Delaware State University Master of Business Administration Entrepreneurship -----***-----

Group Assignment

Business Plan

Lecturer: Kishore Sheth & Anthony R Sanichara Team: Nguyen Thi Thanh Xuan s3147096 Doan Thi Thanh Thuy s3147072 Nguyen Thi Thanh Van s3147081

Tran Kim Chi s3154090

Tri Viet International School

Business Plan

Table of Content
I. Executive Summary..............................................................................................................4 II. The Industry and the Company and its services..............................................................8 1. The Industry.......................................................................8 2. The Company and its services............................................14 III. Market Research and Analysis.......................................................................................16 IV. Marketing Plan................................................................................................................18 1. Overall Marketing Strategy...............................................18 2. Pricing.............................................................................18 3. Sales Tactics....................................................................19 4. Advertising and Promotion................................................19 5. Place and Distribution.......................................................20 V. Management Team ...........................................................................................................21 1. Organization..................................................................... 21 2. Management Team...........................................................21 VI. Overall Schedule..............................................................................................................23 VII. Critical Risks, Problems, and Assumptions.................................................................24 VIII. The Financial Plan........................................................................................................25 1. Important Assumptions.....................................................25 2. Projected Profit and Loss..................................................26 3. Break-even Analysis..........................................................29 4. Projected Cash Flow..........................................................30 Cash.........................................................................................................................................30 5. Financing.........................................................................32 6. Projected Balance Sheet....................................................34 IX. Annexes.............................................................................................................................36 References...............................................................................................................................58

I. Executive Summary
Vietnams integration to the world economy, especially since the country officially joined WTO last November, has led to the increased competition and challenges and has brought in resources and know-how. Among many difficult challenges facing the country, preparing a professional and skillful workforce is one of the major task of the Government and the people of Vietnam, in that education and training plays a critical role. However, the current education and training system in Vietnam have not satisfied both global integrations requirements and development needs of the country. The Government has encouraged and mobilized the whole societys resources to improve the quality of education and have come up with lots of incentives to socialize its education and training system. Whistle there are around 15 private primary and secondary schools of international quality in Ho Chi Minh City, we have not seen many of these similar school projects in Hanoi to address the big imbalance between supply and demand in a city well-known for intellectual training. From our experience when looking for good quality schools in Hanoi for our own kids, the AVENTURA team would like to set up an international standard school called TRI VIET for children of high income families in and around Hanoi who are serious about their children development and would be able and willing to spend around $350/month/child for good quality education so that their children will be successful and responsible global citizens. Business Concept Tri Viet International School commits to provide international standard education to students between 6-18 years old in small class size of less than 25 students managed by our experienced, qualified and caring academic teachers. Students have semi-boarding school time, morning for Vietnamese education program developed by Vietnam Ministry of Education and Training, afternoon for British and American international curricula. Students who graduate from our primary school have English skills and scientific knowledge, equivalent to students in well-developed countries and will be able to continue their studies at our secondary and high school in the future. During the first five years, we plan to lease a fully-furnished building in Van Phuc Diplomatic Compound, where all the facilities have been made available by the property owner in order to start small and build up our brand name. Starting from third year of operations, we will commence the building of our own school facilities in An Khanh Development City which is 20 km South East of Hanoi on the Lang-Hoa Lac express high way. Construction will be completed by the end of the fifth year and the international school will be moved to the new facilities in the sixth year and other new service lines will be introduced together with the new school facilities, e.g. boarding school, etc... The Capital Needed and Use of Cash Proceed

Our Project will be primarily divided into two phases: (i) operating of the School in a leased premise and (ii) construction of a new school facility in a new urban area. Bearing this in mind, there are also two-phased of capital mobilization: Initial capital contribution by the Project Owners of USD300,000, which will be made in the first year. Such capital will be primarily used for the purpose of funding working capital requirements for the initial period. Major capital mobilization for the new school will commence from the third year, when the construction works take place. Expected capital requirement for this new school would be USD18,000,000, which include land rental, construction and installations, and interest capitalization of USD900,000; USD15,000,000 and USD2,100,000 respectively. The Project Owners expect to raise capital required for this second investment phase by Owners capital contribution of USD1,200,000 and by borrowings from banks of USD16,800,000. Such capital mobilization will be taking place over a four-year stage. The other essential part of the capital mobilization process is the acquisition of the land area for the new school. Fortunately, there has been governments incentive to support the education sector by free land rental rate for educators. As a matter of fact, the Owners have been offered with several land area for the construction of the school where we have to contribute only USD30/m2 for infrastructure works. Detailed analysis of the forecasted cash flow projection is presented in Section VIII and of the forecasted capital expenditure plan is presented in Annex 6 of this Business Plan. The Cash Raised To Date Obviously, the Owners ability to draw interest from the bank and financial institutions to provide the required financing is vital to the successful implementation of this Project. In this regard, the Owners have made several inquiries with certain banks as to their financing availability. The reply was very positive based on the assumption that by the time financing from a financial institution is required, the Project has already gone into its third year of operation. In addition, by that time, the Project could use the constructed school as collateral for the required borrowings. The total expected capital contribution by the Owners would be USD1,500,000, which could be achievable. The Size of the Market in Annual Revenues The market size is driven by some major external factors such as city population and its structure, economic growth, city expansion planin which the city demographic structure, the population growth and the household income are the most important. In addition, the current education service providers, their strengths and weaknesses also help to identify market size and market share that our school desires to achieve. Vietnam Living Standards Survey conducted by the Vietnam General Statistic Office in 2004 shows that 0-14 year old age group accounted for 25% of Hanois demographic structure. In term of income groups,
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the middle and richest group has increased from 65% in 1996 up to 75% in 2004 survey. However, when looking at the statistic figures conducted by the Primary Education for Disadvantaged Children Project in 2006, the situation shows more positive, in which the total children in primary level coming from poor families in Hanoi takes about only 15%. Together with an increase in the number of well-being families, the national average proportional spending on education in family income has also increase from an average of about 5% in 1996 up to 10% in 2004. The figures vary among income groups in Hanoi household. The big leap in education spending by Hanoi households can be observed from two recent surveys in 2000 and 2004 conducted by General Statistic Office. In 2000, the middle income families spent less than 5% on education and up to 10% in 2004 while the near richest and richest families spent from 15% to 30% of their total income. It is said that the income proportion spent on non-food categories shows the wealth level of a family. While the near richest and richest families in Hanoi account for about 20% of the total household, their demand for high quality education for their children is high. Meanwhile, at present, the dominant education service provider in Hanoi is public school system, accounts for 89% of the total service, while the private system takes about 10% and the rest belong to the service catered and managed by international organizations management. The domain experience of senior management Tri Viet International School has a strong founding and management team of four people who have extensive experience in Vietnam education and training system; in financial management and auditing; in legal and relationship management; and in outreach, community activities, marketing and sales, thanks to their seniority and strong experience in these fields. Barriers to entry Though we would not foresee strong completion in this field but the following would be considered as potential obstacles to our market entry: Lengthy administrative procedures. This will be addressed by hiring legal consultants. Construction of the new school may be delayed due to technical reasons. Other unknown future strong competitors.

Major Strategic Relationship Apart from capital mobilization, the relationship with the following strategic partners is pivotal: The government authorities, including the Ministry and Hanoi Department of Education and Training, Hanoi Peoples Committee and Department of Planning and Investment, and other related licensing bodies; The potential investors, including bank and financial institutions, venture capitalist, etc;
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 The potential property developer for provision of the required land area for school construction; The academic work force who could eventually become the schools teaching faculty;

The construction contractor, who could effectively ensure the timely completion of the construction of the new school. Revenue/Profit Projections A quick glance of the projected revenue/profit at certain point in time during the first ten years of the Project is presented in the table below: Year No. of students Sales COS Year 1 250 $954,167 ($565,000) Year 5 1,850 $6,335,833 ($4,009,400) Year 6 Year 10 2,450 5,400 $8,902,917 $19,701,667 ($5,330,000 ($11,649,600 ) ) ($1,714,110 ) ($2,561,670) ($892,500) ($112,500) $966,307 $5,377,897 the Project is further analyzed in

Operating expenses ($556,500) ($1,231,374) Interest expenses $0 ($945,000) Net profit ($167,333) $150,059 A detailed forecasted revenue and profit projection of Section VIII. Contact of the AVENTURA Team 1. Bui Anh Tuan Manager - Ernst & Young Email: Tuan.Anh.Bui@vn.ey.com Cell: 090 323 8688 2. Doan Thi Thanh Thuy Chief Representative-Stereau Email: Stereau-thuy@vnn.vn Cell: 090 327 8687 3. Nguyen Thi Thanh Van

Interpreter- Primary Education for Disadvantaged Children Project Email: Bluesky672000@yahoo.com Cell: 091 321 7907 4. Tran Kim Chi Public Information Associate- World Bank Email: ctran@worldbank.org Cell: 0903250256
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II. The Industry and the Company and its services

1. The Industry Background of Vietnam Education Vietnams integration to the world economy has been one of the main drivers of its transition to the market economy. It has led to the increased competition and has brought in resources and know-how. But the new phase of integration associated with the accession to the WTO, raises important challenges for the country in many aspects from trade competition to property rights, from infrastructure to food safety and agricultural health (Vietnam Development Report 2007)Among these many difficult challenges facing the country, preparing a professional and skillful workforce is one of the major task of the government and the people of Vietnam during the next ten years, in that education and training plays a critical role. However, the current education and training system of Vietnam is already confronting some of the challenges typically faced by developing countries. Enrollment has expanded rapidly at all levels and become almost universal in the case of primary education but the quality of education and training program as well as the school facilities have not satisfied both global integrations requirements and development needs of the country. The Government of Vietnam has encouraged and mobilized the whole society resources in order to improve the quality of education and have come up with lots of incentives to socialize the country education and training system. In Vietnam, about 94 percent of the population age 15 and over is literate. Education is free and is compulsory for 5 years of primary school. Nearly all children receive primary schooling. Less than half of young Vietnamese receive a secondary education, however, partly because there is a shortage of adequate facilities, particularly in the mountainous areas. In 1993 the government reorganized education and training system to improve its overall ability to educate students in the principles of a market economy and train them to meet the changing needs of the labor market. General education in Vietnam includes 12 grades, from grade 1 to grade 12 which are grouped into three levels: Primary -from grade 1 to grade 5, lower secondary - from grade 6 to grade 9 and higher secondary from grade 10 to grade 12. The official age for entering grade 1 is 6 years old. Universal Primary Education Law and the Education Law were passed by the National Assembly on 12 August 1991 and April 1997 respectively. The Education Law amended in 2003 has some main amendments such as abolish the certificate for primary education while public and private schools are treated equally. Currently, only public schooling costs for students from grades 1-5 are subsidized by the government of 100% total tuition fee. All other schooling costs for students (100%) past grade 6 are at the parents expense. The average monthly salary of local Vietnamese public teachers is between USD60 to USD100 per month and many supplement their income by working hours in the private language sector or home schooling in their off hours. Public
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schools are under-funded, but have made great strides in attempting to improve their facilities in the larger cities. Primary education is defined by the Governments policy as compulsory to everyone, therefore, only this education level received the subsidy from Government as the parents do not have to pay the tuition fee for their children. Therefore, general education at primary level would increase the ratio specific for this school level. Public school system does not accommodate all children at their schooling age, therefore the Government encourages organizations and individuals to open semi-public and private schools, giving favorable conditions on these business involvements. The Education Law stipulates the school construction should be prioritized and it should be put in the land use plan of all levels (Article 90 Education Laws). According to Article 91 in the Education Laws, investments on education are encouraged and will be given favorable conditions such as land use rights, credit, tax exemption or reduction for organizations and individuals to involve in education business. Teaching methods delivered in the public school system are very teacher oriented. The students are quite studious and disciplined in the classroom. The more successful students are those who can absorb the given material and transfer the knowledge to their notebooks as in class debate is not entirely welcome in every class. This is a sharp contrast to western classroom settings where participation and challenging of materials has a greater focus. Students are arranged by class number and do not move from classroom to classroom between classes. They also stay together as a small group for their entire primary, lower secondary and higher secondary schools in one location per grade. The teachers are the ones who float from classroom to classroom making it difficult for the Vietnamese teacher to establish a room of their own. This is where a western student develops much needed social skills, where as the Vietnamese students develop a stronger group bond. The end result though, is a severe shy quality in many Vietnamese when introduced to a new group of people and the need to interact. It becomes even more apparent at the university level. There is, therefore, a huge demand for quality educational services:

