bia ban cao bach V12 - MASECOmaseco.com.vn/image_manager/1/File/bancaobachENG.pdf · Phu Nhuan...

MASECO

2009

78A Nguyen Van Troi St. - Ward 8 - Phu Nhuan Dist. - Hochiminh City

Tel : 08.38444861 - Fax : 08.38443264 Website : www.maseco.com.vn

PROSPECTUSPROSPECTUS

Phu Nhuan Service Joint Stock Company Prospectus

HOCHIMINH CITY STOCK EXCHANGE ISSUES CERTIFICATE OF SHARE

OFFERING, WHICH SOLELY MEANS THAT THE OFFERING HAS BEEN EXECUTED

IN COMPLIANCE WITH REGULATIONS OF RELEVANT LAW AND HAS NO

IMPLICATION TO THE GUARANTY OF THE SHARE VALUE. ALL DECLARATIONS

CONTRARY TO THIS SHALL BE ILLEGAL.

PROSPECTUS

PHU NHUAN SERVICE JOINT STOCK COMPANY

(Business License No. 4103000625 dated 2 October 2001 and the 9th updated Business

License dated 14 November 2008 issued by the Department of Planning and Investment of

HCMC)

SHARE OFFERING TO THE PUBLIC

(Registration for offering No 504/UBCK-GCN issued by President of State Securities

Commission dated 27January 2010)

This prospectus and supplementary documents are provided at:

1. Phu Nhuan Service Joint Stock Company

Head Office: 78A Nguyen Van Troi, Ward 8, Phu Nhuan District, HCMC

2. Empower Securities Joint Stock Company

* Head Office: Floor 1&2 Chuong Duong ACIC Building

225 Ben Chuong Duong, District 1, HCMC

* Hanoi Branch: Floor 3, 249 Tran Dang Ninh, Cau Giay District, Hanoi

Responsible person for News Release:

Mr. Nguyen Xuan Han Telephone: (84-8) 38 444 861

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PHU NHUAN SERVICE JOINT STOCK COMPANY (Business License No. 4103000625 dated 2 October 2001 and the 9th updated Business

License dated 14 November 2008 issued by the Department of Planning and Investment of

HCMC)

SHARE OFFERING TO THE PUBLIC

Ticker: Phu Nhuan Service Joint Stock Company Stock

Par value: VND10,000/share

Offer price:

- Existing shareholders : VND20,000/share

- Employees : VND25,000/share

- Strategic investors : negotiable but not lower than VND20,000/share

Total number of shares to be offered : 9,000,000 shares

Total offer value :VND90 billion (at par value)

AUDIT ORGANIZATION:

AUDITING AND INFORMATICS SERVICE LTD COMPANY

Head Office:142 Nguyen Thi Minh Khai, District 3, HCMC

Telephone: (84-8) 39 305 163 Fax: (84-8) 39 304 281

CONSULTING ORGANIZATION:

EMPOWER SECURITIES JOINT STOCK COMPANY

Head Office: Floor 1&2 Chuong Duong ACIC Building


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Telephone: (84-8) 38 386 068 Fax: (84-8) 38 386 896

TABLE OF CONTENTS

I. RISK FACTORS 5

1. ECONOMIC RISK 5 2. LEGAL RISK 5 3. INFLATION AND EXCHANGE RATE RISK 6 4. MANAGEMENT RISK 6 5. ISSUING RISK 6 6. DILUTION RISK 7 7. PARTICULAR RISKS 8 8. OTHER RISKS 8

II. MAIN PARTIES RESPONSIBLE FOR THE PROSPECTUS 9

III. ABBREVIATION 9

IV. INFORMATION OF THE COMPANY 10

1. GENERAL INFORMATION 10 2. ORGANIZATIONAL STRUCTURE 13 3. MANAGEMENT STRUCTURE 15 4. LIST OF SHAREHOLDERS WITH 5% OWNERSHIP, FOUNDING SHAREHOLDERS AND

SHAREHOLDER STRUCTURE 20 5. LIST OF PARENT COMPANIES AND SUBSIDIARIES OF THE COMPANY 22 6. BUSINESS ACTIVITIES 22 7. BUSINESS RESULTS IN RECENT YEARS 34 8. POSITION OF THE COMPANY COMPARED WITH OTHER CORPORATIONS IN THE

INDUSTRY 35 9. LABOR POLICY 37 10. DIVIDEND POLICY 39 11. FINANCIAL OPERATION 39 12. BOARD OF DIRECTORS, BOARD OF MANAGEMENT, SUPERVISORY BOARD, CHIEF

ACCOUNTANT 43 13. FIXED ASSETS 50 14. REVENUE AND DIVIDEND PLAN FOR THE PERIOD 2009-2010 51 15. CONSULTING ORGANIZATION’S ASSESSMENT OF MASECO’S REVENUE AND DIVIDEND

PLAN 51

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V. SHARE OFFERING 52

VI. THE PURPOSE OF SHARE OFFERING 56

VII. ACTION PLAN FOR THE USE OF FUND FROM SHARE OFFERING 60

VIII. RELATED PARTIES TO THE SHARE OFFERING PLAN 61

IX. APPENDICES 62

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I. RISK FACTORS

1. Economic risk

The fluctuation of major macroeconomic factors such as economic growth rate, inflation,

interest rate and exchange rate policy as well as economic development policies of the

Government have direct or indirect impacts on the operation of enterprises in general and

the Company in particular. When inflation, interest rate and exchange rate tend to

fluctuate considerably in the future, operation of enterprises will be affected depending

on their business characteristics and financial condition.

Currently, Vietnam has been adversely affected by the global financial crisis and

economic recession; therefore, general business and the Company in particular will be

affected if Vietnam’s economic growth continues to slow down in the upcoming period.

However, according to the forecast from economic experts that Vietnam’s GDP growth

rate is at 5% in 2009 and can be recovered soon in the end of 2009 and beginning of

2010, the Company’s investment in profitable projects is appropriate to capture future

business opportunities.

The Company does not only operate in any particular sector but various sectors including

the sectors in development phrase such as electronic products, agricultural products,

hotels and restaurants services. In recent years, these business sectors have made such

good revenues and profits that these investments are not only essential for the Company

but also in accordance with the market trends. In particular, the two small-scale projects

of office buildings and high-rise apartments which do not face exit barriers under

unfavorable circumstances are appropriate investments which can both capture business

opportunities and overcome risks by contingencies.

It is said that overall economic risk is not significant to the operation of the Company.

2. Legal risk

The legal system of Vietnam has been rapidly supplemented and improved, but it still has

some limitations in practices that may adversely affect long-term business development

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strategy of enterprises in general and the Company in particular. In addition, the

Company’s share public offering is regulated by securities law and monetary policies of

the State, which are currently in the stage of construction and completion. If there are

unpredictable changes in these relevant legal policies, the Company’s operations and

share price will be affected.

In order to reduce legal risk, the Company has been actively updating necessary legal

information, doing research and enhancing the ability to forecast changes in legal

policies. Therefore, it can be said that overall legal risk is not significant to the operation

of the Company.

3. Inflation and exchange rate risk

All investment projects of the Company have been conducted in local currency so the

depreciation of value of Vietnamese dong does not influence the profits from investment

despite its partial influence on production price structure such as interest cost of loans and

the price of imported raw materials.

4. Management risk

The Company has been developed in both revenues and business scale which in turn can

cause management risk related to management hierarchy or staff qualifications. The

Company has implemented several methods for the enhancement of management system

and leadership skills of staff to minimize management risks:

Standardize management system across the Company and each department.

Implement ERP solutions for information management.

Regularly update management skills for operating staff.

5. Issuing risk

The expected number of shares offering is 9,000,000 shares, among which the number of

share offering to existing shareholders and staff is 5,550,000 shares (accounting for

61.7% of total estimated shares offer). This issuing plan was approved in the General

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Shareholders’ Meeting in 2008 and 2009 with the agreement of all shareholders attended,

which guarantees the success of the issuance.

The remaining 3,450,000 shares is expected to offer to strategic investors (accounting for

38.3% of total expected share offer). To ensure the success of this offering plan, the

Company has also collaborated with advisory organizations to survey the needs of

investors who highly appreciate the Company’s investment projects and show interest in

the Company’s share offering. Therefore, 80% of total shares issued is expected to be

successfully offered.

