TABLE OF CONTENTS - VCBS Ban cong bo thong tin (Tieng anh).… · Web viewAUCTION IMPLEMENTATION AND CONSULTANT ORGANIZATION SAI GON – HANOI SECURITIES JOINT STOCK COMPANY . Head

AUCTION IMPLEMENTATION AND CONSULTANT ORGANIZATION

SAI GON – HANOI SECURITIES JOINT STOCK COMPANY

Head Office: 3rd Floor, Union Conference Center, No.1 Yet Kieu, Hanoi

Tel: (84-4) 3818 1888 Fax: (84-4) 3818 1688

Ho Chi Minh City Branch: 3rd Floor, Artex Building, No. 236 – 238 Nguyen Cong Tru, District. 1, Ho Chi Minh City

Tel: (84-8) 3915 1368 Fax: (84-8) 3915 1369

Da Nang Branch: No. 97 Le Loi, Hai Chau District, Da Nang City

Tel: (84-511) 3525 777 Fax: (84-511) 3525 779

ISSUING ORGANIZATION

CIVIL ENGINEERING CONSTRUCTION CORPORATION NO.1

Address: No 623, La Thanh Road, Thanh Cong Ward, Ba Dinh District, Hanoi City

Tel: 043 8350930 Fax: 043 7721232

EQUITIZATION STEERING COMMITTEE OF CIVIL ENGINEERING CONSTRUCTION CORPORATION NO.1 RECOMMENDS INVESTORS TO CAREFULLY READ INFORMATION IN THIS DOCUMENT AND AUCTION REGULATION BEFORE REGISTERING AND PARTICIPATING IN THE OFFERING.

February 2014

CIVIL ENGINEERING CONSTRUCTION CORPORATION NO.1 OFFERING CICULAR

TABLE OF CONTENTSI. INFORMATION ABOUT THE INITIAL PUBLIC OFFERING.........................................31. Issuing Information................................................................................................................32. Shares for offering.................................................................................................................33. Offering Circular about organizations registering for purchasing shares............................4II. LEGAL BASIS RELATED TO THE OFFERING..............................................................4III. PEOPLE TAKE MAIN CHARGE OF CONTENTS OF OFFERING CIRCULAR..........4IV. DEFINITION, ABBREVIATED NAMES ARE USED IN THE OFFERING.......5V. INFORMATION ABOUT EQUITIZATION ENTERPRISE.............................................51. Introduction to Corporation..................................................................................................52. History about formation and development............................................................................63. Business sectors and industries..............................................................................................64. Organizational structure and management...........................................................................75. Major products......................................................................................................................96. Labor situation transformed into Joint Stock Company......................................................97. Value of enterprise on 30/06/2013........................................................................................108. Major assets of enterprise....................................................................................................129. List of Parent Companies, Subsidiaries of Equitization Enterprise....................................1610. Situation of business operation and income statement in 3 years before equitization.........2111 Position of Corporation compared with other enterprises in the same sector.....................37VI. PLANS OF BUSSINESS PRODUCTION OPERATION AFTER EQUITIZATION......401. Name of Joint Stock Company, business sectors and industries.........................................403. Organizational structure of management, administration and control of the Joint Stock Company.......................................................................................................................................414. Business production plan of the Corporation after the implementation of equitization.....444.1 Orientation & Development Strategy after equitization........................................................444.2 The system of basic economic indicators of business production plan in three consecutive years after equitization....................................................................................................................534.3 Solutions and basis for implementing criteria of the plan......................................................535. Charter capital and structure of chater capital of joint-stock company.............................57VII. METHODS OF SELLING AND PAYING MONEY FOR PURCHASING SHARE.......57VIII. PLANS OF USING THE COLLECTED MONEY FROM EQUITIZATION.................60IX. RISK FACTORS INFLUENCE TO OPERATION OF BUSINESS PRODUCTION OF EQUITIZATION ENTERPRISE.................................................................................................611. Risks of the economy............................................................................................................612. Risks of legal framework.....................................................................................................633. Specific risks.........................................................................................................................634. Risks of the offering.............................................................................................................645. Other risks...........................................................................................................................64X. CONCLUSION....................................................................................................................65

Consultant Organization: SAI GON – HA NOI SECURITIES JOINT STOCK COMPANY Page 3


I. INFORMATION ABOUT THE INITIAL PUBLIC OFFERING

1. Issuing Information

Name of company : CIVIL ENGINEERING CONSTRUCTION CORPORATION NO.1

Address : No 623, La Thanh Road, Thanh Cong Ward, Ba Dinh District, Hanoi City

Tel : 043.8350930

Fax : 043.7721232

Charter Capital of Joint Stock Company : 700.000.000.000 VND

Par value of share : 10.000 VND/share

Total share : 70.000.000 shares

In which:

- State owned shares :24.500.000 shares, accounted for 35% of charter capital

- Preferred shares for employees : 7.616.500 shares, accounted for 10,88% of charter capital

- Shares for strategic investors : 21.700.000 shares, accounted for 31,00% of charter capital

- Offering amount :16.183.500 shares, accounted for 23,12% of charter capital

2. Shares for offering

Number of offering shares : 16.183.500 shares, accounted for 23,12% of charter capital

Type of offering share : Ordinary share

Form of the offering :Offering the first share of Enterprise with 100% of Equitization State capital as the method of auction through intermediate organization

The starting price : 10.000 VND/share

The minimum number of shares which each investor is allowed to register

: 100 shares

The maximum number of shares which each investor is allowed to register

: 16.183.500 shares



3. Offering Circular about organizations registering for purchasing shares

Location for providing Offering Circular, receiving registration, receiving deposit, distributing notes for participating, receiving the notes: According to the regulation on Innitial Public Offering of the Civil Engineering Construction Corporation No 1 issued by Hanoi Stock Exchange.

II. LEGAL BASIS RELATED TO THE OFFERING

- Decree No. 59/2011/ND-CP dated on 18/07/2011 of the Government about transferring 100% State Own Enterprises into Joint Stock Company;

- Circular No. 196/2011/TT-BTC dated on 26/12/2011 of Ministry of Finance about the guidance for initial public offering and managing, using the collected money from equitization of Enterprise with 100% State Own Enterprises into Joint Stock Companies;

- Pursuant to Decision No. 49/QD-BGTVT dated on 08/01/2013 of Ministry of Transport about the Parent Company’s equitization - the Civil Engineering Construction Corporation No 1;

- Decision No 3166/QD-BGTVT dated on 10/10/2013 of Ministry of Transport on approving Parent Company’s Value - the Civil Engineering Construction Corporation No 1 to be equitized;

- Pursuant to Decision No. 50/QD-BGTVT dated on 08/01/2013 of Ministry of Transport on the establishment of the Steering Committee for the Parent Company - the Civil Engineering Construction Corporation No 1;

- Decision No.25/QD-TTg dated on 06/01/2014 of Prime Minister on the approval of Parent Company’s equitization method - the Civil Engineering Construction Corporation No 1;

- Decision No.121/QD-BGTVT dated on 13/01/2014 of Ministry of Transport on the approval of the starting price and strategic investors in the equitization of the Parent Company - the Civil Engineering Construction Corporation No 1;

- Pursuant to Contract No. 1628A/2013/SHS-HĐTV dated on 10/12/2013 between the Sai Gon – Hanoi Securities Joint Stock Company and the Civil Engineering Construction Corporation No 1 about consultant services for auction.

III. PEOPLE TAKE MAIN CHARGE OF CONTENTS OF OFFERING CIRCULAR

1. Steering Committee of Equitization:

Mr Pham Dung Title: Chairman of Member Council of the Civil Engineering Construction Corporation No 1 - Head

The Offering Circular was written by the Equitization Enterprise and the Consultant Organization and approved by the Steering Committee of Equitization.

2. Equitization Enterprise: CIVIL ENGINEERING CONSTRUCTION CORPORATION NUMBER 1



Mr Can Hong Lai Title: General Director

We ensure that information and data in this Offering Circular suitable for reality that we are known, or investigated, collected reasonably for investors to be able to assess about assets, financial situation, business result and prospect of the Civil Engineering Construction Corporation No 1 before registering auction for purchasing shares.

3. Consultant Organization: SAI GON – HANOI SECURITIES JOINT STOCK COMPANY (SHS)

Mr. Vu Duc Tien Title: Deputy Director General

(According to the Letter of Attorney No. 08/2013/UQ-TGD dated on 02/03/2012 of the General Director of Sai Gon – Hanoi Securities Joint Stock Company)

The Offering Circular was made by Sai Gon - Hanoi Securities Joint Stock Company based on the consultant contract with the Civil Engineering Construction Corporation No 1. We ensure that the analysis, assessment and choice of words in this Offering Circular to be carefully implemented based on information and data provided by the Civil Engineering Construction Corporation No 1.

IV. DEFINITION, ABBREVIATED NAMES ARE USED IN THE OFFERINGWords or phrases are abbreviated in the Offering:

Corporation : Civil Engineering Construction Corporation No 1

Equitization Enterprise :Civil Engineering Construction Corporation No 1 Or Parent Company - the Civil Engineering Construction Corporation No 1

SHS : Sai Gon - Hanoi Securities Joint Stock Company

Consultant Organization : Sai Gon - Hanoi Securities Joint Stock Company

OAE : Officials and employees

V. INFORMATION ABOUT EQUITIZATION ENTERPRISE

1. Introduction to Corporation

- Name of Enterprise: Civil Engineering Construction Corporation No.1

- Address: No. 623 La Thanh Road, Thanh Cong Ward, Ba Dinh District, Hanoi City

- Tel (84–4) 38350930 Fax: (84–4) 37721232

- Transaction Name: Civil Engineering Construction Corporation No. 1

- Abbreviated Name CIENCO 1



- Business Registration Certificate: 0100104274 is issued the first registration on 17/09/2010 by Department of Planning & Investment

2. History about formation and development

Civil Engineering Construction Corporation No. 1 (CIENCO1) was formerly known as the Board of Western Construction, was established on 03/08/1964. Through 49 years of formation and development, Civil Engineering Construction Corporation No. 1 has changed its names many times as follows:

- Constructional Work Bureau No.II

- Coalition Enterprise for Constructional Work No.II

- Coalition of Civil Engineering Enterprise of Area No.1

- Coalition of Civil Engineering Enterprises No.1

- Civil Engineering Construction Corporation No. 1

In 11/1995, Civil Engineering Construction Corporation No. 1 was re-established in accordance with Decision No. 90/CP of Government Prime Minister and Decision No. 4895/TCCB – LD dated on 27/01/1995 of Minister of Transport about establishment of Civil Engineering Construction Corporation No. 1 (CIENCO1).

Implement in accordance with Decision No. 1756/QD-BGTVT dated on 25/06/2010 of Ministry of Transport, Corporation transformed operation as the form of Parent Company – subsidiary and transformed Parent Company - Civil Engineering Construction Corporation No. 1 into One Member Limited Liability Company.

Implement in accordance with Decision No. 1417/QD-BGTVT dated on 19/06/2012 of Ministry of Transport about approval for restructure Civil Engineering Construction Corporation No. 1, Corporation is drastically implementing equitization for Parent Company - Civil Engineering Construction Corporation No. 1.

Implement in accordance with Decision No 25/QD-TTg dated on 06/01/2014 of Prime Minister on the approval of Parent Company’s equitization method - the Civil Engineering Construction Corporation No 1 and Decision No.121/QD-BGTVT dated on 13/01/2014 of Ministry of Transport on the approval of the starting price and strategic investors in the equitization of the Parent Company - the Civil Engineering Construction Corporation No 1, Corporation is implementing the initial public offering process and is planning to complete in the first quarter of 2014.

3. Business sectors and industries

Business sectors and industries of the Coporation according to Business Registration Certificate No. 0100104274 issued by Department of Planning & Investment on 17/09/2010:

- Build constructional works of foreign and domestic civil engineering;



- Build constructional works of civil and industry;

- Produce constructional materials, precast concrete components;

- Repair facilities, construction equipment and processing steel girders, steel structure, mechanical products;

- Supply, directly export and import equipment, materials of transport industry;

- Consult investment of building civil engineering works;

- Transport materials, equipment, components to serve for execution;

- Train technical, constructional, civil engineering, water and electric workers,

- Export labor;

- Invest into construction and carry on business in houses, lands, hotels, offices;

- Invest into construction and carry on business in exploiting seaport;

- Survey geodesy, geology of foundations for works;

- Design constructional works of bridge, road, design structure of civil and industrial works;

- Export, import goods;

- Carry on business in domestic and international travel;

- Carry on business in commercial services.

4. Organizational structure and management

At the period 31/12/2013, organizational structure of Corporation as follows:




Office

Supervisor

Labor – Personnel

Organization Department

SubsidiariesJSC No. 116- Cienco1 Bridge JSC No. 12- Cienco1 Civil Engineering Construction and Investment JSC No. 120 Civil Engineering Construction Mechanics JSC No. 121 Bridge JSC No. 14-Cienco1 Civil Engineering Construction and Investment Consultancy JSC No. 1BOT Rach Mieu Bridge Company Limited Civil Engineering Construction Consultancy JSC No. 1– Cienco1 Constructional Investment JSC No. 125 – Cienco1Road Joint Stock Company No. 224-Cienco 1Road Joint Stock Company No. 226-Cienco1Road Company No. 230Road Joint Stock company No. 232-Cienco 1Road Joint Stock company No. 240-Cienco 1Road Joint Stock company No. 242-Cienco 1Traffic project constrution & management joint stock com pany No. 244- Cienco 1Road construcion Joint Stock No. 248 – Cienco 1

Owner

Deputy General Managers

Parent CompaniesCorporation’s OfficeCông ty TCCG 1Ho Chi Minh City BranchService & International Labor Supply CompanyCambodia BranchTay Nguyen BranchConstructional Work Vocational College No.1Bridge Enterprise No. 17- Cienco1Bridge Enterprise No. 18- Cienco1Constructional Work Enteprise Cienco1Constructional Company No. 123Management Boards

Member Council

General Manager

Associated companies, joint ventures and other investmentsCivil Engineering Construction JSC No.1Road Bridge JSC No.10- Cienco1Civil Engineering Construction & Material Production JSC No.115Civil Engineering Construction & Material Production JSC No. 119-CIENCO1 Investment and Construction JSC No. 122- Cienco1 Trading and Civil Engineering Investment JSC No. 124–CIENCO1Civil Engineering Construction Investment JSC No.128- CIENCO1Civil Engineering Construction JSC No. 15- Cienco1JSC No. 16- Cienco1BOT Thanh Hoa City Bypass Co., Ltd Constructional Investment JSC – Cienco 1 (CIC)Vietnam Construction and Investment Consultancy JSCChieng Sinh Cement JSC– Cienco1Civil Engineering Construction & Material Production JSC No.1Mai Son Cement JSC Civil Engineering Construction & Material Production JSC No 117- CIENCO1Waterway Civil Engineering Construction& Investment JSC -CIENCO1Civil Engineering Construction Investment Consultancy JSC No. 1– CIENCO1Tourism Trading and Constructional Investment JSC- CIENCO1Hall Brothers International Co., LtdAnphanam Infrastructure Construction & Investment JSCConstructional & Investment JSC No. 134Thai Binh Duong Real Estate & Infrastructure Development JSCCivil Engineering Construction JSC No.189 – Cienco1IMICO JSC – Cienco1Civil Engineering Construction & Trading Investment JSC No. 1

Market – Planning

Department

Equipment – Materials – Engineering Department

Accounting Finance

Department

Investment Project

Verification and Capital

Management Department


5. Major products

As a unit directly under the Ministry of Transport, the Corporation has major businesses and sectors: Constructing bridges, ports, roads, railways,... In addition, the Corporation has also operated more in the complementary fields for core business activities such as design consulting services, trade, tourism, labor export and toll roads.

