REALIZE POTENTIALS PROMOTE ADVANTAGES
ANNUAL REPORT 2019 CONTENTS
01 GENERAL INTRODUCTION 03 ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 06 Company information
08 Milestones 26 Organizational structure
12 Statements from Chairwoman and CEO 26 List of Boards’ members
15 Financial highlights 27 Executive Board introduction
16 Business development orientation 28 Management Board & Supervisory Board introduction
02 EXECUTIVE BOARD’S REPORT 04 BUSINESS OPERATIONS
20 Overview of Vietnam’s economy and stock market in 2019 32 Financial institutional clients
22 Business performance in 2019 34 Corporate clients 38 Individual clients
05 SUSTAINABLE DEVELOPMENT REPORT
44 Prestige and experience
45 Independent, objective and honest supervisory activity
46 Risk management system under international standards
50 Skilled Human Resource
51 State-of-the-art trading technology and diverse products
52 Social responsibility and community commitment
06 OPERATION NETWORK
07 FINANCIAL STATEMENTS GENERAL INTRODUCTION
ON PRESTIGE WE FOUND OUR BRAND
Ngân hàng TMCP Ngoại thương Việt Nam COMPANY INFORMATION
Company name in Vietnamese: Công ty Trách nhiệm hữu hạn Chứng khoán Ngân hàng Thương mại Cổ phần Ngoại Thương Việt Nam.
Company name in English: Vietcombank Securities Co., Ltd (VCBS).
Date of establishment: January 07th 2002 under Decision No.27/ QĐ-HĐQT of the Board of Directors, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).
The Establishment and Operation License No. 09/GPHDKD dated 24 April 2002 issued by the State Securities Commission.
The latest adjustment no. 63/GPDC-UBCK granted by the State Securities Commission on December 29, 2017.
Company business: VCBS is licensed to provide all securities-related products and services in accordance with legal regulations.
Charter capital: VND 1,000,000,000,000 (One thousand billions Vietnam Dong).
Head office: 12th - 17th Floor, Vietcombank Tower, 198 Tran Quang Khai, Hoan Kiem District, Hanoi.
Tel: (+84-24) 3936 6990 - Fax: (+84-24) 3936 0262
Website: www.vcbs.com.vn
6 ANNUAL REPORT 2019 www.vcbs.com.vn 7 MILESTONES
2002 2005 2007 2010
Being the first securities company providing Receiving Certificate of Merit from Vietnam’s Being the advisor of Vietcombank’s IPO, one Opening VCBS Branch in Can Tho city (VCBS online priceboard (www.vcbs.com.vn) and Minister of Finance for outstanding of the largest IPOs in Vietnam. Can Tho). on-line trading platform (Cyber Investor) to performance in the IPO of POSTEF (POT), investors. which was the first IPO conducted at Hanoi Underwriting Vietnam Steel Corporation’s Among the first securities companies Securities Trading Center – predecessor of bond issuance (VND 400 billion in value) and qualifying for connecting with Hanoi Stock Being the leading securities company the current Hanoi Stock Exchange (HNX). Song Da Corporation bond issuance (VND Exchange (HNX) online trading system. tapping bond market (which had solely 300 billion in value). been dominated by commercial banks) and Receiving Certificate of Merit from Vietnam’s Receiving Certificate of Merit from the underwriting the issuance of Government Governor of State Bank for outstanding Opening VCBS Branch in Da Nang city Chairman of HCMC People Committee for Bond worth VND 1,000 billion. contributions in 2004. (VCBS Da Nang). years of excellent performance.
Opening VCBS Branch in Ho Chi Minh City Receiving Certificate of Merit from Vietnam’s (VCBS HCMC). Minister of Finance for building & developing the stock market from 2000 to 2005. 2008 2011
Reorganizing after 5 years of operation. Opening VCBS Branch in Vung Tau city (VCBS Vung Tau). 2003 Opening VCBS Transaction Office at 2006 Vietcombank Hai Duong. Being the first securities company to execute Being the advisor and underwriter of major M&A deals between banks, namely: Imexco’s share issuance, marking the first Increasing Charter Capital from VND 60 firm commitment underwriting in Vietnam’s billion to VND 200 billion. The merger of ShinhanVina Joint-Venture stock market. Bank and Shinhan Vietnam Bank. Receiving Certificate of Merit from Vietnam’s 2009 Prime Minister for socio-economic The merger of First Joint Stock achievements. Increasing Charter Capital to VND 700 billion. Commercial Bank, Vietnam Tin Nghia Joint Stock Commercial Bank and Saigon Receiving Certificate of Merit from the Among the first securities companies Joint Stock Commercial Bank. 2004 Chairman of HCMC People Committee for qualifying for connecting with Ho Chi Minh contributions to municipal bond underwriting. Stock Exchange (HSX) online trading system. Being the advisor and underwriter of Eximbank shares issuance (VND 200 billion Receiving Certificate of Merit from Vietnam’s Receiving “Prestigious Securities Brand” 2012 in value), the largest firm commitment Minister of Finance for outstanding Award for being among Outstanding underwriting deal in the first 5 years of achievements in capital market development. Investment Bankers. Receiving Certificate of Merit from the Vietnam’s stock market. Chairman of State Securities Commission for Receiving “Outstanding Securities Company” “Outstanding achievements in the secondary Award from Hanoi Stock Exchange. bond market’s operations in 2012”.
Brokering M&A deals between:
Saigon Hanoi Joint Stock Commercial Bank and Hanoi Building Joint Stock Commercial Bank.
Vietnam Italy Steel JSC. and Song Da Steel JSC.
Underwriting Vinaenco’s bond issuance (VND 250 billion in value).
Consulting for and arranging BIM Seafood’s bond issuance (VND 250 billion in value).
