BAO CAO THUONG NIEN 2014 (English)

4 ANNUAL REPORT 2014 | C3208 The process of formation and development 10 Lines and locations of business 11 Organization and management apparatus 27 Situation of investment projects

ANNUAL REPORT

2014

Productivity – Quality – Effectiveness

Chartered capital 112.000.000.000 VNĐ

Stock code: C32

Listing: HOSE

The total number of stocks listed: 11.200.000 cp

2 ANNUAL REPORT 2014 | C32

Productivity

Quality

Effectiveness

C32 | ANNUAL REPORT 2014 3

CORE VALUES OF CIC 32

We are always striving to provide products and services

with the best quality, to meet and exceed the

expectations of our customers

We are always creating the best environment and opportunities for each individual to comprehensively develop and create value for themselves, customers and the Company

We are always respecting individuals and combine the

contribution of each individual to create a team's

success

We are constantly creative in finding new solutions to add values for our customers

We are always honest and sincere in thinking and action We are always complying to the prescribed work and

making efforts to create the most effectiveness in work

VISION CIC3-2 strives to be a professional, reputable and qualified company in the field of construction and construction materials production

MISSION CIC3-2 is committed to providing our products / services to customers with high quality and reasonable costs, serving the community and society

4 ANNUAL REPORT 2014 | C32

08 The process of formation and development

10 Lines and locations of business

11 Organization and management apparatus

27 Situation of investment projects

27 Organization and Human Resources

31 Shareholder structure and equity

41 Assessment of the Board of

Management about the Board of Directors

42 Plans and orientations of the Board

of Management

44 Message of sustainable development

45 Values and commitments to the

PRODUCTION AND BUSINESS ACTIVITIES

STATEMENTS OF THE BOARD OF DIRECTORS

STATEMENTS TO THE BOARD OF MANAGEMENT TRỊ

FINANCIAL STATEMENTS NĂM 2014

CORPORATE GOVERNANCE

ORIENTATION FOR SUSTAINABLE DEVELOPMENT

C32 | ANNUAL REPORT 2014 5

MESSAGE

FROM THE CHAIRMAN OF THE BOARD OF MANAGEMENT

My respects, Shareholders, Investors and Partners

In 2014, we developed the plan for business and production in the context of advantages and disadvantages intertwined During the year, the national economic situation obtained positive changes as economic growth and recovery, interest rates and prices of raw materials tending to decrease However, new public investment projects were limited, the capital allocation for basic construction works was not timely, and transport costs were higher due

to increased load control of freight vehicles on road which caused a lot of pressure for the business activities of the enterprise

On the other hand, the Company promptly extended the mining license in Tan Dong Hiep Quarry as well as actively sought works allocated capital to participate in bidding and initially involved in the road maintenance and repair segment that helped the Company stabilize the production and business activities and ensure targets and plans that the Shareholders' meeting approved in 2014 Specifically, the turnover was 453.8 billion VND, reaching 104% of the plan, profits after tax were 71.8 billion VND, reaching 120% of the plan

With the orientation of sustainable development in the field of construction and construction materials production, the Company has gradually improved and enhanced the management, implemented the improvement of the quality

of human resources and maintained the team through staff succession planning Investor Relations (IR) is also focused on building professionally and a powerful tool in improving corporate governance practices of the Company Along with timely and transparently providing information for shareholders, investors, securities companies and media organizations, the Company has also received several multi-dimensional information from the community of investors in order to have sufficient information to consider decisions on business and development investment From the efficiency of transparent information, the Company has created confidence in investors, fostered, preserved and increased the intrinsic values of the Company Besides, the company leaders often control and evaluate to ensure that all regulations and internal procedures as well as the current legislation are fully and properly implemented to reduce risks of operations and business of the Company

TURNOVER

PROFITS

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Entering 2015, the Company continues to sustainably develop, in which focuses on improving the capacity of operation and production, marketing and sales, strengthening the internal management, working on prices and norms in order to control costs, focusing on investments to ensure the completion of the objectives of plans set out and bring sustainable benefits to shareholders

Finally, on behalf of the Company, I would like to thank the support and engagement of shareholders over time We wish shareholdersgood health and flourish success

CHAIRMAN OF THE BOARD OF MANAGEMENT

C32 | ANNUAL REPORT 2014 7

The process of formation and development

Lines and locations of business

Organization and management apparatus

Development orientations

Risks

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The Company was founded under the name

Song Be Business Development Corporation

(SB.P.Corp)

 The company has changed its name to the Construction Investment Company 3/2

The Company officially changed into Joint

Stock Company, called Construction

Investment Corporation 3-2 (CIC3-2)

 Stocks of Construction Investment Corporation 3-2 (Stock code is C32) began to be traded in Hanoi Stock Exchange

Stocks of Construction Investment Corporation

3-2 (Stock code is C32) began to be traded in

HCMC Stock Exchange

 20th anniversary of the establishment and development of Construction Investment Corporation 3-2

OTHER EVENTS

From the early days of establishment,

construction is the only business sector of the

Company According to the needs of social

development, the Company has gradually

expanded its production and business activities

as follows:

In 1994, The Company expanded into the field

of stone mining and trading in construction

stone; in 2001, added real estate business

The field of processing construction

engineering products, centrifugal concrete

culverts, and precast concrete components

was also added

In 2009, according to the development needs

EVENTS IN 2014

Inauguration of Tan Dong Hiep Street, Tan Binh

 On April 23, 2014, the People’s Committee of

Di An Twon solemnly held the inauguration of Tan Dong Hiep Street, Tan Binh (Le Hong Phong Street) in Di An Town, Binh Duong Province This is one of the activities to celebrate 39 years of reunification (April 30,

