While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS 1: Social and Environmental Assessment and Management Systems; PS 2: Labor and Working Conditions; PS 3: Pollution Prevention and Abatement; PS 4: Community Health, Safety and Security; PS 5: Land Acquisition and Involuntary Resettlement; and PS 8: Cultural Heritage. The review did not find adverse material impacts on local indigenous groups, and on local biodiversity and natural resource management. Hence PS6 and PS7 have not been triggered. IFC’s investment may be used to support future Thien Minh hotels yet to be confirmed and constructed. Thien Minh shall assess any new business opportunities against and comply with IFC’s performance standards. Supplemental appraisals by IFC may be required.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific and reversible environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Key environmental, health and safety, human resources and social issues that were reviewed included the following: environmental and social management system; emissions to the environment – air, water and subsurface; hazardous waste and materials management; life and fire safety and emergency preparedness and response; community and occupational health and safety; water and energy use and efficiency; and community engagement.

PS1: Social and Environmental Assessment and Management Systems Environmental Impact Assessments (EIA) have been conducted for hotels of Thien Minh and the Foreign Group, and were approved by local Environmental departments. The Thien Minh Group (Thien Minh) and the foreign hotel group (“the Foreign Group”) have policies and procedures in place to manage and monitor environmental and social (E&S) performance. Each hotel of the Foreign Group has appointed personnel with clearly defined responsibilities to manage E&S operational aspects including waste management, labor and working conditions, energy usage efficiency, and social engagement. Each of the Foreign Group hotel’s general managers reports E&S information to the Group Technical Director (Engineering Department) who is responsible for ensuring proper functioning of all hotels’ equipment and facilities, for energy saving programs, conducting fire safety exercises, and providing technical staff with relevant training. The Foreign Group has developed an Engineering Department Operating System (EDOS) and Engineering Department Fire System (EDFS) including a detailed standard operating manual to guide both existing and newly hired technical staff on practices and requirements of the Engineering Department. At the hotel level, each General Manager monitors environmental performance through daily inspections, weekly meetings and compilation of monthly reports to Group management. At present Thien Minh hotels do not regularly report E&S performance data to Thien Minh or Jetwing Indochina. Thien Minh will commit to setting up a corporate level E&S management system to monitor E&S performance. The system will be appropriate to the size of its hotel operations and will be managed by dedicated personnel. It will be integrated into the ISO9001 certified system, which Thien Minh at the Group level is planning to apply for and for which Thien Minh will commit to achieving certification. Thien Minh is also planning to attain HACCP (Hazard Analysis and Critical Control Point system) food safety management certification for its hotels and will work with the Foreign Group to achieve the same. Refer to the attached E&S Action Plan for ISO9001 and HACCP implementation time lines. PS2: Labor and Working Conditions Thien Minh and the Foreign Group have about 400 and 1,000 permanent employees respectively in Vietnam, all being direct hires and with a majority being local hires. Human resource policies and practices of the Sponsor and the Foreign Group are consistent with Vietnam’s legal requirements – for instance Circular 21/2003/TT-BLDTBXH issued by the Ministry of Labor, Invalid and Social Affairs on details of labor contract provisions. Terms of employment as well as rights and responsibilities of employees are formalized into employment contracts and an employee manual. Visits to hotels and discussions with staff confirmed working conditions to be reasonable, safe and clean. Remuneration is competitively determined by referencing market rates. Employment benefits offered to staff include health, unemployment and travel insurance; monthly and annual performance-based bonuses; company-paid training courses, annual leave and annual retreats. Housing and meals are provided for employees working at Thien Minh hotels. Records confirm that staff is regularly trained on topics such as fire safety management to ensure they are operationally competent and follow safety requirements. The annual turnover rate at Thien Minh and the Foreign Group is estimated at less than 5%. Hiring and employment practices recognize the principles of non-discrimination and equal opportunity. There is no evidence of child or forced labor in the workforce. As required by Vietnamese law, worker unions have been established and union membership includes all staff at Thien Minh and the Foreign Group. IFC reviewed a copy of Thien Minh’s collective bargaining agreement reached between the worker union and Thien Minh in September 2007 – the agreement contains detailed provisions such as on working conditions, remuneration and benefits, occupational health and