8 ANNUAL REPORT 2019 www.vcbs.com.vn 9 MILESTONES (CONTINUED)
2013 2015 2017 2019
Among the top members in the primary and Underwriting the bond issuance by Masan Increasing Charter Capital from VND 700 Top 1 market share in Government Bond secondary bond markets regarding market Consumer Holdings (MCH) (VND 9,000 billion to VND 1,000 billion. Brokerage. share. billion in value), which was a subsidiary of nd Masan Group. Being the only auction agency in the state 2 largest market share in Corporate Bond Among the top ten brokerage houses of capital divestment from Saigon Beer – Brokerage. shares and fund certificates on HSX. Underwriting the bond issuance by Vinpearl Alcohol - Beverage Corporation (SAB) whose nd Nha Trang bond issuance (VND 2,300 billion transaction value through VCBS totalling VND 2 largest market share in Government Underwriting CII’s bond issuance (VND in value), which was a subsidiary of Vingroup. 110,000 billion. Bond Auction. 1,000 billion in value) and Vinacomin’s bond issuance (VND 5,000 billion in value). Officially launching new trading platforms, Honored by Vietnam Securities Depositary Providing advisory and underwriting service including Home Trading, Web Trading, Mobile Center (VSD) as “Outstanding Member in for corporate bond issuances with total Successfully arranging M&A deals between Trading and App Trading modules. stock and payment transactions”. value of over VND 6,000 billions, helping Song Da 9 JSC and Song Da 91 JSC; and companies in various sectors access mid & between Someco Song Da and Someco Hoa Among top 5 stock listing consultants and Honored by HNX as “Outstanding Securities long-term capital in addition to bank credit. Binh. auction agency on HSX. Company Member in 2017”. Providing advisory service and acting as Receiving “Outstanding Member in 2005- Honored by HNX as “Outstanding Member issuing agency for VND 2,250 billions of 2015” Award from HNX. of the Treasury Bond Market in 2017”. bonds with payment guarantee from CGIF (Credit Guarantee and Investment Facility Successfully issuing VCBS bonds to clients – a trust fund of Asian Development Bank 2014 (VND 300 billion in value). rated AA by Standard & Poor). This deal is a complex-structured bond attracting many Among top 4 brokerage houses of Government Establishing Giang Vo Transaction Office in prestigious institutional investors in the capital Bond & Treasury Bill with more than 10% Hanoi and Hai Phong Representative Office 2018 market. market share. in Hai Phong city. Being auction agency in Vietnam Construction Honored by Vietnam Securities Depository Receiving Certificate of Merit from Mr. Vu Bang, And Import-Export Joint Stock Corporation’s Center as “Outstanding member in securities Chairman of State Securities Commission, divestment deal whose value totalling VND depository service in 2019”. for outstanding achievements in developing 7,366 billion. Vietnam’s bond market from 2009 to 2014. 2016 Honored by Hanoi Stock Exchange as Successfully arranging M&A deals for foreign “Outstanding member in 2018 – 2019 Successfully issuing VCBS bonds (VND 200 Providing advisory and underwriting service investors to purchase shares of Vietnam period”. billion in value) to clients. for the issuance of Vietcombank’s bond Textile and Garment Group (10%), Vietnam Receiving “Outstanding Member in 2009- (8,000 billion VND in value). - Itaty Steel JSC. (45%), PAN Group JSC. 2014” Award from HNX. (8.97%). Receiving Certificate of Merit from Minister Among top 10 brokerage houses of shares of Finance for outstanding contribution to the Being the ninth member in the market to and fund certificates on HSX. development of Vietnam’s stock market. provide derivative securities trading service. Receiving “Outstanding Member of Vietnam’s Honored by Vietnam Securities Depository stock market 2015-2016” Award from HNX. (VSD) as “Outstanding member in stock depository service in 2018” and “Outstanding Opening VCBS Representative Office in Binh member in payment and stock transactions Duong city. in 2018”.
Honored by HNX and HOSE as “Outstanding member in 2017 – 2018”.
10 ANNUAL REPORT 2019 www.vcbs.com.vn 11 STATEMENTS FROM CHAIRWOMAN AND CEO
Vietnam stock market ended GDP growth reaching 2019 with VN Index closing at 7.02% 960.99
Dear Valued Clients & Partners,
2019 was the second consecutive year Vietnam achieved and surpassed all 12 objectives of socio-economy development, with stable macro economy and GDP growth reaching 7.02% which surpassed National Assembly’s objective and was among the top highest economies regionally and globally. Inflation was controlled at the rate of 2.79% which was the lowest in the last 3 years. Financial market, monetary market and foreign exchange rate were regulated with proactiveness, flexibility and stability, and public debt declined.
In addition to solid foundation of the domestic macro-economy, 2019 witnessed significant changes in the stock market: National Assembly approved Securities Law Amendment and new derivative product – Cover Warrant (CW) was introduced to the market; substantial IPOs and a new, vibrant wave of Korea-backed securities company appeared in the market; etc. Vietnam stock market ended 2019 with VN Index closing at 960.99 which was 7.7% higher than that at the end of 2018 and higher than many countries in the region such as Singapore, Malaysia, Indonesia.
As a subsidiary of Vietcombank, and with over 17 years of experience in Vietnam’s stock market, state-of-the-art electronic trading system, branch network spreading over the country and experienced experts having in-depth understanding of the market and government’s regulations, VCBS has shown relentless effort and successfully carried out many big deals with international standards involving foreign partners. In 2019, VCBS reinforced its position in the corporate bond underwriting business with numerous successful issuances worth thousands of billion VND in many business sectors. VCBS took part as an advisory institution and issuance agency for Hong Phong 1 Energy JSC’s bond with deal size of VND 2,550 billion. The product was complex- 2019 was the second consecutive year Vietnam structured, which included loans and had payment guarantee from CGIF (a trust fund of Asian Development Bank), and invested by prestigious financial institutions. achieved and surpassed all 12 objectives of Contribution of VCBS to the stock market was recognized as the Company was honorably listed socio-economy development, with stable macro among the top 10 brokerage houses in terms of market share by Hanoi Stock Exchange. VCBS economy and GDP growth reaching 7.02% was honored by Vietnam Securities Depository Center as Outstanding member in securities depository service in 2019. Hanoi Stock Exchange also honored VCBS as Outstanding member which surpassed National Assembly’s objective in 2018 – 2019 period. The achievements in 2019 are the solid proof of the determination and relentless effort of the entire employees of VCBS and the motivation for VCBS to thrive in the and was among the top highest economies next year. regionally and globally.
12 ANNUAL REPORT 2019 www.vcbs.com.vn 13 STATEMENTS FROM CHAIRWOMAN AND CEO (CONTINUED) FINANCIAL HIGHLIGHTS
527,924
In the time to come, despite the forecast of a more volatile stock market, VCBS will continue to expand its business through providing full-packaged products and services from commercial banking to investment banking with the aim of becoming the top investment bank in Vietnam through specific business expanding actions such as: (i) Improving advisory service for institutional and corporate clients; (ii) enhancing service quality and introducing new product packages to meet the diverse demand of retail clients; (iii) keep allocating resource to the upgrade of electronic trading system and technology to provide clients with cutting-edge, save and confidential trading experience. Internally, VCBS will continue to the training process focusing on human resource 184,550 185,420 quality, as well as improve welfare and corporate environment. 145,594 VCBS will continuously contribute to the development of Vietnam’s stock market and will always be a reliable partner of the local and foreign investor community, companies and financial institutions, empowering its ever-prestigious reputation in the market. 2019 Financial highlights (VND million) Profit Gross profit Profit Net revenue after tax before tax
Chairwoman CEO NGUYEN THI KIM OANH LE MANH HUNG Indicator table (Unit: VND million)
Item 2017 2018 2019
Net revenue 578,940 581,914 527,924 Operating expense (225,345) (178,877) (169,632) Financial income 2,364 2,552 1,494 Financial expense (82,859) (89,516) (88,680) General and administrative expenses (86,711) (96,777) (86,556) Gross profit 186,389 219,296 184,550 Other income/expense 76 254 870 Profit before tax 186,464 219,550 185,420 Profit after tax 151,715 171,919 145,594 Charter capital 1,000,000 1,000,000 1,000,000 Current ratio 197.74% 193.16% 193.05% Total liabilities/Total assets 60.97% 51.18% 56.57% Total liabilities/Total stock holder equity 156.19% 104.84% 130.23% Total asset turnover 19.76% 18.85% 16.36% Gross profit margin 26.21% 29.54% 27.58% ROA 11.90% 12.76% 11.05% ROE 4.65% 5.57% 4.51% Capital adequacy ratio 308% 367% 324%
14 ANNUAL REPORT 2019 www.vcbs.com.vn 15 BUSINESS DEVELOPMENT ORIENTATION
In 2019, the stock market witnessed many changes and positive supports from the macro-economy. However, the market might face new challenges from the threat of pandemic affecting the global supply chain in 2020. The global stock market has Difficult conditions in the market do not only offer experienced negative impact, beginning from the Asian markets and now spreading risks but also opportunities for VCBS to thrive ahead. to European and American markets. Vietnam, although offering a rare and surprising bright spot in the COVID-19 pandemic, is still not immune to its adverse impacts as In 2020, VCBS will continue to pursue investment Vietnam’s major partners such as US, China, Korea are all struggling to sustain the banking business model with the vision of becoming economies amid the escalation of the pandemic. a prestigious leader in the market. However, difficult conditions in the market do not only offer risks but also opportunities for VCBS to thrive ahead. In 2020, VCBS will continue to pursue investment banking business model with the vision of becoming a prestigious leader in the market. In order to stand up against challenges, VCBS has set out next year’s priorities including (1) raising chartered capital meeting the requirement to undertake larger deals; (2) improving collaboration with the parent company – Vietcombank and expanding One-VCB model throughout the system, (3) improving overall administrative capacity to meet the current top standards.