1975 - April 30, 2014) and May Day

Honoring outstanding leaders in 2014

 Mr.Vo Van Lanh – Chairman of the Board of Management and the General Director of Construction Investment Corporation 3-2

THE PROCESS OF FORMATION

AND DEVELOPMENT

C32 | ANNUAL REPORT 2014 9

of the market and taking advantage of the

strengths that the Company owns, it

established Real estate trading floor to serve

the real estate transactions of the Company

with customers, brokers, confirmed the

transactions of external partners and

customers, established unbaked brick factory

to utilize the available materials such as

(Grinded stone) and produce for a fraction of

the works that the internal Company is

executing Also in 2009, the Company

established construction materials business

center In 2011, the Company put the second

concrete factory in Long Nguyen - Ben Cat

into operation

reached top 10 effective leaders in trading among 50 most excellent leaders in 2014

AWARDS THE COMPANY HAS ACHIEVED

Ceremony to honor outstanding leaders

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LINES OF BUSINESS

LINES AND LOCATIONS

OF BUSINESS

 Construction of land road works;

 Sewerage, waste water treatment;

 Installation of machinery and industrial equipment;

 Rental of construction machinery and equipment;

 Construction of types of houses;

 Wholesale of machinery, equipment and spare parts of mining, construction;

 Wholesale of machinery, electrical equipment and materials (generators, electric motors, wires and other equipment used in the circuit);

 Wholesale of materials and other installed equipment in construction;

 Wholesale of iron and steel;

 Trading real estate, land use rights belonged to the owners, users or rental of real estate business;

 Consulting, brokerage, auction of real estate and land use rights;

 Installation of systems of water supply, drainage, heating and air conditioning;

 Completing construction works;

 Production of concrete and products from cement and plaster;

 Construction of public works;

 Construction of irrigation works;

 Quarrying of stone, sand, gravel, soil and clay (only allowed exploiting when gaining permits from the competent authorities) Stone processing;

 Manufacture of bricks and tiles (according to the Decision No 15/2000 / QD-BXD dated July 24, 2000 by the Ministry of Construction);

 Warehousing;

 Investment in traffic roads, waterway and road bridges and ferries;

Construction and Installation

Concrete culverts

Construction stones

Land road works

C32 | ANNUAL REPORT 2014 11

LOCATIONS OF BUSINESS

MANAGEMENT APPARATUS

The company operates in the model of joint-stock company with the following structure:

 Annual general meeting: is the highest authority of the Company

 Board of Management: directs and supervises activities of the Company

 Supervisory Board monitors activities of the Board of Management and the Board of Directors

 The Board of Directors includes General Director, Deputy General Director and Chief Accountant to execute activities of the Company

 Functional departments such as Sales, Finance, HR, and Investment perform advisory and expertise management

 Mills manufacturing construction, engineering and concrete stones perform tasks of business and production under sectors

The Company's Head Office is located at 45A Nguyen Van

Tiet, Lai Thieu, Thuan An, Binh Duong

Main location of business of the Company is Binh

Duong Province

ORGANIZATION AND

MANAGEMENT APPARATUS

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ORGANIZATIONAL CHART

SALES DEPARTMENT

DEPARTMENT OF HUMAN RESOURCES DEPARTMENT OF FINANCE INVESTMENT DEPARTMENT

279 CONSTRUCTION MATERIALS TRADING CENTER

REAL ESTATE TRADING FLOOR CONSTRUCTION STONE FACTORY

ENGINEERING AND CONCRETE FACTORY

CONSTRUCTION AND INSTALLATION FACTORY

CONCRETE MANUFACTURING FACTORY

ANNUAL GENERAL MEETING

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ABOUT THE EXECUTIVE COMMITTEE OF THE COMPNANY

THE BOARD OF MANAGEMENT

1 Mr VO VAN LANH

Chairman

 Born in 1963

Qualifications

 Bachelor of Basic construction Finance

 Engineer of Road Bridge Construction

 Currently: Chairman of the Board of Management and General Director

of Construction Investment Corporation 3-2

Number of shares held : 112.200

2 Mr HUYNH HUU HUNG

Member of the BOM

 September, 2004 - March, 2011: Worked in Construction Corporation

No 1 - Building Design Consultancy Corporation CIDECO - Ministry of Construction Position: Deputy Chief of Project Management Consulting Department

 April, 2011 until now: Worked in Binh Duong Producing and Trading Goods Corporation Position: Deputy Director of Department of Investment - Project Management

 Currently: Member of the Board of Management - Construction Investment Corporation 3-2

Number of shares held : 0

“Any success of an organization must also be accompanied

by a core value With C32, twenty-one years is not a long

way, but it marks steady steps of the corporate in which

the general consensus of the entire staff and a dynamic

creative leadership team are the most lofty and beautiful

value.”

Number of shares held : 0

4 Mr NGUYEN THE PHI

Member of the BOM

 Born in 1974

Qualifications

 Bachelor of Business Administration

 Bachelor of Administrative Management

Work experience

 1999 – 10/2001: Employee of Tripple A Co., Ltd

 11/2002 – 3/2007: Employee of Administration - Management, Construction Investment Corporation 3-2

 3/2007 – 8/2009: Sales employee of Construction Investment Corporation 3-2

 8/2009 – 7/2014: Chief of 278 Construction Materials Center

 7/2014 - now: Deputy Chief of Sales Department, Construction Investment Corporation 3-2

 Currently: Member of the Board of Management - Construction Investment Corporation 3-2

Number of shares held : 25.500

5 Mr PHAN THANH DUC

Member of the BOM

 2004 - 2006: Worked in Garment Exports Factory under Binh Duong Producing and Trading Goods Corporation Position: Chief Accountant