safety, and dispute resolution mechanisms. During its visit, IFC found evidence of functional grievance mechanisms in place including weekly and monthly one-on-one and group staff meetings in which employees could voice their concerns. Examples of concerns raised in the past included quality of food at staff canteens which were addressed after consultations between management and union representatives. There have been no fatalities, work-related incidents or labor incidents (e.g. strikes) at Thien Minh and the Foreign Group during the past year. Staff is required to strictly observe company safety policies and company engineers regularly maintain equipment to ensure that they are in working order. As per Vietnam legal requirements, all staff undergoes annual health check-ups. PS3: Pollution Prevention and Abatement Sanitary waste water generated at hotels of Thien Minh and the Foreign Group is processed by on-site waste water treatment plants (WWTP) which consist of septic tanks and filters (e.g. grease traps) before being discharged to surface water. Grease and sludge is collected and disposed of by licensed local sanitary waste management companies. The Foreign Group monitors waste water discharge parameters (e.g. BOD and total suspended solids) and 2009 results met Vietnam effluent discharge standard TCVN6772-200 set by the Ministry of Natural Resources & Environment (MONRE) and IFC guideline levels. Thien Minh at the Group level, and MC Lodge and Hue Festival at the hotel operation level, currently do not regularly monitor waste discharge levels and will be required to do so as part of their E&S management system. In 2009, Thien Minh and the Foreign Group consumed a total of 7,640MWh of grid electricity and 315,000 m3 of water. All hotels except MC Lodge obtain their water supply from local municipal water companies – MC Lodge draws its water supply from local boreholes. The five hotels of the Foreign Group had a 2009 average water consumption index value (m3/guest per night) of 0.92 which falls within the “high” category of 0.8-1.2 according to IFC’s Environmental Health and Safety Guidelines for Tourism and Hospitality Development. MC Lodge with a water index of 4.4 falls into the excessive category (>1.2) whilst Hue Festival Hotel’s index value of 0.35 falls within the excellent category (<0.7). On energy consumption (kWh/m2 serviced space), the 2009 index values of both MC Lodge and Hue Festival are in the satisfactory benchmark range. Four out of five hotels of the Foreign Group are also in the satisfactory benchmark range – the fifth one falls within the excessive category (>320) due to large reported quantities of diesel oil used. The Foreign Group’s energy saving program uses a daily energy and water recording process to identify opportunities for resource savings – for instance it monitors water consumption at the laundry, kitchen and garden areas, checks regularly for water leakage throughout hotel premises, and sets a minimum temperature for air conditioners. The Foreign Group creates awareness amongst staff and adopts measures such as using grey water for gardening. It also operates a waste separation, re-use and recycling program. Thien Minh will commission a water and energy efficiency audit at the MC Lodge and Hue Festival Hotel and implement actions recommended by audit findings towards achieving water conservation goals. It will work with the Foreign Group to commission water and energy efficiency audits at hotels of the Foreign Group and implement actions recommended by audit findings towards achieving resource conservation goals. Total greenhouse gas (GHG) emissions attributable to consumption of grid electricity, fuels and the use of air conditioners were estimated to be 23,400 metric tons CO2 equivalent in 2009. PS4: Community Health, Safety and Security MC Lodge, Hue Festival and hotels of the Foreign Group have the required approval documents from local fire authorities. The Foreign Group has detailed life and fire safety (L&FS) policies and procedures in place at the hotel operation level including emergency preparedness and response procedures. Fire equipment is regularly checked by in-house engineers and local police department personnel to ensure it is in working order. Smoke detectors, alarms, fire extinguishers and fire hoses were installed at Hue Festival and MC Lodge as were emergency lighting, unobstructed exits separated by reasonable distances, and signage in public areas. The fire panel at Hue Festival was not functional during IFC’s visit, whilst conditions in the kitchen area were not conducive to the minimization of fire risks. Thien Minh will commission a qualified fire safety engineer to undertake fire safety audits at the five Vietnamese properties being acquired from Foreign Group and also of the Hue Festival hotel. These audits will identify gaps if any with local fire safety codes, and with an international fire safety standard, this dual code compliance being an IFC guideline requirement. Thien Minh will implement any additional fire protection measures that the audits show to be necessary for code compliance. MC Lodge is planning major renovations to construct additional villa style guest rooms. At this property, a qualified fire safety engineer will undertake a fire safety audit in the manner described above, and will also prepare a life and fire safety “Master Plan” effectively a fire safety specification, which