6. Labor situation transformed into Joint Stock Company

6.1 Income of Officials and Employees Unit: VND

No Target 2010 2011 2012 2013

1 Total salary fund 190.886.400.000 228.240.000.000 343.854.000.000 336.864.000.000

2 Total income 206.793.600.000 246.499.200.000 360.228.000.000 361.363.200.000

3 Average salary (month/person)

9.600.000 10.000.000 10.500.000 11.000.000

4 Average income (month/person) 10.400.000 10.800.000 11.000.000 11.800.000

Source: Cienco 1

6.2 Structure and labor level of Company after equitization

Total number of employees in the labor list at the approval time (10/10/2013): 2.552 people

Classified by labor level of Corporation after equitization as follows:

Employee2012 10/10/2013

No. of people

Rate (%)

No. of people

Rate (%)

1. University and Postgraduate level 751 27,52% 844 33,07%

2. College, Vocational School level 161 5,90% 140 5,49%

3. Technical worker 1.509 55,29% 1,376 53,92%

4. Ordinary employees 308 11,29% 192 7,52%

Sub Total 2.729 100% 2.552 100%

Source: Cienco 1

Labor structure of Company after equitization:

Type of employeeLabor

No. of people Rate (%)

1. University and Postgraduate level 842 33,24

2. College, Vocational School level 136 5,37

3. Technical worker 1.364 53,85



4. Ordinary employees 191 7,54

Sub Total 2.533 100

Source: Cienco 1

7. Value of enterprise on 30/06/2013

According to Decision No.3166/QD-BGTVT dated 10/10/2013 of Ministry of Transport approving enterprise value for equitization, enterprise value at the time of valuation to business equitization on 30/06/2013 is 3.133.945.740.865 VND (Three thousand one hundred and thirty-three billion, nine hundred and forty-five million, seven hundred and forty thousand, eight hundred and sixty-five Vietnamese dong).

In which: The value of the State capital at the enterprise is 478.367.456.916 VND (Four hundred and seventy-eight billion, three hundred and sixty-seven million, four hundred and fifty six thousand, nine hundred and sixteen Vietnamese dong).

Data from the minutes of business value on 30/06/2013 as follows:Unit: VND

NO. TARGET DATA AFTER

HANDLING FINANCE

DATA RE-DEFINED

DIFFERENCE

1 2 3 4 5 = 4 – 3A CURRENT ASSETS (I+II+III+IV) 3.047.934.954.176 3.133.945.740.865 86.010.786.689

I LONG-TERM ASSETS 724.166.870.603 808.353.784.260 84.186.913.657

1 Long-term receivables - - -

1.1 Long-term receivables from customers - - -

1.2 Business capital in directly under units - - -

1.3 Inter-company long-term receivables - - -

1.4 Other long-term receivables - - -

1.5Provision for long-term receivables of bad debts - - -

2 Fixed assets 185.724.250.315 240.201.856.487 54.477.606.172

2.1 Tangible fixed assets 111.452.029.838 155.322.791.065 43.870.761.227

2.1.1 House, structures 41.582.413.926 66.184.792.613 24.602.378.687

2.1.2 Machineries, equipment 47.147.213.279 58.267.270.015 11.120.056.736

2.1.3 Means of transport, transmission system 21.314.293.547 29.154.077.745 7.839.784.198

2.1.4 Equipment and tools for management 1.408.109.086 1.716.650.692 308.541.606

2.1.5 Working animals - - -

2.2 Leased fixed assets - - -

2.3 Intangible fixed assets 2.121.640.376 12.728.485.320 10.606.844.944

2.4 Work in progress 72.150.580.102 72.150.580.102 -

3 Real estate investment - - -

4 Long-term leased investments 441.042.393.012 463.946.905.240 22.904.512.228

5 Other long-term assets 97.400.227.276 104.205.022.533 6.804.795.257

II SHORT-TERM ASSETS 2.323.768.083.573 2.325.591.956.605 1.823.873.032

1 Cash and cash equivalents 455.983.589.425 455.983.589.425 -

1.1 Cash 212.445.444.717 212.445.444.717 -



1.2 Cash equivalents 243.538.144.708 243.538.144.708 -

2 Short-term financial investments 69.393.500.000 69.393.500.000 -

2.1 Short-term investment 69.393.500.000 69.393.500.000 -

2.2Provision for diminution in value of short-term investments - - -

3 Short-term receivables 1.119.960.025.031 1.119.960.025.031 -

3.1 Trade Accounts Receivable 569.517.918.909 569.517.918.909 -

3.2 Advances to suppliers 437.278.839.564 437.278.839.564 -

3.3 Inter-company receivables - - -

3.4Receivables from construction contracts under percentage of completion method - - -

3.5 Other receivables 113.163.266.558 113.163.266.558 -

3.6 Provision for doubtful debts - - -

4 Inventories 550.932.341.174 550.932.341.174 -

4.1 Inventories 550.932.341.174 550.932.341.174 -

4.2 Provision for devaluation in inventories - - -

5 Other short-term assets 127.498.627.943 129.322.500.975 1.823.873.032

5.1 Short-term prepayments 2.932.162.765 4.756.035.797 1.823.873.032

5.2 Value added tax deductible 45.319.868.895 45.319.868.895 -

5.3 Tax and receivables of the State 1.263.617.415 1.263.617.415 -

5.4 Transaction for re-trade State’s bonds -

5.5 Other short-term assets 77.982.978.868 77.982.978.868 -

IIIVALUE OF BUSINESS ADVANTAGE OF ENTERPRISE - - -

IV VALUE OF LAND USE RIGHT - - -

B ASSETS NOT TO USE 1.967.748.369 1.967.748.369 -

C ASSETS FOR LIQUIDATION 571.620.323 571.620.323 -

D

ASSETS ARE FORMED FROM REWARD AND WELFARE FUNDS (not to use for business production)

- - -

TOTAL VALUE OF ENTERPRISE’S ASSETS (A + B + C + D)

3.050.474.322.868 3.136.485.109.557 86.010.786.689

In which:

ATOTAL ACTUAL VALUE OF ENTERPRISE (Item A)

3.047.934.954.176 3.133.945.740.865 86.010.786.689

G1. DEFERRED ACTUAL LIABILITIES 2.655.310.072.201 2.655.310.072.201 -In which: Pay for the State about land use right - - -

G2.BALANCES FROM REWARD AND WELFARE FUNDS 268.211.748 268.211.748 -

G3. FUNDING SOURCES - - -

TOTAL ACTUAL VALUE OF STATE’S CAPITAL IN ENTERPRISE [A – (G1 + G2 + G3)]

392.356.670.227 478.367.456.916 86.010.786.689

(Source: Minutes of defining enterprise value of Corporation)



8. Major assets of enterprise

8.1 Situation of using land:

No. Address

AreaConstructional work in land Use status Form of

using

Legal profileLand Area

Area for constructional

floor Current profile Bases for transforming Joint Stock Company

1No. 623, La Thanh, Ba Dinh, Hanoi

867 m2 6.695,38 m2 Head office of Corrpoation

Head office of Corrpoation

The leased land to pay tax annually – 35 years

+ Decision for transferring the competent authority No. 3819/QDUB dated on 14/11/1996 recovering 867m2

land hired to make the production steering house and transaction by Vietnam Arts Association

+ Contract for Lease No.03-97/DC-HDTDTN dated on 29/01/1997

+ Constructional License No. 141/GPXD dated on 23/4/2003

+ Document No. 6194/UBND-KT dated on 26/08/2013 of Hanoi City People’s Committee about the method of re-arranging, processing bases of house, land which belongs to ownership of the State and Civil Engineering Construction Corporation No. 1 in the compass of Hanoi City

+ Document No. 12470/BTC-QLCS dated on 18/09/2013 of Ministry of Finance about the method of re-arranging, processing bases of house, land which belongs to ownership of the State and Civil Engineering Construction Corporation No. 1 in the compass of Hanoi City

2 Lam Du, Bo De, Gia Lam, Hanoi

552 m2 2.424,84 m2 Working office for Project Executive

Boards

Working office for Project Executive Boards

Land is allocated to use and pay tax annually

+ Land Use Right Certificate No. 808-UBXDCB dated on 01/4/1985 of Hanoi City People’s Committee assigning for coalition of civil enginnering construction enterprises of Area.1 to manage and use 2,500 m2

land in Bo De Commune, Gia Lam District, Hanoi City to build the working base to work and transact



No. Address


using




+ Decision No. 400/QD-TNMT dated on 13/6/2005 of Hanoi City Department of Environmental Resource and Land about receiving, selling houses managed and leased by Civil Engineering Construction Corporation No.1

+ Constructional License No. 84/GPXD dated on 10/4/2003

+ Decision No. 3122/QD-BGTVT dated on 8/10/2013 about re-arranging, processing land house base of Civil Engineering Construction Corporation No.1

3 Tan Dan, Soc Son, Hanoi

43.155,4 m2

8.552,2 m2 To make the training base

To make the training base

Leased land to pay tax annually

+ Decision No.185/XDCB dated on 27/3/1976 of Administrative Committee of Vinh Phuc Province granted 35,000 m2 land for building Engineering Worker School of Constructional Bureau No.2

+ Decision No.548/QD-UB dated on 4/4/1991 of Hanoi City People’s Committee to allow Engineering Worker School No.1 to use 11,000 m2

11.000m2 land to build the training base and one part of house for officials and employees of School

+ Decision No.2309 QD-UBND dated on 19/7/2007 of People’s Committee of Soc



No. Address


using




Son District about receiving 2,919 m2 collective area of Management Transport Professional Engineering School is manage to People’s Committee of Soc Son District to manage

+ Decision No.2473/QD-UBND dated on 17/8/2007 of People’s Committee of Soc Son District about receiving 300 m2 road land for Nothern internal transport of Area.B, collective area of Management Transport Professional Engineering School are managing

4

Condominium K1 Thanh Cong, Ba Dinh, Hanoi

363,6 m2 363,6 m2

Office of Corporation’s Head office

Working office’s Corporation’s office

Leased land within 10 years

+ Contract for Lease Land No. 523-24598/DC-HDTD signed on 26/12/1998

5

No. 278 Ton Duc Thang, Dong Da, Hanoi

120,65 m2

House. 1: 120,65 m2

House. 2:3rd Floor: 592,21 m2

Working head office of Corporation’s member companies

Working head office of Corporation’s member companies

Land to pay tax annually

Land is located in inter-authority. There has not had legal documents about land house lost in the process of storing

6No. 135A Nguyen Van Dau, Ward. 5

422 m2 814 m2Working head office of Southern

Working head office of Southern

The purchased land is issued

Land Use Right Certificate No. 4131/2000 dated on 07/4/2000 issued by People’s Committee

Value of land use right included in the value of enterprise: 3.038.400.000



No. Address


using




Binh Thanh District, Ho Chi Minh City

branch branch

Living Land and House and Ownership Certificate

of Ho Chi Minh City, Transfer Contract No. 49144/HD-MBN dated on 23/6/2000

dong

7

Loi Binh Nhon Commune, Tan An Town, Long An Province

916,4 m2 916,4 m2

Working head office of Southern branch

Working head office of

Southern branch

The State allocates land

and pays money for using land

(until 24/3/2056)

Land Use Right Certificate No. T 00746 dated on 24/4/2006 issued by People’s Committee of Long An Province

Value of land use right included in the value of enterprise: 1.315.433.582 dong

8

Thoi Thanh Hamlet, Thoi Son Commune, Chau Thanh District, Tien Giang Province

16.706 m2 16.706 m2

Make production

factory

Make production

factory

Company paid money

for using land until 12/2053

Land Use Right Certificate No. T -00131 QSDD issued on 30/12/2003 by People’s Committee of Tien Giang Province

Value of land use right included in the value of enterprise: 5.140.616.496 dong

9

Tra Ba Ward, Pleiky City, Gia Lai Province

852 m2

Living land is 400 m2

garden land is 452 m2

Working head office of Tay

Nguyen branch

Working head office of Tay Nguyen

branch

Use long-term

Land Use Right Certificate No. A 419443

Value of land use right included in the value of enterprise: 3.203.520.000 đồng



8.2 Situation of fixed assets on 31/12/2012:

+ Tangible fixed assets:

No. Items Net price (VND) Depreciation value (VND)

Remaining value (VND)

1 Houses, structures 88.083.245.532 42.040.584.770 46.042.660.762

2 Machineries, equipment 171.869.101.759 113.849.772.312 58.019.329.447

3 Means of transport 69.526.327.137 44.649.934.281 24.876.392.856

4 Equipment, tools for management

12.355.037.830 8.880.399.386 3.474.638.444

5 Other fixed assets 2.301.875.030 920.218.067 1.381.656.963

Sub Total 344.135.587.288 210.340.908.816 133.794.678.472Source: Financial Statement in 2012 Cienco 1

+ Intangible fixed assets:

No. Items Net price (VND) Depreciation value (VND)

Remaining value (VND)

1 Land Use Right 4.734.703.518 390.511.348 4.344.192.170

2 Computer Software 229.000.000 120.803.309 108.196.691

Sub Total 4.963.703.518 511.314.657 4.452.388.861Source: Financial Statement in 2012 Cienco 1

8.3 Situation of fixed assets on 30/06/2013:

No. Items DATA AFTER

HANDLING FINANCE (VND)

DATA RE-DEFINED (VND)

DIFFERENCE (VND)

1 Tangible fixed assets 111.452.029.838 155.322.791.065 43.870.761.227

a Houses, structures 41.582.413.926 66.184.792.613 24.602.378.687

b Machineries, equipment 47.147.213.279 58.267.270.015 11.120.056.736

c Means of transport 21.314.293.547 29.154.077.745 7.839.784.198

dEquipment, tools for management 1.408.109.086 1.716.650.692 308.541.606

2 Intangible fixed assets 2.121.640.376 12.728.485.320 10.606.844.944

Sub Total 113.573.670.214 168.051.276.385 54.477.606.171

9. List of Parent Companies, Subsidiaries of Equitization Enterprise

Parent Company: None

Subsidiaries: 09 subsidiaries

Associated companies:: 26 associated companies

In addition, the Corporation also has 08 units transferred from the General Bureau of Vietnam Road, details as follows (as the time of 30/06/2013):



No. Name of Company

Defined State capital on 30/06/2013

AddressMillion dong

Rate

I Subsidiaries (the State Capital> 50%):