16 ANNUAL REPORT 2019 www.vcbs.com.vn 17 EXECUTIVE BOARD’S REPORT
ON GROWTH WE RUN OUR ENGINE OVERVIEW OF VIETNAM’S ECONOMY AND STOCK MARKET IN 2019
The general layout of Vietnam’s economy in 2019 maintained stable and sustainable economic growth with Inflation in 2019 rose by 2.79% which was the lowest within the last 3 years and under National Assembly’s GDP growth rate reaching 7.02%. In specific, industry – construction sector was the leading one and FDI was objective. Central exchange rate increased by 1.44% comparing to that in 2018. VND-currency depreciation an important force in the economy. was less than other countries in the region, confirming the effectiveness of SBV regulations and policies.
VN Index +8.82% HNX Index -0.32% 1,075.00 146 VN Index
HNX Index
138
Massive sell-off on VN INDEX 1,025.00 US raise tax on Chinese Breakout 1,000 goods from 10% to 25% all stock exchanges in early August resistance
130 China - US 3rd day meeting on rate 975.00 agreement. 122
Brexit deadline SBV lower series of delayed administrative interest rate from 6.5% to 6% 114 925.00
106
875.00
FED lower rate for the 3rd 9 months GDP State Bank of Vietnam 98 time in 2019, might rate growth at 6.98% YoY lowered regulatory declining in 2020 interest rates
825.00 90
April 2019 May 2019 June 2019 July 2019 January 2019 March 2019 August 2019 February 2019 October 2019 September 2019 November 2019 December 2019 20 ANNUAL REPORT 2019 www.vcbs.com.vn 21 BUSINESS PERFORMANCE IN 2019
In 2019, despite facing many unpredictable ups and downs of the economy as well as intense competition from other securities companies in the market, VCBS maintained consistent revenue and earning. In particular, net revenue attained VND 527.9 billion and earning reached 185.4 VND billion.
This achievement was due to consistently pursuing the original objectives and flexible regulation that timely adapted to the developments of the market in 2019, especially in Investment, Treasury & Bond Trading. VCBS was honored by Hanoi Stock Exchange (HNX) as outstanding member in 2018 – 2019 period based on the criteria of financial safety ratios, brokerage market share, collaboration with HNX in professional operation, new product development, trading system upgrade and members’ obligation compliance.
NET REVENUE 527.9 VND billion
PROFIT BEFORE TAX 185.4 VND billion
22 ANNUAL REPORT 2019 www.vcbs.com.vn 23 ADMINISTRATIVE ORGANIZATIONAL STRUCTURE
TOGETHER WE TRANSCEND ORGANIZATIONAL STRUCTURE BOARD OF DIRECTORS INTRODUCTION
MS. NGUYEN THI KIM OANH SUPERVISORY BOARD DEPUTY GENERAL DIRECTOR OF VIETCOMBANK, CHAIRWOMAN OF VCBS BOD
Ms. Nguyen Thi Kim Oanh is currently holding the position of Deputy General Director of Vietcombank, Chairwoman of VCBS’s BOD, Chairwoman of Vietnam Bond Market Association. Ms. Nguyen Thi Kim Oanh holds a Master degree in Finance and Banking from the University of New South Wales, Australia.
MS. HOANG DIEM THUY MEMBER OF THE BOARD OF DIRECTORS
RETAIL WHOLESALE SELF-EMPLOYMENT RISK MANAGEMENT SUPPORTING Ms. Hoang Diem Thuy holds the following positions: DIVISION DIVISION DIVISION DIVISION DIVISION Head of Asset Liability Management Department – Vietcombank Head Office, Member of VCBS Board of Directors. Ms. Hoang Diem Thuy holds an MBA from the National Economics University and CFVG.
LIST OF BOARDS’ MEMBERS
NAME POSITION
DEPUTY GENERAL DIRECTOR OF VIETCOMBANK MR. LE MANH HUNG MS. NGUYEN THI KIM OANH CHAIRWOMAN OF VCBS BOD MEMBER OF THE BOARD OF DIRECTORS, CEO MS. HOANG DIEM THUY MEMBER OF VCBS BOD MEMBER OF VCBS BOD MR. LE MANH HUNG CEO Mr. Le Manh Hung has been working for VCBS since 2007. With many years of experience in Finance and MR. LE VIET HA DEPUTY CEO Banking, Mr. Le Manh Hung has held the position of MR. TRAN VIET HUNG DEPUTY CEO Head of Equity Investment Department, Deputy Director of VCBS before being appointed to the position of VCBS MR. PHAN ANH VU DEPUTY CEO Director. Mr. Le Manh Hung holds a Master of Business Administration (MBA) degree in Finance from California MR. DO THANH PHONG DEPUTY CEO State University - East Bay (USA). MS. NGUYEN THUY QUYNH HEAD OF SUPERVISORY BOARD
26 ANNUAL REPORT 2019 www.vcbs.com.vn 27 MANAGEMENT BOARD & SUPERVISORY BOARD INTRODUCTION
MR. LE MANH HUNG MR. PHAN ANH VU CEO DEPUTY CEO
Mr. Le Manh Hung has been working for VCBS since Mr. Phan Anh Vu joined VCBS since 2002; he was 2007. With many years of experience in Finance and Head of Brokerage Department, Head Office before Banking, Mr. Le Manh Hung has held the position of being promoted to the position of Deputy CEO of Head of Equity Investment Department, Deputy Director VCBS. Mr. Phan Anh Vu holds a Master Degree in of VCBS before being appointed to the position of VCBS Finance from the University of Queensland - Australia. Director. Mr. Le Manh Hung holds a Master of Business Administration (MBA) degree in Finance from California State University - East Bay (USA).