GENERAL EDUCATION 1999- 2000- 20012000 2001 2002 SCHOOL Primary Public Non Public Classes - class room ratio Triple shifts General education Person 14.000.000_ Pupil all level 23960 24675 25264 13387 13738 13936 13311 76 1,57 994 13664 74 1,51 711 13859 77 1,47 359 2002- 2003- 2004- 20052003 2004 2005 2006 25811 26359 26817 27231 14163 14346 14518 14688 14084 79 1,39 352 14269 77 1,32 108 14443 75 1,23 127 14601 87 1,15 98

Primary Lower Secondary Upper Secondary Hanoi demographic and average family income According to the demographic census 2004, Hanoi has more than 3 million residents living in the total areas of 921 thousand square kilometers with the population density is 3415 people/square kilometer. It is a very populous city with young population. Hanoi residents are diversified and uneven distribution and most of them locate in central districts and rapidly developed outskirts. Number of migrants to Hanoi is increasing dramatically during the past five years. They move to Hanoi and buy houses for long term residence. They are mostly employed, well-educated, young who work in both state and private sectors. With the overall economic growth of the country, living standards of residents have been improved, in 2004 average GDP per capita of Hanoi is about 18,2 million VND per year. Monthly income per capita in Hanoi in 2004 was at VND8,069,000 at almost double its figure in 1996 at VND3,793,000. Over the years, Hanoi is one of the leading localities in Human Development Index, number of poor families is reduced to lowest level, (present rate is under 1%). Family size is small with an average of 2,5 children per woman. People are paying much attention on education and health care services. In 1996, average spending on education and health accounted for only nearly 9% of household income, however in 2003 the figure for education alone reached more than 10%, varying among income groups. Proportion of household spending on education has been increasing, especially in middle,

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near richest and richest income groups. Household are becoming more willing to pay for their childrens studies. Current Situation of General Education and Primary Education System in Hanoi Hanoi has 9 center districts and 5 outskirt districts, the primary school system has reached to commune level. It means that in every district there are primary schools. At present, there are 277 primary schools in Hanoi. Most of them are public school and there are about 20 are semi-public and private schools. Total number of children is 203,230 of which more than 85% are from average and well being families (Source: Primary Education for Disadvantaged Children Project 2006 - see Annex 2 for details). Class size is normally 30-40 children, the curricula follows the Vietnamese standards. Such too populous class size, teachers attention can not reach to individual student. Though the Ministry of Education and Training has made big effort to improve the teaching methodology, the situation still slowly progresses. The teacher-centered teaching methodology has resulted in childrens shy behavior, lack of selfconfidence and social behaviors. Attending public schools, children are entitled for free of 100% tuition fee; however, the parents have to pay for other fees such as second shift study, annual school development with the total annual cost of around 30USD/school year/child. Attending the private and semi public schools, the fee is much higher than public school. Apart from tuition fee paid monthly which cost more than 350 USD/ school year/child. Parents have to pay their fees such as new enrolment fee: 30 USD/child, school development fee: 30 USD/child/school year Apart from national primary school system, Hanoi has some international schools for primary school level with the presence of some Vietnamese students. The system accounts for very modest proportion of around 1% of the total service. In doing the market research, it is obviously observed that there is imbalance in the quality of service providers against the capacity of education expenditure in Hanoi households. (See the specific information of schools in Annex 1). The schools in the public system are endowed with advantage of large school area, convenient locations that are mostly in city centre, and free of charge for primary education, while the service provided by this system is very poor especially the backward teaching method where children are in passive learning process. That is not what the well-being families want their kids to do. Looking at the modest number of the high quality international standards schools in Hanoi, they have big advantages of school facilities and teaching methodology. However, they mostly serve children of expatriates who are holding senior positions in international organizations or multinational firms which earn annual income from 120,000 up to 300,000 USD, there are only few rich families in Hanoi can afford to send their children to these schools. The private and semi-public school systems which account for 20% of education service in Hanoi are mostly having poor infrastructures such as small school areas, far location and
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difficult access. At the same time, the teaching methodology is more or less the same of what applied by public schools. In the last school year, there are new class model appeared in some private school such as Nguyen Sieu School, Thai Ha School. They normally upgrade part of school buildings to reserve for the so called high quality standard classes to serve the families who wish their children to enjoy the education service higher than normal standards. In this school year, there appeared few more newly set up schools claimed with international standard such as Hoang Dieu Victoria, Dream House The team has conducted site visits to these schools and realize that only two of them are having good infrastructures with the design of small size class and extra art subjects. These schools announce the curricula is mixed up between Vietnamese and international program, focusing on English skills for the kids. These schools charged the annual school fee ranging from 2,500 USD to 3,000USD per child. Comparison of Current Service Providers (Primary Level) Name Location Facilities Curricula Service Cost/School year (US$) 30

Public

Good location

Fundamental

Vietnamese

Large school area Private Far location, inconvenient access UN and Good location, International large area

Higher fundamental International standard

Vietnamese and 400 3,000 additional English course IB Diploma 6,500 11,000

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SWOT analysis SWOT Summary Strengths Strong management team Good relations with relevant licensing bodies Good knowledge of the market Opportunities Lucrative market Government incentive policy Low competition Strengths Strong management team: All members acquire MBA degrees with education, finance and accounting backgrounds. Some have good working experience in public relations and education project, having good acquaintance with relevant authorities such as Hanoi People Committee, Hanoi Planning and Investment Department, Hanoi Construction Department and Hanoi Education and Training Department. The market has been carefully researched and markets knowledge has been thoroughly understood. Weaknesses Ideally, the school location should be in the city center, however, it is impossible to find land area large enough to build the school with international infrastructure facilities. The proposed location to build our new school will be in the outskirt area of Hanoi about 17 km from the city center. Investing in school infrastructure often requires a big investment capital in terms of construction materials, lab equipments, school furniture, teaching aids, supplies and textbooks Opportunities With high GDP growth (11,16% in 2005 Hanoi Statistical Yearbook 2005) and the lifting in living standard, Hanoi families are having high demand for their children to enjoy an international standard education. High income families categorized as those are earning up to $ 1,000 or $ 1,500 per month could not afford to send their children to UNIS or Uniworld schools which cost them around $ 1,000 per month per child. Our school will target on this segment. The Government has provided strong encouragement to organizations and individuals to invest in education by giving incentives on land lease and tax. The Citys planning and investment department is instructed to allocate land for school construction in new residential areas. Investors in education business are entitled to preferable treatment on land lease in
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Weaknesses - Far location - High start-up cost

Threats New rivals

term of low rental fee and long rental period. To start up this school model, the company is considered as the first movers in this potential business with very low competition. Threats In the long run, the school with have to compete with new arrivals that enter the game in later stage, probably after 2010. In doing the market survey, the team found out that there are some similar projects in feasibility study. 2. The Company and its services Mission Our mission is to challenge students to be independent, lifelong learners who strive for professional and highly qualified skills able for global and regional integration and best serve our motherland-Vietnam. Vision Our vision is to become a national leader in education for our students success in the global and regional integration. We commit to provide a challenging learning environment which is child-centered, well-balanced and aims to develop the whole child. Our school is a center of joyful Education, Enlightenment and Excellence to prepare students to be successful and responsible citizens. Strategies Our strategy is to be a leading and highly qualified private school toward a boarding school meeting regional and international standards. The Services We would like to provide international standard education to students between 6-18 years old in small class size of less than 25 students with our experienced, qualified and caring academic teachers. Curriculum Students in our school have semi-boarding school time, morning for Vietnamese education program developed by Vietnam Ministry of Education and Training, afternoon for British and American International curricula. In addition, we will have our own school consolidating and intensive training program. Students who graduate from Tri Viet International Primary School will have English skills and scientific knowledge, equivalent to students in well-developed countries and will be able to continue their studies at our High School in the future. After graduating, students will be able to transfer to prestigious universities in English-speaking countries such as the United States, the United Kingdom, Australia, Canada, Singapore, Koreaor study at other International Universities in Vietnam.
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Teaching Method Focus on self study method, presentation skills, team work and discussion. Apply modern information and communication technology in teaching and learning. Science is highlighted as well as integrated with other subject areas and is a discovery process using films, pictures and books. Children in the primary school are also able to choose to learn Chinese or Japanese and receive special instruction in Art, Physical Education, Music and Martial Arts. Drama and theater receive special emphasis in our curriculum as means to help students enjoy learning and become more confident in themselves and their abilities to express their feelings. Students get to participate in a wide range of activities such as: English club, sports, dress-up day, English song festival, our end-of-the-year variety show, and many other enjoyable activities for Mid Autumn festival, Halloween, Easters, Christmas and other holidays throughout the year. International Standard Facilities We plan to have small class size of less than 25 students with two teachers and a teacher/student ratio of 1:14. Classrooms, bedrooms, canteen, computer rooms, multifunction roomsare air-conditioned and students are provided free of charge access to computer Lab with internet access, well resourced library, first-aid facility with a caring nurse and international standard facilities for physics subjects such as volley ball, basket ball, football, badmintons, baseball, aerobic, dancing and swimming classes. Goals and Objectives As students progress and knowledge is our pride and happiness so we commit to work hard to achieve the following goals: Preparing children with core skills, knowledge, talents, and self confidence for their success in the future integration by helping them to: Instill in our children a sense of self-worth and assurance, to cope with their roles in todays complex and changing society; Acquire an international standard education that inspires understanding and enthusiasm for a good citizenship and service to others; Foster positive attitudes and mutual respect for our children and to live in harmony; Provide a happy and secure environment for the children and to build a close rapport between parents and our staff; and Develop a love of learning and self-motivation by achieving academic and personal goals.

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III. Market Research and Analysis

Market Size and Trends Demographic: According to the demographic survey 2004, the crude birth growth rate of Hanoi was 2,5%/year, an average of 2,2 children/woman. The fertility level has downward tendency due to some government policy on birth rate as well as the education level of women has been increased. Apart from crude birth growth, the number of immigrants to Hanoi will contribute to the city population growth. Though there is no exact statistic figure but the visible observation is very obvious. Hanoi planned to expand to the West, with many high residential blocks are being built where the project site is selected. Market Survey Results The team has conducted a market survey among 200 of our relatives, friends and colleagues who have children between 5-14 years old and whose familys income ranged between USD18,000-USD25,000. We have developed a simple questionnaire (Annex 3) and the survey was conducted by direct interview based on the following five questions: Yes, I am I will No, not Other Interested consider intereste comments d Curriculum Teaching method International standard facilities Cost: starting $250/month excluding transportation, uniforms and other outside schools activities We will complete our new campus in 2013 in An Khanh International Development 17 km from Hanoi

Initial results of our survey are: 78% of the respondents (156) are interested and would like to know more about the curriculum as well as teaching method so that they can enroll their children as soon as our school starts. 85% of the respondents (170) are willing to pay the cost that we mentioned but would like to know what the proposed cost will cover and breakdown cost for lunches.
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24% of the respondents (48) are concerned that their children would have to travel a long distance everyday to school from 2013. So we have mentioned that the new school is also planned to have full boarding program during the week and children will spend weekends with their parents.