1Joint Stock Company No. 116 – Cienco1

5.336 50,3%No. 521 Nguyen Trai Road, Thanh Xuan, Hanoi

2Bridge Co., JSC No. 12 – Cienco1

28.850 50,6%No. 463 Nguyen Van Linh Road, Phuc Dong Ward, Long Bien District, Hanoi City

3Investment & Civil Engineering Construction Co., JSC No. 120

11.590 58,12%No. 622 Ha Huy Tap Road, Yen Vien Town, Gia Lam, Hanoi

4Constructional Mechanics Co., JSC No. 121 – Cienco1

6.419 50,8%No. 2 Ngoc Lam Road, Ngoc Lam Ward, Long Bien, Hanoi

5Bridge Co., JSC No. 14- Cienco1

30.715 50,09%No. 144/95 Vu Xuan Thieu, Sai Dong Ward, Long Bien District, Hanoi City

6

Civil Engineering Construction Investment Consultancy Co., JSC No.1 (the Central)

2.884 51%No. 5/8 Cu Chinh Lan, Buon Ma Thuot City, Dak Lak Province

7 BOT Rach Mieu Company 81.224 50%Hamlet. 4, An Khanh Commune, Chau Thanh District, Ben Tre Province

8

Civil Engineering Construction Experiment Consultancy Co., JSC No. 1-Cienco1

10.088 51% No. 33D, Cat Linh, Dong Da, Hanoi

9Constructional Investment Co., JSC No. 125 – Cienco1

2.942 84,06%No. 168 Thanh Thai Road, Dong Tho Ward, Thanh Hoa City

II Associated companies, joint ventures and other investments

1Work Construction Co., JSC No. 1

4.900 49%No. 77, Group. 23, Long Bien Ward, Long Bien District, Hanoi City

2Road Bridge Co., JSC No. 10 – Cienco1

4.138 34,35%An Hung Commune, An Duong District, Hai Phong City

3Construction and Investment Development Co., JSC 115 – Cienco1

1.263 21,05%Room No. 1208, Building CT6 Van Khe Urban Area, Cau Giay, Hanoi

4 Civil Engineering Construction and Material

587 44,8% Group. 13, Dong Anh Town, Hanoi City



No. Name of Company


AddressMillion dong

Rate

Production Co., JSC No. 119 – Cienco1

5Investment and Construction Co., JSC No. 122-Cienco1

6.156 47,98%No. 11, Lane. 670, Ha Huy Tap Road, Yen Vien Town, Gia Lam District, Hanoi City

6Trading & Civil Engineering Construction Co., JSC No.124

7.200 48%Km 12+500, Ngu Hiep Commune, Thanh Tri District, Hanoi City

7

Civil Engineering Construction & Investment Co., JSC No.128- Cienco 1

6.214 48%No. 24, Ao Sen Street, Mo Lao Ward, Ha Dong, Hanoi

8

Civil Engineering Construction Co., JSC No.15-cienco1 (Civil Engineering Construction Company No.136 old)

4.500 45%Hamlet. 1A, Cluster. 11, Dong Ngac, Tu Liem, Hanoi

9Joint Stock Company No. 16 (Road Company No. 126 old)

5.800 29%No. 26, Villa 03 Van Hanh, Viet Hung Urban Area, Long Bien, Hanoi

10BOT Thanh Hoa Bypasss Co., Ltd

21.050 15,36%Le Mon Industrial Park, Thanh Hoa City

11Constructional Investment Co., JSC – Cienco1 (CIC) 2.350 33,57%

5th Floor, Building No. 623 De La Thanh, Ba Dinh, Hanoi

12Vietnam Construction and Investment Consultancy Co., JSC

2.641 25,91%

5th Floor, Building No. 623 De La Thanh, Ba Dinh, Hanoi

13Chieng Sinh Cement Co., JSC- Cienco1 9.800 49%

Km 9 Le Duan Road, Chieng Sinh Ward, Son La City

14Civil Engineering Construction & Material Production Co., JSC No. 1

2.571 32,96%No. 77, Group.23, Long Bien Ward, Long Bien District, Hanoi City

15 Mai Son Cement Co., JSC 57.494 24,47%Thanh Cong Sub-area, Na Po, Mai Son, Son La

16Material Production & Engineering Construction Co., JSC 117

970 38,8%No. 138 Le Duan Road, Tra Ba Ward, Pleiku City, Gia Lai

17 Waterway Civil Engineering Construction

2.226 24,19% No. 58, Pham Minh Duc Street, Ngo Quyen District, Hai Phong City



No. Name of Company


AddressMillion dong

Rate

and Investment Co., JSC–Cienco1

18

Civil Engineering Construction Investment Consultancy Co., JSC No. 1 –Cienco1

3.220 46%

No. 2, Stub. 34/4, Lane. 34, Nguyen Hong Road, Lang Ha Ward, Dong Da, Hanoi

19Tourism Trading and Construction Investment Co., JSC – Cienco1

2.057 34,27% 278 Hang Bot, Dong Da, Hanoi

20 Hall Brothers International Co., Ltd 2.543

21Anphanam Infrastructure Construction & Investment Co., JSC

4.026 3,35%47 Vu Trong Phung, Thanh Xuan, Hanoi

22Constructional Work & Investment Co., JSC No. 134

5.823 16,26%No. 17, Lane.575 Kim Ma, Ngoc Khanh, Ba Dinh, Hanoi

23Thai Binh Duong Real Estate & Infrastructure Development Co., JSC

6.037 4,30%31/21 Kha Van Can Road, Hiep Binh Chanh Ward, Thu Duc District, Ho Chi Minh City

24Civil Engineering Construction Co., JSC No. 189 – Cienco1

5.000 10,00%B70-71 Anh Dung House and Villa, An Dung Ward, Duong Kinh District, Hai Phong

25 IMICO Co., JSC – Cienco1

8.651 3,36%8th Floor, Building MITEC lot. E2, Cau Giay New Urban Area, Yen Hoa Ward, Cau Giay District, Hanoi

26Civil Engineering Construction & Trading Investment Co., JSC No. 1

5.348 4,03%No. 548 Nguyen Van Cu, Long Bien, Hanoi

III Offices and Branches

1 Company’s office No. 623 La Thanh Road, Thanh Cong Ward, Ba Dinh District, Hanoi City

2Mechanical Construction Company No. 1

7th Floor, Building No. 623 La Thanh, Ba Dinh, Hanoi

3 Ho Chi Minh City BranchNo. 135 Nguyen Van Dau, Ward.5, Binh Thanh District, Ho Chi Minh City

4Services & International Labor Supply

No. 33, Trung Kinh, Trung Hoa, Cau Giay, Hanoi



No. Name of Company


AddressMillion dong

Rate

5Corporation’s branch in Cambodia

No. V42-A, Road. 579, Sangkart Chruy Charngva, Khan Rouseykeo, Pnom Penh

6 Tay Nguyen BranchNo. 37, Truong Chinh Road, Pleiku City, Gia Lai

7Constructional Vocational Secondary School No.1

Tan Dan Commune, Soc Son District, Hanoi City

8Bridge Enterprise No. 17- Cienco1


9Bridge Enterprise No. 18- Cienco1


10Constructional Enterprise- Cienco1


11Constructional Company No. 123


12Condominium Management Board

Hoang Dao Thuy Road, Cau Giay, Hanoi

IVThe new companies moved from General Bureau of Vietnam Road (Being equitization, chartered capital is expected only)

1

Road Construction & Management One Member Limited Liability Company No. 224

12.952

No. 389 Tran Huy Lieu, Moc Chau Town, Moc Chau, Son La Province

2Road One Member Limited Liability Company No. 226

10.250Population Group No.15, Him Lam Ward, Dien Bien Phu City, Dien Bien

3 Road Company No. 230 -Km 10, National Highway No. 5, Duong Xa, Gia Lam, Hanoi


16.264An Tuong, Tuyen Quang, Tuyen Quang Province

5

Civil Engineering Construction Investment & Management One Member Limited Liability Company No. 240

19.731

Km 10, National Highway No. 5, Duong Xa, Gia Lam, Hanoi


11.314 No. 08 Hoang Sao Road, Pho Lu Town, Bao Thang District, Lao Cai

7


13.319

Group. 8, Phung Chi Kien Ward, Bac Kan Town, Bac Kan Province



No. Name of Company


AddressMillion dong

Rate

8


16.304

No. 24, Lane. 55 Le Dai Hanh, Hai Ba Trung District, Hanoi City

Source: Cienco 1

10. Situation of business operation and income statement in 3 years before equitization

10.1. Situation of business operation

10.1.1. Product quantities/service through years

Main businesses and sectors of Corporation

Main businesses and sectors of Corporation: Constructing bridges, ports, roads, railways,... In addition, the Corporation has also operated more in the complementary fields for core business activities such as design consulting services, trade, tourism, labor export and toll roads

Constructing bridges, ports, roads, railways

This is the main business of the Corporation since its establishment. Over 49 years of development, the Corporation has built a strong brand in the field of construction of bridges, ports, roads and railways. Corporation was also awarded the Medal of Ho Chi Minh, the title of Hero of the People’s Armed Forces, 10 independent medals, 5 individuals are Labor Hero, 7 projects were granted Gold Medal for high quality

Some constructional works of typical bridges, ports, roads, railways of Corporation recently as follows:

No.Name of

constructional work

Location ScaleValue

(Billion dong)

Completion year

1Rong Bridge – Da Nang City

Da Nang City

Total length is 666,54m – BTCTDUL, bored pile with large diameter

700 2013

2Tran Thi Ly Bridge

Da Nang City

Length is 759,6m – 1-pylon-cable-stayed bridge

1.500 2013

3Dong Tru Bridge

Dong Anh District, Hanoi

Length is 1.240m, prestressed reinforced concrete

900 2012

4Rach Mieu Bridge

Connect 2 Provinces: Tien Giang and Ben Tre

Length of bridge is: 2.878 m, cable-stayed bridge BTCT DƯL with 2 wire planes

1.397 2009



No.Name of

constructional work

Location ScaleValue

(Billion dong)

Completion year

5Phu Dong Bridge No. 2

Hanoi City Total length of bridge is 946.35m. 495 2011

6Vinh Thinh Bridge

Vinh PhucLength of whole project up to 5.487m, in which: the length of bridge is 4.480m

1.334 12/2014

7

Port exports to products of Dung Quat Dung Quat Oil Refinery

Quang Ngai Province

1.260 2008

8

Noi Bai International Airport (Station T2)

Hanoi CityInternational Airport, capacity is from 15 to 20 millions of passengers/year

600 10/2014

9

Road and Bridge of Project 2E – Laos

Lao People’s

Democratic Republic

This road line with the length is 68,2 km including 3 large bridges, 7 medium and small bridges

120 2011

10

Road and Bridge of Project ADB11 – Laos

Lao People’s

Democratic Republic

Line length is 45 km, asphalt macadam pavement

160 2011

11Road No. 78 Cambodia

People’s Republic of Cambodia

The road line with the length is 70 km, depth is 9m asphalt (pavement is 7m, background is 2m)

200 2010

12Sai Gon – Trung Luong Highway

Ho Chi Minh City

Total length is 61,8km, in which: 39,8km highway and 22km connection line. Sai Gon – Trung Luong Highway moves to compass of Ho Chi Minh City, Long An and Tien Giang

900 2010

13Cau Gie - Ninh Binh Highway

Hanoi – Ninh Binh

Design speed is 100-200km/hour with scale is 6-lane roadbed, background is 4 lanes, road width of 35.5 m with the length is 50km

600 2010

14Ring Road No. 3 Hanoi- Period. 2

Hanoi City

Total length of project is 5,364 km, in which length of the highway viaduct is 4,903 km, this viaduct system is 24 m wide, with 4 lanes, with the height of below urban roads and collector roads are 4.75 m.

500 2010

15Hanoi – Thai Nguyen Highway

Hanoi – Thai

Nguyen

The length is 9km, scale is 4 lanes, width is 21m 971 1/2014

16 CP1A Ninh Binh Build Ninh Binh new Bridge spanning the 1.236 04/2015



No.Name of

constructional work

Location ScaleValue

(Billion dong)

Completion year

Day River with a length of over 1,000 m, 3 steel arch spans and 22 bridge spans of prestressed concrete beams; build Ninh Binh new station with ancillary works serving ships, build road bridge over the South of Ninh Binh new station with the length is 421 m, structure of prestressed concrete girder with the width is 12 m

17 CP1B

Build Do Len railway bridge, build road bridge over the railway bridge in the South of Do Len Bridge, build new railway: Km153+474 ÷ Km154+925 including 1.285m long welded rails, renovation, upgrade current railway: Km152+630 ÷ Km153+474, Build 01 horizontal line is equipped with barrier and 01 horizontal line with automatic warning system within the path of the relevant bridge of the project and build 01 box-population underpasse within the path of the railway overpass

1.460 07/2013

18 CP1C Quang Binh

Build 8 bridges: Cua Rao, Thanh Luyen and Loc Yen (belong to Ha Tinh Province); Tan Duc, Khe Net, Do Vang, Minh Le and Ngan Son (belong to Quang Binh Province); at each bridge, relevant constructional works (horizontal lines, box-culvert) belong to the scope of 2 bridge heads

1.080 01/2014

Other services

In addition to the fields of main business, the Corporation also took advantage of the maximum resources, human powers and material resources to apply to some other business sectors such as construction of civil works, office buildings, tourism and labor export... Every year, this activity also contributes from 5 to 7% to the total revenue of the Corporation.

Revenue segments:

Unit: Billion dong

Output

2010 2011 2012 6 months of 2013

Output Proportion (%) Output Proportion

(%) Value Proportion (%) Value Proportio

n (%)

Execute bridges, ports 1.805 70% 2.202 72% 3.390,3 77% 1.574,2 71%



Execute road land, railway

722 28% 673 22% 968,7 22% 620,8 28%

Other services 52 2% 184 6% 44,0 1% 22,2 1%

Sub Total 2.579 100% 3.059 100% 4.403,0 100% 2.217,2 100%

Source: Cienco 1

Revenue structure over years: Unit: Million dong

Services2010 2011 2012 6 months of 2013

Value Proportion (%)




Execute bridges, ports 1.685.363 72 2.108.917 76 3.245.612 82 1.576.252 79

Execute road land, railway 613.514 26 480.694 17 683.229 17 404.273 20

Other services 44.442 2 191.099 7 33.881 1 14.912 1

Sub Total 2.343.318 100 2.780.711 100 3.962.722 100 1.995.437 100

Source: Cienco 1


Revenues from 2010 to 6 months of 2013

Execute bridges, ports Execute road land, railway Other services

2010 2011 2012 6 months of 2013

2010 2011 2012 6 months of 2013

Execute bridges, ports Execute road land, railway Other services

Revenues structure from 2010 to 6 months of 2013


In the revenue structure of the Corporation, wharf construction activities accounted for a large proportion over the years, respectively, 72% (2010), 76% (2011) and 82% (2012).

Besides, construction services for roads and railways are also quite large proportion and contribute relatively stable revenue sources, averaging 20% of revenue structure over the years.