6. Dilution risk

Share dilution happens because of reasons below:

Share issuance to existing shareholders at the price of VND20,000 per share which is

lower than the market price at the date of closing shareholder list.

Share issuance to the employees at the price of VND25,000 per share which is lower

than the market price at the date of closing shareholder list.

Based on net profits of the last four quarters, average shares outstanding and share market

price during the last three months, the share price and EPS after the issuance are

presented in the table below:

No. Item No. of shares Price Value

(VND mil) 1 Shares outstanding 6,000,000 30,000 180,000 2 Issue to existing shareholders 5,000,000 20,000 100,000 3 Issue to employees 550,000 25,000 13,750

4 Issue to strategic investors (at estimated price) 3,450,000 29,000 100,050

Total 15,000,000 393,800 Adjusted share price 26,253

No. Item Unit Value 1 Net profit of last 4 quarters VND mil 34,4472 Average shares outstanding Shares 5,826,923

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3 EPS before issuance VND/share 5,9124 Adjusted rate Time 1.145 EPS after issuance VND/share 5,173

The share price and EPS after the issuance decrease by 12%. However, dilution risk

depends on profitability of the projects which used fund from the issuance. Particular

investment plan and feasibility study presented in Section VI.2 promises high return on

capital which decreases dilution risk from the share offering.

7. Particular risks

Local producers of electronic goods tend to face strong competition with Chinese or

Japanese importers in both price and advanced technology. Vietnam’s entry to WTO

creates opportunities for Vietnamese exporters to increase export revenues by

penetration, on the other hands creates difficulties when tarriff quotas and State subsidies

are removed.

In recent years, although import duties of electronic goods has been cut down to 0%-5%

that created a competition risk in the sector, the Company still achieved an average

annual growth rate of 30%. The Company’s competitive strategy does not only focus on

pricing but also the development of technology, distribution channels, warranty,

promotion program as well as branding and marketing strategies.

Besides the implementation of business policy, the Company also develops solutions

dealing with unfair competition such as fake products and violation of intellectual and

industrial property rights, by full registration of their trademarks and hiring protection

advisory to minimize competition risk. Competition risk is not significant to the

Company’s business as the Company has had a good brand, stable market share and

continuous development in many years of operation.

8. Other risks

Other risks such as earthquakes, fire, flood, war or dangerous diseases may cause

significant damage for properties, human and business operation of the Company.

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However, the Company has acquired insurance policies for properties and business

operation to minimize the possibility of material damages.

II. MAIN PARTIES RESPONSIBLE FOR THE PROSPECTUS

1. Issuing Organization – Phu Nhuan Service Joint Stock Company

Ms. Truong Thi Thanh Tam Chairwoman of Board of Directors

Mr. Nguyen Xuan Han General Director

Ms. Tran Thi Lua Chief Accountant

We guarantee that all information and data presented in this Prospectus conforms to data

that is factual and has been collected and investigated to the possible extent.

2. Consulting Organization – Empower Securities Joint Stock Company

Ms. Tran Duong Ngoc Thao Acting General Director

This Prospectus is a part of the share offering document jointly made by Empower

Securities Joint Stock Company based on a consulting contract with MASECO. We

guarantee that the analysis, assessment and wording in this Prospectus have been done on

a reasonable and cautious basis according to the information and data provided by

MASECO.

III. ABBREVIATION

The Company : Phu Nhuan Service Joint Stock Company

Issuing Organization : Phu Nhuan Service Joint Stock Company

MASECO : Phu Nhuan Service Joint Stock Company

SSC : State Securities Commission

HCMC : Ho Chi Minh City

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BOD : Board Of Directors

IV. INFORMATION OF THE COMPANY

1. General Information

1.1. History of incorporation and development

Phu Nhuan Service Joint Stock Company (MASECO) was formerly Phu Nhuan Material

and Travel Service Company, established in 1991 based on the merging of Phu Nhuan

District Material Company (established in 1978) and Phu Nhuan District Service

Company (established in 1983).

MASECO was transformed from Phu Nhuan Material and Travel Service Company (a

State-owned company) under Decision No.971/QD-TTg dated 2 August 2001 of the

Prime Minister. At the time of establishment on 10 May 2001, the chartered capital of the

Company was VND20 billion, 25% of which was contributed by State shareholders.

On October 2004, the State shareholders transferred all shares to the rest of existing

shareholders under Offical Document No.2179/UB-CNN of the HCMC People's

Committee.

Till now, MASECO has had two share offerings to increase their chartered capital:

In 2007: 1,000,000 shares for existing shareholders to increase chartered capital by

VND10 billion.

In 2008: 3,000,000 share bonus to increase chartered capital by VND30 billion.

According to the audited financial reports as at 31 December 2008, the Company’s

chartered capital was VND60 billion (equivalent to 6,000,000 shares).

The General Shareholders’ Meeting in 2008 and 2009 decided that the Company

continued to issue additional shares in 2009 and 2010, particularly, offering to existing

shareholders, staff and strategic investors with total number of 9,000,000 shares

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(equivalent to VND90 billion in par value) to increase the chartered capital to VND150

billion.

1.2. Achivements

Operating in the fields of trade, export and import, production of electronic products,

hotels, restaurants services and real estate business, the Company has achieved a high

growth rate in revenue, export values, profits, income and living standard of staff and

contributed to the State budget as well as social welfare in many of previous years.

Awards:

1. Third rank Labour Medal awarded by the State President for excellent achievements

in 1999-2003.

2. HCMC Business Excellence Award 2004 by HCMC People’s Committee

3. Excellent Achievements Award 2003-2008 by the Prime Minister

4. Prestigious Export Enterprise Award 2004-2008 by the Ministry of Trade

5. Sustainable Development Award 2007-2008 by the Ministry of Industry and

Commerce.

6. Outstanding Trade and Service Enterprise Award 2008 by the Ministry of Industry

and Commerce.

7. Prize for Vietnamese High-quality Goods and Top ten Vietnamese Brand 2006, 2008

8. TOP 500 of Biggest Private Enterprises in Vietnam 2007-2008 voted by VNR500

Program of Vietnamnet.

9. Vietnamese Strong Brand 2000-2008

10. Excellent Union Award by HCMC Labor Union

1.3. Introduction about the Company

MASECO was established based on Decision No.971/QD-TTg dated 2 August 2001 of

the Prime Minister, transformed from Phu Nhuan Material and Travel Service Company.

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1. Name: PHU NHUAN SERVICE JOINT STOCK COMPANY

2. Abbreviated name: MASECO

3. Logo:

4. Chartered capital: VND60 billion

5. Head Office: 78A Nguyen Van Troi, Ward 8, Phu Nhuan District, HCMC

6. Telephone: (84-8) 3844 4864 Fax: (84-8) 3844 3264

7. Website: www.maseco.com.vn

8. Email: [email protected]

9. The 1st Business license No.4103000625 dated 2 October 2001, the 9th license dated 14

November 2008 issued by the Department of Planning and Investment of HCMC.

Lines of business:

1. Export and import of consumer goods and production materials; production for

exports

2. Real estate business, hotels, restaurants, office, warehouse, shops and civil

construction.

3. Trade of materials, chemical materials, machinery, metal electrical goods, electrical

appliances, electronics, computers, cosmetics, clothing, linen, fuel, construction

materials, fertilizer, pesticides, food, wine, beer, tobacco, domestically produced and

imported consumer goods.

4. Delivery of domestic and exported goods.

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http://www.maseco.com.vn/

mailto:[email protected]


5. Production, processing and assembly of machineries, electrical equipments and

software technology.

6. Karaoke services, entertainment, sports; music recording.

7. Production and trade of fixed phones, mobile phones, spare parts of

telecommunication equipments; ringtone installation services, lyrics and images for

mobile phones.

