies of the Government causes large impact on the benefit of the Corporation. NON-SYSTEMATIC RISK OPERATING RISK In the past, because of the global financial crisis and national economic slowdown in 2008, KBCs operation has been affected by the risk that customers reject land leased. However, to avoid similar cases KBC now focuses on negotiation and setting up terms of economic contract. The Legal Deparment of the Corporation ensures benefits for both the Company and customers. FINANCIAL RISK Capiatal structure of each project of KBC is normally 30% of equity and 70% of loans including advances from customers, credit loan, issuing private shares and bonds domestically and internationally. This activity has always been tightly controlled; most of IP projects are funded by advances from customers and short-term loans when necessary; thus, it is less risky. As for large scale projects, KBC often arrange long-term fund by issuing corporate bonds, convertible bonds that also minimize the risks may occur. The calculation of capital souces for projects is well planed before so that the Company is not in a passive status. KBC makes plans of raising capital from many sources, only invest in highly feasible projects that are able to offer fastest cash flow and ensure long-term solvency.
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BUSINESS OUTLOOK AND PLAN FOR 2011
BUILD A STEADY FOUNDATION KBC has establised a steady-state foundation, a good brand name in Vietnam and reputation abroad. KBC is considered an enterprise having leading prospect in the field of IP development in Vietnam and having high prestige with investors from Japan, Taiwan, South Korea, Singapore, etc. KBC has become the leading enterprise in supplying utility services in IP and developed urban areas next to IPs, provided housing to foreign experts, workers working in IPs and local people along with other support services such as: general surgery, restaurant, school, customs, banking, telecomunication, etc. The success of KBC firstly thanks to the Boards and the senior management team who have vision and ability to manage in all difficult situations to lead the Company from success to success. Moreover, KBC has professional employee staffs that have high qualification, diligence, and highest responsiblity. Besides, KBC also attract many employees from other leading companies because they find carreer opportunities at KBC to develop their talent and to receive deserving benefits. Thus, KBC has continuously maintained growth speed though years from 50% or more, been highly valued and received exellent competition flag from Vietnam Government, and ranked by national and abroad prestige organization. Therefore, KBC has become an enterprise having high credit status with national and international financial institutions which have always create favourable conditions in arranging capital (e.g Vietinbank, BIDV, Credit Suisse). With a lot of advantages such as the ability to acquire land bank, the ability to attract investment, support from credit institutions to arrange fund, KBCs main activity has been always stable even in difficult macro-economy; thus, KBCs cash flow has been very good.
BAO CAO THNG NIEN NAM 2010
Diamond Rice Project Design
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BUSINESS OUTLOOK AND PLAN FOR 2011
PLAN FOR 2011
Execute ground clearance and investment attraction in operating IPs at the same time such
as Que Vo Expanded IP, Quang Chau IP, Trang Due IP, Nam Son - Hap Linh IP, Phuong Nam IP and Tan Phu Trung IP. Of which, the Nam Son - Hap Linh IP was compensated 100 ha with low compensation cost and ground cleared 10 ha to be leased in 2011; Phuong Nam IP is speeded up compensation, ground clearance and invesment promotion. This new IPs are focused on attracting big groups to brigh about their satellite companies.
DEVELOPMENT OUTLOOK In the context of economic difficulties since 2008 up to now, KBC has take full advantage of opportunities in the crisis by arranging low-cost capital, constructing infrastructure with low cost, acquiring potential project with cheap prices, improving competive ability to attract more foreign investors into Vietnam. So, KBCs are always the first choice of many big corporations to invest and build factories in Vietnam. On the other hand, based on the reputation and the ability to provide full services in IP, KBCs operation is always busy. Specially, when the Company attracts a big customer, it will soon attract the satellites of that customer. In 2011, besides the business opportunities from major companies operating in the IPs need to expand their plants such as Canon, Mitac, Sanyo, there are many other big corporations going to lease land in KBCs IP such as Wintex Group from Taiwan which will construct touchscreen plant in June July, 2011 and Emerson Group from the U.S will build plant to manufacture mobile phone components in 2011. Besides, those big corporations are not only just close customers of KBC but also become partners of the Company in cooperating to develop large-scale projects; for example, cooperating with Foxconn to construct project Hi-tech Trang Cat IP complex, etc. So far, KBC has been the pioneer enterprise in attracting foreign investment into IPs in Vietnam and become bridge between Vietnam and foreign investors. Thus, prospect of main business activities of KBC is always bright and promising to contribute significant profit to the Corporation. In addition, investment in SQC in 2011 also promises to bring profit for KBC after the Ministry of Finance reduce export tax of titanium slag and the pice of the product in the world increased 50% compared to 2010. With regard to developing urban areas such as Phuc Ninh and Quang Chau urban areas are promising to create cash flow in 2011. Currently, Phuc Ninh urban area is being leveled ground to construct infrastructure. There are only some families land areas left for clearing; land price of the region has reached from 15 million dong / m2 to 20 million dong / m2, while Quang Chau urban area has welcomed Wintex Group to plan housing for worker. Having prestige and impressive results in operation throughout the past years, KBC has pleased local people and governments where the Company developed projects; thus, KBC has been created favourable conditions to acquire IP and urban areas in good locations. Besides projects presented in this report, KBC will continuously expand projects to big cities such as Hanoi, Hai Phong, Da Nang and HCM City to become investor of golden land areas. Therefore, in difficult ecomic context, we still believe that we are on the right track and, build KBC stronger, always take full advantage of of business opportunities to overcome this difficult period and to succeed.
2 3
Invest in infrastructure, level ground of Phuc Ninh Urban arrea (146 ha) in Bac Ninh to quickly
put into business in 2011 with price ranging from 15 million to 20 million dong / m2;
Complet legal procedures to bring Quang Chau urban area (120 ha) in Bac Giang into
commerce, attract big companies in IP to invest in this urban area to build housing for experts and workers;
4 5
Invest in infrastructure of Hi-tech Trang Cat IP & urban area in Hai Phong (860 ha), create
joint venture with Foxconn to implement the project together;
Accelerate the completion of legal procedures of Diamond Rice project in Hanoi (previously
was Lotus Hotel project) to quickly inaugurate. The project is designed by a world leading architecture designer FOSTER AND PARTNERS - UK with extreme impresive scale and disign to create outstanding point having unique architecture. The project was approved by the Ministry of Construction to have the height of 400m with complex functions.
Implement Kinh Bac Multi-function project in Diplomatic Corps with the area of 2 ha. The
project is currently completing technical infrastructure and legal documents by Hanoi Construction Corporation to hand over to KBC. KBC is also currently completing the design for the building.
Implement Tan Lap new urban area in Dan Phuong, Hanoi (26ha). This project was assigned
to KBC to do research and make detailed master plan 1/500 by Ha Tay Peoples Committee. When Ha Tay province was mergered into Hanoi, the project was inclue in the list of projects to be reviewed after adjusting the citys master plan being approved by the Government.
8 9
Build one to two more new IPs; merger one to 2 IPs into the Corporation; Implement the strategy of going toward Hanoi and HCM City to develop property projects,
build multi-function complex; contribute capital and acquire shares of other companies to brigh more profit for the Corporation;
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Carry out regularly business promotion plans abroad as well as programs to support
investors in IPs.
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REPORT OF THE BOARD OF MANAGEMENT