In addition, revenue sources from other services accounted for almost negligible in the revenue structure.

Structure of gross profit Unit: Million dong

Target

2010 2011 2012 6 months of 2013

Gross Profit

% so Net

revenueGross Profit

% so Net

revenue

Gross Profit

% so Net revenue

Gross Profit

% so Net

revenue

Execute bridges, ports 104.075 4,44% 113.719 4,09% 123.548 3,12% (66.060) -3,31%

Execute road land, railway 34.453 1,47% 33.540 1,21% 36.777 0,93% (19.271) -0,97%

Other services 14.659 0,63% 10.894 0,39% 11.567 0,29% 7.913 0,40%

Sub Total 153.187 6,54% 158.153 5,69% 171.892 4,34% (77.418) -3,88%


Execute bridges, ports

Execute road land, railway Other services

2010 2011 2012 6 months of 2013

Revenue Structure from 2010 to 6 months of 2013

Gross profit from 2010 to 6 months of 2013 (million dong)

6 months of 2013


Execute road land, railway Other services Total gross profit


Gross profit in the first 6 months of 2013 was negative because at the time equitized (30/06/2013), the Corporation must revaluate and settle asset, including settle projects with high inflation but the approved compensation source was not enough to compensate. That led the cost of goods sold excessed the revenue because the revenue was not correspondingly increase as the increase of cost of goods sold.

10.1.2. Raw materials

- Raw materials:

+ For operations of constructing bridges, wharfs: Raw materials are iron, steel, cement, sand, stone, gasoline, other fuels, the technical materials imported specialty: tensioning cable anchor, bearings, expansion joints...

+ For operation of executing roads, airport: Raw materials are soil, stone, sand, cement, gasoline, other fuels...; asphalt, emulsion...

- The stability of the supply sources of raw materials:

Currently, the supply of major raw materials of Corporations from in the country, partly imported from foreign countries. Except for raw materials to be imported from foreign countries influenced by the quality and price (exchange rate fluctuations) from the supplies, the available raw materials in the country remains generally stable, ready to meet the needs of production and business of the Corporation.

- The impact of raw material price to revenue and profit:

In the business activities of the Corporation, the major products are the road works, in which the proportion of raw material accounts for 60-70% cost. Therefore, the price fluctuations of raw materials such as fuel, asphalt, iron, steel, cement... will affect production and business efficiency as well as profit of the Corporation if the State does not have the subsidy rates, adjustable rates.

- List of some material suppliers:


6 months of 2013


Execute road land, railway Other services

Total gross profit/Net revenure

Rate of gross profit of services per total net revenure


No. Name of supplier Types of materials for provision

1 But Son Cement Company Cement

2 Nghi Son Cement Company Cement

3 POSCO Steel Company Steel

4 Viet Y Steel Company Steel

5 Military Petroleum Joint Stock Corporation Petroleum

6 PLC Asphalt Company Asphalt

7 PETROLIMEX Company Petroleum

8 Adico Asphalt Co., Ltd Asphalt

9 Vinh Hung Trading Consultancy Co., JSC Bearings, expansion joints, prestressed cable

10 Phuong Bac Co., Ltd Bearings, expansion joints, prestressed cable

10.1.3 Cost for business production

Unit: Million dong

Cost2010 2011 2012 6 months of 2013

Value %/Net revenue

Value %/Net revenue

Value %/Net revenue

Value %/Net revenue

Cost 2.190.130,7 93,46% 2.622.557,3 94,31% 3.790.830,2 95,66% 2.072.854,2 103,88%

Financial expenses

30.844,5 1,32% 37.551,5 1,35% 39.206,1 0,99% 9.737,1 0,0%

Sales expenses - 0,0% - 0.0% - 0,0% - 0,0%

Enterprise Management expenses

149.880,2 16,40% 209.049,7 7,52% 224.553.0 5,67% (62.460,6) -3,13%

Sub Total 2.370.855,4 101,18% 2.869.158,5 103,18% 4.054.589,4 102,32% 2.020.130,7 101,24%

Source: Financial statement in 2010, 2011, 2012, 6-month financial statement of 2013 of Cienco 1

Due to the characteristics of Corporation operating in the field of construction of wharves, price accounts for large proportion of operating costs in which financial costs and enterprise management accounts for the very small proportion. Cost of goods sold is kept constant in the 2010-2011 period but tends to increase in 2012. The main reason is due to economic instability makes the cost of inputs such as raw materials, labor costs,... fluctuate strongly. Corporation still attempts to use many measures to control operating costs, increase business efficiency for Corporation.

Cơ cấu chi phí qua các năm

10.1.4. Technology level


Cost Financial expenses

Enterprise Management expenses

Expense structure over years

6 months of 2013


With a thickness of 49 years experience in the field of bridge construction, ports, roads, railways, the Corporation has equipped its necessary and modern equipment enough to serve for all activities of business production.

Some of large machineries, equipment of Corporation as follows:

No. Name of machine Production Country

Year for use Quantity

Original price (VND)

I Office

1 Concrete mixing plant Vietnam 2003 1 1.916.371.882

2 Concrete spreader Germany 2003 1 2.096.298.510

3 Concrete spreader is produced in 1996- Seri 31399 Germany 2005 1 1.924.285.71

4


4


4

6 Excavator CAT 318BL, SK-3LR00575 Germany 2005 1 1.217.304.56

0

7 Stone Production Line Vietnam 2011 1 3.000.000.000

8 Dynapac vibratory rollers Sweden 2011 1 1.105.272.727

9 Dynapac vibratory rollers Sweden 2011 1 1.363.636.364

10 Wheel Loader Korea 2011 1 1.809.454.545

11 Crawler excavator USA 2011 1 1.372.000.000

12 Concrete spreader is produced in 1998- Seri 31447 2005 1 2.300.000.00

0

II Vocational School No.I

1 Pile driving hammer Diesel HD 36 China 2005 1 597.810.97

0

2 Bored pile machine Japan 2004 1 1.555.376.043

3 Vibratory rollers YZ14 China 2003 1 459.033.424

4 Hitachi Excavator Japan 2000 1 485.000.000

III Southern Branch

1 Crawler Excavator Solar Korea 2003 1 1.080.179.190

2 Vibratory rollers Bomag Germany 2003 1 774.353.149

3 Motor Graders Mitsubishi Japan 2003 1 1.359.508.211

IV Work Construction Enterprise No.1






1 Substation in Lang Den Bridge Vietnam 2011 1 601.094.01

6

2 Substation for Package No. 6 NBLC Vietnam 2012 1 679.182.72

7

V Company No. 123

1 Vibratory rollers Saikai with 2 iron wheels (Japan) Japan 2009 1 1.768.080.00

0

2 Vibratory rollers 1 iron wheel 2 tyred wheels Sakai Japan 2009 1 1.114.758.30

0

3 Vibratory rollers 1 iron wheel 2 tyred wheels Sakai Japan 2009 1 1.114.758.30

0

4 Electric generator Komatsu 2010 1 481.818.182

5 Crawler Excavator Komatsu PC2007 Japan 2009 1 1.321.245.71

4

6 Hot asphalt mixing plant CS 120T/h Vietnam 2010 1 4.390.909.09

0

7 Bulldozer Komatsu D41P Japan 2009 1 830.013.333

8 Crawler bulldozer Komatsu Japan 2009 1 831.226.667

9 Crawler excavator CAT 318BL Germany 2007 1 463.997.66

0

10 Roller BOMAG BW 214D-2 China 2007 1 629.107.141

VI Mechanical Construction Company

1 Tyred wheel loader LX 70-2 Japan 2007 1 414.285.714

2 SAMSUNG Crane Korea 2002 1 935.559.432

3 Concrete pump China 2011 1 2.956.695.594

4 Electric generator 250KVA USA 2003 1 431.172.848

5 Wheel Loader KomatsuW150 Japan 2006 1 591.000.000

6 Crawler Crane 60T Japan 2003 1 2.220.976.868

7 Concrete pump China 2011 1 2.956.695.594

8 Concrete mixing plant 60m3/h Vietnam 2003 1 1.242.857.200

9 Drilling rig soilmec RT3 – ST + PK Italia 2001 1 3.212.174.36

7

10 Concrete mixing plant 60m3/h Vietnam 2003 1 1.242.857.200

11 Bored pile drilling machine KH100 Japan 2003 1 1.000.982.65

6

12 Concrete pump 87m3/h Italia 2003 1 1.325.887.184






13 Drilling rig Casagrander RM21 Italia 2001 1 3.619.519.06

6


15 Tower crane 744CS France 2009 1 1.946.051.385

16 Crane HITACHI KH180 – 1551 Japan 2001 1 1.807.164.37

3

17 Hydraulic oil drilling rig R9G Vietnam 2009 1 1.695.238.096



20 Concrete pump truck Deawoo Korea 2003 1 3.209.817.003

21 Concrete pump 87m3/h Japan 2009 1 1.630.476.190

22 Concrete mixing vehicle Korea 2009 1 1.198.678.571

23 Crawler Crane 50T CX500 Japan 2009 1 4.154.666.400

24 Crawler Crane NIPPON SHARYO – DH500 – 5 Japan 2009 1 3.428.571.42

9

25 Cable hammer drill JK10 Vietnam 2009 1 582.991.940

26 Cable hammer drill JK10 Vietnam 2009 1 582.991.941

27 Drilling rig QJ250 + PK Japan 2001 1 2.983.450.798

28 Drilling rig QJ250 + PK Japan 2001 1 3.001.598.678

29 Concrete pump Japan 2008 1 1.398.700.000

30 Crane Sumitomo SC 500 Japan 2012 1 2.695.257.491

31 Crane Hitachi KH180 Japan 2012 1 2.000.000.000

32 Crawler Hydraulic Crane 55T- SUMITOMO Vietnam 2010 1 4.524.545.45

5

33 Crawler Hydraulic Crane 50T-IHI Japan 2010 1 3.600.000.00

0

34 Crawler Hydraulic Crane 40T-SUMITOMO Japan 2010 1 2.400.000.00

0

35 Automatic cement concrete mixing plant Vietnam 2010 1 1.331.818.18

2

36 Rig manufacturing H250 Longmen bean sprouts frame Vietnam 2012 1 915.196.66

6

37 Gantry Crane Equipment China 2012 1 4.289.401.140

38 Longmen bean sprouts Vietnam 2012 1 994.728.470

39 Concrete mixing plant 30m3/h Vietnam 2012 1 730.000.00






0 Source: Equitization Method of Cienco 1

10.1.5 Status of product research and development:

Currently, the Corporation is promoting the completion of new technology products applied to the road and bridge construction as:

- Technology for spraying Novachip anti-slip layer

- Milled recycled technology

- Radkiphan technology

- Technology for airport road construction

10.1.6 Status of checking product quality

Currently, the Corporation is applying management system standard ISO9000-2000 to perform inspection and quality control (projects). Department of Checking Product Quality of Corporation is the Management Standing Committee ISO9000-2000 and KT-VTTB Division of Corporation.

10.1.7 Marketing operation

Corporation realizes that promoting images and products to improve reliability for customers. The Corporation’s promotion is done primarily through newspaper paper, electronic media, website, magazines, sponsorship programs, VTV Television, Voice of Vietnam, the art programs bring to other sociality... However, in the present conditions, promotional activities of images can not simply promote the long-term effects as customers more and more to have services to select. Thus, it comes to the marketing function in the Corporation must be accompanied by providing product quality, maximize benefits for customers.

Along with the deployment of business operations, the Corporation has made a positive contribution to the social and charitable activities such as supporting programs like “Together for traffic safety” and many other charitable programs. Participation in community activities has shown emotion, morality, business style of enterprise, and have a major impact in raising the prestige of the Corporation on the Vietnamese market.

With the strong development, CIENCO1 entered the top 10 well-known brands of Vietnam in 2013, alongside other major brands such as Oil and Gas Corporation, Saigon Beer.... It is worthy of note in the past year efforts of the whole Corporation, as well as the growth of the brand CIENCO1.

This is the second consecutive year CIENCO1 won high into the top famous brands. With nearly 50 year tradition of building and development, with strengths in the field of application of advanced science and technology into production, the product works are always branded CIENCO1 highly evaluated about high quality, fine art, work progress... by investors, people.



Earlier, in 2012, CIENCO1 received the award Top 10 Vietnam Famous Trademark Winner, and is held VNR ranked 127/500 leading enterprises of Vietnam.

10.1.8 Commercial brand

Logo of the Corporation:

The specific characteristics of the brand: CIENCO1 word is abbreviated English name of the Corporation. Brand’s Icon shows roads (03 knob branches) and the bridges (the part containing CIENCO1 word).

Corporation registered and protected Cienco1 trademark and logo of Corporation at National Office of Intellectual Property of Vietnam. The Corporation has also built website to introduce and promote products, business capacity as well as quality provided with the website address of the Corporation: www.cienco1.com.