8. Online information services

9. Advertising service

10. Motobikes security services

11. Other business as stipulated by law.

Tax file number: 0 3 0 2 4 1 6 3 6 4

Bank account:

VND:

- 025.100.100.2457 : Vietcombank – Binh Tay Branch

- 310.100.000.15483: Bank of Investment and Development Vietnam – HCM

Branch

USD:

- 025.137.100.2467 : Vietcombank – Binh Tay Branch

- 310.103.700.02726: Bank of Investment and Development Vietnam – HCM

Branch

2. Organizational Structure

Head Office of PHU NHUAN SERVICE JOINT STOCK COMPANY

78A Nguyen Van Troi, Ward 8, Phu Nhuan District, HCMC

Telephone: (84-8) 3844 4864 Fax: (84-8) 3844 3264

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Related entities:

a) Hanoi Branch:

Address: 121 Nguyen Chi Thanh, Dong Da District, Hanoi

Established at the end of 2006

Produce and trade electronic and electrical goods

b) Gia Lai Branch:

Address: 1028 Hung Vuong Street, Chu Se Town, Gia Lai Province

Establish at the beginning of 1999

Produce to export agricultural products such as coffee and pepper.

c) Electronic Service Center:

Address: 7 Hoang Minh Giam, Phu Nhuan District, HCMC

Established in 1995

Produce and trade electronic and electrical goods, music CDs and karaoke DVDs.

Shops:

- Show room and Waranty center No.1: 7 Hoang Minh Giam, Ward 9, Phu

Nhuan District, HCMC.

- Showroom and Waranty center No.2: 218A Phan Dinh Phung, Ward 1, Phu

Nhuan District, HCMC.

- Showroom and Waranty center No.3: 131 Tran Huy Lieu, Ward 8, Phu Nhuan

District, HCMC.

- Multimedia Services: 218A Phan Dinh Phung, Ward 1, Phu Nhuan District,

HCMC.

- Production Factory: 7 Hoang Minh Giam, Ward 9, Phu Nhuan District,

HCMC.

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d) Hoa Mai Hotel:

Address: 75 Hoang Van Thu, Ward 15, Phu Nhuan District

2-star hotel with 30 bedrooms

Also provide restaurant and wedding services, conference and karaoke services.

HEAD OFFICE

HANOI BRANCH

GIA LAI BRANCH

HOA MAI HOTEL

ELECTRONIC SERVICE CENTER

REAL ESTATE TRADE DIVISION

EXPORT-IMPORT DIVISION

Factory Multi Media Service

Showroom No.1

Showroom No.2

Showroom No.3

MASECO

3. Management Structure

General Shareholders’ Meeting: General Shareholders’ Meeting comprises all

shareholders with voting rights and delegation and acts as the highest decision-making

body of the Company. General shareholders have the following rights:

Decide the type of shares and total number of shares offering as well as annual

dividend policy of each share type.

Elect and dismiss the members of the Board of Directors and Supervisory Board.

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Investigate and decide how to deal with breaches committed by the Board of

Management and the Control Board which cause damage to the company and its

shareholders.

Decide to dissolve or restructure the Company

Approve amendments or supplements of the Charter, except the adjustment of

chartered capital by issuing more shares in the limit of number of shares offering as

stated in the Charter.

Approve the reports and recommendations of Board of Directors on business

operation results, balance of financial year, distribution or use of profits, dividend

payment and use of fund based on the reports of Supervisory Board.

Approve the direction of business development, business and investment objectives of

the next year; make decisions on joint-venture and corperative production; review and

make solutions to overcome financial problems of the Company.

Make decisions on investment or asset liquidation which value is equal or greater than

50% of book value of total assets.

Make decisions on repurchasement of more than 10% of total shares of each type

offered.

Other rights as stipulated in the Charter and current Law.

Board of Directors: has 7 members who have the rights to act on behalf of the Company

except the rights of General Shareholders’ Meeting which can not be delegated. BOD

has the following rights:

Decide the development strategy of the Company

Decide to offer shares and bonds; valuate assets whose funding is not in Vietnamese

dong in the limit of the number of shares offering; decide to mobilize capital by other

methods.

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Make decisions on investment plans; approve fund estimation, the design and

payment of projects.

Make decisions on market penetration method, marketing and technology; approve

trade and loan contracts and other contracts with the total value of lower than 50% of

book value of total assets.

Elect and dismiss the General Director, Deputy General Directors and Chief Account;

decide the salary and bonus and other benefits of the Board of Management.

Make decisions on organizational restructuring, management regulations,

establishment or dissolution of subsidiaries, branches, representative offices and the

share purchase of other enterprises.

Other rights as stipulated in the Charter and current Law.

Supervisory Board: has 3 members as appointed by the General Shareholders’ Meeting

to work on behalf of shareholders in supervising all business management and execution

of the Company. The Supervisory Board has the following rights:

Assess the legality in management, business operations, accounting entries, financial

reports, list of shareholders, Minutes of Shareholders’ and BOD’s Meeting.

Conduct due diligence on annual financial reports

Make recommendation on the modification of management structure

Require the Departments to provide data and documents as well as explain business

results.

Attend meetings and making suggestions but not entitled to voting. Any disagreement

with BOD’s decisions is recommended to record in Meeting minutes and report to

shareholders.

Other rights as stipulated in the Charter and current law.

Board of Management: appointed by the BOD and have the following rights:

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Make decisions on issues related to day-to-day operations of the Company

Act on the decisions of the BOD, but the General Director has the right to refuse to

act on illegal decisions

Appoint and dismiss management persons unless appointed by the BOD

Decide the salary and bonus level as well as welfare policy for employees

Build development strategy and plans to use up the Company’s resource and capital

mobilization

Other rights and obligations as stated in the Charter.

Departments:

a) Sales Department:

Set up and implement business plans approved by the General Director

Research and develope distribution channel and pricing policy

Gather and analyze market data and competitor information

Implement Marketing and brand development plan

Provide sales service in domestic market and export

b) Administration Department:

Conduct administrative tasks

Implement and supervise personnel policy

Keep track of labor contracts and staff records

c) Financial planning Department:

Manage financial and accounting activities, set up financial plan

Prepare financial reports in accordance with the Accounting standard and tax

policies

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Make financial forecast and financial budget plan for the profitability of the

investment

d) Investment Management Department:

Implement and manage investment projects in accordance with the State

regulations

Make plan and organize auction to get the best price and quality of investment

projects.

Manage design and construction files for real estate projects.

Operate real estate business.

Affiliates:

a) Phuong Dong Electronic Technology Co., Ltd:

Address: A12 Phan Van Tri, Ward 7, Go Vap District, HCMC

Telephone: (84-8) 35 888 040

Chartered capital: VND5 billion

Business License No.4102062174 dated 2 June 2008 issued by Department of

Planning and Investment HCMC

Main fields of business: Production and trade of electrical and electronic products

MASECO’s capital contribution: 30% of chartered capital.

b) Phu Nhuan Economic Development Joint Stock Company:

Address: 421 Nguyen Kiem, Ward 9, Phu Nhuan District, HCMC

Telephone: (84-8) 62 920 907 Fax: (84-8) 62 920 908

Chartered capital: VND40 billion

Business License No.4103008660 dated 6 December 2007, issued by Department

of Planning and Investment HCMC

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Main fields of business: Trade on real estate, financial investment, interior design,

business management and consultancy and insurance agency.