SOLVENCY FINANCIAL STATUS REVIEW PROFITABILITY
Indexes Gross profit / Net Revenue Pre-tax profit / Total revenue After tax profit / Total revenue After tax profit / Total assets (ROA) After tax profit / Owners equity (ROE) Unit % % % % % 2010 56,6 79,0 66,6 10,0 25,0 2009 54,7 57,5 53,3 7,2 19,0 2008 61,7 49,4 31,2 6,0 10,5 Indexes Capital structure Liabilities / Total capital Owners equity / Total capital Solvency Current solvency ratio Short term solvency ratio Quick solvency ratio Times Times Times 1.85 2,94 1,48 1,67 2,23 1,8 2,44 1,22 0,82 % % 54,22 38,29 60,02 38,21 40,97 57,22 Unit 2010 2009 2008
According to Consolidated Financial Statements We evaluate solvency in company with the relationship between the growth of capital and of assets. In 2010, the growth rates of total assets and of ownersequity are nearly equivalent, respectively 33.1% (2,845 billion dong assets) and 33.3% (1,096 billion dong owners equity). Equivalence between the growth rates of assets and of capital indicates that KBC cut down using financial leverage in 2010. Although total liabilities increased by 20% (1,044 billion dong) compared to 2009 and lower than the growth rate of ownersequity (1,096 billion dong), the total real loans were significantly smaller than total debts. The remaining in total debts is mainly funds for reinvestment or for generating future cash flow. They are temporarily recorded in liabilities.
According to Consolidated Financial Statements
KBCs gross profit margin has always maintained at high levels over the past years, with rates rising by 56.6% compared to 2009 year. This affirms KBCs effectiveness in controlling business expenses. Compared to other companies in the same industry of the same size, this ratio of KBC is better, for example, ITA (22%), OGC (26%), HAG (51%), etc. Indicators ROA, ROE improved significantly compared with 2009. Currently, indicator ROE is 25% and considered suitable for a large-scale company in early stage of project development like KBC. In comparison with other companies in the same industry, of the same size, financial indicators of KBC are equivalent or better. We believe that, with the stable growth momentum during the years, when projects are put into business, these indicators will improve much more. Considering margin ratios (pre-tax profit/total revenue and after-tax profit/total revenue reached 79% and 66.6% respectively), these ratios rose sharply compared to gross profit margin ratio and compared to 2009. The reason is that the surge of other income (395 billion dong) in the profit structure. This increase Note: is due to revaluation of Tan Phu Trung IP when KBC acquired Northwest Saigon City Development Corporation. Although this profit is not reflected in cash flow of KBC, in the terms of goodwill, KBC has made a successful M&A deal at the cost of 50% cheaper than present value of revaluated assets. The importance is that this project is very feasible, profitable for KBC right from 2010 and promises a stream of future earnings.
THE GROWTH RATES OF EQUITY AND TOTAL ASSETS (Billion dong) Eqiyty Total assets
11,439
8,594
4,781 3,237 2,170 1,027 378 3,284
4,379
2,735
2006
2007
2008
2009
2010
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SOLVENCY (Continued)
Ratios of capital structure: Liabilities / Total capital (54.22%) and Owners equity / Total capital ( 38.29%), these ratios are considered suitable for large scale real estate companies; ensure the ability to provide counterpart funds to mobilize capital from credit institutions when necessary. Ratios of solvency: In 2010, these ratios are much improved compared to 2009, they are all greater than 1 while still guarantee a high level of safety. Of wich, short-term solvency ratio of 2.94, quick solvency ratio of1.48 are considered pretty good and put no great pressure on short-term debts of the Corporation. In comparison with companies in the same industry of the same size such as HAG, ITA, OGC, the ratios of solvency of KBC are equivalent or better. However, when considering the detailed items in total liabilities, ratios of KBCs solvency will be much better. Unit: billion dong Indexes Total liabilities Short term loans and debts Advances from customers Taxes and payables to the State Payable expenses Long term bank loans Bonds Deferred taxes Other loans and debts 31/12/2010 6.202.118.615.129 543.025.413.490 522.489.633.073 459.230.848.217 821.791.589.411 421.843.198.601 3.000.000.000.000 360.755.403.452 72.982.528.884 31/12/2009 5.157.956.349.853 326.539.714.076 615.074.524.472 423.230.665.495 586.893.368.867 313.560.546.941 2.700.000.000.000 49.895.747.921 142.761.782.081 Changes 20% 66% -15% 8,5% 40% 35% 11% 623% -49% 2010 proportion 100% 9% 9% 7% 13% 7% 48% 6% 1% TAX 7% As of December 31, 2010, total liabilities was 6,202 billion dong, rising by 20% (1,044 billion dong) compared to 2009 year. Notable changes in debts are short-term loans increasing by 217 billion dong, five-year bonds (issued by Northwest Saigon City Development Corporation) rising by 300 billion dong and long-term loans growing by 108 billion dong. Compared to 2009 year, KBC reduced its financial leverage, utilized available financial capacity and focused on key investment. On the other hand, with regard to structure of total liabilities, there are 48% of 5-year corporate bonds (due in 2014 2015) mostly at fixed-rates on the average of about 12% per year. In addition, shortterm loans accounted for 9% and long-term loans accounted for 7% against total debts on the average interest rate of about 14. 5%. Thus, total real debts just accounted for 64% of total debts (equivalent to 3,969 billion dong), while, owners equity was 4,414 billion dong. This means that KBCs financial capacity remains at high security level. Therefore, if only considering the possibility
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of paying real debt, indicators of solvency are improved dramatically: the ratio of real loans over total capital only accounted for 32%, current solvency ratio for real loans increased from 1.85 times to 2.85 times. This means that in reality, pressure on debts reduces significantly. Furthermore, in term of debt structure there are some large accounts such as payable costs of 821 billion dong (accrued costs corresponding to recorded revenue and used for reinvestment); advances from customers of 522 billion dong (to generate around 2,000 billion dong in revenue for KBC in the future). A deferred income taxes were 360.7 billion dong; in fact, do not arise but only shown on consolidated financial statements when consolidating financial statements from subsidiaries. These income taxes were due to revaluation of assets of Northwest Saigon City Development Corporation and Sai Gon Hai Phong Industrial Park JSC when KBC acquired them. Taxes and payables to the State actually accounted for 7% (459 billion dong). These taxes must be amortized to the State after tax authority conducts tax settlement. So, we have analyzed the solvency of the corporation in details on the basis of considering debts in comparison with the value of assets. In general, indicators of KBC are considered suitable compared to companies in the same industry, but when looking closer, these indicators are much better. They affirm financial capacity of the Corporation and ensurea high level of security
OTHERS 1% DEFERRED TAX 6%
PAYABLE EXPENSES13%
ADVANCES FROM CUSTOMERS 9%
REAL DEBTS 64%
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2009, KBC arranged a large capital amount at fixed rates within 5 years and lower than saving rates
OTHER FACTORS REFLECT A STABLE AND SUSTAINABLE FINANCIAL STATUS

At the time of December 31, 2010 the balance of cash and cash equivalents was 444 billion dong, equaled to 80% of short term borrowings, thus, ensures high liquidity for short term borrowings. Short term receivables was approximately 3,067 billion dong. Of which, significant accounts are receivables from customers (around 1,099 billion dong); remaining is mainly from advances payment to sellers (this account pays for compensation; KBC pays in advances to facilitate compensation to inhabitants. This work does not depend on plan of the investor, but on the time when inhabitants are willing to receive compensation). Other receivables from related parties are low risk receivables. There is a surge in the value of inventories which equaled to 394% of 2009 year, up to 3,542 billion dong. The reason is the revaluation of the areas which have been cleared and have land allocation decision in Trang Due IP and Tan Phu Trung IP by Knight Frank Viet Nam at fair value after KBC raised its stake in Sai Gon Hai Phong Industrial Park JSC and Northwest Saigon City Development Corporation. Accordingly, Trang Due IP is revaluated at 345,841,200,000 dong (book value is 2,211,429,391 dong) and Tan Phu Trung IP is revaluated at 2,403,302,400,000 dong (book value is 754,736,034,044 dong. The difference creates a great goodwill for KBC. Therefore, in fact, inventories are just about 1,590 billion dong and these inventories are mainly the value of pure land areas in IPs cleared and compensated. This is a huge advantage of KBC because at the present time compensation cost has been adjusted double than that of KBC incurred before.
at the present time. Along with fund arrangement plan, cash flow management plan of KBC also has been good. Arranged funds are prior to invest in product lines and services that have fastest profitability to increase cash flow and ensure instant liquidity as well as contribute to strong financial foundation. For example, when investors were in downsizing period and did not care about expanding plants, the Corporation took advantage of low interest rate capital to build plants so that when the economy shows the sign of recovery, investors would have demand of plants available for operation to welcome the reform of the economy. KBC has been very successful with this revolving fund strategy. In contrast, in 2010 because all costs (cost of capital, price of materials) rose, KBC did no focus on building available warehouses but acquiring potential operating projects that promise immediate profit. For example, in 2010 acquiring Tan Phu Trung IP not only created goodwill of 395 billion dong, but also contributed to the profit of KBC in 2010 and the project would be very profitable in the future. KBCs policy in cash flow management is very flexible and suits the general situation of the market. KBC takes advantage of financial leverages when suitable, invests in product lines that bring the most early profitability, utilizes inner force in the context of economic difficulty, maintains the minimum mount of cash weekly, monthly based on reports from departments and held in payment deposit or savings deposit with original flexible withdrawal and high interest rate at various banks. Consequently, KBC has built up a great reputation to credit institutions.
FUNDARRANGEMENT AND CASH FLOW MANAGEMENT