10.1.9 Large contracts have been implemented or signed

No. Name of contractValue

(billion VND)

Implementation Time

Product/Service

Partner for signing the

contract

1 Package CP1A 1.237 2012-/2015 Execute railway bridge

MES-RINKAI-TAISEI

2 Package CP1B 350 2011-2013 Execute railway bridge MES-RINKAI

3 Package CP1C 1.080 2011-2014 Execute railway bridge MES-TAISEI

4 Package CP3-B Project 44 railway bridges 640 2014-2016 Execute

railway bridge MES-TAISEI

5 Vinh Thinh Bridge 1.334 2011-2014 Execute road GS Engineering


http://www.cienco1.com/


bridge & Construction

6 Package No. 3 Noi Bai – Nhat Tan 784 2012-/2014 Execute road

bridge HANSIN

7 Dong Tru Bridge 1.195 2009-/2014 Execute road bridge

Board of Ta Ngan

Infrastructure Project

Management

8 Vam Cong Bridge 3.100 2013-2017 Execute road bridge

GS Engineering & Construction

9 Rong Bridge 1.700 Completed Execute road bridge

Da Nang Department of

Transport

10 Tran Thi Ly Bridge 1.500 Completed Execute road bridge

Da Nang Department of

Transport

11 Hanoi – Thai Nguyen Highway 972 2010-2013 Execute road THANG LONG -

CIENCO8

12 Project for Station T2 Noi Bai 532 2012-2014 Execute airport TAISEI

13 Lang – Hoa Lac Intersections 518 Completed Execute road Thang Long

Board

14 Cau Gie – Ninh Binh 721 Completed Execute road

Vietnam Highway

Development Investment Joint

Stock Corporation

Source: Cienco 1

10.2 Financial situation and result of business production in 3 years before equitization Receivable debts

Unit: VNDTarget 2010 2011 2012 30/06/2013

Receivables from customers

541.925.415.833 421.359.399.255 733.667.182.682 569.517.918.909

Advances to suppliers

129.660.533.814 294.479.699.509 240.258.004.734 437.278.839.564

Inter-company receivables

482.477.262.859 453.593.535.453 430.869.494.931 -

Other receivables 109.923.317.542 258.450.753.952 153.149.578.821 113.163.266.558

Provision for doubtful receivables

(80.061.376.335) (198.423.817.107) (306.296.049.581) -

Sub Total 1.183.925.153.713 1.229.459.571.062 1.251.648.211.587 1.119.960.025.031

Source: Audited FS in 2010, 2011, 2012, 6-month- Financial Statement of 2013 of Cienco 1

Payables Unit: VND



Target 2010 2011 2012 30/6/2013



Current liabilities 2.134.334.077.564 2.648.637.534.935 2.622.589.400.468 2.529.093.658.499Short-term loans 98.403.398.523 122.457.208.379 91.700.217.582 212.751.627.756

Trade accounts payable

586.850.462.152 668.389.891.719 970.654.414.458 1.040.778.767.783

Advances from customers

1.002.861.019.900 1.297.226.575.140 901.903.798.219 833.751.141.731

Taxes and amounts payable

57.785.632.348 83.226.888.655 107.612.491.307 79.551.537.181

Payables to employees

14.227.309.618 43.213.653.786 57.645.842.383 41.884.072.102

Accrued expenses 20.073.718.770 39.714.936.265 52.989.467.808 59.254.334.745

Inter-company payables

205.014.503.049 171.281.457.877 162.131.146.587 -

Other short-term payables

139.861.504.990 213.735.288.412 272.860.797.881 260.624.213.440

Welfare and reward fund

7.867.779.928 7.733.134.403 4.861.472.230 268.211.748

Provision for short-term payables

1.288.748.286 1.618.500.299 229.752.013 229.752.013

Long-term liabilities 406.630.991.225 169.000.248.841 277.635.378.033 126.714.377.463

Long-term trade payables

3.136.810.097 3.136.810.097 3.136.810.097 -

Long-term payables to inter-company

72.499.681.455 57.812.075.668 37.724.504.718 36.358.486.196

Long-term borrowings and liabilities

237.563.489.163 20.442.246.217 6.606.380.000 4.545.820.000

Provisions for severance allowances

2.569.561.067 3.094.900.971 - -

Provisions for long-term payables

- - 34.223.886.454 -

Unrealized turnover

90.861.448.543 84.514.214.988 195.148.795.864 85.810.071.267

Sub Total 2.540.965.068.789 2.817.637.783.776 2.900.224.778.501 2.655.808.035.962

Source: Audited FS in 2010, 2011, 2012, 6-month- Financial Statement of 2013 of Cienco 1

Result of business production operation

Unit: VNDTarget 2010 2011 2012

1.Total asset value 2.786.659.715.070 3.078.145.354.568 3.194.934.446.332

2. VNN as accounting book 238.927.445.244 253.740.369.755 287.942.466.794

3. Short-term Borrowings 98.403.398.523 122.457.208.379 91.700.217.582



In which : Overdue debts - - -

4. Long-term Borrowings 237.563.489.163 20.442.246.217 6.606.380.000

In which : Overdue debts - - -

5. Total employees (people) 1.657 1.902 2.729

6. Total salary 190.886.400.000 228.240.000.000 343.854.000.000

7. Average income for 1 person/month

10.400.000 10.800.000 11.000.000

8. Total revenue 2.436.860.203.717 2.923.147.338.046 4.125.932.721.069

9. Total expense 2.418.279.716.650 2.901.102.462.742 4.099.080.605.314

10. Implementation Profit 18.580.487.067 22.044.875.304 26.852.115.755

11. Profit after tax 17.873.580.355 21.022.535.629 23.542.104.066

12. Rate of Profit after tax/State capital

7,48% 8,29% 8,18%

Source: Audited Financial Statement in 2010, 2011, 2012of Cienco 1

Financial target from 2010 to 2012

Target 2010 2011 2012

Target about solvency

Short-term Liquidity Ratio (time) 0,98 0,91 0,96

Quick Liquidity Ratio (time) 0,79 0,67 0,69

Target about capital structure

Liabilities /Total assets 91,18% 91,54% 90,78%

Liabilities / Equity 1034,20% 1081,60% 984,10%

Target about operational capacity

Inventory turnover (time) 5,28 4,16 5,29

Net revenue / Total assets (time) 0,84 0,90 1,24

Target about profitability

Profit after tax /Net revenue 0,76% 0,76% 0,59%

Profit after tax / Equity 7,48% 8,29% 8,18%

Profit after tax /Total assets 0,64% 0,68% 0,74%

Profit from business operation/ Net revenue 0,82% 0,56% -0,16%

Source: Audited Financial Statement in 2010, 2011, 2012of Cienco 1

10.3. These factors affect the business production operations of the Company in the reporting year

a. Advantages



- Up to now, the Corporation has nearly 50 years of construction, development and growth. Along with its development, the Corporation has a staff of experienced leaders and workers qualified professional high. With a passion for this job, enthusiasm for work, the staff collective of the Corporation to jointly develop solidarity, develop Corporation and brought Corporation to overcome many difficulties, to fulfill the assigned tasks.

- Under the leadership of the close assistance of Ministry of Transport, the industries, at all levels, localities, units, creating conditions to help Corporation fulfill the assigned tasks

- As the leading unit in work of applying science of industry, new technologies have been received by Corporation, successfully applied in recent years. This is really going to spearhead breakthrough, enhance the competitiveness of the Corporation in the coming time.

- Through years of development, the Corporation has built a brand and solid position in the market, the partners and foreign trust, many partners found to link, cooperate with the Corporation. The quality of the works that Corporation executed, are highly appreciated, many works have been awarded the title of “High-quality work” awarded by the Ministry of Construction.

- Corporation’s finance and some member units remain stable, are on the rise, creating trust and prestige with the credit institutions.

b. Disadvantages

This is the period when the Corporation and the member units still have some certain difficulties such as:

- Many projects lack of funds, not even the allocation of capital by the investors implemented Resolution No. 11 done by the Government, has affected the business production of the whole Corporation.

- Clearance work in some projects delayed and prolonged as: Hoa Lac Intersection, National Highway No. 3 of Hanoi - Thai Nguyen, Package CP1A - Ninh Binh,... affect progress, causing waste to the Corporation and the units involved in the projects

- Working acceptance, payment, price adjustment of the investors in some projects very slow and not in time, while the price of main materials increased as iron, steel, cement, fuel, power,... lead to insufficient bidders for construction costs.

- Although the bank’s interest rate has reduced from April 2012, it is very difficult to get a loan. Because the banks strictly required loan procedures, affect the current capital for production, partially affect production and business activities of the Corporation.

- Some units has risen yet powerful, yet capable of integration, the administration was not scientific, business management system is weak, production efficiency is low. Bad debts are high, still have the accumulated losses, together with the increasingly fierce competition among contractors in terms of investment capital should be reduced, market



work meets many difficulties, especially units in road construction block, construction materials production,...

11 Position of Corporation compared with other enterprises in the same sector

11.1 Position of the Corporation in the sector

+ In terms of production capacity and technological level:

Corporation is the forefront unit of work of applying in science of sector. In recent years, the Corporation has achieved many honors for technological applications and awarded high quality work. In addition to traditional technologies such as auger, cantilever, cable-stayed, prestressed, handle soft ground, anti- sliding... continue to be improved and summarized by Corporation. Corporation has received the new technologies, applied in the recent past such as construction technology for NOVACHIP ultrathin rough creation, milled recycling technology upgrade pavement structure of old vehicle roads, manufacturing and construction of steel structures, steel arch bridge and large aperture concrete steel arch stuffed, high-intensity rock drilling and large drilling depth, Probase for rural roads,... This is really going to spearhead breakthrough, enhance the competitiveness of the Corporation in the future.

Corporation’s leader has directed the engineering department of the Corporation in close collaboration with the engineering units, check verification and construction methods for solving problems in engineering projects that Corporation undertakes, Corporation’s projects authorized as well as the projects that the units can subjects of contracts. Therefore, the technical issues on all projects are resolved promptly with the goal: “Quality - Progress - Safety – Efficiency”

Determine work quality is the survival of enterprises; entire works that Corporation constructs, are paying special attention to quality, this work is focused on the first criteria. In recent period, many works achieved the title: “The high-quality” awarded by the Ministry of Construction as: Rach Mieu Bridge, Dung Quat Port, Ham Luong Bridge, National Highway No. 1A of Ha Noi - Lang Son Section…

+ In terms of operational market:

Currently, on the civil engineering construction market, the competitors of the Corporation are divided into 2 groups are domestic and foreign construction enterprises:

- Domestic competitor group: Striking is the large construction Corporations such as: CIENCO4, CIENCO5, CIENCO6, CIENCO8, Thang Long, Song Da, Truong Son, Licogi ... These enterprises have created fierce and complicated competition in the construction market of Vietnam. Each Corporation has its own advantages in the area of operation or specializes in a particular field. Through the actual survey, Corporation still has advantages over bidding capacity on items of available machineries and equipment levels, assets, capital, work force; the annual output of the Corporation is always higher than the above enterprises.



In addition to the above large Corporations are also independent enterprises, small and medium enterprises in the locality. The small-scale enterprises, weak procurement capacity, but they have close relation with the government of localities, the ability to make quick decisions, moving maneuver, knowledgeable market prices by region comprehend that they can win in many small projects that the share of CIENCO1 left open. For large-scale projects of these enterprises are not qualified to participate in, but not so that CIENCO1 despised rival, CIENCO1 always identifies market work is important work, investment priorities over both.

- Foreign competitor group of CIENCO1: More than 300 foreign contractors are from other countries and territories. The contractors have done so many large works and item on the territory of Vietnam as a general contractor or main contractor. These contractors, especially the construction groups from Japan have dominated the level of management organization, financial capacity and specially have experience and modern technology. Moreover, they also backed the Government’s mother - the donor countries or loans for Vietnam project. From the above practical demands CIENCO1 to build market strategies, investment and sound business strategies to meet the vibrant competition of the market. In such conditions, the link with the domestic and foreign bidders in competitive bidding is a solution creating the general power which CIENCO1 aims at

11.2. Prospects for development of sector

On 03/3/2009 the Governmental Prime Minister issued Decision No. 35/QD/QD-TTg about strategy for transport development until 2020, with a vision to 2030, according to the orientation for domestic transport development is defined as follows:

Develop transport infrastructure synchronously, reasonably, combine with development of each stable step with breakthroughs into modern to create a complete, uninterrupted and linkable network between the methods of transportation, between regions, between urban and rural areas across the country, and also respect maintenance work, ensure efficient exploitation, the existing sustainable transport infrastructure

Combine with new investment to renovate and upgrade in-depth investment to promote the efficiency of industrial facilities with available transportation.

Develop external transport system coherent with the domestic transport system to actively cooperate, integrate regionally and internationally;

Promote local transportation, meet the requirements of industrialization - modernization – rural area, link with the local transportation network with national transportation network, and make the continuous, smooth and reasonable transportation costs, consistent with the majority of people.



Socialization of investment in traffic infrastructure development, Maximum mobilization of all resources, respect domestic resources to invest in developing transportation

To carry out the above orientations, the Government also provides solutions, implementation support policies, which is typical:

Increase investment level for transportation infrastructure in the annual State budget reaches 3.5 to 4.5% of GDP

Mobilize all resources, focus on internal resources, create favorable conditions to attract investment capital from all economic sectors in various forms to build transportation infrastructure...

Encourage and create all favorable conditions for transportation industrial enterprises to expand joint ventures, domestic and foreign associates to raise capital, technology transfer, exchange of management experience...

Establish financial leasing companies under the guarantee of the State to create conditions for enterprises to access and use of financial resources, technologies, new techniques.

With views of the Government, transportation is considered as an important part in the socio-economic infrastructure, needs to prioritize development investment one step ahead at a rapid and sustainable pace, to create foundation for socio-economic development, ensure national defense and security, service of industrialization - modernization of the country has opened up the prospect of future development in the industry, enable enterprises in industry has many business opportunities, access to capital, technical science and experience of new management

11.3. Evaluation of the appropriateness of the orientation development of Corporation with orientation of industry, State policies, and general trends in the world

The suitability of development orientation of the Corporation with the orientation of the industry, State policies and general trends in the world represented by the Corporation determined to transition to operating under the new model is Joint Stock Company. In integration trends and current developments with market economy, model of State enterprises does not work effectively, flexibility and competitiveness is limited. Joint Stock Company model is the most appropriate types of enterprise that the advanced countries in general and Vietnam in particular are adopting and promoting its positive aspects in the economy. With the model of Joint Stock Company, the Corporation will mobilize human resources in society both capital and human power of all economic organizations and domestic and foreign individuals. Legal entities and individuals engaged in production and business operations of the enterprise to help the innovation and develop enterprise, create jobs for employees, increase sources of revenue for local budgets, changes methods of enterprise management, create motivation for development, improve the efficiency and competitiveness of enterprises in the market economy.



VI. PLANS OF BUSSINESS PRODUCTION OPERATION AFTER EQUITIZATION

1. Name of Joint Stock Company, business sectors and industries

Company’s name

:TỔNG CÔNG TY XÂY DỰNG CÔNG TRÌNH GIAO THÔNG 1 – CTCP

English name :CIVIL ENGINEERING CONSTRUCTION CORPORATION NO. 1 – JSC

Abbreviated name

: CIENCO 1

Head Office :No. 623 La Thanh Road, Thanh Cong Ward, Ba Dinh District, Hanoi City

Tel : 043.8350930

Fax : 043.7721232

2. Business sectors and industries

Inheriting the business sectors and industries have been the Department of Planning and Investment of Hanoi City under business registration license No.0100104274 dated 17/09/2010 for the first time and based restructuring plan approved by the Ministry of Transport, business sectors and industries of the Corporation after equitization, including:

No. Name of Sector Sector Code

1 Build constructional works of railways and road 4210

2 Build public constructional works 4220

3 Build other civil engineeiring works 4290

4 Manufacture constructional materials from clay 2392

5 Manufacture cement, lime and gypsum 2394

6 Manufacture concrete and products from cement and gypsum 2395

7 Manufacture metal components 2511

8 Fabricate mechanics, handle and coat metal 2592

9 Exploit stone, sand, gravel, clay 0810

10 Repair machineries, equipment 3312

11 Repair and maintain means of transport (exclude vehicles, motors, motorbikes and other engine vehicles)

3315

12 Repair other equipment 3319



13 Wholesale machineries, equipment and spare parts of other machines 4659

14Operation for supporting financial services which are not divided into any item: In details: Consult investment for building civil engineering works

4290

15 Transport goods by road 4933

16 Short-stay services 5510

17 Carry on business in real estates, land use rights belong to owners, users or lessors 6810

18 Architectural activities and relevant technical consultancy 7110

19 Operation of specialized design 7410

20 Professional, scientific and other technological operations which are not divided into any item 7490

21 Lease machineries, equipment and other tangible appliances 7730

22 Operation of centers, consultant agents, introduce and brokerage labor, works 7810

23 Supply and manage labor source 7830

24 Tourism agent 7911

25 Operating tours 7912

26 Services for supporting related to promoting and organizing tours 7920

27Service operation for supporting other remaining business which are not divided into any itemIn details: Export, import goods

8299

28Career educationIn details: Train technical, professional, civil engineering, electric water workers

8532

29 Other educations which are not divided into any item In details: Teach foreign languages and teach conversation skills

8559

30 Service for supporting educationIn details: Services for overseas study consultancy

8560Decision No. 05/2013/TTg

3. Organizational structure of management, administration and control of the Joint Stock Company

The organizational structure of the Civil Engineering Construction Corporation No. 1 - JSC (hereinafter referred to as the Joint Stock Company) will be specified in the Charter of organization and operation of the Joint Stock Company by the General Assembly of Shareholders passes through and under the provisions of the Law on enterprises.