MASECO’s capital contribution: 10% of chartered capital

SHAREHOLDERS’ MEETING

SUPERVISORY BOARD

GENERAL DIRECTOR

BOARD OF DIRECTORS

SALES DEPARTMENT

FINANCIAL PLANNING

DEPARTMENT

INVESTMENT MANAGEMENT DEPARTMENT

ADMINISTRATION DEPARTMENT

HANOI BRANCH GIALAI BRANCH MEMBERS

4. List of shareholders with 5% ownership, founding shareholders and shareholder

structure

4.1. List of shareholders with more than 5% ownership as at 30 September 2009:

No. Name Adress Shares held Value

(VND mil) Rate (%)

1 Nguyen Xuan Han

94 Dao Duy Anh, Ward 9, Phu Nhuan District, HCMC

627,000 6,270 10.45

2 Trinh Minh Ngoc

16 Phan Tay Ho, Ward 7, Phu Nhuan District, HCMC

555,000 5,550 9.25

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3 Truong Thi Thanh Tam

699 Cach Mang Thang 8, Ward 6, Tan Binh District, HCMC

366,000 3,660 6.10

4 Le Thien Hung 55A/3T Tran Quang Khai, Tan Dinh Ward, District 1, HCMC

370,040 3,700,4 6.17

5 Nguyen Xuan Han

No.7, Lot IX, Tan Quy Dong Residence, Tan Phong Ward, District 7, HCMC

311,000 3,110 5.18

Total 2,229,040 22,290.4 37.15

4.2. List of founding shareholders as at 30 September 2009:

No. Name Address Shares held

Value (VND mil)

Rate (%)

1 Nguyen Xuan Han

94 Dao Duy Anh, Ward 9, Phu Nhuan District, HCMC

627,000 6,270 10.45

2 Trinh Ngoc Minh

16 Phan Tay Ho, Ward 7, Phu Nhuan District, HCMC

555,000 5,550 9.25

3 Truong Thi Thanh Tam

699 Cach Mang Thang 8, Ward 6, Tan Binh District, HCMC

366,000 3,660 6.10

4 Le Thien Hung

55A/3T Tran Quang Khai, Tan Dinh Ward, District 1, HCMC

370,040 3,700.4 6.17

5 Do Huong Duong

34/32 Nguyen Thi Thap, Binh Thuan Ward, District 7, HCMC

276,000 2,760 4.60

6 Tran Thi Lua 5B Ba Gia, Ward 7, Tan Binh District, HCMC 275,400 2,754 4.59

7 Nguyen Tan Phi Khanh

145/13 Nguyen Dinh Chinh, Ward 11, Phu Nhuan District, HCMC

177,000 1,770 2.95

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Total 2,646,440 26,464.4 44.11

4.3. Shareholder structure as at 30 September 2009:

Shareholder Number of shareholders Shares held Rate (%)

1. Local shareholders 194 6,000,000 100

+ Institution: 2 118,360 1.97

+ Individual: 192 5,881,640 98.03

2. Foreign shareholders 0 0 0

+ Institution: 0 0 0

+ Individual: 0 0 0

Total 6,000,000 100

5. List of parent companies and subsidiaries of the Company: None

6. Business activities

6.1. Key products and services:

Major business activities of the Company include:

Manufacture and trade of electronics products

Manufacture and export of agricultural products

Restaurant, hotel and entertainment services.

Real estate business.

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6.2. Revenue and profit of each product/service line

a) Revenue of each product/service line:

Unit: VND million

2007 2008 9 mths 2009 Item

Value % Value % Value %

Electronic products 276,726 34.71 388,482 57.64 328,009 66.67

Agricultural products 505,560 63.42 270,124 40.08 177,058 34.37

Restaurant, hotel and entertainment services 10,978 1.37 12,090 1.79 8,014 1.55

Real estate business 2,127 0.26 2,072 0.30 623 0.12

Others 1,672 0.24 1,172 0.19 1,424 0.29

Total 797,063 100 673,940 100 515,128 100

Source: Head Office

b) Profits of each product/service line:

Unit: VND million

2007 2008 9 mths 2009 Item

Value % Value % Value % Electronic products 9,965 52.01 19,680 61.92 34,170 88.22

Agricultural products 4,205 21.95 4,435 13.95 700 1.80

Restaurant, hotel and entertainment services 2,640 13.78 3,062 9.63 1,893 4.88

Real estate business 1,499 7.82 2,781 8.75 544 1.40

Others 848 4.44 1,821 5.75 1,424 3.80

Total 19,157 100 31,779 100 38,732 100

Source: Head Office

6.3. Raw Materials

a) Source of raw materials:

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Raw materials for electronic products are separate electronic components or clusters,

electronic goods or the equipment covers in the form of removable or semi-finished

goods which are either domestically produced or imported.

Raw materials for agricultural products are agricultural goods procured directly from the

cultivators following purchasing process of the Company; or provided by other domestic

suppliers.

Lists of major raw material suppliers:

Electronic products:

No. Raw material Supplier

* Imported source

1 DVD components HK Electron Enterprise Co – HongKong

2 DVD, Karaoke components Kumyoung Co.LTD - Korea

3 Speaker components S-One & C.Corp - Korea

4 Amply components Suhyoung Electronic & Industries Inc – Korea

5 Microphone and speaker components Sonics Electronics Co.LTD - Korea

* Domestic source

1 Amply components Duong Long Co., Ltd

2 DVD components Sao Kim Electronics Joint stock Company Thai Gia Thuan Co., Ltd

3 Speaker components Phuong Dong Electronics Technology Co., Ltd

Agricultural products:

No. Raw material Supplier

1 Pepper Duc Hanh Trading Co., Ltd

2 Coffee beans Bac Ha Agricultural Trade and Services Co., Ltd

3 Coffee beans Khanh Thuy US. Production and Services Co., Ltd

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Source: Head Office

b) The stability of raw materials supplied:

The source of raw materials for electronic products is materials and semi-finished goods

provided regularly by reliable domestic suppliers or from import. Except the main

components to be imported from long-term suppliers, the others are produced

domestically by the Company’s affiliates in the form of separate components or semi-

finished goods to ensure the stability in both quality and quantity of raw materials.

Raw materials of agricultural products are from domestic source. According to national

statistics, Vietnam, the world’s No.2 coffee producer, has about 525,000 hectares of

coffee cultivated land and the annual coffee output is about 1 million tons. While

Vietnam remains the world’s top pepper exporter, around 49,000 hectares of land are

given to pepper production of about 100,000 tons annually, mainly in the South East and

Central Highland areas.

In particular, the agricultural processing plant of the Company is located at Chu Se

District, Gia Lai Province which provides the largest source of coffee and pepper for the

production of pure pepper (This area has 3,500 hectares of cultivated land and annual

pepper output of 15,000 tons while the production capacity of the plant is 5,000 tons per

year). Besides, as Vietnam is an agricultural country, the source for agricultural products

is plentiful provided by other domestic enterprises at competitive price and stable

quantities.

c) The influence of raw materials price on the revenue and profit:

The cost of raw materials for electronic goods accounts for 70% of the product cost;

therefore, the change in price of major raw materials will have a significant impact on the

profits of the Company. Previously 90% of major raw materials were imported so the

fluctuation of exchange rate also affected the product cost. To deal with this, the

Company has actively reduced the import of materials to below 50% of total materials

needed to reduce partially the impact of exchange rate fluctuation.

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The cost of major materials of agricultural products accounted for 90% of total product

cost so the price change will have large impact on the profits of this product line. To deal

with this risk, the Company has moved to production of high quality pepper products

which raw material cost just accounts for about 50%-60% of total product cost.

6.4. Production cost

The proportion of each production cost item to Net revenue of goods and services:

Unit: VND million

2007 2008 9 mths 2009

Item Value

% of Net

revenue Value

% of Net

revenue Value

% of Net

revenue

Cost of Goods sold 726,494 90.90 555,224 82.38 416,525 80.86

Selling cost 23,044 2.88 27,695 4.11 16,771 3.26

Management cost 19,208 2.40 36,664 5.44 32,423 6.29

Total 768,746 96.18 619,583 91.93 465,719 90.41

Source: Audited financial statements for 2007, 2008 and unaudited financial statement

for the period ended 30/9/2009

6.5. Market share

a) Market for electronic products:

MASECO products account for 40% of domestic market share of which 70% of total

products are of high-quality. Specifically, the consumption of MASECO products has

been increasing in recent years despite economic downturn which indicates the

Company’s ability to compete with rivals in the market.

In recent years, MASECO has also sped up the export of electronic products to meet the

demand of overseas Vietnamese community. The Company has gradually built up new

relationship and distribution channels in Australian and US markets to develop market

share. The market share of electronic products has been continuously increased as a result

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of constant development of distribution channels, advertising, promotion and warranty

services and prestige brand name in consumers’ mind.

b) Market for agricultural products:

Agricultural products have been faced with price fluctuation. To minimize price risk, the

Company has produced more refined products instead of raw products despite the

decrease of revenue of these products. A large proportion of agricultural products are

exported.