MR. LE VIET HA MR. DO THANH PHONG DEPUTY CEO DEPUTY CEO
Mr. Le Viet Ha held various key positions in the Mr. Do Thanh Phong has worked in VCBS since 2012. management team of VCBS before being promoted He was as Head of Investment Department in the to the position of Deputy CEO of VCBS. He graduated Head Office for a long time before appointed Deputy from Banking Academy in Banking and Finance and Director of VCBS. Mr. Do Thanh Phong graduated holds a Bachelor Degree of Law from Hanoi Law MBA from Latrobe University, Australia. University.
MR. TRAN VIET HUNG MS. NGUYEN THUY QUYNH DEPUTY CEO HEAD OF SUPERVISORY BOARD
Mr. Tran Viet Hung has been working for Vietcombank Ms. Nguyen Thuy Quynh has been working for since 2006. Mr. Tran Viet Hung was Deputy Head VCBS for several years and held key positions in the of Asset and Liability Management Department at management team of VCBS before being promoted Vietcombank Head Office, and VCBS’s Head of Capital as Head of Supervisory Board. Ms. Nguyen Thuy and Bond Trading department before being appointed Quynh graduated from Finance – Banking Department, as Deputy Director of VCBS. Mr. Tran Viet Hung National Economics University in Hanoi. received his BA in Foreign Trade from the Foreign Trade University.
28 ANNUAL REPORT 2019 www.vcbs.com.vn 29 BUSINESS OPERATIONS
AIMING TO SERVE THE MARKET FINANCIAL INSTITUTIONAL CLIENTS
HIGHLIGHTS CHANGE FOR THE GREATER
VCBS Institutional Client Division is led by a team Providing equity-related services like Daily market of experts with long history and experience in the reports, over-the-counter transaction consultant, market and energetic and skilled employees, forming initiations of block deals based on investors’ an effective and harmonious team in servicing demands. institutional clients of VCBS. Providing bond-related services like market Top 1 market share in Government 2019 was another volatile year for the stock market reports, corporate bond distribution, RPT agency, Bond Brokerage due to various domestic as well as foreign macro- BHA, account freeze, etc. economic factors. Despite this, VCBS continued to show its energetic image by expanding institutional In 2019, VCBS organized business trip to developed client base, customer service and investment network, financial markets such as Singapore, Thailand and as follows: Japan in order to inquire foreign investors’ demand, hence creating added value, and at the same time Connecting potential businesses with foreign and learn about institutional operation in customer 1 2nd largest market share in Corporate domestic financial institutions; servicing and business developing from the world’s Bond Brokerage top brokerage organizations. Highlighted activities Presenting investment opportunities and macro- drawing significant attention from institutional clients economic analysis once every 3 months to major included: 2 institutional investors in Vietnam, such as Dragon Capital, VinaCapital, KIMC, VNHoldings, VFM, Successfully organizing “CPTPP and Vietnam’s Bao Viet Fund, Manulife AM, Citibank, Standard investment market” seminar in Hanoi which Chartered Bank, HSBC, Deutsche Bank, EIB, attracted more than 50 delegates representing OCB, Saigon Bank, Prudential, Manulife, AIA, reputable investment funds and financial institutions 2nd largest market share in Government 2 Generali Life, FWD Life, etc. locally and abroad. Bond Auction Collaborating with Mizuho Bank to organize “Mizuho-VCBS seminar in Singapore” presenting investment opportunities in Vietnam.
Successfully distributing VND 2,550 billion of Hong Phong 1 corporate bond, with payment guarantee from Credit Guarantee and Investment Facility (CGIF), a Trust Fund of Asian Development Bank (rated AA globally by S&P). This was the first bond receiving payment guarantee from CGIF with complex structure including both loans and bond.
32 ANNUAL REPORT 2019 www.vcbs.com.vn 33 CORPORATE CLIENTS
HIGHLIGHTS
Providing advisory and underwriting service for corporate bond issuances with total value of over VND 6,000 billion, helping companies in various industries access mid & long-term capital in addition to bank credit capital.
Successfully advising and issuance agency of VND 2,550 billion bonds guaranteed payment by CGIF (Credit Guarantee and Investment Facility) - Trust Fund of Asian Development Bank rated “AA” by S&P Global). This is a complex bond structure and has attracted many large and prestigious institutional investors in the capital market.
AFFIRMING AND EXPANDING FOOTHOLD IN VIETNAM’S FINANCIAL MARKET
In 2019, corporate financial advisory activities of The highlight in 2019 is the issuance of Hong Regarding traditional financial advisory operations Vietnam Oil and Gas Group (PetroVietnam/ VCBS gained many remarkable achievements, Phong 1 JSC bonds with CGIF’s payment (relating to enterprises’ restructuring; share offering PVN) as a divestment advisory agency for PVN affirming and expanding the company’s foothold in guarantee. This is the first time that a project’s to raise charter capital; listing; etc.), VCBS continued in PetroVietnam Insurance JSC (PVI) (deal size of Vietnam’s financial market. With extensive experience bond received payment guarantee from CGIF to expand, develop and gain certain achievements, ~VND 2,000 billion); and provided advisory service and in-depth understanding of the market, VCBS has with a relatively complex structure including such as advising for Nguyen Kim JSC on making for the share offering of Quang Tri Commercial signed and carried out many transactions for Clients, a combination of loan and bond with different a tender offer to purchase LDP stock; Advising JSC, for the private share offering for Phu Bai specifically: terms & conditions. VCBS participated in this on the share issuance of Gia Lai Hydroelectric Spinning JSC. transaction with various roles, including: (i) advisory JSC; Advising on conversion to public company For advisory and bond underwriting/agency and issuing agency, (ii) registration, depository, and registration on Upcom exchange for Industrial Along with that, VCBS continued to act as an services, VCBS successfully help issuing more than payment and transfer management agency; and Zone Development JSC (Sonadezi); Advising on intermediary to support liquidity for corporate VND 6,000 billion of corporate bonds, including (iii) representative of bondholders. The successful conversion of Southern Food Corporation Ltd to a bonds issued under VCBS’s advisory service, as well Hong Phong 1 JSC. (VND 2,550 billion), Truong arrangement of such a complex-structured and JSC (Vinafood II); Advising on private share offering as pave the way for a vibrant secondary market. Hai Automobile Company- Thaco (VND 2,000 high value product affirmed the capacity of VCBS of Deo Ca Group JSC (~ VND 2,000 billion). These are also VCBS’s advantages realizing the billion), Ecopark Group JSC (VND 500 billion), in providing investment banking services, thereby potential plan to develop the bond market for MBLand Tonkin JSC (VND 400 billion), Vinh Son helping Hong Phong 1 to raise long-term funding In terms of equitization and divestment advisory individual clients, in addition to corporate bond Song Hinh Hydropower JSC (VND 700 billion, for the project with competitive fixed interest rates. service for State-owned corporations and issuances which has always been the strength of which VND 500 billion was completed), etc. enterprises, in 2019 VCBS was chosen by the of VCBS.
34 ANNUAL REPORT 2019 www.vcbs.com.vn 35 CORPORATE CLIENTS (CONTINUED)
ONE OF THE LEADING INSTITUTIONS PROVIDING INVESTMENT BANKING SERVICE
VCBS always has policies that mutually benefit all parties and the client-centric philosophy has always been embedded in our corporate financial advisory activities, complying with the law and at the same time heading towards sustainable development.