 Currently: Member of the Board of Management - Construction Investment Corporation 3-2

Number of shares held: 0

C32 | ANNUAL REPORT 2014 15

SUPERVISORY BOARD

1 Mr VAN HOANG TUNG

Chief of the Supervisory Board

 5/2014 until now: Head of Administration, Engineering and Conrete Factory under Construction Investment Corporation 3-2

 Currently: Head of Administration, Engineering and Conrete Factory under Construction Investment Corporation 3-2

Number of shares held: 2000

 2006-2007: Worked in Binh Duong Industry and Services JSC

 2008 until now: Worked in Ascendas – Protrade Co., Ltd Position: Chief Accountant

 Currently: Member of Supervisory Board - Construction Investment Corporation 3-2

Number of shares held: 0 cổ phần

3 Mr NGUYEN LUONG TAM

General Director See details in the Board of Management

2 Mr TRAN VAN BINH

Deputy General Director

 Born in 1965

Qualifications

 Bachelor of Economics

Work experience

 1987 - 1993: Accountant of Dong Nai Vegetable Oil Corporation

 1994 – 1998:Chief Accountant of Construction Materials Mining & Manufacturing Factory under Construction Investment Corporation 3-

Number of shares held: 2.500 cổ phần

3 Mr NGUYEN XUAN HIEU

Chief Accountant  Born in 1982

C32 | ANNUAL REPORT 2014 17

OBJECTIVES AND STRATEGIES

MEDIUM & LONG – TERM DEVELOPMENT STRATEGIES

Brand development strategy Production and business strategies

- To develop and expand markets, increase

market share of the products confirmed brand

of the Company To help customers peace of

mind about the quality of the products

- To promote company image through mass

media such as websites of the Company and

reputable websites concerned about by many

investors; to diversify contents and

information updated regularly, accurately and

timely

- To participate in social activities such as

regularly organizing participations in youth

movements, cultural - art exchanges,

participations in sports activities with

provincial agencies and funding charitable

programs, Through these activities, it will

help the Company better known in the system

of agencies, businesses as well as people and

especially customers, who are interested in

Business:

- Based on the platform and inherent strengths of the business Ensure the sufficient and timely supply according to the needs of the market The Company will strive to maintain steady sustainable growth over the years, increase market size and market share in Southeastern provinces, especially three provinces such as Binh Duong, Ho Chi Minh City and Dong Nai Striving to increase the percentage of market sales outside Binh Duong over 50%

- Make good sales policies, customer care, information gathering and listening to feedbacks from customers Incensive and discount policies under turnover for each type of customers in order to strengthen long-term and traditional customers, bulk product consumers

DEVELOPMENT ORIENTATIONS

 To increase market size and market share in Southeastern provinces, especially three provinces such as Binh Duong, Ho Chi Minh City and Dong Nai Striving to increase the percentage of market sales outside Binh Duong over 50%

 Striving to 2016 to complete the search for new alternative mining sources for Tan Dong Hiep quarries

 Capable and building transportation and civil works projects level II with the scale over 100 billion VND

 To grow average labor productivity with the rate of10% / year through streamlined staffing apparatus, management capacity improvement, application and integration of management information system into production and business activities

 To research and develop new products in accordance with the capacity and the available resources of the Company

The average annual

growth rate of turnover

is 8% / year

profits/average turnover

is 19%/year

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the products and services of the Company - To increase in investment and building

infrastructures; to apply science and technology, advanced modern technology;

to increase production capacity, business capacity, development and expansion of joint venture, association with domestic and foreign partners to develop a strong business company in the manufacture and trading of construction materials and construction and installation

- To research and develop new products in accordance with the capacity and the available resources of the Company

Production

- To constantly improve the product quality, service quality policies to attract and retain customers To search for new mines to replace Tan Dong Hiep Quarry To be capable and build transportation and civil works projects level II with the scale of 100 billion VND

- To research technical solutions and reduce costs of unnecessary management; to streamline the apparatus, to save lost materials, rate of damaged products to offer reasonable prices for products in order to satisfy customers' demand

HR strategies

- To develop and implement programs to

upgrade the company's HR to response the

demand to raise the quality and productivity

of the Company through the development and

improvement of management system and

capacity assessment, result evaluation of

tasks under the BSC / KPI

- To implement the planning of key personnel,

inherit personnel and potential personnel to

facilitate for the implementation of better

management for these objects Developments

orientations of workforce are to ensure the

staff with sufficient capacity to meet job

requirements

- Regular inspection and review as well as

policies for effective training and attracting

talents accordingly Professionalizing the

recruitment and training of human resources

in order to create competitiveness and

stabilize resources to stabilize the production

and business

- To improve policies on payment, benefits and

working environment in order to attract

workers with high caliber professionals to

meet the requirements to expand the

production

- To develop the system of indicator

measurement to promote evaluation,

improvement of labor productivity

- To improve and promote the initiative,

innovation spreading to all employees

- To research and outline corporate culture

consistently with the Company as oriented

productivity and quality

C32 | ANNUAL REPORT 2014 19

OBJECTIVES FOR ENVIRONMENT, SOCIETY AND COMMUNITY

Awarding scholarships for poor studious

students

- Along with boosting production and business

development and affirming prestige and

brand of CIC 3-2 in the marketplace, in the

years, Construction Investment Corporation

3-2 has focused on charity work, social

welfares and especially caring for preschool

future generations of the country

- On Aug 26, 2014, Construction Investment

Corporation 3-2 participated in Fund for

Children Sponsor in Binh Duong and along

with philanthropists organized the show:

"XIIIth Mid-Autumn Festival and Awarding

scholarships for poor students and children in

difficult circumstances in Binh Duong

Province in 2014 " On this occasion, the

Company awarded 78 scholarships to

students with difficult circumstances and

three-year-good grade with a total value of

168,000,000 VND to commend and

encourage them to continue to complete

their education and encourage their

studiousity before new school year

Repaying favors, social issue and charity

- On October 3, 2014, the Board of Directors of Construction Investment Corporation 3-2 cooperated with the People's Committee in Hoa Loi Ward, Ben Cat Town to give the House of affestion to Mr Pham Van Dia, son of Martyr Van Thi Huong, residing in Phu Nghi Neighborhood, Hoa Loi Ward, Ben Cat Town, Binh Duong Province

Awarding scholarships, gifts for

disadvantaged students Supporting charitable organizations in and outside Binh Duong Province

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- Legal risks related to changes in policy, legal

documents related to operations of the

Construction and Materials in general and of the

Company in particular The changes in policy, new

regulations of the State of Vietnam related to

operations of the Construction and Materials could

affect the Company

- Business operations of the Company are governed

by Corporate Law, Securities Law and relevant

guidelines Changed contents, amendments or

supplements related to this Act shall affect the

operations of the Company

- To minimize the risks due to policy changes

related to business operations, the Company has

studied and trained the staff to promptly grasp

legal knowledge

- With the trend of increasingly powerful globalization, current business operations of enterprises are subject to direct impact from the growth of domestic and international economy The economic growth rate impacts to product consumption and business outcomes of the enterprises

- When the economy has strong and stable growth,

it will lead to demand for social, economic and engineering infrastructure development Therefore, maintaining the economic growth in Vietnam is a strong impact on real estate business, investments in industrial and civil works However, policies that restrict public investments

by the Government have made the descreased market shrinking, inventories increased that affect business operations of the Company in the field of construction, construction materials real estate in the early of 2014

- In such macroeconomic environment, it requires businesses, including the Company to adapt actively and flexibly The Company always pays to closely monitor the economic situations to make adjustments in strategy, business plans accordingly

RISKS

C32 | ANNUAL REPORT 2014 21

Specific risks

Interest-rate risks Risks of input prices

- Is the risk that fair values or future cash flows of

a financial instrument will fluctuate because of

changes in market interest rates

- Interest-rate risk of the Company is mainly

related to loans

- The Company manages interest-rate risk by

analyzing market conditions to obtain the most

favorable interest rates and still be within the

limits of its risk management

- Construction materials are an important factor in the structure of production costs, so fluctuations

on raw material prices are a risk worthing being concerned about of the Company

- The prices of domestic labor, construction materials constantly fluctuating in recent years have caused many difficulties for the cost estimation of production, increased costs of goods sold, reduced competitiveness and profitability of the Company With the flexibility and experiences

of the Executive Board, the Company has limited this risk and took appropriate countermeasures such as proactive planning for production, reasonable use and storage of raw materials, intensifying the search for other supply sources of raw materials and reserved goods, expanding and searching for alternative sources of supply to ensure stable inputs regarding quantity and prices in order to minimize risks that may occur from pressure on price increase of suppliers, ensure the stability for business and production operations of the enterprise as well as improving supply ability

Competitive risks Credit risks

- In the context of market economy, the

competition for market share, market will take

place fiercely because many rivals strengthen

marketing, market access in many different

segments, resulting in market share will

increasingly narrow However, the Company has a

good competitive position in Binh Duong market

and neighboring provinces, the strengths of the

Company are to supply construction stones,

centrifugal concrete sewers and construction

bidding of industrial and civil works

- After more than 21 years, the Company has

grown up and gained remarkable achievements

such as National Quality Silver Award, the Award

for Vietnamese brand integrating WTO, Certificate

for CIC competive brand Therefore, the

- Credit risk is the risk that one Party of the contract does not have the ability to perform its obligations resulting in financial loss to the Company The Company has credit risks from operating activities (primarily due to receivables from customers) and financial activities (bank deposits, loans and other financial instruments)

- - The Company minimizes credit risks by only dealing with units capable of finance and the accounting staff regularly monitoring receivables must urge the withdrawal On this basis and receivables of the Company related to many different customers, so credit risks do not focus

on a certain customer Most of deposits are deposited at the Company's major reputable banks in Vietnam The Company finds the

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Company can be fully confident in the ability to

compete against rivals in and outside the

Works of DT 744 Street

implemented by CONSTRUCTION

INVESTMENT CORPORATION 3-2

“WITH SPECIFIC LINES OF BUSINESS OF

CIC 3-2, THE MANAGEMENT OF RISKS IS

ALWAYS CONCERNED ABOUT AND PUT

TO THE TOP WITH THE GOAL TO

SUSTAINABLE DEVELOPMENT OF THE

COMPANY, ADD BENEFITS FOR

SHAREHOLDERS AND SAFETY FOR

EMPLOYEES”