Major export markets for the Company’s products in 2007, 2008 and first half of 2009:

Coffee:

Unit: tons

2007 2008 9 mths 2009 Market

Value % Value % Value %

EU 11,000 68.88 2,400 70.58 1,378 59.83

US 3,500 21.92 700 20.58 216 9.38

Asia 1,469 9.20 300 8.84 708 30.79

Total 15,959 100 3,400 100 2,302 100

Source: Head Office

Pepper:

Unit: tons

2007 2008 9 mths 2009 Market

Value % Value % Value % EU 950 63.33 1,950 76.47 1,630 73.65

US 550 36.67 100 3.92 410 18.52

Asia - - 500 19.61 173 7.83

Total 1,500 100 2,550 100 2,213 100

Source: Head Office

Page 31


In 2009, the Company has planned to develop domestic market for “MASECO pepper

beans” through variety of distribution channels such as Co.op Mart, Intimex

supermarkets, Vissan retailing as well as high-class restaurants and households for the

supply of clean products which follow Food hygiene and safety standard.

6.6. Technology

MASECO has constantly renewed technology, improved management skills and product

quality in order to meet the demand of sofisticated consumers. The machinery system has been

updated regularly to enhance productivity.

Major production lines include:

4 DVD assembly lines with annual capacity of 200,000 units

1 amply assembly line with annual capacity of 40,000 units

2 speaker assembly lines with annual capacity of 30,000 units.

1 record room

5 music and midi production rooms

1 closed production line of pepper with annual capacity of 5,000 tons

1 production line of grind pepper and product packaging line with annual capacity of

2 million units.

6.7. Product research and development

The Company always applies modern technology in the production of audio and

electronic equipments. The Company currently has 40 types of different audio electronic

products for different market segments, serving the needs for different consumer targets.

The Company has also built a Multimedia center to enhance the quality of music CDs,

karaoke DVDs and digital audio products.

For agricultural products, the Company has been concentrated more on production of

refined products instead of raw products. Besides the investment in production line and

Page 32


packaging of grind peppers, the Company is going to launch new product lines in small

package targeting households, restaurants and industrial producers.

6.8. Product quality inspection

a) Quality management system:

MASECO has always paid special attention to the product quality management. The

Company has currently implemented the following quality management system:

Quality management system ISO 9001-2008.

Hazard Analysis and Critial Control Points

Good Manufacturing Practice

b) Quality inspection Division:

For electronic products: the quality of electronic components and semi-finished goods

is checked before put into production, in each stage and whole process before taken

out of the factory.

For agricultural products: input materials’ quality has to follow the purchasing policy

of the Company. The production process and warehouse are closely supervised under

quality inspection system of the Company.

For restaurant services: the source of all food ingredients as well as food processing

are inspected carefully to ensure the compliance of Food Hygiene and Safety

standard.

6.9. Marketing strategy

The Company has set up a Marketing department which role is to do market research and

analysis and product design for the enhancement of the Company’s images. Advertising

campaign of the Company includes:

Organizing events, sponsoring football leagues, karaoke competition and social

activities.

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Attending Vietnam High-quality products and domestic and international Trade fairs.

Television or radio advertisement

Panel and sign advetisement

Besides advertising activities, the Company also builds distribution channels and

warranty agencies as followed:

Thousands of shops nationwide distributing products from the Head Office and

branches or Level I agency to shops with different reward systems.

Customer service and warranty system have been built up in most of main cities and

provinces nationwide to meet the demand of a large segment of customers.

6.10. Brandings and Trademarks

Maseco

Maseco pepper

Karaoke Online

Arirang

Maseco Midivision KaraOke

7. Business results in recent years

7.1. Summary of business results

Page 34


Unit: VND million

Item 2007 2008 % change 2008/2007

9 mths 2009

Total assets 246,452 299,567 21.55% 332,400

Net revenue 797,063 673,940 (15.44%) 515,128

Operating profit 18,309 29,957 63.62% 38,505

Other profits 848 1,821 114.74% 227

Before-tax profit 19,157 31,779 65.88% 38,732

Net profit 15,326 24,651 60.84% 33,314

Dividend rate 43.06% 53.54% 24.33% -

Source: Audited financial statementsfor 2007, 2008 and unaudited financial statement


7.2. Impact on business performance in 2008

In 2008, the net revenue decreased 15.44% compared to 2007, mainly the decrease in

export revenue due to the change from raw agricultural to refined products. The purpose

of this new export structure was to limit the risk of price fluctuation of agricultural

products.

On the other hand, the operating profit in 2008 increased 65.15% compared to 2007

despite the decrease in net revenue, mainly due to good control in product cost, especially

the proportion of the cost of goods sold to net revenue declined from 90.9% in 2007 to

82.45% in 2008.

8. Position of the Company compared with other corporations in the industry

8.1. Position of MASECO in the industry

Although MASECO has had to face with the competition from domestic and foreign

rivals in recent years, the Company has always made efforts to maintain their position on

the market with a stable annual revenue growth rate of 30%. The Company’s brand has

been highly valued with the following awards:

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In 2008, Arirang DVD products had the highest market share in Vietnam according to

the analysis of GFK Corporation.

Being in the TOP 500 of biggest private enterprises in Vietnam voted by VNR500

Program of Vietnamnet.

Certificate of Vietnamese high quality goods voted by consumers (organized by

Saigon Marketing News) and TOP TEN of Vietnamese Brand in 2008 by Association

of Science and Technology of Vietnam.

“Prestigious Export Enterprise” Award 2004-2008 by Ministry of Trade

Award of sustainable development 2007-2008 awarded by Ministry of Industry and

Commerce.

a) Strengths:

MASECO is a friendly and prestigious brand in the consumers’ mind. There are not a

lot of comparable competitors in the market so it is easy for the Company to maintain

their market share from time to time.

MASECO has a variety of good-designed products which focus on different

consumer segments.

MASECO constantly implements modern technology to catch up with the market trend.

MASECO products have high quality following the global standard system.

Ideal production process of electronic products, music CDs and digital audio products; skillful

and experienced technicial staff.

Build up high-quality closed production plants of pepper products for the production of

high quality products following Food Hygiene and Safety standard of Vietnam and the

world.

Plants are located at ideal position which facilitates business operation; in particular,

the pepper processing plant is located at area of high qualiy and plentiful material

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sources, and the assembly production plant of electronic products is located at

HCMC, a center of economic activities and skillful employees.

Fully comply with business regulations

b) Weaknesses and Threats

The seasonality of raw materials for agricultural products has an important impact on

the export, therefore, the Company needs to have a purchasing plan for raw materials

to meet the demand for both export and reserve purposes.

Technical and trade barriers of import countries affect the Company’s export plans.

The main source of raw materials for electronic products is imported so the

fluctuation of exchange rate has an impact on product pricing.

The violation of industrial intellectual property and fake electronic products in the

market is a threat for MASECO business as the Company always complies with

regulations.

c) Opportunities

Vietnam with a stable economic growh rate and 85 million of population creates a big

and potential market for developing enterprises.

The investment and development policies of the Company comply with the State

development policy.

The consumers of agricultural products tend to be more concerned about the food

hygiene and safety standard in recent years while the Company’s products fully

comply with the standard.

9. Labor policy

9.1. Labor structure

The total number of staff and labour structure as at 30 September 2009:

Classification Quantity %

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Education level - Postgraduate and Graduate - Junior and Intermediate college - Technical staff - Unskilled staff

50 82 17 108

19.5 31.9 6.6 42

Job title

- Sales and Management staff - Technical staff - Workers and unskilled staff

82 49 126

31.9 19.1 49

Labor contracts

- Unknown duration contract - Fixed-term contract - Temporary contract

05 206 46

1.9 80.1 18

Total 257 100

Source: Head Office

9.2. Labor policy

Recognizing the role of human in the success of the business, the Company has always

paid much attention to the labor force especially the well-educated and skillful staff

through salary, bonus and welfare policy. The staff income has been gradually increasing

with an average annual growth rate of 25% in previous years. The Company also fully

complies with Labor regulations regarding Social and Health Insurance, working time,

holidays and annual leave.

Support and give staff opportunities to attend training courses for the enhancement of technical

skills and legal knowledge.

Pay attention to the welfare of staff by organizing outdoor trips, and help to enhance

their living standard.

Apply employee stock option plan to create motivation and long-term commitment of

staff.

Page 38


10. Dividend policy

The Dividend policy based on the Company’s Charter approved by the Shareholders’

Meeting dated 24 April 2008:

The Company is allowed to pay dividend to shareholders only if the Company makes

profit after paying taxes and other obligations as stipulated by the Law.