Competition and Competitive Edges In making the market research, the team notices that, apart from schools managed by international organizations or diplomatic residents, current private schools in Hanoi do not have international standard infrastructure such as class room buildings, labs, library and swimming pool Therefore, the project will have big competitive advantage. Estimated Market Shares and Sales It is estimated that the school will provide service for children from near richest and richest income groups which account for about 20% of city population. The near richest and richest income groups are defined as earning income from 18,000 up to 25,000 USD per year. Those people are mostly business owners and those are working in private companies and international organizations. Legal issues Our team has approached and met legal consultants and related licensing bodies such as Ministry and Hanoi Department of Education and Training, Hanoi Department of Planning and Investment, Hanoi Peoples Committee and below are legal issues that the team has to go through to get the project up and running: Set up Tri Viet Joint Stock Company specialized in education and training under the authorization of Hanoi Peoples Committee and Hanoi Department of Planning and Investment for the construction of the new school from 2010. We will contract a legal firm to help with all these procedures. Develop Tri Viet International School Business Plan to include school regulations, personnel structure, curriculums, schools head, principal, teachers as well as administrative and finance staff. The schools head must have a postgraduate degree in education management and has at least five years experience in managing a primary school. Submit the School Business Plan together with the house leasing contract signed with the Service Department for Diplomatic Corporations to Hanoi Department of Education and Training for the approval and issuing a official school establishment license. We also need to attach the list of 60 first students agreed to enroll in our school program.

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IV. Marketing Plan

1. Overall Marketing Strategy Our school will be positioned as the best of its kind in Hanoi. At present, considering the teaching method, facilities and price, there is only one real competitor (Dream House School) who will operate from the school year 2007 - 2008, i.e. one year before our operation. But in the future, it is sure that there will be the threat of other new competitors. However, we are among the first comers and we will remain the position of the best in the market. Our targeted segments will be the Vietnamese wealthy families whose income is from 18,000 up to 25,000 USD per year. This income group includes who are working for foreign organizations, in private sector and who are business owners. These families wish that their children can access an international standard education. Our potential client would also be the expatriates whose children tuition fee is not paid by their company, therefore they can not afford the high cost of UNIS school or other foreign schools in the area. 2. Pricing Education should be viewed as a special product/service whereby the customers perceived benefits in the service (i.e. the education) are more important than the perceived costs. In this regard, it is perhaps most appropriate that the Project Owners pursue the perceived valuebased pricing strategy, (Kotler, P. et al, 2006). This strategy would specifically make more sense when the target market of the Project would be the wealthier classes in Hanoi, as well as the expatriate families who could not afford to send their kids to the more expensive schools (e.g. the UN International School, etc.). These segments would particularly want to have their children being educated in an English speaking environment, and arguably, more advanced teaching method. According to the results from Survey on Household Living Standards 2004 conducted by Vietnam General Statistics Office, each family spends 10% of their income for their children education fee. However, this percentage is higher with the rich families of which the majority is ready to spend an average of 25% of their income for the education of their children, hoping that their children will receive the best education standard. Since there are little existing competitors in the market who provide a similar service line as what the Project Owners are intending to do, it is difficult to quantify the perceived value of the customers would be. In this regard, the Owners have made some survey as to the current tuition fee being proposed by other educators in Hochiminh city and in Hanoi.

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Tuition fees (USD/school year) Boarding fees N/A N/A N/A (USD/school year) Sources as derived from the official website of International Primary School in Hochiminh city (http://www.internationalprimaryschool.edu.vn) where there are 10 primary and secondary schools under this system. As the competition level in Hanoi is relatively low, the Project Owners will the market skimming approach by offering a relatively higher price package in the consideration that the perceived benefits by their potential market is higher in Hochiminh city. The following decisions are made: Tuition fee is USD2,500/school year for the first five year and there can be an annual fee increased of up to 5%, based on costs of living and school expenditure. Enrolment fee is USD500/new student; Boarding fee (available in the next 5 years) will be USD2,500/school year.

International Primary School 1,400

Dream House School 2,890

Uniworld School 4,800

3. Sales Tactics Before the school opening, we will conduct a sale program in which leaflet and brochure will be delivered door to door at the targeted areas where defined as the living areas of wealthy families. The new development areas such as Ciputra, Trung Hoa Nhan Chinh, the Manor, and Chelsea Park where young wealthy families stay will be priorities. We will organize the consultation days for parents at big and high quality kindergartens such as: Kaola House, Ohana, Vietkids, Kidlinks, Sesame Garden, Kids Garden, Chip Chip, etc... where we can give direct information to the parents who are seeking for their children a good primary school with good quality and reasonable price. A free one week orientation course will be offered to children and parents in order to make them better understand our school concept and philosophy. In addition, the week will help the children to feel comfortable and adapt easily in the new environment. In parallel, we will launch an interactive website, where parents can find all information they need about the school, management, curriculum, facilities service, learning program, teachers, service costs, contacts, registration forms, etc... Parents can be able to check their children learning results online anytime there. 4. Advertising and Promotion An advertising campaign will be carried out before the launch of the school.

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We will advertise in Lao dong and Vietnam News Newspapers. We would like to choose them because they have a great number of readers. In addition, Vietnam News has a great number of readers who are our targeted clients. Online newspapers such as Dantri and Vnn will be chosen for online advertising based on their huge number of visitors. In addition, a promotion program will be applied. Those who register early can be entitled a certain discount on the enrolment fee. And those who pay the whole annual fee immediately after registration can be entitled a 5% discount of the tuition fee. 5. Place and Distribution We eye a building in Van Phuc Diplomatic Compound for the first 5 year stage. This building is located in an appropriate area: quiet, safe, easily accessible for school bus, reasonable rental fee, etc... In parallel, we try to work with An Khanh New Development Zone developer to get a 3 hectare area for our own school. This zone is 17 km from the centre of Hanoi. It is suitable for the boarding school and is not too far for a semi-boarding school.

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V. Management Team
1. Organization The AVENTURA team plan to set up the Tri Viet joint stock company specialized in education and training with each founder equal share of 25%. The companys legal capital is set at USD1,500,000 and each of the founder will contribute USD375,000 for the start up fund. Tri Viet International School is part of the Tri Viet joint stock company and supposed to be authorized by the Ministry of Education in Viet Nam and the Hanoi Peoples Committee. The School will be administered by a Head of School and governed by a Board of Director (BOD). The BOD is composed of five board members, of whom four appointed by the four co-founders and one is elected by the parents. The School Head and the principles at the school are also ex-officio members of the Board. Board of Directors will comprise of five members appointed and elected as described in the attached box. Board of Directors will meet twice a week to review and approve all policies/procures/guidelines necessary. Co-owners appointed Co-Chairperson Co-Chairperson Treasurer Secretary Parent-Elected members Ex-Officio members One Director Head of School Primary School Principal Secondary School Principle

2. Management Team School Head: will be responsible for the overall management of the school and report directly to the Board of Directors. The school head will have to meet MOETs school head requirements. Primary School Principal: in charge of curriculum and teaching for the whole primary school, international hired at least six months before the first school year starts. Secondary School Principal: in charge of curriculum and teaching for the whole secondary school, who is only hire starting from the forth year of operations. Teaching Department: consists of an international and national teacher ratio of 20:80 responsible for the overall curriculum development and teaching method and program and report to the School Head
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Outreach and Community Services Department: in charge of overall outreach and community services program for students and teachers of the school and reports directly to the School Head Administrations and Facilities Development: in charge of school facilities development and all other administrative works related to day-to-day operations of school and reports directly to the School Head. Finance and Business Development Department: in charge of business development and financial issues and report directly to School Head and Board of Directors.

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VI. Overall Schedule

07 No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Task name Application for opening school Negotiation on the building rental fee and conditions Design for rehabilitation works on the existing building Bidding and Selection of contractor for the rehabilitation works Rehabilitation works on the existing building Equipment supply and installation Advertising campaign Information day and enrolment starting day Starting school year Negotiation procedures on the land lot in An Khanh Establishment of the campus construction project Evaluation on the feasibility project Detailed design Detailed design evaluation and approval Construction and installation work on the campus Starting year school at the new campus 6,0 m 6,0 m 3,0 m 9,0 m 3,0 m 30,0 m Duration 6,0 m 1,5 m 1,5 m 1,0 m 4,0 m 0,5 m 1,0 m Start Q4 Q 1 2008 Q Q 2 3 Q 4 Q 1 2009 Q Q 2 3 Q 4 Q 1 2010 Q Q 2 3 Q 4 Q 1 2011 Q Q 2 3 Q 4 Q 1 2012 Q Q 2 3 Q 4 Q 1 2013 Q Q 2 3 Q4

01/10/2007 05/11/2007 01/01/2008 15/02/2008 01/04/2008 01/08/2008 15/04/2008 15/05/2008 05/09/2008 01/04/2009 01/09/2009 01/01/2010 01/04/2010 01/01/2011 01/04/2011

VII. Critical Risks, Problems, and Assumptions

As discussed in Section VIII.1, the following assumptions are important to the successful implementation of the Project: The Government will continue its policy to open the investment opportunities to nonstate owned investors to invest into the education sector; The Government continues its support for the education sector by maintaining such incentives as lower land rental rate, taxes (e.g. enterprise income tax, value added tax, etc.) exemption status; The economic growth of the country will continue at relatively high rates.

Furthermore, the following critical success factors will need to be addressed during the Projects lifecycle: Relationship with the government authorities, including the Ministry of Education and Training and other licensing bodies are essential to smooth operations of the Project; Relationship with the potential investors, including bank and financial institutions, venture capitalist, etc. Ability to negotiate with other stakeholders to come to terms with the Owners expectations. E.g.: o Lease terms of existing facilities for school premises; o Lease agreement with the property developer on the land areas; o Others Ability to secure the services from international and local teaching faculties;

Ability to complete the construction within the required schedule to as to give the Owners first-mover advantage in this market. We would also need to consider other risks: The inflation rate of the USD in the Vietnamese context;

The fluctuation in the market interest rate (whether the interest rate in the next three years would be as assumed); The foreign exchange risk, relating to the movements of the USD against other currencies, especially to the Vietnam dong since majority of the Projects transactions would be VND-based.

VIII. The Financial Plan

The financial plan for the international school venture is built based on the following scenarios: o For the first five year, the international school venture will operate in an operating leased premise, where all the facilities have been made available by the property owners; o Starting from the third year of operations, the venture will commence the construction of its own schooling facilities in an new urban areas. Construction will be completed by the end of the fifth year and the international school will be moved to the new facilities in the sixth year. Other new service lines will be introduced together with the new school facilities, e.g. boarding school, etc. Bearing this in mind, the financial plan will be presented and analyzed over a 10 year horizon so as to better illustrate the forecasted financial position and business performance of the venture in this two-phased project. 1. Important Assumptions Important assumptions The following assumptions are important to the commercial viability of this international school project: The Government will continue its policy to open the investment opportunities to nonstate owned investors to invest into the education sector; The Government continues its support for the education sector by maintaining such incentives as lower land rental rate, taxes (e.g. enterprise income tax, value added tax, etc.) exemption status; The economic growth of the country will continue at this relatively high rate;

General assumptions Some of the other assumptions being used in arriving at this financial plan include:
General assumptions The inflation rate of the United State dollar Construction period Credit sale Credit purchase Terms of repayment of long term loan principal Interest rate of long term (secured) loans Relatively insignificant Three years from Year 3 to Year 5 of the Project 0% 0% 6 years 7.5%

Table 1: General assumptions in the financial plan for the first 10 years of the Project

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2. Projected Profit and Loss Education business might appear as a not for profit organization while in fact, they are quite profitable. With the ever-growing economy, there is an increasing demand for the better education for the Vietnamese children. And this international school venture, with its core business objectives of providing international education quality standard, at affordable prices, will surely be the big hit in the market. For this reason, we have projected that the project will turn to a profitable position in its second year of operations.