Diagram of Corporation’s organization structure after Equitization


Supervisory Board

General Assembly of Shareholders

Board of Management

General Director

Corporation’s Departments

Dependent accounting

units

Subsidiaries Associated companies

Branches


General Assembly of Shareholders: is the highest authority of the Corporationn, annual General Assembly of Shareholders is held once a year. Assembly of shareholders must annually meet the stipulated time is four months since the date of ending the fiscal year. General Assembly of Shareholders passed decisions within its jurisdiction by voting at the meetings or in writing opinions

Board of Management: is the agency directly manages in Corporation. Board of Management organizes implementation of rights and obligations that the General Assembly of Shareholders in the Corporation’s Charter and the provisions of law and the right to the name of the Corporation to exercise the rights and obligations of the Corporation, except for matters of the General Assembly of Shareholders;

Supervisory Board: Is elected by General Assembly of Shareholders. Supervisory Board is responsible for checking the legitimacy of management, business operations, and appraisal of the annual financial statements of the Corporation; notice of inspection results and business operations of the Corporation to the General Assembly of Shareholders and perform other duties under the Corporation’s Charter;

General Director: Implements the resolutions of the Board of Management and the General Assembly of Shareholders, business plans and investment plans of the Corporation


Executive

Boards


passed by Board of Management and General Assembly of Shareholders and other duties under the Corporation's Charter

Parent Company: Includes branches, departments of Corporation, the dependent accounting units and Executive Boards

- Branches: Ho Chi Minh City Branch; Cambodia branch, Tay Nguyen Branch; Constructional Vocational School No.1, Mechanism Execution Company No. 1; Services & International Labor Supply Company; Bridge Enterprise No. 17 – Cienco1; Bridge Enterprise No. 18 – Cienco1; Constructional Enterprise Cienco1; Constructional Company No. 123.

- Professional Departments: Office of the Corporation; Market Planning Department, Department of supplies and equipment engineering, Finance Accounting Department, Department of Organization and Personnel Labor, Capital Management Department and Department of appraisal for investment projects:

- Executive Boards

The subsidiaries, associated companies:

- Subsidiaries: Joint Stock Company No. 116- Cienco1; Bridge Joint Stock Company No. 12- Cienco1; Investment and Work Construction Joint Stock Company No. 120; Civil Engineering Construction Mechanics Joint Stock Company No. 121; Bridge Joint Stock Company No. 14-Cienco1; Work Construction and Investment Consultancy Joint Stock Company No. 1; Công ty TNHH.BOT Rach Mieu Bridge Co., Ltd; Civil Engineering Construction Experiment Consultancy Joint Stock Company No. 1– Cienco1; Constructional Investment Joint Stock Company No. 125 – Cienco 1; Road Joint Stock Company No. 224 - Cienco 1; Road Joint Stock Company No. 226 – Cienco 1; Road Company No. 230; Road Joint Stock Company No. 232 - Cienco 1; Road Joint Stock Company No. 240 – Cienco 1; Road Joint Stock Company No. 242 – Cienco 1; Traffic Project Construction & Management Joint Stock Company No. 244 – Cienco 1; Road Construction Joint Stock Company No. 248 – Cienco 1.

- Associated companies: Work Construction Joint Stock Company; Bridge Joint Stock Company No. 10- Cienco1; Work Construction & Material Production Joint Stock Company No. 115; Work Construction & Material Production Joint Stock Company No. 119-Cienco1; Investment and Construction Joint Stock Company No.122- Cienco1; Trading and Civil Engineering Construction Investment Joint Stock Company No. 124- Cienco1; Work Construction Investment Joint Stock Company No.128- Cienco1; Work Construction Joint Stock Company No. 15- Cienco1; Joint Stock Company No.16- Cienco1; BOT Thanh Hoa City Bypass Co., Ltd; Constructional Investment Joint Stock Company – Cienco 1 (CIC); Vietnam Construction and Investment Consultancy Joint Stock Company; Chieng Sinh Cement Joint Stock Company – Cienco1; Work Construction & Material Production Joint Stock Company No. 1; Mai Son Cement Joint Stock Company; Material Production& Work Construction Joint Stock Company No. 117- Cienco1; Waterway Work Construction & Investment Joint Stock Company- Cienco1; Civil Engineering Construction Investment Consultancy Joint Stock Company No.1– Cienco1; Tourism Trading and



Constructional Investment Joint Stock Company- Cienco1; Hall Brothers International Co., Ltd; Anphanam Infrastructure Construction & Investment Joint Stock Company; Work Construction & Investment Joint Stock Company No. 134; Thai Binh Duong Real Estates & Infrastructure Development Joint Stock Company; Civil Engineering Construction Joint Stock Company No.189 – Cienco1; IMICO Joint Stock Company – Cienco1; Civil Engineering Construction & Trading Investment Joint Stock Company No.1;

The political and political - social organizations: Party, Trade Union, Youth Union of Parent Company - Corporation

4. Business production plan of the Corporation after the implementation of equitization

4.1 Orientation & Development Strategy after equitization

a. Orientation

After transferring operations in the model of joint stock company, the Company will focus on implementing the following objectives:

- Promote the autonomy, creativity, exploiting all the potentials, advantages, focus on promoting business production, achive high efficiency, conservation and capital development. To continuously improve the operational efficiency of enterprise, on the basis of business production development, improve care and physical life, spirit of employees.

- Build Corporation, specialized agencies at all levels in a clean and strong. Promote the role of the political – social unions, build enterprise culture, implement democracy, mobilize solidarity strength to build Corporation to develop stably, sustainable growth, contribute in the industrialization and modernization of the country and the capital.

- Link strategic shareholders, strategic partners have the potential for capital, technology, management capability, product and market; and also promote the intra-links to create more opportunities, create integrated resources to have the more competitive and efficient advantages.

- Orientation of businesses and sectors and products: Robust growth and steady, focus on improving the brand in the traditional manufacturing operations. Research, deploy and develop fields of manufacturing and new services such as construction of urban housing, construction materials production, investment projects under the BOT and BT ...

- About engineering, technology: Step by step renovate execution technology, equipped with advanced equipment, make our products more competitive high-quality growth creates high added value.

- Deeply innovate business administration; Create and develop enterprise brand and enterprise culture.

b. Strategies for specific development

Arrange, innovate organizational and operational structure



Innovate organization, strengthen and enhance the effectiveness of apparatus in parent company

- Continue to renovate and reorganize the Office of the parent company, to ensure both the direct functions and tasks manufacturing business of the parent company, just managing the capital of the parent company in subsidiaries, associated companies to enhance the staff capacity and operating efficiency of Office of the parent company.

- Strengthen, stabilize organization of parent company’s Office towards smaller and lighter, assigning clear responsibilities, facilitating reduced focal maximize the capacity of staff.

- Develop function of specific tasks, the boundary of each department. Build titles for each working position. Review classification agency’s staffs to arrange suitable jobs

- Examine and review the management regulations of dependent accounting units, the member units to modify, supplement or newly build regulations in accordance with the actual conditions of the unit on the basis of the provisions of the parent company in the statute was enacted.

- Strengthen the organizational model of improving management and executive capacities of the project steering committee. Institutionalized relationships in solving tasks in projects between Executive Board and the parent company’s departments and construction units.

- Build application programs in information technology in management and executive works from the parent company to the member units. Effective use of information technology in the management and executive works in business production

- Organize the training classes, raise awareness of the managers on the administrative procedures, organize systems of profile rotation, update and transfer information in the executive apparatus to ensure processing accurate, timely and situations in production and execute in compliance with directives and orders of leaders at all levels.

Arrange, innovate organization and management to improve the operational efficiency of the dependent accounting units, the member units

- Renew the dependent accounting units, the member companies as the target: “productivity, quality and efficiency”; gradually improve the competitiveness capacity of the units on the market. Enhance autonomy and self-responsibility in the business operations of units. Build the dependent accounting units evolved into the core units of the parent company. Along with the ability to promote links, set of member units when performing large tasks requiring the general power

- The dependent accounting units, member units for building management mechanism from the company to the workshop. Pay particular attention to the management of



schedule, quality, managements of salary, materials, equipment and benefits of the employees associated with the results of production business....

- Accelerate the reorganization and renew units:

Reorganization the assisting apparatus of parent company to improve efficiency in the works of executive management

Create conditions for the dependent accounting units to operate effectively.

Organize operations of Constructional Vocational School No.1 well, towards the establishment of Vocational College

Strengthen capital preservation and development of the parent company and the parent company’s capital investment in subsidiaries, associated companies.

- Apply the advanced engineering and technoligical sciences in business production and management, create products with reasonable cost, fast payback, highly profitable.

- Exploitation of resources, potentials and strengths in land, factories, head office, business brand, the brand of the Corporation (CIENCO1) ... to create additional revenue sources for developing business production.

- Use effective assistance of financial resources in the country and abroad (if any).

- Mobilize capital of officials - workers - employees and society (including the participants, stock market trading, ...).

- Supplement capital source from annual profits.

- Promote the role and responsibilities of the representative of capital part at the subsidiaries and associated companies.

- Develop and closely manage costs, especially the cost of works. Practice savings against waste in production and enterprise management.

- Perform works of inspection, audit comprehensive internal and regular to capture the financial situation of the parent company and the member units to serve for enterprise management

- Strengthen works of capital management in Corporation and capital in joint stock companies. Financial investment in the joint stock companies effectively.

- Rotate, balance capital funds to serve for business production, meet the financial planning and additional investment for machineries and equipment, raise construction capacity of basic construction projects.

- Focus on test work of completed volumes, full settlement for projects, timely to collect backlog outstanding



- Reviewe to amend, supplement to the regulations on responsibilities, rights and duties of representing person of the parent company in the member units, associated units. Through the capital representatives to guide the work of the business production of member units, to the use of capital of the parent company in the member units, associated units are most effective.

- Implement the relationship between the parent company and the member units, associated units through the economy, on the basis of the provisions of law.

- Through the representative to guide the raising competitiveness of the companies after implementing equitization, especially raising financial capacity through the issuance of new shares to raise charter capital.

- Develop an appropriate roadmap for listing shares of joint stock companies, target to the 2015 has at least 50% joint stock companies listed shares.

Develop business industries and sectors

These are important goals for market expansion and selection, arrange restructuring products, contribute to the development of capital source to re-invest and expand, improve product quality, locate new position of the Corporation in the market with the role as investor.

In the field of construction of transport infrastructure

Focus on strengthening, enhancing brand of Civil Engineering Construction Corporation No. 1 (CIENCO1) in business production operations in the traditional fields of Corporation has strength: Building bridges, roads, airports, ports ...; perform management, exploit and maintain road infrastructure system, synchronously deploying strategies about product, market and implemention solutions, as follows:

- Mobilize the general power of the whole Corporation, exploit the best brands of the Corporation and the member units for the market.

- Focus all resources to participate in key bidding, especially on large projects, high technical requirements. Analysis bid price scientifically, reasonable to assure principles of competitive and profitable price

- Strengthen alliances, partnerships, links with partners, preferred partners, the traditional customers on the basis of ensuring harmony of interests between the parties, not to be forced cost or disadvantage. Select, consider carefully when joining subcontractor or quotation for partners, the foreign companies

- There is a scientific and flexible behavior in each case, each specific project to ensure harmony of interests of the Corporation.

- Keep abreast of the markets where have projects of Corporations are doing good, reputable.



- Research on the construction investment of tunnels to 2013 can perform the first work and to 2015 can be owner of all the construction technology for large-scale projects.

- Expand fields of project management and providing technical services such as design consultancy, supervision consultancy and experiment consultancy:

Enhance the ability to provide services for technical experts working in construction supervision.

Develop the consulting work to make investment projects since the investment preparation phase to the implementation phase of investment for building large-scale bridges and roads (Project of Group.A) and perform a full integrity and technical consultancy in the projects. Basically perform design of the construction of bridges has modern structure

For the experimental work: Strengthen materials experiment capacity for construction to afford the staff, technical staff, equipment and technology to perform to complete all mechanical targets of materials of the member units, affiliates and parent company and achieve standard of VILAS laboratory.

Annual market work strives to achieve 8000 billion - 10.000 billion to meet basic enough jobs for the whole Corporation. The focus for the market for large projects funded clearly in the period from 2012 to 2015. Details as follows:

- Cao Lanh Bridge (Dong Thap): 2.000 billion dong

- Vam Cong Bridge (Dong Thap): 2.000 billion dong

- Ben Luc – Long Thanh Project (3 packages are sponsored by JICA): 8.000 billion dong

- Tan Vu – Lach Huyen Project: 10.000 billion dong

- Da Nang – Quang Ngai Highway (7 packages are sponsored by JICA): 9.000 billion dong

- Nhon – Hanoi Station Overhead Railway (Hanoi): 5.000 billion dong

- 44 railway bridges (3 packages CP3): 2.000 billion dong

- Yen Vien – Ngoc Hoi Railway Line: 10.000 billion dong

- Co Chien Bridge ( BOT 35%): 1.000 billion dong

- Lach Huyen Port (the expected part of Cienco1 undertakes): 1.000 billion dong

- Cua Lo Port: 1.500 billion dong

- Building JFE Steel Factory: 1.500 billion dong

For some other business lines

Research and develop business and invest in the manufacture and market services which have great demand such as:



- Construction of urban housing: High apartments, urban areas with appropriate ability. In short-term, the exploitation of the land of holding company and member units in Hanoi is focused

- Invest, joint venture in production of building materials, production of bridges, roads, ports equipment …which are suitable to the Corporation's ability to serve its business and provide to the market.

- Organize research, improve quality, and expand the scale of design survey consultancy, investment consultancy, experiment, testing, and so on.

- Select investment and build projects industrial, civil ...

- To act as investors in the investment projects of industrial zones and civil constructions

- Implement the role of investor in investment projects under the form of BT, BOT ... in the economic sectors in accordance with the capacity, the available potential of holding company.

- Develop industrial production:

Focus for the production of specific products, especially products serving the brigde construction (anchor loops, elastic joints, bridge bearings ...).

Manufacture block packing, equipment which is specialist in burning serving the production of cement concrete, hot asphalt concrete, cast-in-place pile drilling technology and foundation treatment ...

Consolidate and develop the mechanical manufacturing facilities. Produce steel girders and non-standard steel structure to serve the construction industries.

- Consolidate and promote the export of labor and export of specialists.