The BOD is entitled to pay interim dividend if the payment is in accordance with the

profitability of the business.

Dividend payment in 2007 and 2008 is as followed:

Item Unit 2007 2008

Chartered capital VND million 30,000 60,000

No. of shares outstanding shares 3,000,000 6,000,000

Dividend rate % 22 22

Dividend paid VND million 6,600 13,200

Source: Audited financial statements for 2007, 2008 and unaudited financial statement


11. Financial operation

11.1. Fundamental financial ratios:

The financial year starts from 1 January and ends at 31 December annually. Items in

Financial Statements of the Company are presented in VND in accordance with the

Accounting standard of Vietnam.

a) Depreciation and amotization of fixed assets:

From 2003 backward, the Company applied the Depreciation method based on the

Decision No.166/1999/QD-BTC dated 30 December 1999 of the Ministry of Finance.

Since 2004, the Company has been using straight-line method over estimated useful life

of the assets in accordance with the Decision No. 206/2003/QD/BTC dated 12 December

Page 39


2003 of the Ministry of Finance regarding the management, use and depreciation of fixed

assets.

- Premises and buildings: 5-30 years

- Plants and machineries: 7-10 years

- Motor vehicles: 10 years

- Office equipments: 5 years

- Other fixed assets: 3-4 years

- Intangible fixed assets (land use rights): None

b) Average salary: In 9 months of 2009, the average monthly salary of employees is

VND4,500,000/staff

c) Bad debts: The Company has no bad debts as at 30 September 2009.

d) Payables: The Company fully complies with the VAT tax and enterprise income tax

regulations of the State.

e) Provisions in compliance with regulations: The Company creates provisions in

accordance with the Charter and current regulations as followed:

Provision for Investment and Development: 10%-15% of net profit

Compulsory reserve fund: 5% of net profit to be cummulated until the fund accounts

for 10% of the chartered capital.

Welfare and reward fund: 15% of net profit.

Provisions in 2007 and 2008:

Unit: VND million

Item 2007 2008

Provision for financing activities 542 766

Provision for Investment and development 3,572 4,161

Page 40


Welfare and reward fund 1,626 2,298

Total 5,740 7,225

Source: Audited financial statements for 2007and 2008

f) Bank loan:

Bank loan balances as at 31 December 2008:

Short-term loans: VND 166,482,219,185

Long-term loans: VND 4,088,963,980

Bank loan balances as at 30 Sep 2009:

Short-term loans: VND 166,567,921,120

Long-term loans: VND 7,502,963,989

g) Account receivables:

Unit: VND million

Item 31/12/2007 31/12/2008 30/09/2009

Account receivables from customers 31,605 21,153 25,844

Prepayment for suppliers 32,327 25,574 45,729

Account receivables on construction in progress - - 231

Other receivables 17,262 14,670 14,493

Provision for bad receivables (2,000) (6,400) (6,400)

Total 79,196 54,998 79,897

Source: Audited financial statements for 2007, 2008 and unaudited financial

statement for the period ended 30/9/2009

h) Account payables:

Unit: VND million

Item 31/12/2007 31/12/2008 30/09/2009

Page 41


Short-term liabilities 160,079 204,237 209,406- Short-term debts 136,005 166,482 166,568

- Payables to suppliers 10,227 12,485 5,654

- Deferred revenue 1,023 576 137

- Taxes and payables to State budget 2,568 3,496 6,387

- Payables to employees 5,227 16,395 24,400

- Accrual expenses 4,744 4,260 5,679

- Other payables 282 540 579

Long-term liabilities 2,309 4,446 7,811

Total 162,389 208,684 217,215

Source: Audited financial statements for 2007, 2008 and unaudited financial

statement for the period ended 30/9/2009

11.2. Major financial ratios:

Item 31/12/2007 31/12/2008 30/09/2009

1. Liquidity

Current ratio 1.15 1.12 1.21

Quick ratio 0.83 0.42 0.44

2. Financial leverage

Total debts/Total assets 65.89% 69.66% 65.35%

Total debts/Equity 1.93 2.29 188%

3. Efficiency

Total Asset turnover 3.23 2.25 1.55

Inventory turnover 14.02 5.73 2.73

4. Profitability

Net profit /Net revenue 1.92% 3.66% 6.47%

Net profit /Equity 18.91% 28.34% 28.92%

Net profit /Paid-in capital 51.08% 41.08% 55.52%

Net profit /Total assets 6.21% 8.22% 10.02%

Operating profit/Net revenue 2.29% 4.45% 7.47%

Page 42


5. Share-related ratio (Face value: VND 10,000/share)

Average shares outstanding 3,000,000 3,591,780 6,000,000

Earning per share (VND/share) 6,699 6,863 5,552

Book value per share (VND/share) 27,019 24,216 18,015

Source: Audited financial statements for 2007, 2008 and unaudited financial statement for

the period ended 30/9/2009

12. Board of Directors, Board of Management, Supervisory Board, Chief Accountant

12.1. Board of Directors:

a) Chairwoman – Ms Truong Thi Thanh Tam

Date of birth :15/08/1947

ID number :020116692 issued by HCMC Police authorities on

03/3/2003

Place of birth : Dong Thap

Nationality : Vietnamese

Ethnic : Kinh

Permanent address : 54/1/8A Bach Dang, Ward 2, Tan Binh District, HCMC

Office telephone : (84-8) 38 444 861

Education :12/12

Qualification : Intermediary school

Employment history

1983-2009 : Work at MASECO

Number of shares held : 366,000 shares

Violation of law : None

Page 43


Rights not in the Company’s interests: None

b) Vice Chairman – Mr. Nguyen Xuan Han

Date of birth : 11/8/1957

ID number : 020111503 issued by HCMC Police authorities on 30/12/2002

Place of birth : Da Nang


Ethnic : Kinh

Permanent address : 94 Dao Duy Anh, Ward 9 , Phu Nhuan District, HCMC


Education : 12/12

Qualification : Bachelor of Law

Employment history



Current position : General Director of MASECO


Rights not in the Company’s interests : None

c) Member – Mr. Do Huong Duong


ID number :021722032 issued by HCMC Police authorities on 29/6/2007

Place of birth : HCMC


Ethnic : Kinh

Page 44


Permanent : 34/32 Nguyen Thi Thap, Binh Thuan Ward, District 7, HCMC

Telephone number : (84-8) 38 444 861

Education : 12/12


Employment history



Current position : Deputy General Director



d) Member – Mr. Trinh Ngoc Minh


ID number :020649447 issued by HCMC Policy authorities on 08/8/2008



Ethnic : Kinh

Permanent Address :16 Phan Tay Ho, Ward 7, Phu Nhuan District, HCMC

Office Telephone : (84-8) 38 444 861

Education :12/12

Qualification : Engineer of Electronics

Employment History



Page 45


Current position : Deputy General Director



e) Member – Mr. Nguyen Tan Phi Khanh


ID No. :021719134 issued by HCMC Policy authorities on 29/6/2007



Ethnic : Kinh

Permanent Address :145/13 Nguyen Dinh Chinh, Ward 11, Phu Nhuan District,

HCMC

Office telephone : 38 444 861

Education :12/12


Employment History



Current position : Manager of Administration Department



f) Member – Mr. Le Thien Hung


ID No. :280713693 isssued by Song Be Policy authorities on 15/6/1995

Page 46


Place of birth : Hue


Ethnic : Kinh

Permanent Address : 55A Floor 2, Tran Quang Khai, District 1, HCMC


Education : 12./12

Qualification : Engineer of Electronics

Employment History



Current position : Manager of Electronic Service Center



g) Member – Ms. Tran Thi Lua





Ethnic : Kinh

Permanent Address : 5B Ba Gia, Ward 7, Tan Binh District, HCMC


Education : 12/12

Qualification : Bachelor of Economics

Page 47


Employment History



Current position : Chief Accountant



12.2. Supervisory Board:

a) Director – Ms. Nguyen Thi Lan



Place of birth : Ha Tay


Ethnic : Kinh

Permanent Address : D9 Lam Son Quarter, Nguyen Oanh, Go Vap District, HCMC


Education : 12/12


Employment History



Current position : Deputy Director of Hoa Mai Hotel



Page 48


b) Member – Ms Nguyen Thi Thanh Tung





Ethnic : Kinh

Permanent Address : 321/4/1 Phan Dinh Phung, Phu Nhuan District, HCMC


Education : 12/12


Employment History



Current position : Deputy General Director of Electronic Service Center



c) Member - Mr Le Thi Hien Dieu





Ethnic : Kinh

Page 49


Permanent Address : D2 Nguyen Van Troi Quarter, Ward 17, Phu Nhuan District,

HCMC


Education : 12/12

Qualification : College of Accounting

Employment History



Current position : Deputy Manager of Financial Planning Department



12.3. Board of Management

a) General Director – Mr. Nguyen Xuan Han: same in Section 14.1 (b) of BOD.

b) Deputy General Director – Mr. Do Huong Duong: same in Section 14.1 (c) of

BOD.

c) Deputy General Director – Mr. Trinh Ngoc Minh: same in Section 14.1 (d) of

BOD.