C32 | ANNUAL REPORT 2014 23

The situation of production and business operations

Financial situation

The situation of project investment

Organization and Human Resources

Shareholder structure and equity

24 ANNUAL REPORT 2014 | C32

GENERAL BUSINESS & OPERATION RESULTS

Production and business operations of the Company in

2014 completed objectives set out such as turnover and

profits exceeding and growing compared to 2013, which

is a positive result compared with businesses in industry

when the business environment remains difficult

Specifically, happenings in business results each month

showed difficulties such as tightening cargo load to be

very large, while turnover from May, 2014 sharply

declined in most areas However, with the strengthening

of monitoring and management, the Company has

gradually adjusted operations such as promoting

investment in means of transportation to ensure sales

activities, trying to remove obstacles at works to

accelerate the construction progress Whereby, business

results have gradually improved and ensured norms set

C32 | ANNUAL REPORT 2014 25

Construction and Installation

Although bidding situation remains difficult, the value of bid winning reached the plan set out with the total value of 134.3 billion VND During the year, the Company focused on the construction of key projects, including 747A Street, Sunflower School, Phuoc Vinh School, Dau Tieng Culture House The situation

in progress at the works still remained difficult due to clearance problems, design adjustments affecting the construction progress However, the clinging

to resolve problems has helped to ensure proposed production plans and turnover, specifically, outputs reached 129% with 141, 847 million VND compared to the plan, turnover was 131,842 million VND, reaching 112% of

target

Construction stones

During the year, performance of deep exploitation from cos -80m to cos-100m and the integration of mining and opening new routes for transportation and storage mining made the exploitation relatively difficult However, these are difficulties that the Board of Directors anticipated, so mining and processing outputs during the period still maintained the plan set out, specifically, outputs were 1,132,496 m3, reaching 103% compared to the plan and increasing by 6

% compared to the same period in 2013 Regarding consumption, despite affected by the tightening load condition on road and waterway as well as customers tending to use stones in neighboring areas with lower quality and prices, but with the quality maintained when deep exploitation, the Company maintains traditional customers, turnover in year was 199, 157 million VND, reaching 102% of target

Concrete culverts

Market demand in year declined when the number of new construction works was limited as well as transport problems affected the development of the market However, the Company maintains a high volume of orders while enhancing the layout for production in two concrete factoriesm so turnover in year reached 58,925 million VND, reaching 108% of the plan set out and grew 36% compared to the same period in 2013 On the other hand, the cost of sales increased by freight load reduction, production operation and norm control was still much difficult

Other areas

Including business in fuel, real estate, concrete bricks, construction materials with high sales growth over the same period Turnover was 63, 737 million VND, reaching 95% of the plan and increasing by 24% over the same period in

2013 However, the effect from some areas such as concrete bricks, onstruction materials business was not high due to fierce competition while production costs have not been competitive compared with the market, so expanding and

looking for new customers are not satisfactory

Unit: VND The financial situation in year of the Company was stable; funds to serve business operation were guaranteed However, the balance of incomes and expenditures in some periods was still difficult due to increased receivables when the payment for works volume was very slow Specifically, receivable debts on Dec 31, 2014 were 135,857 million VND, increasing by 59% compared with the first period In particular, receivable debts of the construction sector accounted for 85% due to insufficient public capital allocation to pay the finished volume of works Total assets and capital in 2014 increased by 13% in values compared with 2013, up to 373,

366, 442, 081 VND The company's assets increased primarily from short-term financial investments (accounting for 16% / total assets), from 34 billion VND in 2013 up to 60 billion VND in 2014 This financial investment was funded from the equity

FINANCIAL RATIOS

1 Indicators of liquidity

2 Indicators of capital structure

3 Indicators of operational capacity

4 Indicators of profitability

Profits after tax / Net revenues coefficient % 16 15,8

Profits after tax /Total assets coefficient % 20 19

Profits from business operations / Net

FINANCIAL SITUATION

The financial indicators showed that the Company had a healthy financial situation, including good solvency, low debt ratios Profitability indicators were guaranteed despite lower than

2013 due to turnover and profits growing slowly compared with the same period

C32 | ANNUAL REPORT 2014 27

“Acknowledgement quoted: 2014 was a memorable year for Construction Investment Corporation 3-2 when finished excellently all plans set out Such achievement was thanks to not only advantages in terms of market conditions, selling prices, stable operations of machinery but also enomous contribution of the Board of Manegement, the Board of Directors of the Company which was active in the administration along with the aassistance

of units, boards and agencies concerned with understanding, sharing of shareholders and tireless effort of all employees of the Company ”

The opening value in 2014 was 8,779 million

VND, reaching 20% of the plan In particular,

focusing on investments in means of

transportation was to meet the requirements of

carriage of goods of the Company The

construction portfolio of kindergartens and

markets in An Phu residential area, the Company

is looking for partners to transfer the

implementation or leasing; particularly, the

portfolio of new quarry investment has no results

although in year, the Company also sought to

invest in new quarry in Binh Duong, Dong Nai and

Ba Ria - Vung Tau, but finding qualified and

well-positioned quarry resources is very difficult

SITUATION OF HUMAN RESOURCES

ORGANIZATION AND HUMAN RESOURCES

INVESTMENT IN MEANS OF TRANSPORTATION

“ACTIVITIES SUCH AS EMULATION OF

LEARNING, UNION, ENTERTAINMENT

CONCERNED AND ORGANIZED TO

IMPROVE THE SOLIDARITY, STUDIOUS

SPIRIT OF PLENARY STAFF OF THE

COMPANY ”