With 17 years of experience from the early days of working for prestigious securities companies and Vietnam’s stock market, VCBS received the trust and financial institutions domestically and internationally. appreciation from State-owned corporations and enterprises as well as domestic and international In order to expand investment banking services, VCBS companies. With the current trend and the orientation will continue to uphold regular training courses and from the parent bank -Vietcombank to become one recruit high quality employees to increase manpower of the leading institution providing investment banking as well as contribute to the development of Vietnam’s services, VCBS will focus more on M&A deals and stock market. securities underwriting service.
Moreover, with the advantage of being a 100%-owned subsidiary of Vietcombank and backed by the parent bank in terms of both financial resource and customer network, as well as the standardized and systematic cooperation between Vietcombank and VCBS, VCBS has utter confidence in providing quality services catering for customers’ needs, even the most demanding ones. VCBS policies mutually benefit all parties and the client-centric philosophy has always been embedded in our corporate financial advisory activities, complying with the law and at the same time heading towards sustainable development.
VCBS is proud of possessing skilled human resources majoring in economics – finance from domestic and foreign universities and having financial certificates issued by the State Securities Commission (SSC), as well as international certifications such as CPA, ACCA, CFA, etc. Moreover, the corporate finance advisory team of VCBS has many years of experience
36 ANNUAL REPORT 2019 www.vcbs.com.vn 37 INDIVIDUAL CLIENTS
HIGHLIGHTS PROFESSIONAL DERIVATIVES TRADING WITH THE CONDITIONAL ORDERS
2019 saw a remarkable growth in derivative securities transactions in the context of the volatile underlying stock Launching corporate bond distribution product, with market. In order to meet the professional trading demand of investors, VCBS introduced a new Conditional flexible type and termed product type, to help clients Order system in the derivative trading platform since November 2019 with various advantages as follows: invest with fixed income; Various types of conditional orders: Stop, OCO, Trailing stop, Bull & Bear;
High - speed Top 10 Bought/Sold price board;
Technical analysis graph with full functions; Implementing a system of Conditional orders for derivative trading to provide tools helping Investors Support functions for quick order, security management, etc. benefit the most from market opportunities; In particular, conditions for checking conditional orders based on the best bid and asked prices reflected the actual demand in the market. The use of conditional order system helped Investors cut losses and take profits with expected conditions in line with volatile market.
Comprehensively cooperating with Vietcombank in 2020 will continue to be the year for VCBS to upgrade and improve its technology platform to provide clients introducing products and services of VCBS to the with the best trading experience. investor community in all regions of the country;
Applying modern technology in customer care through Contact Center system.
CORPORATE BOND - EFFECTIVE INVESTMENT INSTRUMENT
Corporate bonds are not new to professional termed corporate bonds are designed as an investors. However, to individual clients, getting optimal alternative to savings deposit with attractive access to the product is still limited due to the strict interest rates. regulations of the law on the number of bond holders, the minimum ownership value of the issuer, In 2019, VCBS has successfully distributed KSB and etc. In order to provide individual clients with an VPI corporate bonds in the secondary market. As easier access, VCBS has built and implemented the one of the prestigious bond issuance advisory and distribution of corporate bonds in the secondary underwriting agencies in the market, VCBS has a market with two types of products: flexible corporate great potential to provide more and more products bonds and termed corporate bonds. In particular, to investors in the secondary market, especially individual clients, with high interest rates in the future.
38 ANNUAL REPORT 2019 www.vcbs.com.vn 39 INDIVIDUAL CLIENTS (CONTINUED)
FLEXIBLE POLICIES
In order to accurately meet the actual needs of clients, service packages. With a team of experts having VCBS created a tool to allow clients to choose service extensive experience in the security market and a packages (proactive /consultative) with attractive fees. clear investment philosophy, clients could choose receiving direct care from staff in accordance with Following the success after implementing the their investment strategies simply and quickly via proactive service packages with competitive fees, online platform. As a reliable companion of clients, in 2019 VCBS strengthened analytical products to each broker would closely monitor the market and support the proactive service package. Clients using the devise appropriate strategies to ensure maximum proactive service package were provided with macro, profitability and sustainable asset growth for clients. industry and business reports to gain an overview of the market, outstanding stock recommendations with With the intention of encouraging new clients to updated information and modern valuation models. trade/re-trade at VCBS in the context of downtrend Especially in the context of various fluctuations in in Vietnam’s stock market due to the overall impact the global market in 2019, VCBS always updated of global economic downturn, VCBS implemented clients with the most in-depth assessment reports in a service package applicable to new clients with Vietnam’s stock market. attractive transaction fees and interest rates offer within 06 months from the account opening date. Along with that, VCBS also strived to continuously At the same time, clients could experience the improve and upgrade the quality of consultative consultative service package at no additional cost.
ACCOUNT MANAGEMENT ENTRUSTMENT
In 2019, VCBS continued to implement Account Management Entrustment (VCBS Privilege) product, expanding the investment strategy in accordance with the risk appetite of each individual client. With a team of experts who directly built strict investment MODERN AND PROFESSIONAL CUSTOMER SERVICE and account management strategies, VCBS Privilege would be an effective product for busy clients with As a pioneer in applying modern technology to Intelligent identification and automatic allocation low cost. business activities and customer care, VCBS Contact system to provide immediate care from Center with modern technology adopted artificial professionals and experienced consultants; intelligence to provide intelligent services as follows: Third-party conference between Customer - FINANCIAL SUPPORT Multi-channel communication with VCBS via: Consultant - VCBS Expert; online website, phone, email, instant messaging With the financial strength backed by Vietcombank, and other smart devices. Voice message to contact VCBS for support, etc. VCBS has been deploying a set of financial products to support investors, such as normal margin loan, 24/7 automatic responding when clients query on short-term margin loan (10 days), advanced cash account balance and transaction results of the day; payment of sold securities. In 2019, VCBS adopted the diversification of service prices in line with customers’ needs, type of customers in order to EXPANDING CUSTOMER - CARE NETWORK encourage clients to trade good stocks and limit risks at speculative stocks. 2019 marked the comprehensive cooperation between VCBS and Vietcombank’s nationwide system to expand the customer-care network and support procedure completion conveniently. Along with that, the upgrade of online securities account opening system helped clients to obtain securities accounts in a quick and safe manner.
40 ANNUAL REPORT 2019 www.vcbs.com.vn 41 SUSTAINABLE DEVELOPMENT REPORT
TREASURING COMMUNITY COMMITMENTS PRESTIGE AND EXPERIENCE INDEPENDENT, OBJECTIVE AND HONEST SUPERVISORY ACTIVITY
Through supervision, the Supervisory Board can Travelling with the stock market from the promptly issue risk warnings and discover problems beginning and having personnel with in-depth in the operational and regulatory process to propose understanding of the investment environment, the Board of Directors and the Board of Management legal policies and client demand, as well as a for adjustment and improvement of internal control modern, user-friendly and secured transaction procedures to prevent and hinder risks and ensure technology. operational secure.