13. Fixed Assets

Fixed assets balance as at 30 September 2009:

Unit: VND million

No. Item Beginning Value

Accumulated depreciation

Value at end the of

year

Tangible fixed assets 1 Premises and buildings 23,527 5,082 18,445

Page 50


2 Plants and machineries 7,013 3,190 3,823

3 Motor vehicles 9,266 2,873 6,392

Total 39,806 11,146 28,660

Source: Unaudited financial statement for the period ended 30/9/2009

14. Revenue and dividend plan for the period 2009-2010

Unit: VND million

2008 2009 2010

Item Value Value

% change compared

to 2008 Value

% change compared

to 2009

Total Assets 299,567 350,000 + 16.8% 600,000 + 71.4%

Chartered capital 60,000 115,500 + 92.5% 150,000 + 29.8%

Net revenue 673,940 700,000 + 3.9% 800,000 +14.3%

Operating profit 29,957 35,000 + 16.8% 45,000 + 28.6%

Other profit 1,821 2,000 + 9.8% 3,000 + 50%

Before-tax profit 31,779 37,000 + 16.4% 48,000 + 34.37%

Net profit 24,651 31,800 + 29% 38,400 + 20.7%

Net profit/Net revenue 3.66% 4.5% + 7.4% 4.8% + 6.6%

Net profit/Chartered capital 41% 43% - 25.6% -

Dividend/Net profit 53.54% 51% - 3.6% 78% + 53 %

Dividend rate (%) 22% 22% - 20% -

15. Consulting Organization’s assessment of MASECO’s revenue and dividend plan

EPS has collected data and conducted careful and reasonable studies on the business

operations of MASECO to assess the feasibility of the business plan for the next two

years. In 2008 and first half of 2009, although Vietnam and the world’s economy fell into

financial crisis and economic recession, MASECO with own business strategy and

position in the industry was still able to overcome difficulties and maintain a significant

profit growth rate. Moreover, the Company’s operation has been diversified with a

Page 51


variety of product and service lines to be able to maintain a stable revenue level and

reduce business risks especially in an unfavorable condition. Specifically, the revenue

and profit from electronic products which account for more than 50% of total revenue

and profit of the Company tend to increase gradually when the Company plans to limit

the use of imported raw materials as well as increase export. For agricultural products,

the Company has focused on the production of refined products and penetrates domestic

market to increase revenue and decrease cost of goods sold. In addition, with further

investment in variety of real estate projects while this sector accounts for an increasing

proportion in the profit structure of the Company, this would be an additional source of

profit for the Company in a near future.

The Company has a competitive position in the market with modern technology

application in production, constant research and development activities, and special

concern of food hygeine standard, the ability to control cost, branding development and

an experienced Management team who is able to forecast and deal with business risks.

With these strengths, EPS believes that the Company’s ability to achieve the revenue and

profit plan is feasible if there is no significant crisis affect the operation of the Company.

The dividend plan is to maintain the dividend rate for shareholders as well as

reinvestment purposes.

This assessment is for reference only and does not guarantee the value of the share.

16. Information about commitments that the company has not completed: None

17. Information about disputes related to the company that may affect the share price:

None

V. SHARE OFFERING

1. Stock: Common share of Phu Nhuan Services Joint stock Company

2. Face value: VND10,000/per share

3. Number of shares offered: 9,000,000 shares, in which:

Page 52


Share offer to existing shareholders: 5,000,000 shares which account for 55.55% of

total number of shares offered at a pro rata of 6:5 (At the date of closing shareholder

list, each existing shareholder is entitled to buy 5 shares for every 6 shares of their

current holding. The number of shares offered for each shareholder will be rounded to

the nearest ten). The distribution of remaining shares to others will be decided by the

BOD.

Share offer to current employees who sign the labor contract with the Company:

550,000 shares which account for 6.11% of total number of shares offered. The BOD

decides the criteria, restrictions and the list of staff as well as the number of shares for

each staff.

Private placement with strategic investors: 3,450,000 shares which account for

38.34% of total shares offered. The BOD decides the list of individual and

institutional strategic investors who have one or more of following criteria: ability to

enhance management quality, market development, being regular partners of the

Company and financial support for upcoming projects.

4. Expected offer price and pricing method:

Existing shareholders: VND20,000/share. This price is based on the Company’s share

price on OTC market during the nearest 3 months and can be adjusted by the BOD

but not lower than the book value as at end of nearest quarter.

Employees: VND25,000/share. This price is based on the Company’s share price on

OTC market during the nearest 3 months and can be adjusted by the Board of

Directors but not lower than the book value as at end of nearest quarter.

Strategic investors: the price is decided later based on the negotiation between the

BOD and each investor but can not be lower than the price offered to existing

shareholders.

Book value of MASECO shares is calculated based on figures on audited financial

statement for the period ended 30/9/2009:

Page 53


No. Item Unit Value 1 Equities VND mil 115,185

2 Bonus and welfare fund VND mil 7,096

3 Shares outstanding shares 6,000,000

4 Treasury stock shares -

5 Book value [(1)-(2)]/[(3)-(4)] VND 18,015

Source: Unaudited financial statement for the period ended 30/9/2009

5. Share placing method: conducted by the Company

6. Placing schedule:

6.1. Stage 1 - Offer to existing shareholders:

Step 1- Announcement: In 7 days from the date receving the License, MASECO

anncounces the offer on public media in accordance with the Securities law, and closes

shareholders list (10 days from the announcement date).

Step 2 – Make the list of shareholders entitled to share offer

Step 3 – Announce the rights for share offer to each of shareholder in 3 days from the

date of closing the shareholder list.

Step 4 – Shareholders register to buy shares and make payment at the Head Office of the

Company in 22 days from the date of announcement of the rights

Step 5 – The BOD makes decision on the distribution of remaining shares.

Step 6 – The Company finalizes the results and reports to the SSC in 10 days from the

date of closing the offer. Issue the ownership certificate for each shareholder in 30 days

from the date of closing the offer.

6.2. Stage 2 - Share offer to employees and strategic investors:

1. Offer to employees:

Step 1 – Announcement

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Step 2 – The BOD decides and announces the list of staff and number of shares each staff is

entitled to buy.

Step 3 – Employees register to buy shares and make payment in the Company’s Head

Office in 20 days from the annoucement date. The rights can not be transferred.

Step 4 – Finalize, report the results and issue ownership certificate.

2. Offer to strategic investors:

Step 1 – Annoucement

Step 2 – Offer letter is sent to each strategic investor. Strategic investors register to buy

shares.

Step 3 – The BOD meets to decide the list of investors as well as the quantity and share

price

Step 4 – MASECO and investors sign the contracts and make payment.

Step 5 – Finalize and report the results to the SSC in 10 days from the date of closing the

offer. Issue ownership certificate in 30 days after the date of closing offer.

7. Limit on foreign shareholding

The Charter of the Company does not set a limit on foreign shareholding. After the

listing, the limit depends on regulations.

According to the Decision No. 55/2009/QĐ-TTg dated 15 April 2009 of the Prime

Minister, a public company will not have over 49% of foreign ownership and

MASECO must comply with this regulation.