28 ANNUAL REPORT 2014 | C32

Strengths

 Labour structure by level in the Company is

gradually rationalized between professional

division and direct production division (labor

from vocational level and above accounts for

34.5% of total employment, vocational and

general employees account for 65.5%) The

team of engineers, technicians, skilled workers

meets the needs of number, qualifications, skills

and has good attitudes and motivation to have a

strong attachment to the Company

 The average employee age is young (average

age of the whole Company is 34.8, particularly,

labor under 40 is 334 employees, accounting for

80% of total employment) which is the age in

the stage that promotes the highest potential to

contribute intellectual resources and strength for

the business and production process of the

Company

 The business development strategy with the

advice of a professional unit will assist in

improving vision and strategic thinking for

managerial staff Besides, the application of the

system of result evaluation according to KPI and

individuals associated with KPI and strategic

goals of the Company facilitate to orient human

resources to focus on implementing the

objectives of the Company

 Policy mechanism of the Company about labor is

always given serious attention, timely adjusted

to suit actual conditions of the Company and

employees The Company always seriously

implements regimes and policies prescribed by

the State to ensure rights for labor, to help

motivate the employees peace in mind to work

hard

 The situation of employment in the construction

sector is significantly improved and has a

significant development in the procurement of

works, creates jobs and improves incomes for

labor

Weaknesses

 Labor fluctuations were relatively large, especially in the early months of year in Mechanical Plant, indirect departments and direct production departments such as engineering, maintenance and concrete, which require recruitment and replacement; besides, recruited workforce to replace does not adapt to the working environment, so it is very difficult for recruitment to meet the requirements of production and business For indirect departments changing much in concrete engineering department and contract monitoring, storekeepers are experienced and have a strong attachment to the company, so it causes more or less difficulties in assignment and allocation of alternate labor to ensure operations in the Plant

 Irregular employment situation in Mechanical Plant, Stone Plant is mainly in tile manufacturing department, so can not retain employees who have been trained, experienced, newly recruited workers do not meet demand for skills and experiences

 Professional skill, sense of observing the process

of workers in some manufacturing parts are still limited; management skills of managers at the level of team, group and workshop have not been uniformly trained, so the labor productivity

is not high

C32 | ANNUAL REPORT 2014 29

STATISTICS OF HUMAN RESOURCES (Up to Dec 31, 2014)

According to the nature of contract

CHANGES IN BOARD OF DIRECTOR

In 2014, the Company had changes in personnel in Board of Director as follows:

 Dismissal of Deputy General Director for Mr Nguyen Thanh Xuan on May 7, 2015

 Appointment of Deputy General Director for Mr Tran Van Binh on May 7, 2015

 Appointment of Chief Accountant for Mr Nguyen Xuan Hieu on May 7, 2015

LABOR POLICY

“Taking care of employees' living conditions such as visiting and timely supporting cases of illness contribute to motivate the mental for employees, represent the interest of the company's leaders to employees' lives In 2014, the Company has supported 281,800, 000 VND to employees and their families”

Policies for salaries, bonuses and

allowances

In addition to indicators on business

outcomes, in 2014, the Company also

ensured indicators on labor incomes; the

average incomes of the whole 2014 were

estimated at 7,700,000 VND / person,

reaching 107% compared to the plan set out

The average incomes of workers over the

years are as follows (VND / month / person):

30 ANNUAL REPORT 2014 | C32

 The Company pays and awards under performance and labor outcomes of the staff, continues to maintain payment for indirect part, units and build regulations on payment to departments for motivating employees, saving costs and improving the productivity and work efficiency

 Per capita income reached 107% compared to the plan set out; the remuneration was implemented fully and promptly to ensure the lives of workers; however, for tile manufacturing department, salary is still low because there is no work

 In the course of work, employees are fully engaged in modes of social insurance, health insurance and unemployment insurance Taking care of employees' lives such as visiting and timely supporting cases of illness contribute to motivate employees' mental Besides, the Company also ensures the welfares such as periodic health check-up, shift meals, annual vacation, visiting and buying personal insurance for employees,

 Implementing the Decree No 103/2014 / ND-CP dated Nov 11, 2014 by the Prime Minister adjusting the basic salary scales adopted by the Company in 2015, conversing new basic salary for all employees and adjusting labor unit cost under the new basic salary scale

Working mode

 The Company always ensures regular employment for employees; cases waiting for work due to few orders are arranged in different scope of work

 The Company always adheres to the provisions of the Labor Code Periods for vacation, holidays, sickness, maternity comply with the provisions of the Labor Code The Company always creates friendly and professional working environment, encourages the employees

to fulfill the creativility to work and develop career and to be advanced at work

 The management of labor contracts is monitored and signed, renewed and terminated relatively promptly and in accordance with the provisions of Labor Code

 The Company focused on short-term training courses to facilitate specific professional skills for the employees to apply onto work immediately The training courses of Vietnamese - Japanese Cooperation Center for Human Resources have been sent many turns of employees for attendance as equipped much knowledge and practical skills to help employees apply for work and life

 Mining and construction operations of the Company have high unsafe risks; the Company regularly maintains annual safety training courses for production employees to protect them to avoid unsafe risks

C32 | ANNUAL REPORT 2014 31

 The total number of issued shares: 11,200,000

 The total number of shares outstanding:

11,200,000

 Treasury shares: 0

 Par value: 10,000 VND

 Transactions on treasury shares :

During the year, the Company had no operations on purchase and sale of treasury shares

 Situations to change in invested capital by owners : None

 Other securities : NoneSTATISTICS OF SHAREHOLDERS

No Types of shareholders

Number of shares owned

Total

Ownership percentage of shares/Chartered capital

Free to transfer

Restricted to transfer

I State shareholders 5.712.000 5.712.000 51%

II Internal shareholders 142.200 142.000 1,268% III Domestic

MAJOR SHAREHOLDERS (more than 5% chartered capital)