Accelerate the research and application of new techniques and new technology

- Research, deploy and perfect the application of new technologies such as technology of casting concrete box girder with moving scaffolding system, constructing of concrete steel pipe arch bridge, constructing cable-stayed bridge, constructing tunnel, subway, high-speed rail with NOVACHIP no-skid road ...

- Complete and apply in practice technology of raking, removing and recycling foundation of old pavement.

- Widely apply of information technology in management, production and business operation to meet development needs.

- Develop the intranet of each unit (LAN network); apply in unification manner one management software. Build network systems between the offices of parent company and dependent accounting units, subsidiaries, and link units (WAN network), implement



production hand over via the network between the Project Steering Committees and the units with the parent company.

Human resource development

Organize the training to develop professional human resource with high level of speciality, foreign languages and to expand knowledge in other sectors to meet development goals and requirements of Corporation until 2015 and the next years. Invest with emphasis in training for engineers, professional management staffs, and skilled workers. Each year, organize the selection of officials having good competence, high level and good political quality to send to train in depth specilaites in domestic and abroad. Develop and perfect technical facilities system, focus on investment in development of Construction Vocational intermediate school No. 1 into Vocational College or the same.

Organize re-training activites and self-training in officials and staff in the Corporation. Perfect the system of policies on recruitment and clear and suitable use of human resource after training in the direction of strengthing the activeness of the parent company in finding and attracting candidates with high level, good quality and good morality and good managerial staff to contribute their intelligence and effort to the development of business of the Corporation, especially in high technology and technique sectors which the Company is now lack of.

Continue to improve policy on salary, income of staff under the direction to prove their ability, their intelligence, experience and performance, have appropriate treatment policy for high skilled workers to create strong attachment in long-term to the Corporation, encourage workers to make more efforts in study, improve professional level.

Implement policy on rotation and appointment; build the next professional managers and managerial staff.

For directing staff and managerial personnel

- Training directing staff and managerial personnel; implementing the strategy, strategy of bringing new blood into staff, building young and strong directing ans managerial staff class with good quality and enthusiastic; developing parent company and its subsidiaries having good capacity, the professional knowledge, sensitivity and dynamic to market economy, determination in management, and being determined to fulfill assigned responsibilities.

- Reviewing and classifying current staff on the basis of personnel standard and the development ability of each person to plan leaders of the parent company. Bringing new blood into leaders, ensuring harmony between ages to avoid the shortage of next leaders.

- Conducting training staff in accordance with planning to ensure that they have enough necessary conditions and criteria to use when having demand. Building competent



managerial personnel to add in the missing titles and replace older staff in 2-3 coming years.

- The Youth Union of Parent Company will be responsible for introduction of engineers, bachelor of Ecomomics who have good professional speciality, good moral character, will of progress and leadership qualities, willingness to work for long term in the parent company and its subsidiaries in the age of 25-35 years old to conduct training and effectively use.

- There are incentives for leaders, managerial personnel so that they learn by themselves foreign language to be active in trading.

For professional staff

- Implementing statistics to grasp the situation of professional staff of the parent company and its subsidiaries. Classifying staff to properly arrange staff in accordance with their capacity and forte. Conduct a transfer or retraining for staff that have good moral quality, good sense of responsibility but are working in sector that is not their speciality.

- Seriously implementing regulations of professional staff recruitment. When having demand on recruitment, it is necessary to conduct tests and check of qualification, speciality and other requirements for the vacancy.

- Developing officer standards to conduct annual examination to create motivation for actively cultivating, updating their knowledge of science technology and managerial science of staff and timely handling cases which do not commensurate with the duties and development requirements of the unit.

- Performing the rotation of professional officials in managerial and administrative agencies, and officers who directly produce to acquire practical experience and management skills.

For skilled workers and high qualified labours

- Listing skilled technical workers and high-qualified labours to balance the production tasks of the unit. Building reasonable treatment regime for these objects and managing them closely. Considering skilled workers and labours as invaluable assets of the unit. Building regulations on the management, rotation, treatment policies for skilled workers and high-qualified labours in parent company and its subsidiaries. Rotating staff between the subsidiaries to appropriately use and exploit the potential of skill of skilled workers skilled and high-qualified labours.

- Organizing re-training the workforce for the parent company and its subsidiaries and associated companies. Focusing on training of special jobs: machine operator, specialized equipment, special equipment, and brigde fitter and so on.



Build the brand of Corporation

- Focusing on the direction of the state key projects so that they are completed with good quality, on time schedule, performance, safety and high finr arts, which continues to develop the brand of Cienco1.

- Focusing on promoting resources to invest in new and advanced technologies applied in Vietnam to have own direction in main business line and affirm the brand of Cienco 1.

- Promoting the image of Cienco1 through partnerships with the media agency, the press, the social organizations and so on to raise awareness and responsibilities of officers and staff of the Corporation in building and protecting the image and the brand of Cienco1.

Develop enterprise culture

- Building labour style with high discipline

Strictly complying labour discipline, technology discipline and especially strictly implementing processes, technical regulations on labour safety, industrial hygiene for each equipment, each construction site, each factory, ... and first of all in the executive body.

Work Style is advanced, industrial, creative, overcoming difficulties.

- Developing business culture

Always being respectful and willing to work with its customers, partners.

Being confident, honest in work and being trusted partner of partners and customers.

- Building civilized style and cultural lifestyle

Training civilized behavior manners for all subjects, especially those who frequent receive visitors, communicate with domestic and international partners of the parent company and its subsidiaries.

Regularly organizing cultural activities, arts, sports, holidays and travels for labour collective, paying adequate attention to the spiritual life of staff.

Focusing on developing enterprise culture of the parent company and its subsidiaries from the grassroots, organizing propaganda and implementing by specific movements.

c. Investment plans

Implementing goals, development orientations - on the basis of plan of investment and development for the period 2011-2015 in the restructuring plan approved by the Ministry of Transport approved in Decision No. 1417/QD-BGTVT dated 19/06/2012 and the forecast for the period 2013-2015, the parent company and its subsidiaries focuses on the implementation of projects which invest in key sectors: construction of traffic work and some other ancillary works to enhance production capacity and competitiveness.



Corporation builds development investment plan in period 2016 - 2020, focusing on a number of manufacturing sectors such as:

- Construction of transport infrastructure: Strengthening and enhancing brand in business production in traditional areas which the Corporation has strength: Building bridges, roads, airports, ports; implementing management, exploitation and maintenance of road infrastructure, comprehensively deploying strategy of product and market as well as implement solutions.

- The other business lines:

Developing urban housing: High apartment, urban areas with appropriate its capabilities

Investing in, joint ventures in producing building materials, production of bridges, roads, ports equipment and so on.

Producing specific products, especially products serving the brigde construction industry.

Manufacture block packing, equipment which is specialist in burning serving the production of cement concrete, hot asphalt concrete, cast-in-place pile drilling technology and foundation treatment ...

4.2 The system of basic economic indicators of business production plan in three consecutive years after equitization

Criteria Unit In 2014 In 2015 In 2016

1. Charter capital Million VND 700.000 700.000 700.000

2. Total labours Person 2.713 2.963 3.313

3. Total wage fund Million VND 406.950 469.339 560.559

4. Average income Million/Person/month 12,5 13,2 14,1

5. Total revenue Million VND 4.195.380 4.409.553 4.720.624

6. Total cost Million VND 4.119.604 4.329.672 4.630.814

7. Profit after tax Million VND 61.526,9 64.777,4 74.138,5

8. Dividend rate %/year 7% 8% 9%Source: Equitization plan of Cienco 1

4.3 Solutions and basis for implementing criteria of the plan

To achieve the targets set, the Corporation offered solutions including:

Solutions on products, brands and markets

- Improving the quality of products, developing new product; Organizing investment in products which have low ICOR indicator, low prices - creating competitive advantage on price, Seizing market signals on time. Consolidating and developing market share. Directly importing technical materials and exporting some products of the Corporation.



- Strengthening quality management, appropriately applying quality management system in accordance with national and international requirements. The parent company and its subsidiaries develop appropriate and effective quality policies in order to consolidate and enhance credibility in the market, satisfy the increasing demands of customers.

- No continuously perfecting and improving the effectiveness of quality management system to manage business and production effectively.

- Office of the parent company and the units should be focused on building and maintaining application of quality management system according to ISO, is considered as an important solution for sustainable development.

- The parent company and its subsidiaries need to have a comprehensive program to consolidate and develop the brand. Adequately invest in finance and human resources to implement development programs and promote the brand. Raising awareness for the employees of the parent company and its subsidiaries on the brand. This must be considered as an important solution to improve competitiveness, the main way to enter and develop the market.

Solutions on application of advanced technique and technology

Implementing the strategy of technological innovation, upgrading and supplementing automatic equipment; applying science and technique in industrial and agricultural production; increasing investment in technological and technical application to improve productivity, quality and diversity of product.

Solutions on finance and capital

- Restructuring capital resources, balance capital for business and investment. Using capital with right purposes, strictly managing assets, materials and capital; implementing cost reduction, capital preservation and development.

- Promote enterprise innovation, adjusting production structure to facilitate for companies to operate efficiently, increase the ability to accumulate capital for reinvestment to develop, for the sustainable development of units.

- Re-evaluating the current status of production capacity of the member units; breakthrough solutions are necessary to solve the shortcomings of financial measures such as investment cooperation, charter capital restructuring, selection of strategic partners to issue shares.

- Jointing ventures with national and international partners which have financial capacity. Especially building relationships with credit institutions to receive financial support.

- Working with the State agency, financial organizations for the promotion of projects and for preferential loans to implement projects of BT, BOT, BTO ...

- Effectively xploiting and using business advantages especially the potential of land prospective to add business capital on the basis of best use of the capabilities of each parcel of land.



- No investing spreadly and invest with low effectiveness, focusing on invest on improvement of machinery and technology capacity to meet the requirements of the projects.

- Quitting investment capital in enterprises which opetate ineffectively or less effectively to focus on capital investment in enterprises which effectively trade, contributing capital to set up enterprises.

Solutions on enterprise management

- Continuing to review, arrange apparatus and manpower in the direction of simplicity and efficiency; Systematizing basic operations and key aspects in subsidiaries and associated.companies. Completing appropriate internal management rule system. Continuing to link with strategic partners having strengths and reputation for mutual development. Strengthening the responsibility of the Board of Directors and Executive Committee; Strengthening inspection, supervision and assessment for enterprise.

- Establishing and perfecting the system of management regulations of parent company to create uniform and consistency, ensuring harmony of interests, create fairness and democracy within the internal parent company, between collective and individual of workers.

- Conducting a strong management dicentralization, division of responsibilities between superior and subordinate. Proving the autonomy of the units, and improving the effectiveness of management and operation of the parent company.

- Strengthening inspection and supervision of business and production activities its subsidiaries, affiliates to ensure effective capital use of the parent company. Closely coordinating the activities of the parent company’s Control Committee and test, inspection of the parent company

Solutions on investment on production development

- Continuing to invest in enterprises with effective business and great potential; Implementing comprehensive reform of investment to develop traffic infrastructure and so on.

- Promoting cooperation and joint ventures between subsidiaries and affiliates, as well as subsidiaries/affiliates with its parent company:

o Paying attention on cooperation between units, expansion of joint venture model between two or more units for the mutual promotion and implementation of the project.

o Implementing the long-term and comprehensive cooperation between two or more units to promote strength, potential of each unit to provide mutual effectiveness and timely mutual assistance in necessary cases.

o Directing companies having the same products (the blocks of bridges, roads construction, industry and services) to sign agreement for long-term and comprehensive cooperation.



o The parent company will play role as a link to organize activities to strengthen and develop cooperation among member units.

- Promoting cooperation and joint ventures, affiliation with national and international organizations and individuals:

o Strengthening and expanding long-term and comprehensive cooperation joint venture and affiliation with enterprises, economic organizations in the country to promote the strengths of each side. Attaching importance to cooperation with other units of the Ministry of Transport to support and promote the projects of traffic infrastructure construction with large scale.

o Searching for partners that have financial strength for joint venture and affiliation to together implement investment projects.

o Cooperating with enterprises of all economic sectors to implement the projects as the role of contractor, investor or cooperating in the field of science and technology, technical support, financial investment.

o Establishing a relationship and comprehensive cooperation with enterprises and economic groups in the country.

o Expanding international cooperation, developing relations with traditional partners for many years to enlist the assistance of technology, management skills, technical assistance and training.

Solutions on human resource

- Evaluating the human resources of the Corporation. Developing and implementing human resource and personnel planning. Real innovating recruitment, training and effective management of human resources of the Corporation to meet the requirements of the business and production development corporation in period of 2014-2016 period and forwards to 2020.

- There are policies to attract and train young staff, which is considered as the investment for future. There are remuneration policies for persons with special contributions in business and production.

- Developing and strengthening a healthy and democratic working environment, creating favorable conditions for competent staff to dedicate and develop.

- There are plans to add, replace and improve the quality of labor on the basis of implementing training programs, retraining combined with the recruitment of new young workers who are trained basically.

- Building wage unit price in the direction of gradual increase and suitable to the growth rate of labor productivity and ensuring an advanced life for laborers. Salary is considered as an expense for future investment.



- Building reasonable and scientific salary payment, ensuring fairness in the distribution in accordance with the principle that salary is proportional to the product and workload, productivity of each laborer.

- Coordinating between government and labor union to have plans to take care of the spiritual and cultural life for workers. Organize annual periodic health examinations for staff and workers.

- Building reward regulations to promptly encourage and promote the contribution of staff in the construction and development of the parent company.

5. Charter capital and structure of chater capital of joint-stock company

Charter capital and shareholder structure

No. ShareholderHolded shares

Rate of capital contribution (%)Quantity

(share) Price (VND)

1 State owned 24.500.000 245.000.000.000 35,00%

2 Strategic investors 21.700.000 217.000.000.000 31,00%

3 Staffs 7.616.500 76.165.000.000 10,88%

4 Share offering by IPO 16.183.500 161.835.000.000 23,12%

Total 70.000.000 700.000.000.000 100 %

Plan to increase/decrease charter capital after moving into joint-stock company:

In the period 2014 - 2016, the expected charter capital of the Company is 700 billion Vietnam dong and the Company does not have plans to increase its charter capital in this period.

VII. METHODS OF SELLING AND PAYING MONEY FOR PURCHASING SHARE

1. Selling method

Compling with the provisions of Decree 59/2011/ND-CP dated on 18/7/2011 of the Government, objects to purchase shares which are issued for the first time by the Corporation include: staff, strategic investors and other investors.

1.1. Shares sold for employees

Preferred shares sold to employees in Corporation are made according to list approved by of irregular staff meeting in Conference of labourers on 30/10/2013. Number of shares sold with preference to staff is 7.616.500 shares, accounting for 10,88 % of the charter capital, including:

a) Preferred shares with price reduction (discount 40 % for the employee) in accordance with provision in paragraph 1 of Article 48 of Decree 59/2011/ND-CP.