26

Projected Profit and Loss for the first 10 years of the Project
Currency: USD Pro Forma Profit and Loss Year Year 1 2008 $625,000 $125,000 $0 $204,167 $954,167 $565,000 $389,167 Year 2 2009 $1,625,000 $200,000 $0 $530,833 $2,355,833 $1,469,000 $886,833 Year 3 2010 $2,625,000 $200,000 $0 $857,500 $3,682,500 $2,373,000 $1,309,500 Year 4 2011 $3,625,000 $200,000 $0 $1,184,167 $5,009,167 $3,211,000 $1,798,167 Year 5 2012 $4,625,000 $200,000 $0 $1,510,833 $6,335,833 $4,009,400 $2,326,433 Year 6 2013 $6,431,250 $200,000 $325,000 $1,946,667 $8,902,917 $5,330,000 $3,572,917 Year 7 2014 $8,531,250 $200,000 $525,000 $2,566,667 $11,822,917 $7,075,600 $4,747,317 Year 8 2015 $10,631,250 $200,000 $725,000 $3,186,667 $14,742,917 $8,821,200 $5,921,717 Year 9 2016 $12,731,250 $200,000 $925,000 $3,806,667 $17,662,917 $10,514,000 $7,148,917 Year 10 2017 $14,175,000 $200,000 $1,100,000 $4,226,667 $19,701,667 $11,649,600 $8,052,067

Tuition fees Enrolment fees Boarding fees Other school fees Total sale Cost of Goods Sold Gross Margin Operating Expenses: Sales and Marketing expenses Total General and Administrative Expenses Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit

$25,000

$25,000

$25,000

$25,000

$25,000

$50,000

$50,000

$50,000

$50,000

$50,000

$531,500 $556,500 ($167,333) $0 ($167,333)

$673,670 $698,670 $188,163 $0 $188,163

$817,707 $842,707 $466,793 ($360,000) $106,793

$1,017,036 $1,042,036 $756,131 ($660,000) $96,131

$1,206,374 $1,231,374 $1,095,059 ($945,000) $150,059

$1,664,110 $1,714,110 $1,858,807 ($892,500) $966,307

$1,899,022 $1,949,022 $2,798,295 ($682,500) $2,115,795

$2,124,725 $2,174,725 $3,746,991 ($472,500) $3,274,491

$2,375,700 $2,425,700 $4,723,216 ($262,500) $4,460,716

$2,511,670 $2,561,670 $5,490,397 ($112,500) $5,377,897

Table 2: Projected Profit and Loss for the first 10 years of the Project

For a more comprehensive illustration of the expected profit and loss of the Project in its first 10 years, please refer to Annex 4.

With the first years student intake of only 250 pupils, which is quite reasonable, the international school will be expected to be receiving at least 400 pupils every year afterward. With the commencement of the new school facility in Year 6, the new pupil intake will be expected to be at least 600 kids/year and this is where the project owners start to yield real fruits due to significant increase in revenue while land costs have significantly reduced (due to the fact that the owners have been able to lease the land at much lower costs as compared to previous years). Gross Margin and Net Margin for the first 10 years of the Project

Gross margin vs Net margin in the first 10 years

50% 40% 30% 20%

%
1 0% 0% -1 0% -20% Y ear 1 Y ear 2 Y ear 3 Y ear 4 Y ear 5 Y ear 6 Y ear 7 Y ear 8 Y ear 9 Y ear 1 0

GM NM

Year

Chart 1: Gross Margin and Net Margin for the first 10 years of the Project

The Projects Gross Margin (GM) will be maintained at relatively the same level during its operating life, at around 35% to 40%. This is quite reasonable given the fact that most of the direct costs of sale are sale volume-based (e.g. the payroll expenses for the academic staff, or the food and beverage costs will be very much linked to the number of students attending the school). On the other hand, there will be some significant fluctuation in the Net Profit Margin (Net Margin or NM) during the first 10 years of the Projects life: Starting as a negative in the first year, the Net Margin will be positive in the second year but will stay very low in the Year 3 to Year 5 since this is the period where the construction phase will be commencing, resulting in significant increase in interest arising on the loan capital obtained to finance the construction costs; Net Margin will start to pick up from Year 6 and will rise to as high as 30% in Year 10 for the reason that there will be significant increase in student intake from Year 6 (due to the expansion of the school facility) and the reducing interest expenses;

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 Net Margin will be expected to be staying at around the Year 10s level afterward since there will not be any significant activities expected to be occurred. 3. Break-even Analysis Break-even analysis is a good indicator on mow many students does the School require in order to cover for its fixed costs. The following chart is a summary of the break-even number of students over the first ten years of the Projects life:
Break-even points in the first 10 years of the Project
2,500

2,000

No of students

1,500

1,000

Breakeven point

500

0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Year

Chart 2: Break-even analysis in the first 10 years of the Project

The following table also illustrates how the break-even number of students was arrived at each year, as well as the total fixed costs, the unit variable costs and unit sale price for each year:
Year Fixed costs Unit variable costs Unit sale revenue Breakeven point
Year 1 619,000 Year 2 861,170 Year 3 1,105,207 Year 4 1,404,536 Year 5 1,693,874 Year 6 2,346,110 Year 7 2,793,022 Year 8 3,230,725 Year 9 3,693,700 Year 10 3,977,670

2,010 3,858

2,010 3,624

1,667 3,507

1,509 3,455

1,406 3,425

1,553 3,634

1,707 3,638

1,801 3,640

1,852 3,642

1,874 3,648

335

533

601

722

839

1,128

1,447

1,756

2,064

2,242

Table 3: Fixed costs, Unit Variable Cost and Unit Sale Revenue for the first 10 years of the Project

We are of high confidence that the School could well surpass the required break-even number of students in its second year of operations, owing to the fact that it could retain the Class 1 pupils, who would then move up to their Year 2 while a new batch of Class 1 pupils would join in.

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4. Projected Cash Flow At the initial stage of the operations, the Project owners would have to contribute their own money into the School to meet its operating requirements, as well as to cover the expected operating losses for the first year. During the Year 3, when the Owners start the construction works, capital would have to come in two forms: Cash The following chart represents the expected net cash flow and the cash position of the Project in its first 10 years of operation:
Net Cash Flow and Cash Balance in the 1st 10 years
$2,750,000 $2,500,000 $2,250,000 $2,000,000 $1 ,750,000 $1 ,500,000

Long-term borrowings from financial institutions; and New capital contributions from Owners.

US$

$1 ,250,000 $1 ,000,000 $750,000 $500,000 $250,000 $0 ($250,000) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 1 0

Net Cash Flow Cash Balance

Year

Chart 3: Net Cash Flow and Cash Balance in the first 10 years of the Project

The Net Cash Flow and Cash Balance of the Project are expected to be very low in the first seven years (the Net Cash Flow could sometimes be negative) which is owing to the fact that this is the main construction period and the Companys major cash flow movements would be in financing investment activities and servicing the debts. However, after the completion of construction works, the cash flow position would be in a much better position and this is when the Project Owners start to earn fruits of their investment with some significant dividends being paid out. The following chart better illustrates the cash flow movement of the Project in the first 10 years, which are broken down into three main activities: (i) operating, (ii) investing and (iii) financing.

30

Cash Flow by Activities in the first 10 years of the Project

Currency: USD Pro Forma Cash Flow Year Year 1 2008 Year 2 2009 Year 3 2010 Year 4 2011 Year 5 2012 Year 6 2013 Year 7 2014 Year 8 2015 Year 9 2016 Year 10 2017

Cash flow from operating activities Cash Sales Cash Spending Repair and maintenance Net cash flow from operating activities Cash flow from investing activities Land rental Purchase Long-term Assets Net cash flow from investing activities Cash flow from financing activities Proceeds from long-term loans New capital contribution Repayment of long term loans Interest payment Dividends to owners Net cash flow from financing activities

$954,167 ($725,500) $0 $228,667

$2,355,833 ($1,767,900) $0 $587,933

$3,682,500 ($2,810,340) $0 $872,160

$5,009,167 ($3,750,824) $0 $1,258,343

$6,335,833 ($4,648,156) $0 $1,687,677

$8,902,917 ($6,273,242) ($30,000) $2,599,675

$11,822,917 ($8,213,886) ($30,000) $3,579,030

$14,742,917 ($10,154,595) ($50,000) $4,538,322

$17,662,917 ($12,037,774) ($100,000) $5,525,142

$19,701,667 ($13,299,032) ($100,000) $6,302,635

($396,000) ($28,600) ($424,600)

($396,000) ($42,460) ($438,460)

($396,000) ($5,061,100) ($5,457,100)

($396,000) ($4,725,490) ($5,121,490)

($396,000) ($4,723,708) ($5,119,708)

($900,000) ($313,460) ($1,213,460)

$0 ($83,306) ($83,306)

$0 ($83,306) ($83,306)

$0 ($81,082) ($81,082)

$0 ($58,720) ($58,720)

$0 $300,000 $0 $0 $0 $300,000

$0 $0 $0 $0 $0 $0

$4,800,000 $0 $0 ($360,000) $0 $4,440,000

$4,800,000 $500,000 ($800,000) ($660,000) $0 $3,840,000

$5,400,000 $600,000 ($1,600,000) ($945,000) $0 $3,455,000

$1,800,000 $100,000 ($2,500,000) ($892,500) $0 ($1,492,500)

$0 $0 ($2,800,000) ($682,500) $0 ($3,482,500)

$0 $0 ($2,800,000) ($472,500) ($1,000,000) ($4,272,500)

$0 $0 ($2,800,000) ($262,500) ($2,000,000) ($5,062,500)

$0 $0 ($2,000,000) ($112,500) ($2,000,000) ($4,112,500)

Net cash flow Cash balance

$104,067 $104,067

$149,473 $253,540

($144,940) $108,600

($23,147) $85,453

$22,969 $108,422

($106,285) $2,136

$13,224 $15,360

$182,515 $197,876

$381,561 $579,436

$2,131,415 $2,710,851

Table 4: Cash Flow by Activity in the first 10 years of the Project

(For a more comprehensive illustration of the expected cash flow of the Project in its first 10 years, please refer to Annex 2).