No Names of shareholders

ID number / Passport number / Business Registration

No

Number of shares (shares) Value (VND) Rate (%) / Chartered

32 ANNUAL REPORT 2014 | C32

Assessment on production and business results

Financial situation

Development plan in 2015

Explanations of the Board of Directors with audit opinions

C32 | ANNUAL REPORT 2014 33

1 Advantages 2 Disadvantages

 The business environment in 2014 had many

positive changes such as economic growth recovery,

areas with industrial manufacture and construction

industry having prominent changes with the growth

of 7.14%, inflation only increasing by 1, 84%, the

lowest in 13 years while prices of raw materials such

as oil prices falling to 5,950 VND / liter, domestic

steel prices falling 750-950 VND / kg compared with

the end of 2013 contributed to reduce costs, lower

product costs, created favorable conditions for sales

operations

 In 2014, the Board of Directors of the Company

tried to extend timely mining licenses in Tan Dong

Hiep Quarry as well as complete new transport route

from East to West which ensured mining and

processing outputs of construction stones and

recovered the remaining reserves of the mines

Besides, the Company actively sought for works

allocated capital to participate in bidding such as

DT747A Street, expand the field of construction and

installation when involved in the road maintenance

and repair sector at the first time These are

important factors that help the Company stabilize

business and production operations and ensure the

targets set out in year

 Regarding the management, the Company continued

to strengthen and replace personnel at the Company

that has not met the requirements under the

Regulations, consolidate management personnel in

factories; completed business strategy development

for the period 2014-2018; overall, the strategy set

out direction, objectives and basic suitable measures

 In 2014, although the areas of real estate, construction and construction materials showed signs of recovery and growth in some segments, basically, the market was still difficult New public investment projects were limited by only implementing truly urgent projects; untimely funds allocation and budget balance to pay for basic construction projects caused difficulties for contractors, including the Company when paying in advance for the construction but the payment of the amount of works was very slow, increasing receivable accounts

 Production and business activities in year of the Company were affected by the fierce competition in most areas, particularly price competition Procurement is increasingly difficult due to many complex required profiles while the capacity of the Company is still limited The market development has not had many positive results, especially in remote markets such as Long An, Tay Ninh, Ho Chi Minh City as transportation costs rise, overload fine rate increases by 3-4 times compared to the begin

of year due to the increased control of load freight

of vehicles on road under the Resolution No 29 / NQ-CP dated May 02, 2014 by the Prime Minister

At the Stone Plant, mining operations is increasingly deep, reducing productivity of machinery, narrowing down mining areas, means

of transportation moved away by sub-contractors had higher prices and moving more continually, exploitation costs increased, the reserve of stones

on pits was hard by complex topographical

ASSESSMENT ON PRODUCTION AND

34 ANNUAL REPORT 2014 | C32

for the Company to continue to grow as well as

strengthen ability of the managerial staff;

strengthened the inspection and surveillance of

operations at the units, in which focused on the

control of production norms; implemented and

applied information technology in the management

such as Online Office, FAST and so on; initially,

deployed and applied evaluation of outcomes under

BSC-KPI

conditions At the Construction Plant, the construction progress at most works was slowly than planned because of premises, design adjustment as well as untimely materials and subcontractors

BUSINESS RESULTS IN 2014

Unit: VND

Turnover of goods sale and service supply 427.551.359.291 453.767.633.639

Net turnover of goods sale and service supply 427.534.725.481 453.660.817.396

Gross profit from goods sale and service supply 113.878.543.797 110.093.566.796

Turnover from financial operations 3.135.310.106 4.472.109.610

In which: interest expenses 3.119.669.332 590.072.664

Corporation management costs 13.654.600.824 13.040.967.935

Net profits from business operations 95.165.501.943 92.118.105.380

Total accounting profits before tax 89.146.541.832 92.545.419.214

Current corporation income tax expenses 22.528.719.883 20.741.343.530

Deferred corporation income tax expenses - -

Profits after corporate income tax 66.617.821.949 71.804.075.684

C32 | ANNUAL REPORT 2014 35

Turnover:

In 2014, although the business environment did not have

any advantages, thanks to the close execution and steering

of the leaders in centralizing the implementation of

objectives of the plan set out, consumption outputs and

turnover of most business areas were completed and

exceeded Specifically, turnover from business operations

was 453,767 million VND, reaching 104% of the plan set

out, increasing by 6% compared to the same period in 2013

(turnover in the same period was 427, 535 million VND)

There are results thanks to:

 During the year, the Company's leaders tried to remove

constraints to complete the renewal of mining licenses in

Tan Dong Hiep Quarry at the beginning of year to

ensure for the mining and processing operations not to

be interrupted At the same time, the Company pushed

deep mining activities to ensure processing and

consumption outputs, thereby ensuring targets for

turnover and profits at this field

 In the construction and installation sector, the Company

accelerated the construction of key projects and started

the construction of some new projects such as DT747A

Street, Muoi Muon Street to increase the productivity

and ensure turnover as planned For concrete curverts,

with abundant orders from 2014 and the strengthening

of productive activities such as layouting the production

with two shifts in concrete workshops helped turnover

increase by 43,286 million VND in 2013 to 58,925 million

VND in 2014, representing an increase of 36% over the

same period

Profits:

 Profits from operational activities in 2014 were 92,118

million VND, reaching 121% of the plan set out, this was

the result of the Company to boost the consumption of

1x2 and 0x4 stones with high added values while

enhancing supervisory measures, saving production

norms

However, compared to the same period in 2013, the profits from operation activities in 2014 decreased by 3% due to costs of goods sold and selling expenses increased, respectively, 10% and 74% compared with the same period Specifically, for the costs of capital, in year, the Company did not recognize turnover from the compensation of projects as in 2013, it was 10,850 million VND (this was the increased turnover but did not affect the costs), and the costs of capital of stone products in 2014 increased by 4% compared to 2013 due to the costs of mining authorization, increased resource tax, deep mining activities also increased the cost of mining

“In the context of the economic recovery remains sluggish, CIC 3-2 proved right development plan with

Turnover rose by 6% and profits after tax increased by 8% compared

to the same period in 2013”

