OFFICE FOR LEASE, COMMERCIAL SERVICES AND RESIDENTIAL BUILDING VP6 I OVERVIEW Project owner: COMA 18 JOINT STOCK COMPANY - Main office: Km No.10, Nguyen Trai Road, Thanh Xuan District, Hanoi City, Vietnam - Tel: 04.33544667 - COMA 18 is an joint stock company with independent accounting shares under the General Engineering Construction Company (COMA) The Ministry of Construction and be transformed into Construction Engineering JSC No 18 based on Decision No 2102/QD-BXD issued by the Ministry of Construction On 23/12/2010, the company officially changed its name to COMA 18 JSC Construction site: Linh Dam, Hoang Liet ward, Hoang Mai district, Hanoi Project Scale Construction of building and outside infrastructure for the area of 2637.4 m2 Constructing a 25-storey block and basement floors with a total construction area is 31,344 m2 Total investment: 458,466,137,000 VND (in words: four hundred and fiftyeight billion, four hundred and sixty-six million, one hundred and thirty seven thousand) Capital investment: Forms of Management: Project Self- implementation by the project owner Date for completion: II Own equity, capital form investors and loans 1st quarter 2014 BRIEF INFORMATION ABOUT PROJECT Page | 1 Project objective:  The project is designed to contribute to reduce pressure on very high housing demand, as follows :  Based on findings of Population & Housing Survey carried out on April 1, 2009 , each year Vietnam 's population increased by over million people , while the average housing area of 18.6 m2 per person To keep the average area, 19 million square meters of housing should be created for each year  The demand for housing is still very large The average housing area per capita in Vietnam has just reached over 13 m2 According to the Decision of the Prime Minister, Vietnam, up to 2015, will meet the target of 15 - 20 m2/person in 2020  Vietnam currently has over billion m2 of housing; Vietnam should have a total area of over billion m2 house in 2020 It means that in 10 years we have to build about billion m2 of housing It is average of 100 million m2 need to be build per year  It is expected that Hanoi has about 60,000 apartments will be completed in 2012, but according to statistics, Hanoi needs more than 110,000 apartments in this phase By 2020 , Hanoi City need to have 450,000 apartments to meet the needs of the people  Due to the high population density and limited land for developing projects in the city center, the demand for apartments tend to move to the outside districts with good infrastructure such as: Hoang Mai, Tu Liem, Cau Giay and Tay Ho  Meet the needs of the general construction plan of Hanoi  Create landscape architecture contribute to Linh Dam area in Hoang Liet Ward, Hoang Mai district, Hanoi  Using and exploiting land effectively  Contributing to reduce housing demand , office and commercial center of the city  Addressing the housing needs for people in the city of Hanoi  Empowerment, brand improvement for COMA 18 Company in the field of real estate investment Scope of Study Page |  Investment in new construction and equipment installation for a 25-storey block and basements  Technical connection of system building into the existing infrastructure around the building  The project is built in an area of 2637.4 m2, of which construction area for almost half the total area of 1,170 m2 with inherited prime location of new urban areas of Linh Dam, located in the south of Hanoi, 15km from the capital center The area have lake with 74ha, high green rate, an average of 13m2 water per person, the urban infrastructure system is synchronous Detail of the construction scope is presented in Table below: No Criteria Quantity Unit The total plot area 2,637.4 m2 Construction land 1,170 m2 Total floor area of building 31,344 m2 178 m2 Trade center area 4,503 m2 Office area 3,092 m2 Auxiliary Area 2,454 m2 Resident area 16,176 m2 Basement floor area (3 basements) 4,941 m2 25 Floor Nursery area Building stories 07 foundation floors, 03 basement and 02 engineering floors Building density throughout the 44.3 % The coefficient of land use 9,9 times Products and service provided: Page | VP6 Linh Dam project with 25 floors and basements located in prime locations in urban Linh Dam area, including the function of commercial services, office rental and apartments, of which :  7-storey foundation from 1st floor to 5th floor is the area is arranged for public and commercial services  6th floor to 9th floor are the offices  From 10th – 25th floor are apartments, including 138 luxuries furnished apartments designed for the type of area from 83.62 m2 to 194.56 m2 Each floor has 6-9 apartments with system highspeed elevators, high-end furniture  The basement has a floor area of 4,941 m2 building Time and cost estimate  Cost estimate: The project has a total cost of 405,085.27 million (excluding VAT) and 437,485.93 million (inclusive of VAT), which includes plans for the project include: (1) construction costs; (2) the cost of equipment, (3) PMU costs & other costs, (4) provision expense, (5) interest in the construction loan Details about the costs presented in the table below: Total project cost No Content Construction costs Equipment Costs PMU & Other Costs Provision expense Page | Unit Calculating way VND Excel VND Excel VND VND Excel Excel Amount Before Vat 246,450.2 53,099.4 65,764.1 39,771.4 After Vat 27 1,095.24 58,409.42 