8. Related tax

8.1. Corporate Income tax:

The Company is entitled to have a corporate income tax of 20% over the taxable

operating profit from 1 October 2001 to 31 December 2011. From 1 Jan to 31 December

2009, the Company has a deduction of 30% on corporate income tax rate.

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8.2. Tax from Securities Investment:

On 19 June 2009, the National Assembly approved the Decision of tax exemption for

personal income on capital investment and fund transfer (including share transfer) from

January to June 2009 and for the rest of 2009. All share trading activities will receive tax

incentive in 2009.

9. Bank account for payment:

Account number: 025 137 100 2467 at Vietcombank – Binh Tay Branch

VI. THE PURPOSE OF SHARE OFFERING

1. The purpose:

The share offer is to mobilize capital for the projects approved by Shareholders’ Meeting

in 2008 and 2009 as followed:

Arirang Office building: 131 Tran Huy Lieu, Phu Nhuan District, HCMC

MASECO I Office building for lease: 149-151 Nguyen Van Troi, Phu Nhuan District,

HCMC

Hotel: 157 Phan Dang Luu, Phu Nhuan District, HCMC

Production plants at Hiep Phuoc Industrial Zone (HCMC) and Dat Cuoc Industrial

Zone (Binh Duong)

High-rise Residential apartment building: 108 Le Loi, Ward 4, Go Vap District,

HCMC

Other projects in business plan approved by the Shareholders’ Meeting and the BOD.

Increase working capital

Basically all of the construction projects are conducted on the area which land-use rights

belong to the Company. All projects fulfill the development plan of the Company as well

as the market demand and the Government policy on modern urban infrustructure. Page 56


2. Feasibility plan

2.1. Arirang Office building: 131 Tran Huy Lieu, Phu Nhuan District, HCMC

Project originator: Van Xuan Construction Design and Environment Co., Ltd

Investor: MASECO

Phu Nhuan District is considered one of central districts of economic, international

trade and travel activities. The demand for office space has been increasing in recent

years and is expected to increase at a higher rate with the economic recovery in the

end of 2010-2011. Therefore, the investment in this project is not only profitable but

also meets the demand of the Company occupying 30% of total area for office space.

The construction license has been issued.

Expected time to finish: August 2010.

Total investment: VND32 billion

Total construction area: 3,000 m² (8-floor office building).

2.2. MASECO I Office building for lease: 149-151 Nguyen Van Troi, Phu Nhuan

District, HCMC

Project originator: Apave of Vietnam and South East Asia

Investor: MASECO

This office building is built on Nguyen Van Troi Street in accordance with the urban

design plan to meet the demand for more office spaces of corporations, financial

institutions and banks.

The construction license has been issued and will be in construcion soon.

Area: 720 m² (45m height, including 2 basements, 1 ground, 1 middle and 11 floors)

Construction area: 7,000 m²

Total investment: VND65 billion from share issue capital and bank borrowing.

Page 57


Time put into operation: October 2011

Time to break-even: 10 years

2.3. Hotel: 157 Phan Dang Luu, Phu Nhuan District, HCMC

Investor: MASECO

This project was originally office building and finally turned into hotel construction to

meet the demand for 3-4 star hotels of both domestic and foreign visitors.

3-4 star hotel, 60-70 bedrooms and restaurants, entertainment areas.

Area: 590 m² (45m height, including 2 basements, 1 ground, 1 middle and 11 floors).


Total investment: VND80 billion from share issue capital and bank borrowing.

Time to start construction: 2010

Time put into operation: 2012

2.4. Production plants at Dat Cuoc Industrial Zone (Binh Duong Province) and

Hiep Phuoc Industrial Zone (HCMC)

Investor: MASECO

The Company plans to move existing plants in central area to industrial zone for the

production development.

1. Agricultural plant and warehouse at Dat Cuoc Industrial Zone, Binh Duong province:

Long-term lease contract (49 years) for the land with full payment

Total area: 19,000 m²

2. Electronic plant and warehouse at Hiep Phuoc Industrial Zone, HCMC

Long-term lease contract (49 years) for the land with full payment

Total area: 12,000 m²

Page 58


All documents for these two projects have been prepared, land rental has been paid and

the certificate of land use right has been issued.

Total construction area: 20,000 m²

Total investment: VND50 billion from share offering and bank borrowings.

Time to start construction: 2010

Time put into operation: beginning of 2011

2.5. High-rise Residential apartment building: 108 Le Loi, Ward 4, Go Vap

District, HCMC

Investor: MASECO

The land use right with the value of VND67 billion has been transferred to the Company.

The plan for this project has been granted by HCMC Department of Architecture

Planning in the Document No. 2340/SQHKT-QHKV2 dated 1 July 2008.

Total area: 2,087 m² (45m height, including 2 basements, 1 ground, 1 middle and 11

floors)


Number of apartment units: 100 units + 2,000m of business area

Total investment: VND150 billion

Intial capital need: VND100 billion from share offering and bank borrowings

Expected selling price: VND20 million/m² for apartment unit, VND15 million/m² for

business area

Expected revenue: VND210 billion

After-tax profit: VND60 billion

Time to start construction: end of 2010

Time put into operation: 2012

Page 59


2.6. Other projects:

The current lease contracts of 6 individual houses have been transferred to the

ownership of the Company for a more convenient future use. The estimated

investment is VND20 billion.

The Company plans to buy houses to build up office spaces for Hanoi, Danang and

Cantho branches. These three branches will be distribution centers for the future

business development of the Company in the future. Total investment for this projects

is VND30 billion

- Hanoi branch : VND16 billion

- Danang branch: VND7 billion

- Cantho branch: VND7 billion

VII. ACTION PLAN FOR THE USE OF FUND FROM SHARE OFFERING

1. Total capital from the issue

No Shareholder No. of shares offer Total capital (VND mil)

1 Existing shareholders 5,000,000 100,000

2 Employees 550,000 13,750

3 Strategic shareholders 3,450,000 100,350

Total 9,000,000 214,100

2. Action plan

Unit: VND million

Fund from issuance No. Project Total fund

Stage 1 Stage 2

1 Arirang Office building 131 Tran Huy Lieu, Phu Nhuan District, HCMC

32,000 12,000

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2 Maseco I Office building for lease 149-151 Nguyen Van Troi, Phu Nhuan District, HCMC

65,000 20,000

3 Hotel 157 Phan Dang Luu, Phu Nhuan District, HCMC

80,000 24,000

4 Office, production plant and warehouse of electronic products at Hiep Phuoc Industrial Zone, HCMC

35,000 14,000

5 Production plant and warehouse of agricultural products at Dat Cuoc Industrial Zone, Binh Duong

15,000 7,000

6 High-rise residential apartment 108 Le Loi, Go Vap District, HCMC

100,000 40,000

7 Transfer the lease of 6 individual houses to ownership of the Company 20,000 10,000

8 Purchase properties for branches in other big cities 30,000 15,000

9 Working capital 72,000 5,000 67,000

Tổng cộng 449,000 100,000 114,000Total capital need for projects are VND449 billion in which borrowings account for 50%-

70% of total capital and the rest is capital from share issue. The remaining unused capital

is contributed to working capital.

VIII. RELATED PARTIES TO THE SHARE OFFERING PLAN

1. Consulting organization: Empower Securities Joint Stock Company (EPS)

Head office: Floor 1&2 Chuong Duong ACIC Building


Telephone: (84-8) 38 386 068 Fax: (84-8) 38 386 896

Hanoi Branch: Floor 3, 249 Tran Dang Ninh, Cau Giay District, Hanoi

Telephone: (84-4) 39 744 448 Fax: (84-4) 39 744 501

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2. Auditing organization: Auditing and Informatic Service Co., Ltd HCMC

Head office: 142 Nguyen Thi Minh Khai, District 3, HCMC

Telephone: (84-8) 39 305 163 Fax: (84-8) 39 304 281

IX. APPENDICES

1. The Charter of MASECO

2. Copy of Business Registration Certificate of MASECO

3. Audited financial statements for the year 2007 and 2008 and unaudited financial

statements for the period ended at 30 September 2009.

HCMC 26 December 2009

REPRESENTATIVE of MASECO

CHAIRWOMAN

Truong Thi Thanh Tam

General Director

Nguyen Xuan Han

Chief Accountant

Tran Thi Lua

Page 62

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