As a 100%-owned subsidiary of Vietcombank, The Supervisory Board comprises of 03 members, in the Company; and in conducting decisions of VCBS inherites 55 years of experience and a strong including the Head of Supervisory Board and one (01) the Owner. reputation in the banking & finance field, together with full-time member and one (01) concurrent member Through supervision, the Supervisory Board can solid financial foundation, modern technology system who represents the Owner to supervise all business promptly issue risk warnings and discover problems and an extensive client network. VCBS services have activities and corporate governance of the Company in the operational and regulatory process to propose been trusted and used by reputable foreign financial independently, objectively and honestly. the Board of Directors and the Board of Management institutions, including Mizuho, Shinhan, Citibank, The Supervisory Board shall examine the fairness, for adjustment and improvement of internal control Deutsche Bank, Standard Chartered Bank, ANZ legality, integrity and prudence in the management procedures to prevent and hinder risks and ensure Bank, and ABN AMRO Bank, and major domestic and execution of business activities; in accounting, operational secure. The Supervisory Board successfully corporation like Vietnam Minerals Group, VNPT, auditing, making statistics and financial statements fulfilled their assigned duties. EVN, SCIC, Song Da Corporation, Vietnam Steel Corporation, PJICO, Vinamilk, Vietnam Airlines, etc.
Travelling with the stock market from the beginning and having personnel with in-depth understanding of the investment environment, legal policies and client demand, as well as a modern, user-friendly and secured transaction technology. VCBS is the leading financial intermediary trusted by all clients, and is the prestigious partner of most domestic and international financial institutions, banks, securities companies, insurance companies, finance companies and investment funds which are doing business in Vietnam.
44 ANNUAL REPORT 2019 www.vcbs.com.vn 45 RISK MANAGEMENT SYSTEM UNDER INTERNATIONAL STANDARDS
In the context of increasingly volatile business environment, the size of the stock market is constantly expanding with more and more diversified products and services. With the goal of becoming one of the leading financial institutions in the market, VCBS has always set the top priority to build a Risk Management system that not only ensures compliance with the regulations of the State authority bodies but also meets international standards on risk management in the financial sector.
Recognizing that the difficulty and complication in 1st floor: includes front units and supportive units, Risk Management in VCBS is operating in a VCBS also focuses on improving risk management limiting risks in the financial market, the Company where risks arise directly, is responsible for directly complete cycle according to the theoretical behaviors and culture within the Company. Through has prioritized adding more staff with in-depth implementing risk management measures in daily standards and regulations of the State Securities internal training sessions, basic knowledge of risk knowledge and practical experience to the Risk operations; Commission, namely Decision No.105/QD- management has been disseminated to each Management Department. All specialized staff have UBCK, which includes 5 steps: i) Identifying risks, employee, thus leading to positive changes in nd had many years of experience in the financial market 2 floor: includes independent centralized ii) Measuring and assessing risks, iii) Determining risk employees’ views and behaviors in risk management. and participated in risk management training courses risk management departments such as Risk limits, iv) Monitoring risks, v) Handling risks. locally and abroad. Management Division, Compliance Department, Besides, the establishment of an effective infrastructure that is responsible for developing, maintaining The system of documents and policies regulating to collect data, and report risks is also targeted by the In addition, the Company also chooses to apply a and monitoring the Company’s risk management the Company’s risk management also continues Company. The collection of data on losses of the risk management model including 03 independent activities; to be standardized and completed. Each year, the Company is not merely for compliance but also for protection layers to ensure all units and employees Company issues a Risk Management Policy that the purpose of making possible loss predictions and rd of the Company involved in the risk management 3 floor: includes independent monitoring is guideline for the Company’s risk management estimating the extent of the impact of losses, through process. Each protection layer consists of different departments such as Internal Audit Department activities in the year determining risk limits and risk which to establish thresholds and risk limits for each units in the Company with different tasks in risk and Supervisory Board. These units implement appetite to each specific activity of the Company. In activities. management, but they can all support each other monitoring measures to ensure compliance with addition, the management processes of vital risks are towards a coalescent and effective risk management the strategies, policies and risk management also amended and updated in turn to meet changes system. regulations set by the Company. of management policies and business environment.
46 ANNUAL REPORT 2019 www.vcbs.com.vn 47 RISK MANAGEMENT SYSTEM UNDER INTERNATIONAL STANDARDS (CONTINUED)
In 2019, the Company’s risk management continued to on these stock ratings, the Company will set lending limit be carried out properly following the original orientation. according to the stocks’ quality. The list of stocks used Implemented activities include: as collateral is reviewed periodically, and on request if necessary, to update the volatility situation of stocks in a Operational risk management timely manner.
The system of documents, policies, procedures to A system of limits is also built to control the concentration control operational risks continued to be completed. of outstanding loans and, along with warning levels, to promptly conduct debt recovery - including criteria like Periodic seminars to review and self-assess vital control total margin lending limit; maximum limit per client; points of potentially risky operations were held; maximum limit per stock code; safety threshold; warning Periodic training sessions to disseminate basic rate; force-selling rate; etc. knowledge of risk management throughout the system The management of outstanding loans, concentration in order to raise the awareness of risk management level by clients and by stocks and risk ratios is also done responsibility of each employee were organized; daily to quickly detect risky signs. System of major risk indicators were built to monitor Liquidity risk management signs of potential risks. Cash flow forecasting system is periodically updated and Market risk management liquidity status is supervised daily. The Company also VCBS prioritizes the usage of quantitative models to develops liquidity measuring instruments and contingency quantify market risks. Specifically, the company applied plans to ensure capital adequacy. During the last 18 years in VaR method to assess risks. In addition, the company the market, the Company has always met capital demand also implemented Stress Testing model to evaluate for investment plans as well as payment obligations. The the maximum possible loss level under predefined financial safety ratio of the Company reached 325% as of scenarios so that measures could be set up to limit December 31, 2019, far exceeding the rate set by the State losses if necessary. The calculation of capital according Securities Commission of 180%. to VaR method also helps VCBS go along with the Legal risk management parent bank in implementing Basel II standards. Legal risks happen to the Company in the process of Investment decisions must always maintain the close complying with laws due to changes in regulations, failures coordination between departments from monitoring, to comply with regulations and disputes or lawsuits with evaluating, assessing and forecasting the market, to the partners during the daily operation of the Company. In order system of limits, warnings and handling procedures. to limit these risks, new and amended legal documents are The market risk limits are also established and complied always updated promptly, published widely and integrated absolutely in all investment activities in the Company. into the Company’s operational procedures and regulations.
Risk management in margin lending Next year, the Company will continue to pursue prudent risk management strategy, promote compliance with policies and Recognizing credit risks that may arise, all decisions regulations while ensure the security and efficiency of capital. regarding margin portfolio, lending limits applied to The Risk Management Department will focus on identifying each group of clients are made carefully and comply and preventing risks and increasing human resources to meet with the regulations of the authority and the internal risk management objectives applied to available activities and risk management procedures of the Company. products at the moment, as well as preparing in advance for the deployment of new products and policies. In addition, the internal The lending portfolio is carefully formed and complies risk management framework will also be updated to ensure its with the State Securities Commission’s regulations and consistency with the scale of the Company and the market. the Company’s risk appetite from time to time. Stocks Moreover, the Company also plans to upgrade technology and are graded and classified based on liquidity factors, invest in software systems to support risk measurement and price fluctuations and stock valuation according to their ensure that risk assessment is done as quickly, objectively, and financial statement analysis and business results. Based accurately as possible.