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5. Financing There will be two primary sources of financing of the Project: Equity financing Equity financing is to be contributed by the Project Owners. Such equity financing will be further split as follows: Initial contribution of USD300,000 to meet working capital requirement in the first year, when cash flow from operating was not sufficient to meet investment requirement; Additional capital contributions are required in the Year 4, 5, and 6 when the construction works of the new school facilities will be commencing. This is the period when major capital expenditures will have to be incurred and additional cash flow would also be required to service long-term loan principal repayment and interest payment. In total, the Project Owners would have to contribute to the Project USD 1,500,000. However, the return (in the form of dividends) are expected to be good when dividends are paid out in Year 8, 9 and 10 at USD1,000,000, USD2,000,000, and USD2,000,000 respectively, representing a Return on Investment in Year 10 of 333%. Debt financing The Owner would also utilize the other source of capital in order to finance its expansion plan by way of obtaining the long-term borrowings from a financial institution. This is expected to be not so difficult given the fact that: The Vietnams capital market is on the growing moods and are opening up opportunities for investors (of all types); Education is area of special interest by the Government and there could be government backed securities granted to the Project so that it could obtain the loans; The Project also has other tangible assets that could be used as security for the loans (i.e. the constructed assets itself). Based on the expected capital expenditure plan, the total investment costs of the whole Project is expected to be USD15 millions. In order to meet this financing requirements, the Project Owner should have to be able to draw debt capitals of USD16.8 millions (see Table 4 above) since in certain years, the cash flow generating from operating activities would only be sufficient to meet the servicing of interest payment, but not loan principal repayments. However, given a loan period of six years, by the end of year 10, the Project would be in a relatively debt-free position (see further analysis in Section VIII.6 Projected
32

Balance Sheet). Starting from Year 7, the School would have generated more-thansufficient cash flow from its operating activities to, not only, meet loan principal repayment and interest payment, but also to distribute dividends to the Project Owners. Please refer to Annex 6 for more detailed insight on the forecasted capital expenditures of the Project in the first 10 years and Annex 7 for other assumptions in arriving at this projected cash flow.

33

6. Projected Balance Sheet Balance sheet

Currency: USD Pro Forma Balance Sheet Year Assets Current Assets Cash Total Current Assets Non Current Assets Long-term Assets Accumulated Depreciation Long-term prepaid land rental Total Long-term Assets Total Assets Liabilities and Capital Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Distributed dividends Total Capital Total Liabilities and Capital 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$104,067 $104,067 $28,600 $0 $28,600 $132,667

$253,540 $253,540 $71,060 ($3,770) $67,290 $320,830

$108,600 $108,600 $5,132,160 ($13,137) $5,119,023 $5,227,623

$85,453 $85,453 $9,857,650 ($119,349) $9,738,301 $9,823,754

$108,422 $108,422 $14,581,358 ($315,967) $14,265,392 $14,373,813

$2,136 $2,136 $14,894,818 ($1,038,835) $882,000 $14,737,983 $14,740,120

$15,360 $15,360 $14,978,124 ($1,801,570) $864,000 $14,040,554 $14,055,915

$197,876 $197,876 $15,061,431 ($2,574,901) $846,000 $13,332,530 $13,530,406

$579,436 $579,436 $15,142,512 ($3,358,826) $828,000 $12,611,686 $13,191,122

$2,710,851 $2,710,851 $15,201,233 ($4,153,065) $810,000 $11,858,168 $14,569,019

$0 $0 $300,000 $0 ($167,333) $132,667 $132,667

$0 $0 $300,000 ($167,333) $188,163 $320,830 $320,830

$4,800,000 $4,800,000 $300,000 $20,830 $106,793 $427,623 $5,227,623

$8,800,000 $8,800,000 $800,000 $127,623 $96,131 $1,023,754 $9,823,754

$12,600,000 $12,600,000 $1,400,000 $223,754 $150,059 $1,773,813 $14,373,813

$11,900,000 $11,900,000 $1,500,000 $373,813 $966,307 $0 $2,840,120 $14,740,120

$9,100,000 $9,100,000 $1,500,000 $1,340,120 $2,115,795 $0 $4,955,915 $14,055,915

$6,300,000 $6,300,000 $1,500,000 $3,455,915 $3,274,491 ($1,000,000) $7,230,406 $13,530,406

$3,500,000 $3,500,000 $1,500,000 $6,730,406 $4,460,716 ($3,000,000) $9,691,122 $13,191,122

$1,500,000 $1,500,000 $1,500,000 $11,191,122 $5,377,897 ($5,000,000) $13,069,019 $14,569,019

Table 5: Forecasted Balance Sheet for the first 10 years of the Project

This is a simplified version of the forecasted balance sheet of the Project in the first ten years whereby credit sale and credit purchases are assumed to be 0%.

34

Consistent with the forecasted cash flow and profit and loss, the Project will experience increasing asset based during the first ten years, especially from Year 3 onwards, when the Owners will have commenced the construction phase of the new school facility. During the period from Year 4 to Year 7, the Project will experience high gearing ratios, which is explained by the fact that significant debt capital will need to be obtained in that period to service the capital expenditure requirements for the construction of the new school. However, after that period, the gearing ratio will reduce dramatically when the new School will come into full operations and cash flow from operating activities will far surpassed the cash flow required for loan repayment and interest payments. By the end of Year 10, the Project will be in a relatively debtfree position. A summary of the relevant financial indicators of the Project in its first 10 years are presented in Annex 8.

35

IX. Annexes Annex 1 List of schools in Hanoi

1. Hanoi International School Hanoi International School opened in 1996, locating in one of the main boulevards of Hanoi, close to diplomatic missions and expatriate residences. There are about 226 students from 318 years old. Classes are small (maximum size 15). All teachers are certified and experienced expatriates from the US, Canada, Australia, New Zealand, the UK and continental Europe. Teachers are having an average of five years international school experience. The school's curriculum is international and the medium of instruction is English. Students receive close attention from teachers and instruction is geared to meet their needs and abilities. The tuition fee: 8,500 USD/school year together with some other compulsory fees such as: Development Fund Fee: 2,000 USD charged for each of the first three years attending the school. 2. United Nations International School of Hanoi The United Nations International School of Hanoi (UNIS) is a coeducational Englishlanguage day school and located in Tay Ho District, about 6 kilometers from the city centre and was established through the support of the United Nations Development Program in Vietnam (UNDP) in 1988 as a non-profit organization. The school now has seven hundred fifty seven students (757) enrolled between Discovery and 12th Grade classes, representing nearly forty (40) nationalities. Their student populations come from families of foreign diplomatic missions, international organizations, international NGOs, foreign business firms as well as local Vietnamese families. As of August 2006, the school has 100 full-time teaching staff representing 17 countries and offers instruction in English language and literature, mathematics, science, social studies, computer, French, Swedish and Vietnamese language/culture, as well as art, music and physical education. Classes are limited to 18 in elementary and 22 in the middle and high schools and the student/teacher ratio now is 12:1. The program of studies is international in its focus and draws on materials from Canada, the UK, Australia, New Zealand and the US. Tuition fee: Annual tuition for the 2006-2007 school year ranges from US $5,054 for the half-day Discovery Program to US $12,411 for Grade 12. An annual development fee of US$

36

3,000 for grades Kindergarten through 12 is also levied with Pre-kindergarten paying US$ 1,500. Other additional fees for school bus, EAL may apply to some students. 3. Lycee Francais Alexandre Yersin The Alexandre Yersin French International School Ha Noi enrolls over three hundred students, from pre-school through graduation, the majority of students are French. The school is under the guardianship of the Embassy of France in Hanoi. The quality of teaching provided conforms to the French curriculum. The decision on what courses should be followed is recognized in all French school in France and abroad. Registration fee: 940USD Tuition fee for Primary Children: 4.890 USD/school year Some other international schools are Arabic School-Al Fateh, Japanese School, Korean School, Russian School catering education service for children from these nationalities currently working in Hanoi.

Current competitors with similar business model

1. VIP International School Respond to the demand of many parents in Hanoi who are wishing to send their children to international standard school in Hanoi. This school was set up from private model school established in 1997. The school delivers bi-language teaching program. In school year 2007-2008, the school will enroll 500 pupil from grade 1 to 5, class size is from 20-24 children. In the morning, children will learn Vietnamese program. In the afternoon, program designed to focus on the language skills and individual capability in modern program. Children will learn English with native speakers from English speaking countries. The school locates in the area of 7,000 m2, one modern building is going to complete. The school has plan to expand this model to lower secondary and upper secondary. Tuition fee: $1,600 USD/child/school year First registration fee: $ 200 School development fee: $100/each following years 2. Nguyen Sieu Private School Opened International English Classes for primary level from school year 2005-2006 with 4 grade 1 classes, there are 15 to 20 children per class with two main teachers. English lessons

37

will be in charged by foreign teachers. Children will be taught Vietnamese program in the morning and English lesson in the afternoon in international program. Tuition fee: $ 900 including English lessons and meals 3. Hoang Dieu Victoria School The Hoang Dieu Victoria School (www.hdvictoriaschool.net) is a dual English-Vietnamese semi-boarding school and located in Cam Hoi street, Hai Ba Trung district of Hanoi. The school has been in operation for more than a year and now has one Grade 1 class, one Grade 6 class and 16 Grade 10 classes with the potential registration for the next school year of five more Grade 1 classes, five Grade 6 classes, and 16 Grade 10 classes. Their student populations come from mainly local Vietnamese families with above average incomes. As of May 2007, the school has 100 full-time teaching staff from Vietnam and five foreign teachers and offers Vietnamese curriculums instruction in the morning and afternoon for English curriculums in mathematics and sciences. Class sizes range from 20 to 32 students with different tuition fee levels. Tuition fee: Annual tuition for the 2007-2008 school year ranges from US $40/month for class of around 32 students, US$ 55 for classes between 22-25 students and special English class of less than 20 students place a tuition fee of $250/month. The school applies $50 for registration and an annual development fee of US$ 20. Other additional fees for school bus, sight-seeing and uniform may apply to some students. 4. Dream House International School Located in the area of 5000 m2, about 10 km from city center. The school is two-storey building of approximately 2000 m2 with large playground, gardens and a beautiful view by the West Lake. The school employs international curriculum with a strong emphasis on English language proficiency, the learning outcomes based on Cambridge Young Learners Certificate guidelines. The English program includes maths and science enrichment lessons in which students further build their language and, most importantly, learn to apply their English in a real learning context, thereby taking the first steps in preparing students for further studies at home or abroad in schools or universities. Tuition fee: Annual tuition fee: 2,600USD with other compulsory fees such as admission fee of 150USD, annual school development fee of 400USD.