Structure of owners equity includes contributed charter capital, share capital surplus and undistributed profits. Since listing, owners equity has been continuously added from undistributed profits through payment of dividends in stock to shareholders. This policy may be unattractive to investors, but considered suitable for a company having rapid growth speed like KBC. We believe that increasing capital from additional profits is more reasonable than issuing additional shares to existing shareholders. Until projects are put into operation and the Corporation can itself balance its capital, the Board will consider the plan to pay dividends in cash to shareholders. Therefore, using inner force to raise financial capacity is the first priority in the context of the early process of developing projects. In addition, the Corporation always plans the budget for each project based on its own budget and expected progress of each project. The ratio of owners equity/loans of each project is commonly 30:70. This is the general principle of the Corporation. Of wich, borrowings are often raised from various sources such as bonds, stock issuance, loans from credit institutions, etc. Especially, when issuing bonds, the Corporation always tries to negotiate at fixed rate as low as possible. Until now, using financial instruments of KBC has been as quite effective. KBC has taken advantage of any low interest rate opportunity to arrange funds and reduces financial instruments at periods of high interest rates that do not bring investment effectiveness for the Corporation. For example, in Indexes Net Sales - Sales from land lease - Sales from selling warehouses - Other revenue Financial income Other profit Operating total income Profit after-tax of Parent Company EPS (dong) Dividend and bonus shares
ASSESS BUSINESS PERFORMANCE BUSINESS RESULTS

2010 913,9 794,8 107,3 11,8 750,1 395,2 1.664 1.095 3.7080 15% 2009 889,6 365,4 517,8 6,4 270,7 1,15 1.160 600,6 2.063 50% Changes 103% 218% 21% 184% 278% 34.365% 143,4% 182% 189% 50%
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STRUCTURE OF PROFITS
In the context of difficult economy, the Corporation was also affected in attracting investment and developing projects. However, the growth of business results in 2010 remained at high level compared to 2009, specifically: total business revenue reached more than 1,664 billion dong, equaled to 143% of 2009. Profit after tax of the Parent company reached over 1,095 billion dong, equaled to 182% of 2009.
Profitafter tax of paren company
Profit structure chart
REVENUE STRUCTURE
It can be seen that business revenue is mainly generated from land lease and sales from warehouses. Nevertheless, financial income of around 750 billion dong, accounting for 45% of total revenue and equivalent to 278% of 2009 year, is mostly generated from transferring 75% of exploitation right in the project which lies at 1A, Lang Ha Street, Dong Da district, Ha Noi of the corporation. Although this revenue is recorded as financial income under accounting policy, it is related to real estate business activity. Though this transfer, KBC gains a huge profit and avoids some of risks in policy of the State which constantly changes in 2010 related to regulations on the height of building.
1.160
Total revenua
1.664
ty ong
Others 30%
Profit from core business 31%
1.129 Financial profit 39%
It can be seen that profits from core business activities accounted for 31%, financial profits
601
accounted for 39% (which mainly come from the transfer of exploitation right of project at 1A, Lang Ha Street, Dong Da district, Ha Noi, analyzed in this report). However, other income also accounted for 30% (equals to 395.2 billion dong), generated from revaluation of assets in Tan Phu Trung IP HCM City with an area of 590 ha when the Parent Company has successfully implemented acquisition of Northwest Saigon City Development Corporation at the cost lower than the present value of revaluated assets by Knight Frank Viet Nam. Accordingly, Tan Phu
2009 Revenue structure chart

Others 1%
2010
Trung IP project is worth 5 times than book value. Importantly, this project has great potential and advantages to bring KBC huge profit. Presently, the project begins to attract investment and and to generate cash flow in 2010.
INVESTMENT ATTRACTING SITUATION IN 2010

Attracting investment KBC in 2010 mainly occurred in Expanded Que Vo industrial zone, Quang Chau industrial zone, Trang Due industrial zone and Tan Phu Trung industrial zone. The organization of KBCs business activities is based on close cooperation between the parent company and subsidiarFinancial income 45% Land lease 48%
ies. Business model is arranged like centipede foot shaped network, easy to bring spillover effect. Customers are always introduced the whole system of industrial zones of the parent company and subsidiaries no matter where customers come to work. In 2010, KBC held investment promotion campaigns in Japan, Korea, TaiwanThrough these promotion campaigns, some enterprises signed minutes of land lease agreement with KBC and many enterprises promised to consider KBC to be the first choice when they come to Viet Nam
Warehouse sales 6%
In spite of difficulty context of macro economy, activities of leasing land and sale of factories account
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recovers and develops, continuing abroad investment of Taiwanese companies is very positive; (4) According to our assessment, corporations and enterprises in many countries are restructuring production and business system after economic crisis. This is an opportunity for Viet Nam to appoach and to attract investment. After considering such investment trend, KBC has prepared specific strategies to attract each type of customers to be able to catch future demands. As expected, in 2011 revenue from IPs is KBCs major source of revenue. Presently, we have attracted some of potential customers such as Wintek, Aichi Tokei denki, Citizen watch, Sanko Seisaku, Motec, Creativotip, etc. with the demand up to 100 ha. Of which, some customers has completed signing land leasing contract, even Wintek Group is negotiating to lease land in Quang Chau urban area to build houses for workers. Besides Que Vo IP, Quang Chau IP, Trang Due IP and Tan Phu Trung IP, in 2011 KBC will focus on attracting investment into Nam Son Hap Linh IP where concentrate on attracting Sam Sung Corporation and its satellite companies. About Phuong Nam IP, KBC conducts promotion to attract Chinese companies such as Dong Nhat Engineering Co., Ltd with the investment of 70 million USD; An Thoi Long Electronic Technology and Science Co., Ltd with the investment of 50 million USD; Ai Duc Dac Electric Co., Ltd with the investment of 30 million USD.
Signing ceremony with Wintex - Tainan
for more than 50% of total revenue. However, this figure do not reflect the whole of investment attraction activities because the period from depositing, handling land over the investors to revenue recognition often lasts from 6 months to 1 year. Therefore, for over 1 - year investment activities, we head toward the future and prospect rather than what is reported in financial data that year.
INVESTMENT ATTRACTING PROSPECT