48 ANNUAL REPORT 2019 www.vcbs.com.vn 49 SKILLED HUMAN RESOURCE STATE-OF-THE-ART TRADING TECHNOLOGY AND DIVERSE PRODUCTS
VCBS always focuses on conducting market research and developing new products and services. The company has been implementing market research in diverse forms to develop products and services meeting clients’ demand, such as through local and foreign seminars on the financial market and the stock market and market surveys.
From the first days of establishment, VCBS aims that to develop business, it is necessary to make appropriate investment in modern and secure technological facilities. With the support of professional management software, VCBS is always one of the leading companies to apply information technology to serve clients’ business and transaction needs.
VCBS always focuses on conducting market research and developing new products and services. The company has been implementing market research VCBS has been creating high quality human Along with maintaining the high quality of personnel, in diverse forms to develop products and services resources with professionally education in the fields VCBS also creates opportunities for generations of meeting clients’ demand, such as through local of Economics, Finance, Banking, Law, and with young students to access and experience reality in and foreign seminars on the financial market and certificates like CPA, ACCA, CFA, certificates issued a professional financial environment, helping them the stock market and market surveys. This helps by the State Securities Commission, etc. These obtain knowledge and further their education. In the cooperating with domestic and foreign investment professionals have years of experience working at past 10 years, VCBS is the co-organizer and sponsor organizations and issuers in development of investment banks, fund management companies, of the I-INVEST competition, alongside the Foreign products and services meeting market’s demand. consulting firms, etc. domestically and internationally. Trade University, which is a competition for students Market research activities have had a very positive In 2019, VCBS continued to improve its operating studying in the economic field in Northern Vietnam. impact on the Company’s product and service model approaching international investment banking Through the competitions, candidates may receive development strategy and business orientation, model; established new departments to increase internship in the Company. VCBS realized that along contributing significantly to revenue growth and and diversify revenue sources; provide clients with with academic education, after participating in the business performance in the past. diverse products and features to promote sustainable actual working environment, students will become development of the Company. confident and be clearer of their career goals. These well-trained and young human resource will contribute greatly to the development of the securities industry in the future.
50 ANNUAL REPORT 2019 www.vcbs.com.vn 51 SOCIAL RESPONSIBILITY AND COMMUNITY COMMITMENT
VCBS regularly organized programs returning to the to build a playground for children inside the Primary Origins of Revolution and political activities combined Care Faculty and Adolescent Faculty with a total In VCBS, business activities were not only associated with with the admission of new Communism Party value of more than VND 85,700,000, donating (Party) members. Last year, the Party committee of 200 items and over 100 books; participated in the the development of the market and clients, but also with VCBS cooperated with the History Education and first “Loving Meal” Program at Tan Thong Charitable social and community responsibilities. Community activities Communication Center to organize the “Returning Nursing home, Cu Chi District, which specialized in the Origin of Uncle Ho” journey in Nghe An, including taking care of homeless elderly people, with the total such as reliefs, gratitude programs, humanitarian activities, visiting Uncle Ho’s historical house, offering incense value of meals and necessities at VND 30,154,000; etc. are one of the regular tasks and criteria for assessing to commemorate fallen war martyrs and heroes in collaborated with the charity organization “Loving Truong Bon national historical site and giving gifts to bus” to provide meals to 150 patients at Pediatric business culture standards in the Company. their families in Do Luong district. This was an annual Faculty of Oncology Hospital with total value of activity of VCBS to express the spirit of “Drinking 5,000,000 VND, and many gifts and toys; organized water - Remembering the source” which awoke Mid-Autumn Festival to give presents, toys, books, and brightened the traditional and human values of and school supplies to students at Vinh Hai 1 Primary the sacrifices of precedent generations as well as School, Vinh Chau, Soc Trang province; donated improved spiritual values of employees of VCBS. VND 8,800,000 via Vietcombank Union to Sea & Island Gratitude Fund and Social Security Fund; paid In VCBS, business activities were not only associated gratitude to families of war invalids and martyrs on with the development of the market and clients, July 27th, along with charitable programs towards but also with social and community responsibilities. disadvantaged communities launched by the Labour Community activities such as reliefs, gratitude Union and the Youth Union of VCBS. programs, humanitarian activities, etc. are one of the regular tasks and criteria for assessing business Activities to enhance internal cohesion and culture standards in the company. To maintain and understanding within the company as well as the nurture this tradition, employees of VCBS joined Vietcombank’s system were also regularly organized hands in programs such as organizing voluntary by the Company. By joining programs such as VSD blood donation program to employees, customers men’s football open tournament in 2019; Children’s and partners of VCBS which collected 104 blood Festival and Mid-Autumn Festival programs for units. In addition, VCBS Union members also actively children of employees in the Company; teambuilding participated in other blood donations organized by activities in Quy Nhon; etc., relationships, traditions Vietcombank, HNX, and the Union of Central State- and business culture within the Company were owned Companies with over 40 blood units in total; continuously improved. participated in the “Autumn heart” voluntary program
52 ANNUAL REPORT 2019 www.vcbs.com.vn 53 OPERATIONAL NETWORK
HEAD OFFICE
12th & 17th Floor, Vietcombank Tower, 198 Tran Quang Khai Str., Hoan Kiem Dist., Hanoi City. Tel: (84-24) 3936 6990 Fax: (84-24) 3936 0262
Ha Noi
Giang Vo Transaction Office Can Tho Representative Office Hai Phong
1st Floor, C4 Giang Vo Building, Giang Vo Ward, 4th Floor, No. 3-5 Hoa Binh Str., Ninh Kieu Dist., Ba Dinh Dist., Hanoi City. Can Tho City. Tel: (84-24) 3726 5551 Tel: (84-292) 3750 888 Fax: (84-24) 3726 5550 Fax: (84-292) 3750 878
Tay Ho Transaction Office Vung Tau Representative Office
3rd Floor, 565 Lac Long Quan Str., Tay Ho Dist., 2nd Floor, No. 27 Le Loi Str., Ward 4, Vung Tau City, Hanoi City. Ba Ria – Vung Tau Province. Tel: (84-24) 3219 1048 (ext: 100) Tel: (84-254) 3513 974 Con Co Island
Fax: (84-24) 3219 1049 Fax: (84-254) 3513 979 HOANG SA ISLANDS