Total employees : 2.552

Total employees who register to buy share : 1.877



with preferred price

Total years of working : 12.401 years

Total bought shares with preferred price :1.240.100 shares, equal to 1,77% of Charter Capital

Type of share : Common share

Condition for transfer : No restriction on transfer

Sold price of preferred share :60% of lowest successful selling price for strategic investors

Expected implementation time : Before making a public auction

b) Shares which are registered to extra buy defined in Clause 2 Article 48 of Decree 59/2011/NĐ-CP.

Criteria to define in :Minute Labourer Meeting on 30/10/2013

Total labourers pledging to work for long-term

:2.008 people

Total shares which are bought according to commitment on working

:6.376.400 shares, equal to 9,11% of charter capital

In which:- Buy more under the provisions of point a,

Clause 2 of Article 48 of Decree No. 59/2011/ND-CP (200 shares/year)


- Buy more under the provisions of point a, Clause 2 of Article 48 of Decree No. 59/2011/ND-CP (500 shares/year)


Type of shares : Common shares Conditions for transfer : Limit to transfer

Sold price :Equal to the lowest successful selling price for strategic investors

Expected implementation time : Before making a public auction

1.2. Shares sold to strategic investors

Follow Decree 59/2011/ND-CP dated 18/7/2011 of the Government, the strategic investors who buy shares of Cienco 1 must meet the criteria as follows:

As domestic investors or foreign investors have the financial capacity and sufficient contribution.

Have committement to support new to CIENCO 1 after equitization technology transfer; train human resources; enhance financial capacity and corporate management; supply materials; develop product consumption market.



Commitment on holding share in CIENCO 1 minimum 05 years from the date when CIENCO 1 was issued business registration certificate for the first time under the Enterprise Law in the form of joint stock company;

Do not perform any transaction with CIENCO 1 after equitization which leads to conflicts of interest and creates exclusive right or unfair competition with clients, other investors of CIENCO 1 after equitization.

In addition to the above criteria, foreign investors must meet the following criteria:

Having an account at one of the organizations which provide payment services are operating on the territory of Vietnam and comply with Vietnam law. All activities related to shares purchase must be notified via this account.

There is a written authorization (authorization contracts, trust contracts, investment assignment contracts) if foreign investors authorize representative organization in Vietnam to buy shares.

Number of shares which are sold to strategic investors: 21.700.000 shares, respectively 31 % of chater capital.

List of strategic investors who register to buy shares.

No. Name of strategic investorsBusiness

sectors and industries

Quantity of registered share

Purchase Rate

1Yen Khanh Service Trading Production Co., Ltd

Invest and build 7.000.000 10%

2FECON Foundation Engineering & Underground Construction Co., JSC

Invest and build 7.000.000 10%

3 HASSYU Company - Japan Invest and build 7.700.000 11%

Sub Total 21.700.000 31%

Source: Cienco 1

Time to sell shares to strategic investors: before the public offerring.

Method of selling to strategic investors: Direct agreement.

Starting price for agreement the sale of strategic investors: 10.000 VND/share.

1.3. Shares sold to other investors

The total number of shares sold at public auction: 16.183.500 shares, equivalent to 23,12% charter capital

The starting price at auction: 10.000 VND/share



Order procedures and specific regulations to participate in auction details are specified in the “Regulation on Initial Public Offering of Civil Engineering Construction Corporation No.1” issued by Hanoi Stock Exchange.

2. Payment method and stipulated time

- For share to offer public auction: Method and stipulated time for payment of share money are detail specified in “Regulation on Initial Public Offering of Civil Engineering Construction Corporation No.1” issued by Hanoi Stock Exchange (HNX);

- For share to offer officials and employees and strategic investors: Equitization Steering Committee regulates.

VIII. PLANS OF USING THE COLLECTED MONEY FROM EQUITIZATION

1. Expected proceeds from the equitization

On the basis of the actual value of the State capital in enterprise, capital contributions of the State at Joint Stock Company, Corporation provisionally estimates proceeds from equitization as the assumption scheme of all the number of shares auctioned are purchased with a starting price is 10.000 VND/share, after having official price will adjust, as follows:

No. Content Value (VND)

1 Joint Stock Company’s charter capital 700.000.000.000

2 The actual state capital in enterprise after revaluation 478.367.456.916

3 Proceeds from the equitization 450.039.600.000

a - Proceeds from selling the preferred shares to officers and employees

7.440.600.000

b - Proceeds from selling shares to employees to purchase more 63.764.000.000

c - Proceeds from selling strategic shareholders 217.000.000.000

d - Proceeds from selling the auction shares 161.835.000.000

4 State capital value participating in shares 245.000.000.000

5 Par value of shares sold 455.632.543.084

6 Equitization expenses for execution unit (provisionally estimate) 1.993.000.000

7 Settlement costs for redundant employees 871.279.740

8 Surplus to the corresponding enterprise issuing more shares (3-5)x5/1 0

9 The total budget payback amount (9) = 2 + 3 - 4 - 5- 6 - 7 - 8 225.542.777.176

Source: Equitization Method of Cienco 1

2. Handle the shares not sold out

Pursuant to Decree 59/2011/ND-CP dated 18/07/2011 of the Government and Circular No. 196/2011/TT-BTC dated 26/12/2011 of the Ministry of Finance, in case, Corporation does not sell all of the Public Offerring, the Equitization Steering Committee has right to offer



publicly to the number of shares not sold to the investors participate in the auction by the method of direct negotiation.

In case of public offering in a direct manner that does not deal to sold out, Equitization Steering Committee reports to the competent authority for approval equitization plan implemented structural adjustment of the charter capital of Corporation to transfer the Joint Stock Company before organizing first General Assembly of Shareholders. The adjustment of the charter capital structure follow the principle of priority to determine the number of shares sold is the number of additional shares issued under the share sale plan has been approved. In case, the total number of shares sold (including by means of public offerring) is greater than the number of shares issued under the plan to sell more shares, the increasing difference is defined as the state capital shares sold.

IX. RISK FACTORS INFLUENCE TO OPERATION OF BUSINESS PRODUCTION OF EQUITIZATION ENTERPRISE

1. Risks of the economy

Economic growth:

Current situation and development trend of domestic economy always affect the survival and development of enterprises. When the economy is in a high growth phase will create more opportunities for enterprise development. Conversely, when the economy declines, the recession will cause a negative impact to the enterprises.

Vietnam’s economy in 10 years has gained a high growth rate, reaching 7,3% in 2003, reaching 7,7% in 2004, reaching 8,4% in 2005, 8,17% in 2006, reaching 8,48% in 2007. However, the financial crisis of some large economies in 2008 has pushed the world economy into recession, narrowing export markets, capital markets, labor markets and negatively impact to social-economic sectors of our country, economic growth rate in the country in 2008 was only 6,23% and the figure in 2009 and 2010 and 2011 respectively 5.32%, 6,78 %, and 5.89%.

GDP growth rate of Vietnam

Source: General Statistics Bureau



In 2012, the economic situation in the country continues to face large difficulties and challenges. Economic growth continued to slow down in 2012 (only 5,03%, lower than target in 2011; interest rates site remained high, however, inflation has been curbed down to one figure.

In 2013, facing with many difficulties, Viet Nam economy is positively changing toward. GDP reached 5.52%, the significant increase comparing with 4,73% in 2012.

The economic difficulties and instability in recent years has directly affected the business production activities of the Corporation. Although the economy has gradually exitted the recession, to continue to exist and develop, it requires the Corporation to be always proactive, responsive, timely to have solutions and measures to overcome difficulties, challenges, take full advantage of the opportunities to get to rise development.

Inflation:

Inflation index affects business production activities of the Corporation through the input material costs. Inflation increases to make the cost of business production of Corporation rises up due to rising raw material prices, labor costs....

Despite economic growth in recent years has been maintained at a stable level, Vietnam is also facing increasing inflationary pressures. The inflation rate rose from 6,6% in 2006 to 12,6% in 2007, especially in 2008 the inflation rate had risen to 18,9%. After falling 6,9% in 2009, inflation has continued to rise back up to 11,8% in 2010 and 18,12% in 2011. Thanks to the efforts to control inflation of the State Government, the inflation rate in 2012 fell to 6,81%.

Generally, in the period 2001-2012, Vietnam’s inflation rose on average 8,8%/year, far more number of some other countries in the region such as Thailand (2,7%) or China (2,1%).

Inflation rate of Vietnam

Source: General Statistics Bureau

As reported by General Statistics Bureau, the consumer price index (CPI) in 2013 increased by 6,04% compared to period last year, but still lower than the same period last year. However, domestic goods demand and supply is basically stable, the prices of some


Inflation rate


essential commodities such as food, foodstuffs, livestock feed, cement,.. at a stable level. In 2014, CPI is forecasted at 7%, slightly higher than 2013.

2. Risks of legal framework

Vietnam is in the development period so the legal system has also been completed gradually, flexibly changeable policy to suit each development period of the economy. Therefore, the legal documents are inevitable gaps and overlap, causing difficulties for all concerned agencies and individuals and implementation organizations.

Corporation operates under the Enterprise Law and subjects to regulation by the relevant legislation, so changes in environmental legislation will affect business activities of the Corporation.

3. Specific risks

Operational risks

Specific operation of the Corporation is the construction time of the constructional works lasts, the acceptance and handover is done piecemeal, which is parallel to the slow disbursement, the completion process for the construction records as well as approval of the settlement agreed between the investor and the contractor usually takes a lot of time. Besides, there are many projects, constructional works which investor estimates the cost estimate and the missing commensurate with investment funds led to the execution time is prolonged. This makes the slow progress of disbursement, liquidation finalization of the constructional work, affects the financial status of the Corporation, and sometimes not properly reflects business performance as revenue results, the Corporation’s profits between operational quarters as well as in financial year.

To overcome this risk, Corporation implements measures to focus on accelerating the process of constructional works, strengthening the acceptance of payment of capital recovery. Execute any item, check and take over its item.

Risk of price fluctuations in input raw material

With the characteristics of a construction and installation unit, cost of raw materials of corporation accounts for the large proportion in the total cost. Besides, the construction technology of Corporation mainly relies on heavy motor machinery, to operate and use these devices; input fuel is an indispensable element. However, sources of current raw materials of Corporation have been influenced by the price changes of fuel prices in the country and in the world. Prices of construction materials such as asphalt, cement, steel, explosives, gasoline prices... are a growing trend. Thus, they affect largely on the situation and the business results of the Corporation. To determine the level of influence of these factors, the Corporation has implemented many measures to create stability to the source of raw materials, such as the signing of the construction contracts which has price adjustment in case prices of input materials and fuel have been fluctuated, the signing of contract for



supplying long-term raw materials and build reputable and sustainable business relationships with suppliers… in order to minimize this risk.

Risks of market and competition:

The constructional market is heavily dependent on the investment plan, the volume and progress of construction works, while the number of enterprises engaged in business in this field more and more to bring fiercer competition in process of providing products and services. In one hand, competition inevitably faces pressure to lower the price of construction, sales and profits, on the other hand, it requires the construction enterprises to have reasonable solutions to approach market; maintain and increase consumption market share but it must ensure the quality and progress of handing over the finished product at the same time

Technical risks:

The construction sector requires to have systems of technical equipment and construction machinery which are suitable and maintain with the rapid advancement of the science and technology. Due to unavoidable obsolescence, It is required that the Company shouldhave depreciation regime and appropriate machinery procurement plans to minimize cost price while ensuring technical systems serving constructional execution

Risks ofinterest rate and solvency:

This risk derives from the characteristics of the construction industry that the industry requires relatively long duration of the large capital investment, capital accumulation, immediately unrecovered customer receivables. Thus, Corporation must raise capital from external sources andregular liabilities account for high proportion. The Company must pay interest costs for the debt, especially long -term bank debt, so it will be unavoidable risk about interest rate and risk of insolvency if it does not timely recover of debts from customers. To overcome the above shortcomings, the Corporation has been implementing initial efficient measures, such as strict control of receivables and liabilities and implementing restructuring funds towards increasing the rate of long-term capital of the Corporation.

4. Risks of the offering

Relations of market supply and demand greatly influence to the stock price. This relationshipdepends on economic and psychological factors of investors. Therefore, it can be possible that not distribute all the number of shares offered for sale at auction.

5. Other risks

As prescribed in Clause 4 of Article 21 of Decree No. 59/2011/ND-CP dated on 18/07/2011 of the Government on the transfer of enterprises with 100% state capital into Joint Stock Companies, the reduction of account differences between the actual value of the State capital at the time of business transfer to a Joint Stock Company and the actual value of the State capital at the time of determining the enterprise value (for the company dated 30/06/2013) shall be handled as follows:



a) If due to objective reasons:

With some objective reasons (natural disasters, sabotage, losses from state policy changes or fluctuations of the international market and other unforeseen reasons), the enterprise reports the competent authorities to decide equitization plan to review, decide the use of the proceeds from the sale of shares to offset losses after deducting compensation of insurance (if any). In case, the proceeds from the sale of shares not fully offset, the competent authority decides equitization plan review by the General Assembly of Shareholders to adjust the scale and structure of the charter capital of Joint Stock Company.

b) If due to subjective reasons:

- If losses are from not definitively settling the finance existance under the current regulations of the State when enterprise’s valuation, the responsibilities of the agencies involved must clearly be identified the: enterprise, organization for valuation and consulting and agency to decide equitization to compensate;

- If losses are from production and business operation, its management officials are responsible for compensation for the loss caused by subjective according to current regulations;

- In case of force majeure reasons that people who take charge of compensating are unable to compensate as the decision of the competent authority, the remaining loss part is handled as case resulting from object causes as prescribed in above Section a.

Other risks such as natural disasters, epidemics, war, fire... are the risks of force majeure, if they happen, and they will cause damage to property, people and the operational situation of the Corporation.

X. CONCLUSION

The Offering Circular is part of documents of the initial public offering of Civil Engineering Construction Corporation No 1. It is offered to investors for helping them to self-assess about assets, business operations, financial situation and prospects of the Corporation in the future. This information does not imply a guarantee of the value of the shares.

The Offering Circular is made on the basis of the information and data provided by the Corporation to ensure openness, transparency, fairness and protect the rights and legitimate interests of investors.

Investors should refer The Offering Circular before deciding whether to participate in auction to purchase shares of the Corporation.


Hanoi, date month year 2014

ON BEHALF OF EQUITIZATION STEERING COMMITTEE CIVIL ENGINEERING CONSTRUCTION CORPORATION NO.1

THE HEAD

PHAM DUNG

ON BEHALF OF EQUITIZED COPORATIONCIVIL ENGINEERING CONSTRUCTION CORPORATION NO.1

GENERAL DIRECTOR

CAN HONG LAI

ON BEHALF OF CONSULTANT ORGANIZATION SAI GON – HANOI SECURITIES JOINT STOCK COMPANY

DEPUTY GENERAL DIRECTOR

VU DUC TIEN

Tổ chức tư vấn: SAI GON – HA NOI SECURITIES JOINT STOCK COMPANY Page 35

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TABLE OF CONTENTS - VCBS Ban cong bo thong tin (Tieng anh).… · Web viewAUCTION IMPLEMENTATION AND CONSULTANT ORGANIZATION SAI GON – HANOI SECURITIES JOINT STOCK COMPANY . Head