36 ANNUAL REPORT 2014 | C32

 Profits after tax was 71,804 million, reaching 120% of the plan; the rate of return on sales was 16% Although, profits from business operations decreased over the same period, profits from financial activities and other activities also highly increased over the same period in 2013, respectively 4,472 million VND and 427 million VND compared with the same period in 2013, respectively, 16 million VND and -6,019 million VND At the same time, the corporate income tax rate also descreased by 3% from 25% in 2013 to 22% in 2014, so profits after tax in year increased by 8% compared to the same period in 2013 (after-tax profits at the same period were 66,618 million VND) In addition to the indicators on guaranteed business results, in 2014, the Company enhanced the average income of employees from 7,500,000 VND / person / month in 2013 to 7,700,000 VND / person / month; ensured budget plan in 2014 to be 65,264 million VND, reaching 139% of the plan set out

The situation of assets

Indicators

2013 2014 %

increase

or decrease (VND) (VND)

decrease

Short term debts 110,128,827,641 113.116.213.859 2,7%

Total 110,128,827,641 113.116.213.859 2,7%

 The financial situation in year of the Company was stable; the capital for production and business operations was guaranteed The payment for customers, subcontractors, salary and regime for employees was fully implemented However, the balance of incomes and expenditures in some times was difficult due to rising receivable debts when the payment for the volume of works was very slow The main reason was due to the insufficient allocation of public capital to pay the complete amount in some works such as Phuoc Vinh School, Thanh Tan School, Sunflower School, Tan Phuoc Khanh resettlement area For liabilities, in year, the Company paid long-term debts, so the criteria on payment and debt ratio were continuously improved at a good level Regarding business efficiency, although ROA, ROE decreased compared to 2013 due to the slow growth of turnover and profits over the same period; however, if removing price premiums for works in 2013, the return ratio above maintained and increased over the same period

 Tax settlement in 2014 and audit in 2014 of the Company reflected truely and fairly the financial position, suitable with accounting standards and other legal relevant requirements

75%

25%

Tài sản ngắn hạn Tài sản dài hạn

The proportion of total assets

The structure of short-term assets

Current assets Long-term assets

Cash and cash equivalents Inventory

Short-term receivables Other assets

C32 | ANNUAL REPORT 2014 37

1 Objectives 3 Plans for output in 2015

 To increase market size and market share in

Southeastern province, especially Binh Duong

and Ho Chi Minh City; to strive to increase

the proportion of turnover outside the market

in Binh Duong over 55% of total turnover

 To be capable and to build transportation and

civil projects with the scale over 70 billion

VND; to complete the search for new sources

of quarries to promptly replace Tan Dong

Hiep quarry

 To raise collection for shareholders through

the stabilization of the level of annual

dividend payments; to raise collection for

employees through the increase in average

labor productivity

 To focus on exploitation with the maximum capacity of machinery and equipment in the factories, the whole production system; to improve techniques to enhance the performance of production lines and equipment

 To strengthen the inspection and supervision of raw materials rate; to regularly maintain and upgrade machinery and equipment to reduce the maximum consumable costs of materials and operational costs of machinery and equipment; to lower costs of products, to ensure safe and constant production; to ensure 100% products to meet quality and schedule as committed

 The value of production and business outputs in 2015 was 510,465 million VND In particular, construction stones, construction and installation, concrete curverts continued

to be three main areas of the Company

No Products Unit Implemented in 2014 Planned in 2015

Manufacture

1 Construction stones m3 1.132.496 1.160.000

2 Construction and installation

Million

3 Types of concrete

4 Back-up wall briquette 969.550 1.862.000

5 Terrazzo tile briquette 154.334 151.658

Trading

6 Trading construction

7 Trading fuels litre 1.013.664 1.175.000

2 Targets for business and production in

2015 are as follows:

 Turnover from sales of goods and service

supply was 516,000 million VND, increasing

by 14% compared to 2014

 Profits after tax were 76,000 million VND,

increasing by 6% compared to 2014

 Basic earnings per share were 6,786 VND per

share, increasing by 6% compared to 2014

 Dividend payout ratio was 24% of chartered

PLAN OF TURNOVER

PLAN FOR PROFITS

-Cống nhỏ (fi 300-600)

Cống lớn (fi 800-

2000, cống hộp)

Công trình dân dụng

Công trình giao thông

Đá 1x2 Đá 0x4 Đá khác

Năm 2014 Năm 2015

THE STRUCTURE OF OUTPUT VALUES OF MAIN PRODUCTS

The improvement of the organizational

structure, policies and management

Explanations of the Board of Directors with audit opinions

During the year, the Company had no improvements

related to operation and corporate governance

restructuring

The audit report did not contain any item needing explanations from the the Board of Directors

4 The structure of product outputs:

Regarding the structure of products, in

2015, the company will increase the

outputs of products with high added

value, consisting of the construction of

transportation projects, road

maintenance - repairing works, types of

big concrete culvert from fi800 to fi2000

and boxed culverts, 1x2 and 0x4 stone

products

3 Plans for turnover from

production and business operations

Planned turnover from business and

production operations in 2015 will be

516,000 million VND, increasing by 16%

compared to the implemented estimation

in 2014, in which, recording the turnover

growth in most sectors, especially

construction and installation increased

by 38%, concrete culverts increased by

20% On the structure of turnover,

construction stones, construction and

installation, concrete culverts continue to

be three main products of the Company,

in which, construction stones account for

39%; construction and installation make

up 35% and concrete culvert account for

13% and other sectors account for 15%

Plans for turnover growth from business

and production activities in 2015 are in

accordance with strategic objectives set

out, in which two fields of construction

and concrete structure are responsible

for as the main lever of the growth for

C32 | ANNUAL REPORT 2014 39

Assessments of the Board of Management

Assessments of the Board of Management about the Board of Directors

Plans and orientations of the Board of Management