Currently, KBC is focusing on some large customers from Japan, South Korea, Taiwan, etc. Among, (1) the group of Japanese customers is having plans to shift investment from China to other countries including Viet Nam. Basically, there are two major investment groups: large enterprises and support industry companies; (2) the group of Korean customers including large corporations and small-medium companies spending more and more attention to Viet Nam, especially, when the relationship between Viet Nam and Korea is elevated to strategic partnership. In addition, South Korea spends more and more ODA for Viet Nam and preferential investment fields are mainly projects of infrastructure construction that has a positive impact on FDI inflow from South Korea into Viet Nam. Because the biggest concern of large corporations investing in Viet Nam is infrastructure and when this concern is reduced, more and more investors will determine long term investment in Viet Nam; (3) Taiwanese enterprises are still big customers of KBC. When Taiwans economy gradually
Signing ceremony with Chinese enterprises
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COMPETITIVE ADVANTAGES OF KBC
In fact, it is very difficult to define adequate competitors of KBC in the field of developing IP in the North. Because KBC is the number 1 group in attracting foreign investment in Viet Nam and capable to create a huge land bank, with the following advantages: Established reputation and brand for developing IPs in the country and overseas, be invited to implement IP projects by many provincial authorities; Diversified and full products and services, modern infrastructure; Competitive rental price in comparison with other Northern industrial parks; There are some rivals that are investors of modern industrial parks such as Thang Long industrial zone or Viet Nam Singapore industrial zone, but their land fund is limited and their rental price is quite high. Furthermore, the model of IP development of KBC is associated with development of urban areas has not yet been implemented by any other investors. KBC always has its own way and separate direction to create products and services different from its competitors. For residential real estate, specifically in the field of urban area development, KBC just begins with some of projects. Although this is a challenge of KBC because there are a lot of rivals, this is also opportunity to affirm KBCs capacity. 7 8 9 Customer care services Support for customer Ability to attract large customers Rather good Good Have ability to attract many large customers, followed by many satellite enterprises Have many clues to attract customers, relationship to hold investment promotion seminars domestic and abroad Rather good Rather good Have ability to attract many large customers, followed by many satellite enterprises Have relationship with agencies, foreign investment promotion organization. Have support from foreign organizations when holding seminars abroad Bad Medium Not have ability to attract big customers 3 4 5 Infrastructure in IPs Rental rates Management and maintenance fees Connectivity ability between investors and State agencies Fair Good Higher Higher Medium Lower Equivalent or lower 1 2 Trademark Location Strong trademark Convenient to develop, convenient for transportation by road, by waterway and by No Articles IPs of the Group IPs of big rivals (Thang Long, VSIP, Yen Phong) Stronger and longer trademark Convenient to develop, convenient transportation IPs of small rivals
DIRECT COMPETITORS OF KBC IN THE FIELD OF INDUSTRIAL PARK CAN BE DIVIDED INTO THE FOLLOWING GROUPS:
Weak trademark Inconvenient, not near important highways
Good
Good
Fair
10
Marketing
Directly approach customers. There is few relationship with foreign organizations
11 12
Other Opportunities for customers
Have support IPs More opportunities for customers, many IPs are put into operation Less Less
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BUSINESS ADMINISTRATION A pioneer in being the bridge between Viet Nam and international corporations and guideline for business activities of KBC
KBCs success in the field of business management of IPs firstly thanks to the management ability of the Management Board and the capacity of implementation of the business staffs. Although business result only equals to 93% of proposed plan, this is still a great effort of the Management Board in the context of Viet Nams difficult macro economy and the decline in FDI, while KBC depends deeply on FDI. Our business staffs have great experience in organizing investment promotion in foreign countries. They are the bridge between Viet Nam and foreign corporations. They not only bring the image of KBC to overseas but also play an important role in transmission of investment policy and macro policy of Viet Nam to large corporations in the world. We are proud of them. It can be said that KBC is the pioneer company in spreading image and investment environment of Viet Nam to foreign corporations and investors. In spite of facing many difficulties while domestic economy is still erratic and global economy has not fully recovered, we still maintain our current business strategies which concentrate on foreign customers, turning IPs into high tech IPs without chimneys nor environment pollution and bringing image of KBC to the world.
RISK CONTROL AND PERFORMANCE ENHANCEMENT MEASURES

Organize business activities systematically, tightly associate with subsidiaries, give customers more choices of positions in IPs of the Corporation, creating spillover effect from the Parent company to subsidiaries; Build comprehensive preferential policies for customers including freely supporting them in applying for investment license, helping them to complete procedures quickly, reducing risks for customers as well as for the Corporation; Organize investment promotion campaigns in foreign countries quarterly or extraordinarily; Participate in economic forums between Viet Nam and other countries, held by Vietnamese organizations; Concentrate on attracting large corporations in new IPs, accordingly, attract their satellite companies; Negotiate carefully terms of contract, avoid causing damage for customers as well as for the Corporation; In business activities, focus on reducing costs at maximum level, maintain the ratio gross profit/revenue at 50%; Choose appropriate period to invest in developing new products to catch up future demand, in order to generate early profit and to have quick return on capital.
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OTHER FACTORS BOOK VALUE
At 31 December, 2010 book value of the Corporation is
KBC BONDS
Bonds Total value (billion dong) 700 300 200 400 500 300 300 Issuing dates 8/5/2009 11/8/2009 1/9/2009 30/11/2009 28/12/2009 24/12/2009 30/12/2009 Maturity dates 8/5/2014 11/8/2014 1/9/2014 30/11/2014 28/12/2014 24/12/2014 30/12/2014 Interest rates 11,5% 12,5% 12,5% 12% Tha noi * 12% 11,5%
4,379,960,163,305
dong
KBCbond001 KBCbond002 KBCbond003
CHANGES IN EQUITY
In 2010, the Corporation continued to increase equity through paying dividends of year 2009 (20%) and issuing bonus shares (30%) to existing shareholders, raising dong total equity from
KBCbond004 KBCbond005 KBCbond006 KBCbond007
1,991,243,300,000 dong up to 2,957,111,670.000
(*) The floating rate of KBCbond005 is calculated at the arithmetic mean of 12 month savings rates of (Viettinbank, Vietcombank, BIDV, Agribank) plus margin of 3.5% per year.
STOCK INFORMATION
Common stock Treasury Total shares Outstanding shares 289.760.188 stock 5.950.979 stock Bonds 295.711.167 stock 289.760.188 stock 001/2009/TPSCD01/HMB 002/2009/TPSCD01/HMB 003/2009/TPSCD01/HMB
In addition, Northwest City Development JSC also has 3 bond issuing contracts, as followings:
Total value Issuing date (billion dong) 86,868 98,856 114,276 17/9/2009 18/12/2009 18/12/2009 Maturity date 17/9/2014 18/12/2014 18/12/2014 Interest rates 12,5% 12,5% 12,5%
DIVIDEND POLICY
Currently, KBC applies the policy of paying dividends in stock to reinvest shareholders capital in new projects. This is a reasonable dividend policy of the company which is in the first stage of implementing many large projects with objectives of developing both equity and assets to attract more capital from investment organizations in the country and overseas. In 2011, the Corporation will pay dividend of year 2010 to shareholders in stock at the rate of 15%. For the rest, depended on business status of KBC, particularly, on forecasts as well as macroeconomic policies of Viet Nam in the last months of this year and years ahead, The Board will carefully consider and asks for shareholders opinion in writing. INNOVATION IN ADMINISTRATION In 2010, KBC has implemented many activities to improve the organization and to enhance the quality of corporate administration, including: Appoint two foreigners as independent members of the Board: Mr. Mistu Okada (Japanese) and Mr. Piet Steel (Belgian) Appoint Mr. Phan Anh Dung as Deputy Director in charge of management and implementation of urban area projects.
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PLANS FOR 2011

Revenue Profit In 2011, the Board of Management plans revenue and profit as below: Expected revenue: 2,000 billion dong Expected after tax profit: 1,000 billion dong Of which: Revenues are primarily generated from Que Vo Expanded IP, Quang Chau IP, Trang Due IP, Tan Phu Trung IP, Nam Son Hap Linh IP and Phuong Nam IP. Some revenues are expected to come from Phuc Ninh Urban area project.
Fund arrangement With the implementation of a series of large scale projects such as Lotus hotel, industrial zones and urban towns which were or are about to be put into operation, so, in 2011, the demand for capital of KBC is estimated to increase from additional 2,000 billion to 3,000 billion dong, through channels as followings: Issuance of private shares Issuance of international convertible bonds Issuance of domestic corporate bond Borrowings from credit institutions Mobilize advances from customers
Picture: The chairman of KBC Mr. Dang Thanh Tam, the Prime Minister Mr. Nguyen Tan Dung and leaders of Credit Suisse signed memorandum of understanding on the issuance of international convertible bond of 200 million USD in Swiss
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ORGANIZATIONALH BAN IEU HAN STRUCTURE