38

ANNEX 2 List of primary schools in Hanoi and their enrolment rate

(*) District TenHuyen Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ba nh Ty H Ty H Ty H Ty H Commune TenXa Phc X Nguyn Trung Trc Qun Thnh Trc Bch in Bin Kim M i Cn Cng V Cng V Cng V Cng V Ngc Khnh Ngc Khnh Ging V Ngc H Ngc H Thnh Cng Thnh Cng Vnh Phc Vnh Phc Bi Bi Thy Khu Thy Khu School Code (DFA 8 digits) TTHId TH Ngha Dng TH Nguyn Trung Trc TH Nguyn Tri Phng TH Vit Nam - Cu Ba TH Phan Chu Trinh TH Vn Phc TH i Yn TH Hong Diu TH Nguyn B Ngc TH Thc Nghim TH DL H Ni TH Ngc Khnh TH Th L TH Kim ng TH Ngc H TH Ba nh TH Thnh Cng A TH Thnh Cng B TH Hong Hoa Thm DL Le Thanh Tong TH ng Thi TH DL ng TH Chu Vn An THDL Hn Thuyn Total Enrolment G1_5T 621 963 985 1386 1143 449 926 1516 515 819 198 1171 552 1640 685 798 1347 1070 981 75 803 135 1640 93 Maths/Vn Textbooks Students without G1_5NB 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 % Students with
G1_5Bookper

Stationery (pens..) Students without G1_5NS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 % Students with

G1_5Statper

Classified Poor Poor Students G1_5Poor 72 0 17 13 17 50 41 30 11 0 0 0 0 0 5 26 7 36 0 0 0 0 32 0 % Students poor

G1_5Poorpe r

VLS Materials EM %EM Students Students with with G1_5VLS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

G1_5EVLSper

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

11.59% 0.00% 1.73% 0.94% 1.49% 11.14% 4.43% 1.98% 2.14% 0.00% 0.00% 0.00% 0.00% 0.00% 0.73% 3.26% 0.52% 3.36% 0.00% 0.00% 0.00% 0.00% 1.95% 0.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

39

Ty H Ty H Ty H Ty H Ty H Ty H Ty H Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hon Kim Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng

Yn Ph Yn Ph T Lin Nht Tn Qung An Xun La Ph Thng Trn Hng o Trn Hng o Hng Bi Phan Chu Trinh L Thi T L Thi T L Thi T Hng Bum ng Xun Hng B Hng Bng Hng Bng Hng Gai Hng Gai Hng Trng Hng Trng Phc Tn Chng Dng Phm nh H Nguyn Du L i Hnh Bi Th Xun Ph Hu Ng Th Nhm Phm nh H ng Nhn ng Mc

TH An Dng THDL Nguyn Vn Huyn TH T Lin TH Nht Tn TH Qung An TH Xun La TH Ph Thng Binh Minh Quang Trung L T Trng V Th Su Nguyn Du Trng Vng DL Nguyn Hu Trn Nht Dut Kim ng Hng H in Bin Thng Long Nguyn B Ngc DL Nguyn Hin Trn Quc Ton BC Trng An Phc Tn Chng Dng Nguyen Dinh Chieu Ty Sn Vn H B Triu on Kt Ng Th Nhm L Ngc Hn Trng Trc ng Nhn

567 43 362 497 685 733 657 686 1344 355 460 1556 1522 677 411 483 801 666 1305 435 248 1144 714 372 738 770 962 295 358 514 683 1559 1177 599

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 99.16% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 72.07% 100.00% 100.00% 100.00% 100.00% 100.00%

28 0 0 0 22 2 32 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17 0 17

4.94% 0.00% 0.00% 0.00% 3.21% 0.27% 4.87% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.09% 0.00% 2.84%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100 0 0 0 0 4

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

40

Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng Hai B Trng ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a ng a

Bch ng Thanh Lng Thanh Nhn Cu Dn Bch Khoa Bch Mai Qunh Li Qunh Mai Vnh Tuy Vnh Tuy Vnh Tuy Vnh Tuy Minh Khai Trng nh ng Tm Nam ng Vn Miu Ct Linh Vn Chng Hng Bt Ch Da Nam ng Trung Lit Th Quan Trung Phng Phng Lin Kim Lin Phng Mai Trung T Trung T Khng Thng Thnh Quang Thnh Quang Lng H Lng Thng

TH Lng Yn Thanh Lng Minh Khai TH T Hong L Vn Tm Bch Mai Ng Quyn Qunh Mai Vnh Tuy DL T Hin Thnh DL Nguyn Khuyn DL Trn Kht Chn Qunh Li Trung Hin ng Tm Xa Dan L Thng Kit Ct Linh Vn Chng T Vnh Din Thnh Ho B Vn n Quang Trung La Thnh Trung Phng Phng Lin Kim Lin Phng mai Trung T Khng Thng Tam Khng Thnh Quang Thi Thnh Nam Thnh Cng Lng Thng

728 395 420 1114 1849 900 996 822 528 295 113 116 513 462 754 279 892 1405 1074 742 778 1278 573 468 294 544 3314 1275 1314 1230 407 960 1552 2636 791

0 0 0 0 0 0 0 0 0 0 0 116 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

38 19 0 5 0 0 18 6 18 0 0 79 0 14 4 0 0 0 0 0 0 0 0 0 23 0 0 0 0 0 0 0 0 0 0

5.22% 4.81% 0.00% 0.45% 0.00% 0.00% 1.81% 0.73% 3.41% 0.00% 0.00% 68.10% 0.00% 3.03% 0.53% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7.82% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

41

ng a ng a Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Thanh Xun Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Cu Giy Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn

Lng Thng Ct Linh Thanh Xun Trung Nhn Chnh Khng Trung Khng Mai Phng Lit Thng nh Khng nh Thanh Xun Bc Thanh Xun Nam Kim Giang Thanh Xun Bc H nh Trung Ha Ngha Ngha Tn Quan Hoa Mai Dch Mai Dch Mai Dch Mai Dch Dch Vng Hu Dch Vng Dch Vng Yn Ha Trung Ha Trung Ha Trung Ha Ph Linh Sc Sn Tn Dn Tn Dn Thanh Xun Thanh Xun

Thi H DL Bui Thi Xuan Nguyen Truong To TH Nhn Chnh TH Nguyn Tri TH Khng Mai TH Phng Lit TH Phan nh Git TH Khng nh TH ng Trn Cn A TH ng Trn Cn B TH Kim Giang Phan Phu Tien Ha Dinh Nguyn Siu Ngha Ngha Tn Quan Hoa Mai Dch Nguyn Kh Trc HermannGmeiner Nguyn Bnh Khim Dch Vng A Dch Vng B Lmnxp Yn Ha Trung Ha L thi T Nguyn Vit Xun Nui dng & GD TETT Th Trn Tn Dn A Tn Dn B Thanh Xun A Thanh Xun B

271 97 226 630 1565 1019 866 611 548 1999 1202 823 124 217 785 237 1775 584 792 599 338 107 1455 897 241 833 532 299 50 75 594 379 371 440 457

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 60.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 22 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 70.67% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 9 0 0 0 0 0 6 0 0 11 0 0 0 0 0 0 0 0 0 6 0 27 15 0 50 55 1 0 73 15 8

0.00% 0.00% 0.00% 0.00% 0.58% 0.00% 0.00% 0.00% 0.00% 0.00% 0.50% 0.00% 0.00% 5.07% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.67% 0.00% 3.24% 2.82% 0.00% 100.00% 73.33% 0.17% 0.00% 19.68% 3.41% 1.75%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

42

Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn Sc Sn ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh

Minh Tr Minh Ph Hin Ninh Quang Tin Ph Cng Ph Minh Mai nh Mai nh Mai nh Ph L Ph L ng Xun Nam Sn Bc Sn Bc Sn Hng K Trung Gi Tn Hng Bc Ph Vit Long Xun Giang c Ho Xun Thu Kim L Ph Linh Tn Minh Tn Minh Tin Dc Th Trn Th Trn Xun Nn Nguyn Kh Uy N Uy N C Loa

Minh Tr Minh Ph Hin Ninh Quang Tin Ph Cng Ph Minh Mai nh A Mai nh B Hng nh Ph L A Ph L B ng Xun Nam Sn Bc Sn B Bc Sn A Hng K Trung Gi Tn Hng Bc Ph Vit Long Xun Giang c Ho Xun Thu Kim L Ph Linh Tn Minh A Tn Minh B Tin Dc Th Trn Th Trn A Xun Nn Nguyn Kh Uy N Chuyn Bit Bnh Minh C Loa

844 915 676 574 729 623 309 387 350 689 395 843 589 291 985 668 893 857 756 683 788 597 918 920 615 565 450 798 842 358 775 1101 1410 60 1126

6 0 0 0 0 0 0 0 0 0 0 0 589 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

99.29% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

78 36 9 62 0 58 9 32 0 0 0 81 21 22 20 42 0 59 40 0 116 0 76 0 0 49 24 25 0 0 0 0 39 0 84

9.24% 3.93% 1.33% 10.80% 0.00% 9.31% 2.91% 8.27% 0.00% 0.00% 0.00% 9.61% 3.57% 7.56% 2.03% 6.29% 0.00% 6.88% 5.29% 0.00% 14.72% 0.00% 8.28% 0.00% 0.00% 8.67% 5.33% 3.13% 0.00% 0.00% 0.00% 0.00% 2.77% 0.00% 7.46%

0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

43

ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh ng Anh Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm

Tin Dng Nam Hng Bc Hng Vn Ni Kim N Kim Chung i Mch Vng La Hi Bi Lin H Vn H Dc T Thu Lm Thu Lm Vit Hng Mai Lm ng Hi Xun Canh Tm X Vnh Ngc Yn Vin Yn Vin Bt Trng L Chi nh Xuyn Ninh Hip Ph ng Trung Mu Dng H Yn Thng TT Yn Vin Kim Lan C Bi Tru Qu Tru Qu

Tien Dng Nam Hng Bc Hng Vn Ni Kim N Kim Chung i Mch Vng La Hi Bi Lin H Vn H Dc T Thu Lm Thu Lm A Vit Hng Ng Tt T ng Hi Xuan Canh Tm X Vnh Ngc Yn Vin Tin Phong Bt Trng L Chi nh Xuyn Ninh Hip Ph ng Trung Mu Dng H Yn Thng TT Yn Vin Kim Lan C Bi Tru Qu Nng nghip1

1075 827 841 683 752 729 663 528 705 1081 745 1140 592 740 1107 736 693 436 502 926 304 556 595 682 574 1095 822 330 400 1102 760 455 589 308 495

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 50 0 0 0 0 193 0 0 39 27 0 0 0 0 41 20 0 14 0 0 0 28 13 0 0 15 0 0 15 4 0 0 0

0.00% 0.00% 5.95% 0.00% 0.00% 0.00% 0.00% 36.55% 0.00% 0.00% 5.23% 2.37% 0.00% 0.00% 0.00% 0.00% 5.92% 4.59% 0.00% 1.51% 0.00% 0.00% 0.00% 4.11% 2.26% 0.00% 0.00% 4.55% 0.00% 0.00% 1.97% 0.88% 0.00% 0.00% 0.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

44

Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm Gia Lm T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim T Lim Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr

a Tn Dng X Kiu K Vn c ng D Dng Quang Ph Th ng X Kim Sn M nh Th Trn Cu Din M nh Ty Tu Ty Tu Ph Din Minh Khai Thng Ct Lin Mc Thu Phng ng Ngc ng Ngc Xun nh C Nhu C Nhu Trung Vn M Tr M Tr Ty M i M Xun Phng Vn in Vn in Ng Hip ng M Yn M

a Tn Dng X Kiu K Vn c ng D Dng Quang Ph Th ng X Kim Sn on Th im TH Cu Din TH M nh TH Ty Tu A TH Ty Tu B TH Ph Din TH Minh Khai TH Thng Ct TH Lin Mc TH Thu Phng TH ng Ngc A TH ng Ngc B TH Xun nh TH C Nhu A TH C Nhu B TH Trung Vn TH M Tr A TH M Tr B TH Ty M TH i M TH Xun Phng Khuyet tat TH TT Vn in TH Ng Hip TH ng M TH Yn M

758 838 673 525 268 704 427 550 772 1905 857 607 658 527 568 895 487 408 368 474 798 1035 543 576 364 453 668 725 736 734 53 1496 1018 515 638

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 2 0 13 3 0 40 2 0 0 0 19 0 0 0 30 33 35 17 0 0 0 6 9 0 0 0 49 34 0 0 0 0 12 15

0.00% 0.24% 0.00% 2.48% 1.12% 0.00% 9.37% 0.36% 0.00% 0.00% 0.00% 3.13% 0.00% 0.00% 0.00% 3.35% 6.78% 8.58% 4.62% 0.00% 0.00% 0.00% 1.10% 1.56% 0.00% 0.00% 0.00% 6.76% 4.62% 0.00% 0.00% 0.00% 0.00% 2.33% 2.35%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

45

Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Thanh Tr Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Long Bin Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai

Duyn H Vn Phc T Hip Thanh Lit Tam Hip Tn Triu Vnh Qunh Lin Ninh Ngc Hi i ng Hu Ho T Thanh Oai Ngc Thu Ngc Lm c Giang c Giang c Giang Si ng Si ng Thch Bn Giang Bin Thng Thanh Vit Hng Ngc Thu B B Long Bin Phc Li C Khi Phc ng Hong Vn Th nh Cng Thanh Tr Trn Ph Yn S