68,209.82 39,771.45 Interest in construction loans VND Excel 20,980.2 20,980.21 The total investment Not Excluding construction interest VND Excluding construction interest  III 405,085.2 43 7,485.93 426,065.4 45 8,466.14 Duration of the project: The project is prepared to invest time and construction from July 2011 - June 2014 (duration: 35 months) WORK BEAKDOWN STRUCTURE Investment in construction projects include a lot of work, but the study only focuses and summaries two main stages include: (1) preparation, and (2): the investment period Phase 1: Preparation tasks - Step 1: Prepare the browser application for approval End of 9/2011 of premises and preliminary architectural plans - Step 2: Preparation of investment projects construction: including TKCS and project notes to 4/10/2011 - Step 3: Evaluation of basis design End of month 15/10/2011 - Step 4: Evaluation of investment projects End of month 15/10/2011 - Step 5: Approval of project construction investment Last 10/2011 Phase : Project implementation - Step 6: Make a record of the construction drawing End of 11/2011 design and cost estimate - Step 7: Verification of the construction drawing design and estimate to 15/12/2011 - Step 8: Approval of the construction drawing design End of 12/2011 Page | and estimates - Step 9: Start of construction 12/2011 - Step 10: Construction 24 months Works breakdown structure (WBS) is presented as following: Project VP6 Preparation tasks IV Project implementation Prepare the browser application for approval of premises and preliminary architectural plans Make a record of the construction drawing design and cost estimate Preparation of investment projects construction: including TKCS and project notes Verification of the construction drawing design and estimate Evaluation of basis design Approval of the construction drawing design and estimates Evaluation of investment projects Approval of the construction drawing design and estimates Approval of project construction investment Construction ESTIMATE ACTIVITIES The financial targets of the project are presented in the table "financial analysis of the project." Page | Criteria Unit Value NPV Million 35.907>0 IRR % 24,1%>20,0% Year 8th year Payback Time Note With the discount rate = 20.0% Assess The financial feasibility Criteria Unit Value NPV million IRR % Notes 35 907 > 24.1%> 20.0% Return period: Year With the discount rate = 20.0% Financial evaluation: the project is financially feasible V SCHEDULE, HUMAN RESOUCES AND BUDGET Schedule The schedule of the project: Due to limited framework of this article, we only offer items schedule overall nature without going more A Construction project team:  PM  Project Leader  Project Accounting Department  Project engineering department Page |  Parts Supply Chain Management ( Procurement )  Project Secretary B Construction schedule - Manicure 1.1:  piles  Construction of basement foundation - 1.2 Construction of ground floor  Pour concrete frame ground  Raw Ground - 1.3 Construction of 1st floor  Pour concrete floor frame  1st floor - 1.4 Construction of 2nd floor  storey concrete frame  raw Building 2nd floor - 1.5 Construction of 3rd floor  storey concrete frame  Building 3rd floor C Equipment installation:  Installation of electrical system  Installing water supply systems  Installed drainage system  Installation of sanitary equipment  Door Installation  Installation of the machinery Page | D Complete works  Tiles  Paint  Attach  Kitchen Cabinets  Other Work E Handing work  Hygiene  Delivering F End of project:  Identify the work is done in accordance with the requirements  Check Actually Works  Project legal documents  Checking the quality of the records  Disposals procurement contracts and tenders  Settlement contracts  Records disposal contracts  Report overall project completion  Approval of the investor  Organization of test council  Test records  Handing over of works  Transfer Products  Hand over the records of the  Handover Page |  Meetings of the overall draw lessons  Dissolution  Construction equipment  Organize farewell party  Virgin human Preparation of HR: The specialized components of the project based on the original scale of the project, total investment, and project progress to plan:  Human: suitable for professional competence, sufficient in quantity and quality  Materials: Construction and shall sign the contract with the supplier to make supply chain to ensure the safety and quality of the materials needed for the project, with the note contingency plans for the bad amalgams of market volatility  The equipment and construction machines ensure enough quality to work well for construction work  Finance: Arranging roughly the capital to ensure financial resources are meeting the requirements of the project Budget:  Fixed capital investment *) The total investment of the project (including interest during construction) is: 458 465 million *) The credit terms are included in the economic analysis calculated for the following projects: + Capital of investors: 15.02% + Customer capital raising (selling apartments): 63.76% + Loans of commercial banks are: 21.22%, estimated interest rate of 20% / year Detailed capital structure is presented below: No Resource Page | 10 Investment budget % Loan credit institutions 21.22% 97,286,514,271 15.02% 68,861,613,777 63.76% 292,318,008,951 100.00% 458,466,137,000 Own capital Capital raising