Organization structure of the corporation is established by the functional model. Accordingly, the manager of each division takes charge of reporting to Management Board. This structure creates deep specialization, allows each staff to focus on his/her expertise, and facilitates recruitment of new staff with skills appropriate for each functional division.
GENERAL MEETING OF SHAREHOLDERS SUPERVISORY BOARD BOARD OF DIRECTORS
GENERAL DIRECTOR
DEPUTY DIRECTOR
DEPUTY DIRECTOR
DEPUTY DIRECTOR
ACCOUNTING & FINANCE DEPART
COMPENSATION & SUBSIDIARY MANAGEMENT DEPART
SALES & MARKETING DEPART
HUMAN RESOURCE DEPART
MEDIA & INVESTOR RELATION DEPART LAW DEPART
URBAN &
ACCOMMODATION
CONSTRUCTION TECHNICAL DEPART
MANGAMENT DEPART
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MANAGEMENT BOARD
During the past 9 years, the talented captain who has led the ship KBC to go through many waves, to get success after success is Mr. Dang Thanh Tam. He has ever been a marine engineer with the ability of learning continuously. Whether it is big or small issue he has considerate plans and preparation.
MANAGEMENT BOARD
From left to right: Mrs. Nguyen T.Thu Huong, Mr. Dang Thanh Tam, Mrs. Le Hai Anh (Deputy Director of Sai Gon Bac Giang), Mr. Phan Anh Dung, Mr. Dao Hung Tien
Mr. Dang Thanh Tam Take speech confidently in front of hundreds of leaders of enterprises in the country and oversea. He is like an anonymous lawyer understanding thoroughly the laws of Viet Nam as well as international practices. He grasps the direction of social and economic development of locality, of Vietnam as well as the world economic situation. He is a familiar speaker who represents Viet Nam businessmen in economic conferences and forums in the world and regionally such as APEC, ABAC, World Economic Forum Annual Meeting in Davos, World Economic Forum on East Asia 2010, etc. With confidence, knowledge and business skills he has met many entrepreneurs in the world, had dialoguges with heads of many states and hundreds of leaders of large international corporations. These are opportunities for him to seek cooperation and business chances for the Corporation. He is not only the captain of KBC, but also to play an important role of Viet Nam businessmen community and of the State. Therefore, KBC ship is always guided to take the right direction in accordance with the development orientation of Viet Nam and integration with the world. One of the most effective supporters of Mr. Dang Thanh Tam is Mrs. Nguyen Thi Thu Huong Deputy Director, who helps him to implement successfully detailed investment strategies and business plans. During the past 9 years, she has built a friendly and professional culture for KBC. More importantly, she is the diplomat of KBC and takes charge of attracting and training business
staffs who are proficient at least 2 foreign languages, expert in business culture of many countries and able to transmit investment opportunities in Viet Nam to foreign investors. Therefore, she is an integral part in building the brand of Kinhbaccity, one of the leading real estate companies in Viet Nam. She is the person who holds the key to open the door of success for KBC. Together with Mrs. Nguyen Thi Thu Huong, the next supporter of Mr. Dang Thanh Tam is Mr. Dao Hung Tien Deputy Director who has a strong attachment to KBC over the past 9 years. He is the companion with the development of KBC to establish, manage and implement projects. Presently, he mainly takes charge of managing compensation task and administrative activities in subsidiaries to ensure the growth of subsidiaries corresponding to the Parent company. Now, Mr. Tien is appointed as General Director of Sai Gon Hai Phong Industrial Park JSC, in charge of developing business in Trang Due IP and urban area. He plays an important role in developing KBCs projects and its brand in Hai Phong city such as the project Trang Cat hi tech IP and urban area. In 2010, in order to strengthen the power and to meet timely the growth speed of KBC, the Board appointed Mr. Phan Anh Dung as Deputy Director who has many years of experience in developing urban town and housing projects. He is responsible for construction techniques and implementation of commercial real estate projects such as urban towns and superior commercial center complexes.
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MANAGEMENT BOARD
HUMAN RESOURCE POLICY
SHARES HELD BY THE MANAGEMENT BOARD

Name Position Number of shares Ownership proportion THE NUMBER OF STAFFS, THE POLICY OF RECRUITMENT AND TRAINING On 31 December, 2010 the total number of staffs of KBC is 128 people, increased by 16 people 1 2 3 4 Dang Thanh Tam Nguyen Thi Thu Huong Dao Hung Tien Phan Anh Dung General Director Deputy Director Deputy Director Deputy Director 101.250.000 299.478 279.647 0 34.2% 0.1% 0.1% 0% compared to 2009 year. KBCs personnel structure is mainly high qualified staffs university graduates, post-graduates and technical workers. Recruitment motto of KBC is to attract talent staffs and put them in right positions that is suitable for their capacities and strengths. KBC always creates good conditions to support each individuals to develop his/her career. Management staffs are also given intensive training on professional management. SALARY Presently, the average salary of staffs in KBC is 8,500,000 dong/person/month. Salary is reviewed depended on the entire working process of each staff during the year and promotion of the head of his/her department. Adjustment of salary increase is appropriate for the title and new tasks which staffs will be responsible for after having decision of assignment to higher position.
Note: the ownership proportion of the Board of Management has not changed since listing. There has not ever been any trade of shares by members of the Board of Management.
INTERESTS OF MANAGEMENT BOARD

Issue bonus shares at appropriate rate for senior management officials to encourage them to attach and contribute to the development of the corporation; Reward villas in some urban towns to ensure that they have sufficient and stable lives; Reward cash in time and appropriately based on achievements of each individual on the occasion of year end summation; Other interests: private car to go to work everyday and travel in business, armed with laptop and cell phone for work; The total of salary and bonus of the Board of Directors is 4 billion dong per year.
REWARD KBCs staffs are rewarded corresponding to their achievements. For each year, staffs receive at least salary of 13 months. Moreover, KBC have the regimes of additional salary and bonus for typical units and individuals of the year, for excellent ideas and holidays. ALLOWANCES, SOCIAL INSURANCE AND LEAVE Besides salary and bonus, employees also enjoy other allowances depending on specific jobs such as: responsibility allowances, allowances for supporting other departments, allowances for holding more than one position, allowances for lunch, work expenses, cell phone, travel expenses, etc. In addition, in order to create friendly atmosphere between departments, on the basis of financial status KBC organizes a vacation trip for all employees each year. All employees of KBC have social insurance, health insurance and allowed to have leave days under provisions of Labor law. Especially, female employees are entitled to receive 100% of normal salary on the period of maternity leave. KBC is proud of the ability of building, managing and using human resource efficiently. Human resource is the most value asset of the corporation, with professional working manner and spirit of devotion to work in order to ensure stable and sustainable development of the corporation.
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THE BOARD OF DIRECTORS