when adopted will cause fire safety aspects of building design and operation to be compliant with all local requirements and an international fire safety standard. For all future properties to be constructed by Thien Minh, including the planned Thien Minh-owned hotel in Luang Prabang, Lao PDR, Thien Minh will commission a qualified fire safety engineer to develop a life and fire safety master plan at the construction planning phase. Whenever Thien Minh engages in new construction or substantial renovation of a hotel property, it will commission a post-construction fire safety audit of the property in order to confirm that the works were completed in compliance with the master plan. Thien Minh will also develop as part of its E&S management system detailed policies and procedures on its L&FS management, and on emergency preparedness and response. The pH and chlorine levels at the swimming pools and spas of all Thien Minh and Foreign Group hotels are monitored on a daily basis. All hotels provide bottled water to guests and buy food ingredients from reputable suppliers. Thien Minh will commit to ensuring improved hygienic conditions in the kitchen area of Hue Festival Hotel and will be implementing a HACCP (Hazard Analysis and Critical Control Point) system to reinforce food safety management at its hotels and work with the Foreign Group to establish the same (refer to PS1 and E&S Action Plan). Whilst there have been no past incidents of Legionella infections from the use of water systems (e.g. showers, spa baths), Thien Minh will commit to establishing Legionella monitoring for its hotels and working with the Foreign Group to establish the same. Hotels of the Thien Minh and the Foreign Group are located in mixed-use neighborhoods or resort settings. No local communities have been significantly affected by environmental risks or impacts from hotel operations and the sponsor has not been the subject of any public complaints or litigation with respect to its environmental, social or health and safety performance. Security guards at hotels of Thien Minh and the Foreign Group are unarmed and there have not been any reported security incidents. No traffic accidents related to the Foreign Group’s northern Vietnam train tourist cabin services, or to Thien Minh’s Mekong river tourist boats and tourist vans have been reported. Safe driving policies and guidelines are in place. The tourist boats have safety provisions in place such as unobstructed exits, life jackets, safety rafts, fire extinguishers, fire hoses, and sand pits. PS5: Land Acquisition and Involuntary Resettlement Original land acquisitions of all hotel sites of the Sponsor and the Foreign Group occurred on and before 2003. IFC’s review concludes that there are no material outstanding PS5 issues. If any of the future new facility sites were to involve land acquisition and involuntary resettlement of local communities - including government-led acquisition which occurred prior to Thien Minh entering project negotiations - the sponsor would ensure ex-post fulfillment of PS5 requirements. Follow-up PS5 appraisals by IFC may be required. PS8: Cultural Heritage Thien Minh is planning to develop a Greenfield boutique hotel in Luang Prabang, Lao PDR - a designated UNESCO World Heritage site. It has submitted the site development plan to the Luang Prabang Government Heritage Department for review and has received required construction and inspection permits. Government development plan for UNESCO protected areas defines four different zones (ZPP-Ua; ZPP-Ub; ZPP-M; ZPP-N) and Thien Minh’s proposed property will be located in the ZPP-Ua zone. Prior to and during construction, Thien Minh is committed to commissioning surveys of all structural aspects of the site and existing buildings, retain formal records of survey results, and use the results as a basis for reproducing original architecture where required by the Government Heritage Department. Thien Minh will also document measures taken to preserve, protect and restore cultural aspects of the site during construction and operation.

Hotels of the Foreign Group organize annual community outreach activities such as a Green Action Day to raise environmental awareness amongst guests and local communities. Thien Minh runs a voluntourism program providing opportunities for tourists to take part in philanthropic activities during their stay in Vietnam, and MC Lodge works closely with its neighboring Thai ethnic communities to help develop income sources from selling handicrafts and other livelihood activities. Most MC Lodge employees are from nearby Thai communities trained by Thien Minh to take up hotel positions. Both Thien Minh and the Foreign Group have a policy of encouraging their hotels to buy produce and grains from local communities. To reinforce community engagement, Thien Minh will post local language E&S updates on its website periodically.

For more details on the project, contact: Mr. Ho Viet Ha Thien Minh Thien Minh Travel Joint Stock Company Tel: +84(4)3828-0702 Fax: +84(4)3826-9370 http://www.buffalotours.com Thien Minh will place an advertisement in a major local newspaper both in Hanoi and Ho Chi Minh City to alert the public that results from IFC’s ESRS is available for access. It will also post the ESRS and ESAP outside all its Vietnam and Lao PDR facilities; and the same on its corporate website or provide a web- link to IFC’s disclosed ESRS and ESAP.