TH Duyn H TH Vn Phc TH T Hip TH Thanh Lit TH Tam Hip TH Tn Triu TH Vnh Qunh TH Lin Ninh TH Ngc Hi TH i ng TH Hu Ho TH T Thanh Oai L Thng Kit i M c Giang Ng Gia T Hy Vng Si ng V Xun Thiu Thch Bn Giang Bin Thng Thanh Vit Hng Ngc Thu B Ngc Lm Long Bin Phc Li C Khi Phc ng n L nh Cng Thanh Tr Trn Ph Yn s

193 610 548 838 618 781 1233 542 562 648 595 976 444 1516 763 667 43 713 514 644 301 816 732 865 301 1547 656 470 431 521 201 1126 742 455 726

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 96.50% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 96.50% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

21 0 28 5 29 26 18 29 20 18 15 0 0 12 0 0 0 8 18 6 11 15 19 0 5 0 19 8 15 36 6 0 0 0 0

10.88% 0.00% 5.11% 0.60% 4.69% 3.33% 1.46% 5.35% 3.56% 2.78% 2.52% 0.00% 0.00% 0.79% 0.00% 0.00% 0.00% 1.12% 3.50% 0.93% 3.65% 1.84% 2.60% 0.00% 1.66% 0.00% 2.90% 1.70% 3.48% 6.91% 2.99% 0.00% 0.00% 0.00% 0.00%

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

46

Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai Hong Mai

Thnh Lit i Kim Lnh Nam Hong Lit Vnh Hng Tng Mai Gip Bt Mai ng Tn Mai Hong Vn Th

Thnh Lit a Kim Lnh Nam Hong Lit Vnh Hng Tn nh Gip Bt Mai ng Tn Mai Hong Vn Th 277 schools

666 664 983 622 701 874 830 1242 1597 407 203230 Total Enrolment

0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 0 0 0 0 0 0 0 0 0

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0 14 16 0 13 0 0 15 82 0 3262 Poor Students

0.00% 2.11% 1.63% 0.00% 1.85% 0.00% 0.00% 1.21% 5.13% 0.00%

0 0 0 0 0 0 0 1 0 0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00%

47

ANNEX 3 Market Survey Form for Tri Viet International School

Dear Parents: We are working on our business plan to open Tri Viet International Primary School in Hanoi area starting in September 2008. Our school project will have the following key components: Business Concept Tri Viet International School commits to provide international standard education to students between 6-18 years old in small class size of less than 25 students managed by our experienced, qualified and caring academic teachers. During the first five years, we plan to lease a fully-furnished building in Van Phuc Diplomatic Compound, where all the facilities have been made available by the property owner in order to start small and build up our brand name. Starting from third year of operations, we will commence the building of our own school facilities in An Khanh Development City which is 20 km South East of Hanoi on the Lang-Hoa Lac express high way. Construction will be completed by the end of the fifth year and the international school will be moved to the new facilities in the sixth year and other new service lines will be introduced together with the new school facilities, e.g. boarding school, etc... Curriculum Students in our school have semi-boarding school time, morning for Vietnamese education program developed by Vietnam Ministry of Education and Training, afternoon for British and American International curricula. In addition, we will have our own school consolidating and intensive training program. Students who graduate from our International Primary School have English skills and scientific knowledge, equivalent to students in well-developed countries and will be able to continue their studies at our High School in the future. After graduating, students will be able to transfer to prestigious universities in English-speaking countries such as the United States, the United Kingdom, Australia, Canada, Singapore, Koreaor study at other International Universities in Vietnam. Teaching Method Focus on self study method, presentation skills, team work and discussion Apply modern information and communication technology in teaching and learning Science is highlighted as well as integrated with other subject areas and is a discovery process using films, pictures and books. Children in the primary school are also able to choose to learn Chinese or Japanese and receive special instruction in Art, Physical Education, Music and Martial Arts. Drama and theater receive special emphasis in our
48

curriculum as means to help students enjoy learning and become more confident in themselves and their abilities to express their feelings. Students get to participate in a wide range of activities such as: English club, sports, dress-up day, English song festival, our end-of-the-year variety show, and many other enjoyable activities for Mid Autumn festival, Halloween, Easters, Christmas and other holidays throughout the year. International Standard Facilities We plan to have small class size of less than 25 students with two teachers and a teacher/student ratio of 1:14. Classrooms, bedrooms, canteen, computer rooms, multifunction roomsare air-conditioned and students are provided free of charge access to computer Lab with internet access, well resourced library, first-aid facility with a caring nurse and international standard facilities for physics subjects such as volley ball, basket ball, football, badmintons, baseball, aerobic, dancing and swimming classes. We would like to carry out a little survey to understand better your needs please help to tell us if you would like to have your children signed up in our school program by simply filling this questionnaire. Yes, I am I will Interested consider No, not intereste d Other comments

Curriculum Teaching method International standard facilities Cost: starting $250/month excluding transportation, uniforms and other outside schools activities We will complete our new campus in 2013 in An Khanh International Development 20 km from Hanoi Please give us your contacts so that we will be able to reach you once our school is ready to open: Full Name: Your children names: Home Address: Office Telephone: Home Telephone: Cell phone: Email:

49

ANNEX 4 PROJECTED PROFIT AND LOSS FOR THE FIRST TEN YEARS OF THE PROJECT
Currency: USD Pro Forma Profit and Loss Year Year 1 2008 Year 2 2009 Year 3 2010 Year 4 2011 Year 5 2012 Year 6 2013 Year 7 2014 Year 8 2015 Year 9 2016 Year 10 2017

Tuition fees No of kids Tuition fee per kids

250 $2,500 $625,000 $125,000 0 $0

650 $2,500 $1,625,000 $200,000 0 $0 $130,000 $130,000 $270,833 $530,833 $2,355,833

1050 $2,500 $2,625,000 $200,000 0 $0 $210,000 $210,000 $437,500 $857,500 $3,682,500

1450 $2,500 $3,625,000 $200,000 0 $0 $290,000 $290,000 $604,167 $1,184,167 $5,009,167

1850 $2,500 $4,625,000 $200,000 0 $0 $370,000 $370,000 $770,833 $1,510,833 $6,335,833

2450 $2,625 $6,431,250 $200,000 130 $2,500 $325,000 $490,000 $490,000 $966,667 $1,946,667 $8,902,917

3250 $2,625 $8,531,250 $200,000 210 $2,500 $525,000 $650,000 $650,000 $1,266,667 $2,566,667 $11,822,917

4050 $2,625 $10,631,250 $200,000 290 $2,500 $725,000 $810,000 $810,000 $1,566,667 $3,186,667 $14,742,917

4850 $2,625 $12,731,250 $200,000 370 $2,500 $925,000 $970,000 $970,000 $1,866,667 $3,806,667 $17,662,917

5400 $2,625 $14,175,000 $200,000 440 $2,500 $1,100,000 $1,080,000 $1,080,000 $2,066,667 $4,226,667 $19,701,667

Enrolment fees Boarding fees No of boarding kids Boarding fee per kids Other school fees Uniform and insurance Text books School bus fees

$50,000 $50,000 $104,167 $204,167 $954,167

Total sale Direct Costs of Goods Payroll for academic staff Uniform and insurance Textbook F&B costs Cost of Goods Sold Gross Margin

$330,000 $50,000 $50,000 $135,000 -----------$565,000 $389,167

$858,000 $130,000 $130,000 $351,000 -----------$1,469,000 $886,833

$1,386,000 $210,000 $210,000 $567,000 -----------$2,373,000 $1,309,500

$1,848,000 $290,000 $290,000 $783,000 -----------$3,211,000 $1,798,167

$2,270,400 $370,000 $370,000 $999,000 -----------$4,009,400 $2,326,433

$2,956,800 $490,000 $490,000 $1,393,200 -----------$5,330,000 $3,572,917

$3,907,200 $650,000 $650,000 $1,868,400 -----------$7,075,600 $4,747,317

$4,857,600 $810,000 $810,000 $2,343,600 -----------$8,821,200 $5,921,717

$5,755,200 $970,000 $970,000 $2,818,800 -----------$10,514,000 $7,148,917

$6,336,000 $1,080,000 $1,080,000 $3,153,600 -----------$11,649,600 $8,052,067

Operating Expenses:

50

Currency: USD Pro Forma Profit and Loss Year Sales and Marketing expenses Total Sales and Marketing Expenses General and Administrative Payroll Depreciation Utilities Insurance Land rental Buses rental Annual repair and maintenance Other General and Administrative Expenses $4,000 -----------$4,400 -----------$4,840 -----------$5,324 -----------$5,856 -----------Year 1 2008 $25,000 -----------$25,000 $60,000 $0 $30,000 $4,000 $396,000 $37,500 Year 2 2009 $25,000 -----------$25,000 $90,000 $3,770 $78,000 $4,000 $396,000 $97,500 Year 3 2010 $25,000 -----------$25,000 $120,000 $9,367 $126,000 $4,000 $396,000 $157,500 Year 4 2011 $25,000 -----------$25,000 $120,000 $106,212 $168,000 $4,000 $396,000 $217,500 Year 5 2012 $25,000 -----------$25,000 $120,000 $196,618 $206,400 $4,000 $396,000 $277,500 Year 6 2013 $50,000 -----------$50,000 $240,000 $722,868 $268,800 $30,000 $18,000 $348,000 $30,000 $6,442 -----------Year 7 2014 $50,000 -----------$50,000 $240,000 $762,735 $355,200 $30,000 $18,000 $456,000 $30,000 $7,086 -----------Year 8 2015 $50,000 -----------$50,000 $240,000 $773,331 $441,600 $30,000 $18,000 $564,000 $50,000 $7,795 -----------Year 9 2016 $50,000 -----------$50,000 $240,000 $783,926 $523,200 $30,000 $18,000 $672,000 $100,000 $8,574 -----------Year 10 2017 $50,000 -----------$50,000 $240,000 $794,238 $576,000 $30,000 $18,000 $744,000 $100,000 $9,432 ------------

Total General and Administrative Expenses Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit

$531,500 -----------$556,500 ($167,333) $0 ($167,333)

$673,670 -----------$698,670 $188,163 $0 $188,163

$817,707 -----------$842,707 $466,793 ($360,000) $106,793

$1,017,036 -----------$1,042,036 $756,131 ($660,000) $96,131

$1,206,374 -----------$1,231,374 $1,095,059 ($945,000) $150,059

$1,664,110 -----------$1,714,110 $1,858,807 ($892,500) $966,307

$1,899,022 -----------$1,949,022 $2,798,295 ($682,500) $2,115,795

$2,124,725 -----------$2,174,725 $3,746,991 ($472,500) $3,274,491

$2,375,700 -----------$2,425,700 $4,723,216 ($262,500) $4,460,716

$2,511,670 -----------$2,561,670 $5,490,397 ($112,500) $5,377,897

51

ANNEX 5 PROJECTED CASH FLOW FOR THE FIRST TEN YEARS OF THE PROJECT
Currency: USD Pro Forma Cash Flow Year Year 1 2008 $1,254,167 $954,167 $954,167 Year 2 2009 $2,355,833 $2,355,833 $2,355,833 Year 3 2010 $8,482,500 $3,682,500 $3,682,500 Year 4 2011 $10,309,167 $5,009,167 $5,009,167 Year 5 2012 $12,335,833 $6,335,833 $6,335,833 Year 6 2013 $10,802,917 $8,902,917 $8,902,917 Year 7 2014 $11,822,917 $11,822,917 $11,822,917 Year 8 2015 $14,742,917 $14,742,917 $14,742,917 Year 9 2016 $17,662,917 $17,662,917 $17,662,917 Year 10 2017 $19,701,667 $19,701,667 $19,701,667

Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received New Long-term Liabilities New Capital Received Subtotal Cash Received Expenditures Expenditures from Operations: Cash Spending Payment of Accounts Payable Subtotal Spent on Operations Additional Cash Spent Taxes Principal Repayment - 1st loan Principal Repayment - 2nd loan Principal Repayment - 3rd loan Principal Repayment - 4th loan Interest repayment - 1st loan Interest repayment - 2nd loan Interest repayment - 3rd loan Interest repayment - 4th loan Land rental Purchase Long-term Assets Repair and maintenance Dividends

$4,800,000 $300,000 $300,000 ($1,150,100) ($725,500) ($725,500) $0 ($2,206,360) ($1,767,900) ($1,767,900) $4,800,000 ($8,627,440) ($2,810,340) ($2,810,340)

$4,800,000 $500,000 $5,300,000 ($10,332,314) ($3,750,824) ($3,750,824)

$5,400,000 $600,000 $6,000,000 ($12,312,864) ($4,648,156) ($4,648,156)

$1,800,000 $100,000 $1,900,000 ($10,909,202) ($6,273,242) ($6,273,242)

$0 ($11,809,693) ($8,213,886) ($8,213,886)

$0 ($14,560,401) ($10,154,595) ($10,154,595)

$0 ($17,281,356) ($12,037,774) ($12,037,774)

$0 ($17,570,252) ($13,299,032) ($13,299,032)

$0

$0

$0

$0 ($800,000)

$0 ($800,000) ($800,000)

$0 ($800,000) ($800,000) ($900,000) ($180,000) ($240,000) ($337,500) ($135,000) ($900,000) ($313,460) ($30,000)

($360,000)

($300,000) ($360,000)

($240,000) ($300,000) ($405,000) ($396,000) ($4,723,708) $0

$0 ($800,000) ($800,000) ($900,000) ($300,000) ($120,000) ($180,000) ($270,000) ($112,500) ($83,306) ($30,000)

$0 ($800,000) ($800,000) ($900,000) ($300,000) ($60,000) ($120,000) ($202,500) ($90,000) ($83,306) ($50,000) ($1,000,000)

$0 ($800,000) ($800,000) ($900,000) ($300,000) $0 ($60,000) ($135,000) ($67,500) ($81,082) ($100,000) ($2,000,000)

$0 ($800,000) ($900,000) ($300,000) $0 ($67,500) ($45,000) ($58,720) ($100,000) ($2,000,000)

($396,000) ($28,600) $0

($396,000) ($42,460) $0

($396,000) ($5,061,100) $0

($396,000) ($4,725,490) $0

52

Currency: USD Pro Forma Cash Flow Year Subtotal Cash Spent Net Cash Flow Cash Balance Year 1 2008 ($424,600) $104,067 $104,067 Year 2 2009 ($438,460) $149,473 $253,540 Year 3 2010 ($5,817,100) ($144,940) $108,600 Year 4 2011 ($6,581,490) ($23,147) $85,453 Year 5 2012 ($7,664,708) $22,969 $108,422 Year 6 2013 ($4,635,960) ($106,285) $2,136 Year 7 2014 ($3,595,806) $13,224 $15,360 Year 8 2015 ($4,405,806) $182,515 $197,876 Year 9 2016 ($5,243,582) $381,561 $579,436 Year 10 2017 ($4,271,220) $2,131,415 $2,710,851

53

ANNEX 6 CAPITAL EXPENDITURE PLAN FOR THE FIRST TEN YEARS OF THE PROJECT
Currency: USD Pro Forma Capital Expenditures ("CAPEX") plan Year Year 1 2008 Year 2 2009 Year 3 2010 $302,400 $0 $0 $4,260,000 $3,360,000 $900,000 $38,600 $18,000 $12,000 $6,000 $4,000 $2,000 $1,000 $1,000 $15,600 $1,600 $12,000 $2,000 $1,000 $1,000 $0 $0 $0 $0 $0 $4,601,000 $460,100 $5,061,100 $4,260,000 $3,360,000 $900,000 $35,900 $17,250 $12,000 $5,250 $4,000 $2,000 $1,000 $1,000 $13,650 $1,400 $10,500 $1,750 $1,000 $1,000 $0 $0 $0 $0 $0 $4,295,900 $429,590 $4,725,490 $4,260,000 $3,360,000 $900,000 $34,280 $16,800 $12,000 $4,800 $4,000 $2,000 $1,000 $1,000 $12,480 $1,280 $9,600 $1,600 $1,000 $1,000 $0 $0 $0 $0 $0 $4,294,280 $429,428 $4,723,708 $0 $0 $0 $0 $0 Year 4 2011 Year 5 2012 Year 6 2013 Year 7 2014 Year 8 2015 Year 9 2016 Year 10 2017

Design, consultancy, quality control, etc. Construction works Main construction works Infrastructure and landscape Machineries and equipment For classrooms Table and chair Teaching aids (projector, white board, other aids For library Books, journals, Learning aids (PC, listening, TV, Video, Radio, etc.) Table and chair Teachers' rooms Table and chair Computers Other costs Equipment for kids' exercise Equipment Bedrooms for kids + servants Beds and linens Others Central air con system Kitchen and dining rooms Total Contingency GRAND TOTAL - CAPEX

$26,000 $11,250 $7,500 $3,750 $4,000 $2,000 $1,000 $1,000 $9,750 $1,000 $7,500 $1,250 $1,000 $1,000 $0 $0 $0 $0 $0 $26,000 $2,600 $28,600

$38,600 $18,000 $12,000 $6,000 $4,000 $2,000 $1,000 $1,000 $15,600 $1,600 $12,000 $2,000 $1,000 $1,000 $0 $0 $0 $0 $0 $38,600 $3,860 $42,460

$304,330 $25,800 $18,000 $7,800 $22,000 $2,000 $10,000 $10,000 $20,280 $2,080 $15,600 $2,600 $20,000 $20,000 $16,250 $13,000 $3,250 $400,000 $200,000 $304,330 $9,130 $313,460

$80,880 $34,800 $24,000 $10,800 $5,000 $2,000 $2,000 $1,000 $28,080 $2,880 $21,600 $3,600 $1,000 $1,000 $10,000 $8,000 $2,000 $2,000 $2,000 $80,880 $2,426 $83,306

$80,880 $34,800 $24,000 $10,800 $5,000 $2,000 $2,000 $1,000 $28,080 $2,880 $21,600 $3,600 $1,000 $1,000 $10,000 $8,000 $2,000 $2,000 $2,000 $80,880 $2,426 $83,306

$78,720 $34,200 $24,000 $10,200 $5,000 $2,000 $2,000 $1,000 $26,520 $2,720 $20,400 $3,400 $1,000 $1,000 $10,000 $8,000 $2,000 $2,000 $2,000 $78,720 $2,362 $81,082

$57,010 $23,100 $16,500 $6,600 $5,000 $2,000 $2,000 $1,000 $17,160 $1,760 $13,200 $2,200 $1,000 $1,000 $8,750 $7,000 $1,750 $2,000 $2,000 $57,010 $1,710 $58,720

54

ANNEX 7 OTHER ASSUMPTIONS USED IN ARRIVING AT THE PROJECTED CASH FLOW Assumptions for operating activities Assumptions for income of the School Tuition fee per student per year Enrolment fee Boarding fee

Other school fees (uniform, insurance, text book) No. of student intake in Year 1 No. of student intake in Year 2-5 No. of student intake in Year 6 No. of student intake in Year 7-10

USD2,500 (subject to 5% increase after five years) USD500/new students USD2,500 (subject to 5% increase after five years) No profit (i.e. proceeds from students will be 100% expended 250 400 600 800

Assumptions for operating expenses of the School No. of teachers Determine based on total required teaching hours (i.e. no. of classes required * no. of teaching hours/day)/teaching hour availability of each teacher/day (i.e. 4 hours/day) No. of foreign teachers vs. no. of local 30%/70% teachers Salaries + wages for local teachers Average at USD6,000/year Salaries + wages for foreign teachers Average at USD30,000/year Food and beverage costs USD2/day for non-boarding students USD4/day for boarding students No. of student per class 20 kids/class for Class 1-3 25 kids/class for Class 3-9 Salaries for general and administrative Average at USD6,000/year staff Other expenses (insurance, utilities, Projected based on size of etc.) school and number of school classes.

55

Assumptions for land rental and construction works Assumptions for CAPEX Land and premise rental in the first five years Land rental rate in the following years Construction cost of the new School Infrastructure and landscaping of new School Transportation (rented buses) (*) (**)

USD11/m2/month (*) USD30/m2/50 years (*) USD420/m2 (**) USD150/m2 (**) Leased finance

: actual figure as surveyed by the Owner. The lower land rental rate in the following years was for the reason of the Governments support to the education sector. : figures approximate to those used by an international property developer of their construction projects in Vietna

56

ANNEX 8 KEY FINANCIAL INDICATORS

Year 1 2008 Percent of Total Assets Current assets Long-term Assets Long-term Liabilities Net Worth Percent of Sales Gross Margin G&A expenses PBIT Main Ratios Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Debt Ratios Debt to Net Worth Long-term Debt/Long-term Asset Liquidity Ratios Interest Coverage Additional Ratios Sales/Assets Sales/Net Worth Dividend Payout 78.4% 21.6% 0.0% 100.0% Year 2 2009 79.0% 21.0% 0.0% 100.0% Year 3 2010 2.1% 97.9% 91.8% 8.2% Year 4 2011 0.9% 99.1% 89.6% 10.4% Year 5 2012 0.8% 99.2% 87.7% 12.3% Year 6 2013 0.0% 100.0% 80.7% 19.3% Year 7 2014 0.1% 99.9% 64.7% 35.3% Year 8 2015 1.5% 98.5% 46.6% 53.4% Year 9 2016 4.4% 95.6% 26.5% 73.5% Year 10 2017 18.6% 81.4% 10.3% 89.7%

40.8% 55.7% -17.5%

37.6% 28.6% 8.0%

35.6% 22.2% 12.7%

35.9% 20.3% 15.1%

36.7% 19.0% 17.3%

40.1% 18.7% 20.9%

40.2% 16.1% 23.7%

40.2% 14.4% 25.4%

40.5% 13.5% 26.7%

40.9% 12.7% 27.9%

-126.1% -126.1%

58.6% 58.6%

25.0% 2.0%

9.4% 1.0%

8.5% 1.0%

34.0% 6.6%

42.7% 15.1%

45.3% 24.2%

46.0% 33.8%

41.1% 36.9%

-17.5% -55.8%

8.0% 62.7%

2.9% 35.6%

1.9% 12.0%

2.4% 10.7%

10.9% 64.4%

17.9% 141.1%

22.2% 218.3%

25.3% 297.4%

27.3% 358.5%

0.0 0.0

0.0 0.0

11.2 0.9

8.6 0.9

7.1 0.9

4.2 0.8

1.8 0.6

0.9 0.5

0.4 0.3

0.1 0.1

#DIV/0!

#DIV/0!

1.3

1.1

1.2

2.1

4.1

7.9

18.0

48.8

7.2 7.2 0.0

7.3 7.3 0.0

0.7 8.6 0.0

0.5 4.9 0.0

0.4 3.6 0.0

0.6 3.1 0.0

0.8 2.4 0.0

1.1 2.0 0.3

1.3 1.8 0.4

1.4 1.5 0.4

57

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58