THONG TIN VE CO ONG VA QUAN TR CONG TY
On April 16, with the consensus of ministries and departments, the President of Bac Ninh provincial THE BOARD OF DIRECTORS Strategies for development of the corporation that are approved by General Meeting of Shareholders such as business development plan, new project investment, funding arrangement are executed by the Board of Directors. The Board include the following members: Peoples Committee worked with the Board of KBC to sign the decision of approving KBC to become the investor of Nam Son Hap Linh IP in order to quickly construct infrastructure under international standards. On April 27, in Uong Bi town Quang Ninh province, the Board of KBC directed to hold the launching ceremony of Phuong Nam IP with the total investment capital of 1.108 billion dong in an area of 1,569.27 ha. This is a large project and the first project of KBC in Quang Ninh. Only within 2 months, Name Position Number of shares Ownership proportion 34,24% 7,42% 0,11% 0,05% 0,03% 0 0 Change KBC completed all procedures to begin construction of this major project. On May 3, while visiting and working in Viet Nam, Mr. Yoshito Japanese Minister of State in charge 1 2 3 4 5 6 7 Mr. Dang Thanh Tam The chairman 101.250.000 21.937.500 317.077 135.232 101.250 0 0 0.34% 0,08% 0% 0% 0% 0% 0% of National strategy and the third character of Democratic party in Japan who plays a very important role in planning strategies and newest policies of Japan, invited Mr. Dang Thanh Tam personally to visit and discuss about important issues related to Japanese national strategies on Viet Nams economy and enterprises. On May 4, the Board of KBC participated in the launching ceremony of Le Meridien Da Nang resort & spa invested by Sai Gon Da Nang Investment JSC (SDN). This is one of the largest scale projects at the Son Tra Dien Ngoc Sandy beach. Currently, KBC is the largest shareholders of SDN. On May 25, the Board and senior managers of KBC welcomed the visitation of Mr. Nguyen Tan Dung Politburo member, the Prime Minister in Que Vo IP, Bac Ninh province. The Prime Minister recognized, praised and highly appriciated KBCs outstanding achievements. The Prime Minister affirmed that KBC is the leading enterprise in attracting high tech companies and building support industrial zones. For business activities, KBC needs to improve the ability of attracting investment better, ACTIVITIES OF THE BOARD IN 2010 In 2010, the Board continues to focus on setting up diplomatic relationships with international corporations, working with senior managers, with State ministries and departments, with authorities in provinces and cities in order to build strategies for stable development of the Corporation with target of leading KBC to become the investor of potential projects across the country. The Board always concentrates on participating social and economic events, economic forums and awards for enterprises to enhance the status and the image of KBC. On February 26, in Ha Long City, Quang Ninh provincial Peoples Committee and the Board of KBC held a meeting to sign cooperation arrangement on developing key industrial and services projects in Quang Ninh. On March 4, Mr. Dang Thanh Tam Chairman and General Director of KBC attended the ceremony night Viet Nam entrepreneur with Hoa Lu Thang Long Ha Noi, 1000 years of stable construction and development. There, Mr. Dang Thanh Tam was honored to represent for 1,000 typical businessmen to speak about responsibility of entrepreneurs and enterprises in the process of integration and development. especially in high tech industry which makes added value and high content of grey matter, accordingly, in order to develop sustainably, to bring Viet Nams products to the world and integration in global added value chain. On May 27, the Board and managers of KBC welcomed the visitation of Mr. Truong Tan Sang Politburo member, permanent member of the Party Secretariat in Phuong Nam IP, Uong Bi town, Quang Ninh province, invested by KBC. Mr. Truong Tan Sang directed leaders of KBC to focus on attracting investors in high tech industry and support industries to create added value for the country as well as jobs for local people. From 6 to 7 of July, Mr. Dang Thanh Tam participated in the World Economic Forum on East Asia 2010 as a speaker at the conference. Attendants in this forum include the Prime Minister of Viet Nam, Laos, Cambodia, Myanmar, Secretary General of Asean, WTO Director General Mr. Pascal Lamy, Deputy Secretary General of the OECD, Ministers of Economy of some countries, regional and international senior officials of financial institutions such as ADB, IMF, and other world leading enterprises. Mr. Dang Thanh Tam worked with 5 major global groups of enterprises and achieved some
Mrs. Dang Thi Hoang Phuong Member Mr. Ngo Manh Hung Mr. Tran Quang Son Mr. Chung Tri Phong Mr. Piet Steel Mr. Mitsu Okada Member Member Member Member Member
(Note: Mr. Piet and Mr. Mitsu are independent members)
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THE BOARD OF DIRECTORS