customer Total Amount The project includes the following costs:  Personnel costs  Direct Costs  Indirect Costs  Incremental Costs  Determine the time the costs are incurred  Provision expense  Prepare detailed budgets for each of the above Unit: million No Cost Value Total cost up to year Time year >7/2011 I Investment cost: Construction costs 2012 2013 >6/2014 6,576.41 115,273.91 173,481.23 109,753.72 405,085.27 246,450 86,257.58 123,225.11 36,967.53 246,450.22 Equipment Costs 53,099 PMU & Other Costs Page | 11 65,764 6,576.41 5,309.95 26,549.73 21,239.79 53,099.47 19,729.24 19,729.24 19,729.24 65,764.13 Provision expense II II.1 II.2 II.3 III III.1 III.2 39,771 The ability to raise capital: Own capital Capital Bank Borrowing Capital mobilized from customers 3,977.14 3,977.14 31,817.16 39,771.45 6,576.41 115,273.91 173,481.23 109,753.72 405,085.27 15.02% 6,576.41 23,054.78 31,226.62 60,857.82 21.22% 27,650.53 45,401.71 12,900.82 63.76% 64,568.60 96,852.90 96,852.90 258,274.40 27,650.53 45,401.71 12,900.82 85,953.05 Balance (II)-(I) >=0 Debt and Interest during Construction Principal investor Loan for Construction Paying interest loans (selfbalancing payment source) Total to first period Arising during the year 20,980.21 27,650.53 75,817.29 94,269.87 2,765.05 8,316.82 9,898.34 2,765.05 8,316.82 81,369.05 81,369.05 95,851.39 95,851.39 Interest payment period before Left at end of period Total payable outstanding Page | 12 85,953.05 30,415.58 30,415.58 loans and interest  The cost of the project include :  Cost of building management and operation: (includes salary, annual insurance costs , utility costs ) : Estimated range 42.000d ( $ ) / m2 per year  Expenses Depreciation and amortization The value of depreciated assets includes all costs to create assets that are accounted for by separate groups of assets Depreciation according to Circular dated 20/10/2009 203/2009/TT-BTC Depreciation and amortization of the Minister of Finance The characteristics of this project are a mixture of office, commercial and apartment should only amortize to the office area and the commercial floor apartment  Identify the depreciation period for each type of asset According to Appendix 01 " The time frame used for fixed assets " issued Circular No 203/2009/TT-BTC Depreciation and amortization on 20/10/2009 by the Minister of Finance , determine the time fixed assets used for the following projects: No Time for use Time for project Types of fixed assets Buildings and structures 25-50 25 Machinery Equipment 10-20 10 The deduction gradually (clearance, other expense, provision expense, interest building ) 5-10  Planning depreciation of fixed assets Pursuant to Article 13 of the Regulation on management, use and depreciation of fixed assets issued under Circular No 203/2009/TT-BTC, choose the method of Page | 13 depreciation for office building project, commercial and residential apartments VP6 Linh Dam: straight-line depreciation method  General expenses , administrative costs , marketing , sales equal to % of turnover  Cost of repair and maintenance works: Estimated 150,000 VND / m2 per year / (area public office + commercial)  Interest payment in operation  The taxes in accordance with the project 's current state , including: VAT : 10 % of sales Corporate Income Tax : 25 % of taxable profits Based on the total investment, based on the progress and schedule of the project’s accounting department will project planning how to budget initiative, the most appropriate and effective to serve up the requirements of each project phase The budget plan will be approved by the investor and the investor to understand the disbursement for the project to avoid delays affects the project implementation Finally, when you have the schedule, resources and budget plans clear, essential and important time management is the ability to run as well as the actual implementation of the project, how to achieve all of the project objectives outlined This is a very carefully the possibility of project management, due diligence with serious mental attitude of all the members of the project management department to direct the construction VI CONCLUSION: The economic efficiency of the project finance  Leasing Office : 3.092m2  Commercial rental : 4.681m2  Looks basement parking : 35 cars , 345 motorcycles  Service fee apartments : 138 apartments  Apartments: 138 apartments ECONOMIC EFFICIENCY Page | 14 During operations, the project will contribute to the state budget the following amounts:  Value Added Tax :1,439 billion  Corporate income tax: 3,483 billion EFFECTIVE SOCIAL PROJECTS • Meet the requirements for infrastructure, housing, apartments for People Capital and the accompanying public utilities in the immediate future and in the future • Promoting economic efficiency and the advantages Linh Dam • Create jobs and incomes for workers • Ensure business goals, business functions of the Corporation Coma 18 • Increased revenues of the city • The project will be put to use to form new residential planning system complete with integrated technical infrastructure and modern improve life for the people of the city, creating economic opportunities sales to businesses operating in the city, contribute positively to the economic growth of the city Page | 15 REFERENCES Handbook of project management Project Management Balancing hard project management skills and soft skills Page | 16