SUMMARY OF MEETINGS AND RESOLUTIONS OF THE BOARD OF DIRECTORS In 2010, with functions, power and responsibility entrusted by General Meeting of Shareholders, the very important agreements with encouraging results. After the first working day, the Prime Minister of Lao Peoples Democratic Republic Mr. Bouasone Bouphavanh greeted Mr. Dang Thanh Tam informally. The Prime Minister acclaimed KBCs contribution to Laos and promised to create better conditions for KBC to implement important projects here. On July 22, at Gala Dinner of Asean Foreign Ministers hosted by Deputy Prime Minister - Foreign Minister Mr. Pham Gia Khiem, with the participation of American Foreign Minister Mrs. Hillary Clinton and Foreign Ministers of 27 countries including China, Russia, Japan, Australia, Canada, etc. Sai Gon Invest Group was honored to be the only sponsor of the party night. At the dinner, Mr. Dang Thanh Tam met and discussed with Foreign Ministers of other countries. On August 29, in framework of Viet Nam Gold Star Award, a walk parade with the subject Viet Nam Gold Star For children in difficult situations is organized. There, on behalf of KBC, Mr. Dang Thanh Tam contributed 1 billion dong to Tay Ninh provincial Peoples Committee. This is a noble gesture aiming at sharing with difficult and unlucky lives under the traditional spirit of solidarity of Vietnamese people. From August 31 to September 2, in the sequence of events to celebrate August Revolution and National Day, KBC took the team of Ba accompanied Bac Ninh love duet to Laos to celebrate National day of Social Republic of Viet Nam at Viet Nam Embassy with Vietnamese community in Lao Peoples Democratic Republic. On October 15, KBC gave 1 billion dong to support compatriots in Central Vietnam through Viet Nam Youth Federation and Youth magazine. On December 12, representative of the Board attended the ceremony of signing agreement with Wintek Group from Taiwan to lease land in Quang Chau IP invested by Sai Gon Bac Giang Industrial Park JSC, one of subsidiaries of KBC. Wintek is the group of developing high tech, specialized in manufacturing touch screen, one of two manufacturers of Ipads touch screen in the world. In 2010, GMS approved the addition of two independent members to the Board: Mr. Piet Steel (Belgian) and Mr. Mitsuru Okada (Japanese). These two members have much experience and capacity of management in multinational corporations. Therefore, in 2010 year they have made significant contribution and given objective ideas to governance activities of the Corporation, especially, they play the role as the bridge between the Corporation and foreign investors. The Board adopted the resolution to change auditor and choose Ernst and Young Viet Nam as new auditor in order to improve quality of financial statements, to ensure accuracy and transparency. Board of KBC has conducted regular and extraordinary meetings to discuss and approve important issues related to business and investment activities of the corporation. Resolutions and decisions approved by the Board in 2010 mainly concentrate on following problems: issuing bonus shares and paying dividends to existing shareholders, investment in new projects, merger and acquisition, selection of contractors, permit of deploying projects, decision on remuneration for two independent foreign members of the Board, appointment of Deputy General Director, etc. Quarterly, the Board submits on corporate governance report to State Security Commission and HOSE in accordance with regulations for public companies.
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THE BOARD OF SUPERVISORS
SHAREHOLDER STRUCTURE (according to shareholder list dated 18/03/2011) (Changes against shareholder list dated 16/11/2009) No Shareholders 1 Organization Among: - Organizations in the country - Foreign organizations 0.01% 0.017% 0% 3 2 Personal Among: - Personals in the country - Foreign personals Treasury Total (6.284 shareholders) 180.418.588 43.658.140 5.950.655 194.124.330 61,01% 14,76% 2,01% 100,00% -10,39% 2,26% -0,98% 0,00% Number of shares (shares) 65.683.461 33.482.889 32.200.572 224.076.728 Proportion 22,21% 11,32% 10,89% 75,78% Change 9,1% 0,76% 8,34% -8,12%
Name 1 2 3 Mr. Nguyen Tri Ho Mr. Bui Ngoc Quan Mr. Nguyen Chung Thuy
Position Head Member Member
Number of share 103.690 51.356 47.500
Ownership proportion 0.04% 7,42% 0,02%
Changes
The Board of Supervisors is directly under GMS and elected by GMS to ensure common interests for shareholders. The Board of Supervisors consists of 3 members, responsible for checking the rationality and legality of administrative activities of the Board of Directors, business management activities of the Management Board, accounting and finance management of the Corporation, independent operation with the Boards. Over the past years, The Board of Supervisors has carried out exchanging necessary information with senior leaders as well as with departments to grasp thoroughly the situation and timely to comment to the Boards. Specifically, the Board of Supervisors implemented examination of financial statements quarterly, semiannually and annually, evaluating reports of the the Board of Directors, review plans of the Management Board before submitting to GMS. Remuneration of the Board of Supervisors: No RECOMMENDATION OF BOARD OF SUPERVISORS FOR THE BOARD OF DIRECTORS AND MANAGEMENT BOARD Due to rapidly expanding operation scale of the Corporation, the Supervisory Board recommends the Board to focus more on developing operation engine to catch up with growth speed. Continue to supplement and improve internal regulations and to standardize processes and functions in all business aspects of the Corporation. Improve the policy of recruiting and training high qualification staffs.
Treasury 2% Foreign sharedolders 26%
Management Board 42% Shareholders in the country 11%
Personals in the country 19%
MAJOR SHAREHOLDERS
No Shareholder 1 2 3 4 Mr. Dang Thanh Tam Address Number of shares Proportion 34,24% Change 0.34% 20, Phung Khac Khoan, 101.250.000 DaKao Ward, District I, HCM city 140/11 Su Van Hanh, Mrs. Dang Thi 21.937.500 Ward 12, District 10, Hoang Phuong HCM city 20 Phung Khac Khoan, DaKao Sai Gon Investment JSC Ward, District 1, HCM city 16.875.000 Mrs. Nguyen Thi Kim Xuan Total 69, Ba Huyen Thanh Quan, Ha Noi 43.432.647 183.495.147
7,42%
0.08%
5,71% 14,69% 62,05%
0.05% 2.27% 2.74%
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SOCIAL RESPONSIBILITY Sustainable business development is a solid foundation of KBC to conduct more social and charitable activities practically and meaningly. This is one of significant strategies to create the value for corporate culture. In 2010, following traditional activities for social benefits, the corporation contributed billions dong to social activities. In the framework of Viet Nam Gold Star Award with the subject Viet Nam Gold Star For children in difficult situations, on the behalf of KBC Mr. Dang Thanh Tam contributed 1 billion dong to Tay Ninh provincial Peoples Committee. This is a noble gesture aiming at sharing with hard and unlucky lives with traditional spirit of solidarity of Vietnamese people. At the ceremony, Mr. Dang Thanh Tam represented for Viet Nam Gold Star Club to read the commitment expressing good deep, enthusiasm and dedication of Viet Nam Gold Star enterprises to social community and to the bright future of Viet Nam. In the evening of October 10, Mr. Nguyen Thi Thu Huong Deputy Director of KBC attended the program thousand year of shining spirit, Festival of youth doing business well for the development of the country, on behalf of KBC she gave 1 billion dong to support compatriots in Central Vietnam. At the press interview after the program, Mrs. Huong said: we do business with all spirit of an enterprise and always wish best things for community and society. We hope with our deep sympathy that compatriots in Central Vietnam will overcome present difficulties. Moreover, KBC is also interested in developing education and training. In 2010, KBC continues to invest 8 billion dong in Hung Vuong University, Ho Chi Minh City under the motto non profit. KBC considers that contributing capital to construct schools is social responsibility of KBC for education. Accordingly, KBC also calls on other enterprises to join and contribute to the socialization of education in Viet Nam. In addition, the corporation also spent hundreds of scholarships for Laos students to study in Viet Nam worth tens of billions dong to foster the traditional friendship between Viet Nam and Laos more sustainably. With the spirit of combination between enterprise development and social development, KBC promises to continue to implement this work and consider it a good cultural tradition of the Corporation. (Pictures: 1. Mr. Dang Thanh Tam represents Viet Nam Gold Star Club reading the commitment in the program Viet Nam Gold Star Accompanying with children of difficulty situations. 2. Mr. Dang Thanh Tam and the organization Board take photo with unfortunate children. 3. Mr. Nguyen Thi Thu Huong Deputy Director supports compatriots in Central Vietnam)
SUBSIDIARIES AND ASSOCIATES
As of 12 December, 2010 there is not any company holding more than 50% equity of the corporation. KThe corporation has 4 subsidiaries:
No. 1 Companies Business field Register KBCs ownership proportion Charter capital 200 200 300 3.000 62% 90% 60,52% 51%
2 3 4
Sai gon - Bac Giang Industrial park Industrial Park Corporation Sai Gon - Hai Phong Industrial park Industrial Park Corporation Northwest City Development Corporation Industrial park
Bac Giang Thermal Power Electricity Corporation
SAI GON BAC GIANG INDUSTRIAL PARK JOINT STOCK COMPANY SBG is the investor of Quang Chau industrial zone (with an area of 426 ha) and Quang Chau urban area (with an area of 126 ha) in Bac Giang province. Currently, Quang Chau is considered to be the industrial zone having the fastest clearance speed and ability of investment attracting in Bac Giang province. So far, this industrial zone attracted some large corporations such as Sanyo, Tawang, Nichirin, UMEC, Hosiden, Crystal Apprel, and Wintek, etc. In 2010, business activity of this IP witnessed a unprecedented growth compared to 2009 year. Among, total revenue reaches 88.3 billion dong, after tax profit reaches 28.1 billion dong (after tax profit in 2009 is just only 2.24 billion dong). In 2011, although the overall situation is expected to be still difficult, according to our view, the prospect of this industrial zone is not alarming. Now, there are some big contracts signed but have not been recorded as revenue such as the contract with Wintek Group worth of nearly 2 million USD, the contract with HOPE Viet Nam Breeding Special Zone Co. Ltd worth of nearly 1.3 million USD, the contract with Crystal Apprel Company worth 3.3 million USD. Beside, SBG is also the investor of Quang Chau urban area project. This project is developed in parallel with Quang Chau industrial zone project aiming at creating housing fund for professionals and workers
Mr. Dang Thanh Tam represents for Viet Nam Gold - Star Club to read the commitment in the program Viet Nam Gold - Star - Accompany with children having difficult stituation
Mr. Dang Thanh Tam and organizing board take photo with unfortunate children in walk charade
Mrs. Nguyen Thi Thu Huong Deputy Director of KBC support compatriots in Central area.
in industrial zones in Bac Giang province. Presently, Wintek Group has expressed a wish to lease land in this urban area to build housings for their workers.
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BAC GIANG THERMAL POWER JOINT STOCK COMPANY BGC operates in the fields of investment, construction, operation and exploitation projects of electricity resources and grids. The company is now the investor of Bac Giang thermal power plant, the coal fired thermal power project with the total capacity of 600 MW with investment of 800 million dong. In 2010, the company has still been in the process of receiving capital contributed by shareholders and not yet conducted business activities. On the date of December 31, 2010 KBC has not yet contributed capital in BGC.
SAI GON HAI PHONG INDUSTRIAL PARK JOINT STOCK COMPANY SHP is the investor of Trang Due industrial zone project. Stage 1 of the project deployed and beginning to attract investment is 150 ha. Currently, the industrial zone has attracted over 20 companies in the country and overseas, consisting of some large corporations such as Bucheon Vina, Aichi Tokei Denki, Emerson Network Power Among, Emerson Network Power, one of American leading corporations with a deep history, has planned to put their plant into operation in mid 2011. Therefore, in 2011 Trang Due industrial zone promises to attract investors of high stature, to raise prestige and competitive capacity in comparison with rivals in Hai Phong city. In 2010, business result from Trang Due contributed significantly to business result of KBC, among, revenue reaches 209 billion dong and profit reaches 101 billion dong.
KBC PARTICIPATES IN JOINT VENTURES WITH 6 COMPANIES MAINLY IN FIELDS OF REAL ESTATE, ENERGY AND TELECOMMUNICATION. BELOWS ARE ASSOCIATES OF KBC SAI GON TAY BAC URBAN DEVELOPMENT JOINT STOCK COMPANY STB operates in fields of investment, construction and development of industrial zones and urban areas and officially becomes the subsidiary of KBC in June 2010. Presently, the company is the investor of Tan Phu Trung industrial zone with an area of 590 ha inside the master planning of Tay Bac urban area of 6,000 ha. Currently, this industrial zone has comprehensive and modern infrastructure, attracts more than 20 investors. In 2010, business activities of STB have gained dramatic results compared to 2009 year, specifically, total revenue reaches 55 billion dong and after tax profit reaches 8.4 billion dong. Big customers in this industrial zone with the total value of contract from 2 million USD to 5 million USD consist of Viet Nam electricity cable JSC, Nam Phuong Co. Ltd, Hung Hau Import Export JSC, etc. From 2011, business strategy in industrial zone will follow general direction of KBC. KBC will focus on attracting investment in this industrial zone to affirm its power and to raise competitiveness of KBC compared to peers in South area. 5 6 3 4 2 Sai Gon Binh Phuoc Industrial Park JSC Sai Gon Dung Quat Investment and Development JSC Industrial park construction, investment and100 business Real estate inside and outside industrial 200 zone construction, investment and business 300 20% 40% 27,44% STT Cong ty 1 Lnh vc hoat ong VL ang ky
(ty VND)
Ty le s hu cua KBC 20%
Ca Mau Infrastructure JSC Real estate business
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Sai Gon High Tech Real estate construction, investment and Industrial Park Investment business and Development JSC Sai Gon Nam Viet Real Construction Estate JSC Sai Gon Telecommunication Telecommunication Technology JSC
100 672,74998
20% 21,48%
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INVESTOR RELATION
FURTHERMORE, KBC CONSTANTLY EXPANDS INVESTMENT AND CAPITAL CONTRIBUTION TO ESTABLISHMENT AND HOLDING DOMINANT SHARES OF MANY COMPANIES IN FIELDS OF REAL ESTATE, ENERGY, TELECOMMUNICATION, MINERAL AND FINANCE. We are ready to welcome and answer questions of investors STT 1 2 3 4 5 6 7 8 9 10 11 12 13 Cong ty Sai Gon Can Tho Industrial Park JSC Sai Gon Nhon Hoi Industrial Park JSC Sai Gon Hue Investment JSC Sai Gon Quy Nhon Mining JSC Sai Gon Da Nang Investment JSC Ban Viet Health Sercurities Fund Sai Gon Construction Investment and Materials JSC VTC SaigonTel Telecommunication JSC Sai Gon Ham Tam Travel JSC VL ang ky
(ty VND)
so tien gop (ong)
Ty le gop von/ 10% 10% 11,86% 5,75% 19,5 15 t 19% 19,2% 6,5% 6% 0.35% 11,23% 5%
and shareholders through any means of information such as: direct conversation, email, phone and letters, etc. We always update information in time on main information ports to help investors to track such as websites http://www.kinhbaccity.com and http://www.hsx.vn and other websites related to finance, securities in Viet Nam. KBC always strive to become professional listed company disclosing information transparently and timely. KBC stock is considered to be a favorite stock of organization investors and careful figures and development potentials of the corporation. KBC is a familiar address for investors in the country and overseas to find out investment opportunities, update financial figures and business status. On average, we welcome at least one organization finding out investment opportunities per week. During the past year, there are many organizations, investment funds and securities companies to come back often in order to update figures, business status and to visit industrial zones and projects of KBC. KBC always is the attention of stock analysts. The reason is that we are always willing to help them to update information quickly and accurately. For example, according to comment of analysts from Sacombank Securities Company, the reason for them to list KBC in typical stocks to track and analyze is that figures what they want are easily provided. It is different from other large companies which in spite of strong fluctuation of their stocks often refuse to provide information. That is what investors do not want, especially foreign investors. As we see, there are many securities companies to analyze and update KBC stock often such as HSBC, Thang Long SC, Tan Viet SC, SHS, Woori CBV, etc. In addition, there are many reports of investment funds about KBC stock but not posted on the internet and we are respect of investors private ideas. As we were notified, some investment funds have announced their analysis reports and updates about KBC stock on Bloomberg, etc. Therefore, information about KBC stock not only spreads over the mass media in the country, but also, often updated on international news channels. individual investors, especially, to be very popular with foreign investors because of transparency in providing
100 100 200 1.200 200 500 50 160 108
Viet Nam Infrastructure Development and Financial Investment JSC 5.000 Sai Gon Binh Thuan Power Plant Investment Development JSC Sai Gon Binh Dinh Energy JSC Lang Ha Investment JSC 1.000 10.000 23,64
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INVESTOR RELATION
We do not hold regular meetings to answer questions and to introduce investment opportunities like other companies and as recommendation of some organizations. We find that this is not the only way to satisfy requirements of all types of investors. On the other hand, information must be updated to investors immediately, so, through main ports of information, email, phone or direct conversation, we are always willing to answer questions to satisfy all subjects of investors. We believe that all organizations and investors who contact with us feel pleased with our welcome. However, in 2010 the disclosure of financial statements of KBC has been delayed for some times. The reason is due to objective factors but not entirely due to poor business results. Thus, we wish for the understanding of shareholders and potential investors; and look forward to opinions of shareholders and investors to improve ourselves. Many thanks!
Contact information Email: info@kinhbaccity.com Tel: (+84.4) 3734 6889 Fax: (+84.4) 37346891
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KBC Annual Report 2010

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KBC Annual Report 2010

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2010 ANNUAL REPORT

Cooperate to create superior value for investors

2010 ANNUAL REPORT

KBC - Foundation for sustainable development

MESSAGE FROM THE CHAIRMAN

Mr. Dang Thanh Tam Chairman & Genral Director

Dang Thanh Tam

DEVELOP LAND FUND

SCALE OF ASSETS AND EQUITY (31/12/2010)

TYPICAL EVENTS IN 2010

INVESTMENT ATTRACTION SITUATION

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

QUE VO Occupied area 2009

TAN PHU TRUNG Remaining area 2010

Occupied area 2010

Remaining area 2009

Note: Que Vo IZ 311,6 ha Expanded Que Vo IZ 300 ha

CHARTER CAPITAL GROWTH

CAPITAL GROW PROCESS

LAND BANK DEVELOPMENT

PLAN WITHIN THE NEXT 3 YEARS

OBJECTIVES AND BENEFITS

REPORT OF THE BOARD OF DIRECTORS

ASSESS BUSINESS PERFORMANCE IN 2010

Unit: billion dong Changes 143% 182% 183% -

Unit: billion dong Changes 72% 91%

NAM SON HAP LINH IP BAC NINH PROVINCE (402.5 ha)

Parent Company only:

1. Merger and acquisition

About the Corporation:

1. Structure of investment by sector accumulated as at 31/12/2010

2. Invest in new projects

PHUONG NAM IP QUANG NINH PROVINCE (709 ha)

1. Structure of investment by sector accumulated as at 31/12/2010 (continued)

PORTFOLIO DETAIL CHART

Commercial Real State Commercial Center Office for lease

AFFILIATES Sai Gon Ca Mau Infrastructure JSC 20%

Sai Gon Quang Ngai IZ

Sai Gon High-Tech Infrastructure Development JSC

Sai Gon Binh Phuoc Industrial Park JSC

Bac Giang Thermal Power JSC

Bac Giang Thermal Power Plant

Supply telecom services & invest in real estate projects

Sai Gon Telecommunication Technology JSC (SGT)

OTHER LONG TERM INVESTMENT (3.103 BILLION DONG) IZ & UZ (60%)

Sai Gon Can Tho (Hung Phu IZ)

Sai Gon Hue (Chan May Non tariff Zone)

Sai Gon Quy Nhon Mineral (Manufacture titanium slag)

Other (Telecom,Financial investment 99 billion dong ~ 3%)

Sai Gon Nhon Hoi (Sai Gon Nhon Hoi IZ)

Sai Gon Da Nang (Hoa Khanh Lien Chieu IZ)

(See portfolio detail Chart)

Mineral (Binh Dinh Thermal Power Center)

Sai Gon Constructrion Material (Phu Huu IZ)

Sai Gon Ham Tan (Resort Lagi Ham Tan,...)

Lang Ha Investment (Lang Ha Project)

Infrastructure Development (Ha Noi Hai Phong High - way)

RISK MANAGEMENT STRATEGY

RISK MANAGEMENT STRATEGY

BUSINESS OUTLOOK AND PLAN FOR 2011

BAO CAO THNG NIEN NAM 2010

Diamond Rice Project Design

BUSINESS OUTLOOK AND PLAN FOR 2011