Hoang Mai Transaction Office Dong Nai Representative Office Da Nang 1st Floor, Han Viet Building, 203 Minh Khai Str., 1st and 2nd Floor, 79 Hung Dao Vuong Str., Trung Minh Khai Ward, Hai Ba Trung Dist., Hanoi City. Dung Ward, Bien Hoa City, Dong Nai Province. Ly Son Island Tel: (84-24) 3220 2345 Tel: (84-251) 3 918 815 Fax: (84-24) 3220 2346 Fax: (84-251) 3918 817 HCMC BRANCH An Giang Representative Office
th 1st & 7th Floor, Green Star Building, 70 Pham Ngoc 7 Floor, Vietcombank An Giang Building, 30 – 32 Thach Str., Ward 6, 3rd district, Ho Chi Minh City. Hai Ba Trung Str., My Long Ward, Long Xuyen City, Tel: (84-28) 3820 8116 An Giang Province. EAST SEA Fax: (84-28) 3820 8117 Tel: (84-296) 3949 843 Fax: (84-296) 3841 845 Sai Gon South Transaction Office Hai Phong Representative Office Binh Duong 3rd floor, V6 Building, Plot V, Him Lam new urban 11 Hoang Dieu Str., Minh Khai Ward, Hong Bang Ho Chi Minh City Dong Nai area, 23 Nguyen Huu Tho Str., Tan Hung Ward, District, Hai Phong City. Phu Quy Island Ba Ria - Vung Tau District 7, Ho Chi Minh City. Tel: (84-225) 3821 630 An Giang Tel: (84-28) 3775 1409 Fax: (84-225) 3821 633 Can Tho Fax: (84-28) 3775 1416 Binh Duong Representative Office Phu Quoc Island TRUONG SA ISLANDS DA NANG BRANCH 3rd Floor, 516 Cach Mang Thang Tam Str., Phu Con Son Island 12th Floor, 251 Nguyen Van Linh Str., Vinh Trung, Cuong Ward, Thu Dau Mot City, Binh Duong Hon Khoai Island Thanh Khe Dist., Da Nang City. Province. Tel: (84-236) 3888 991 Tel: (84-274) 3855 771 Fax: (84-236) 3888 881 Fax: (84-274) 3855 775
54 ANNUAL REPORT 2019 www.vcbs.com.vn 55 FINANCIAL STATEMENTS
CONNECTED THROUGH TRUST AND TRANSPARENCY CORPORATE INFORMATION STATEMENT OF THE BOARD OF MANAGEMENT
The Board of Management of Vietcombank Securities Company Limited (“the Company”) presents this ESTABLISHMENT AND 09/GPHĐKD 24 April 2002 statement and the accompanying financial statements of the Company for the year ended 31 December 2019. OPERATION LICENSE NO. The Establishment and Operation License was issued by the State The Board of Management is responsible for the preparation and fair presentation of the financial statements Securities Commission of Vietnam. in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises, The most recent amended licence No. 63/GPDC-UBCK was issued by Circular No. 210/2014/TT-BTC dated 30 December 2014 of the Ministry of Finance on accounting guidance the State Securities Commission of Vietnam on 29 December 2017. applicable to securities companies (“Circular 210”), and Circular No. 334/2016/TT-BTC dated 27 December 2016 issued by the Ministry of Finance on amending, supplementing and superseding Appendix 02 and Appendix 04 of Circular 210 and the relevant statutory requirements applicable to financial reporting. In the BOARD OF MEMBERS Ms. Nguyen Thi Kim Oanh Chairwoman opinion of the Company’s Board of Management:
Ms. Hoang Diem Thuy Member »» the financial statements set out on pages 58 to 75 give a true and fair view of the financial position of the Mr. Le Manh Hung Member Company as at 31 December 2019, and of the result of operation, cash flows and changes in equity for the year then ended in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises, Circular No. 210/2014/TT-BTC dated 30 December 2014 of the Ministry of Finance on accounting guidance applicable to securities companies (“Circular 210”) and Circular No. 334/2016/TT-BTC SUPERVISORY BOARD Ms. Nguyen Thuy Quynh Head of the Board dated 27 December 2016 issued by the Ministry of Finance on amending, supplementing and supersed- Ms. La Thi Hong Minh Member ing Appendix 02 and Appendix 04 of Circular 210 and the relevant statutory requirements applicable to financial reporting; and Ms. Tran Kim Van Member »» at the date of this statement, there are no reasons to believe that the Company will not be able to pay its debts as and when they fall due. BOARD OF MANAGEMENT Mr. Le Manh Hung Director The Company’s Board of Management has, on the date of this statement, authorised the accompanying Mr. Le Viet Ha Deputy Director financial statements for issue. Mr. Phan Anh Vu Deputy Director On behalf of the Board of Management Mr. Tran Viet Hung Deputy Director Mr. Tran Viet Anh Deputy Director (dismissed from 19 September 2019)
REGISTERED OFFICE 17th Floor, Vietcombank Tower 198 Tran Quang Khai Street Hoan Kiem District Hanoi, Vietnam Le Viet Ha Deputy Director
AUDITOR KPMG Limited Vietnam Hanoi, 29 February 2020
58 ANNUAL REPORT 2019 www.vcbs.com.vn 59 INDEPENDENT AUDITOR’S REPORT
TO THE OWNER AUDITOR’S OPINION VIETCOMBANK SECURITIES COMPANY LIMITED In our opinion, the financial statements give a true and fair view, in all material respects, of the financial position We have audited the accompanying financial statements of Vietcombank Securities Company Limited (“the of Vietcombank Securities Company Limited as at 31 December 2019, and of its results of operations and Company”), which comprise the statement of financial position as at 31 December 2019, the statements of cash flows for the year then ended in accordance with Vietnamese Accounting Standards, the Vietnamese income, cash flows and changes in equity for the year then ended and the explanatory notes thereto which Accounting System for securities companies prescribed in Circular No. 210/2014/TT-BTC dated 30 December were authorised for issue by the Company’s Board of Management on 29 February 2020, as set out on 2014 of the Ministry of Finance on accounting guidance applicable to securities companies (“Circular 210”), pages 58 to 75. Circular No. 334/2015/TT-BTC dated 27 December 2016 issued by the Ministry of Finance on amending, supplementing and superseding Appendix 02 and Appendix 04 of Circular 210 and the relevant statutory MANAGEMENT’S RESPONSIBILITY requirements applicable to financial reporting.
The Company’s Board of Management is responsible for the preparation and fair presentation of these financial statements in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System KPMG LIMITED for securities companies prescribed in Circular No. 210/2014/TT-BTC dated 30 December 2014 of the VIETNAM Ministry of Finance on accounting guidance applicable to securities companies (“Circular 210”), Circular No. 334/2016/TT-BTC dated 27 December 2016 issued by the Ministry of Finance on amending, supplementing Audit Report No.: 19-02-00166-19-3 and superseding Appendix 02 and Appendix 04 of Circular 210 and the relevant statutory requirements applicable to financial reporting, and for such internal control as the Board of Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Tran Anh Quan Pham Thi Thuy Linh Practicing Auditor Registration Practicing Auditor Registration An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Certificate No.: 0306-2018-007-1 Certificate No.: 3065-2019-007-1 financial statements. The procedures selected depend on the auditor’s judgement, including the assessment Deputy General Director of the risks of material misstatement of the financial statements, whether due to fraud or error. In making Hanoi, 29 February 2020 those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Company’s Board of Management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
60 ANNUAL REPORT 2019 www.vcbs.com.vn 61 Form B01 - CTCK STATEMENT OF FINANCIAL POSITION (Issued under Circular No. 334/2016/TT-BTC as at 31 December 2019 dated 27/12/2016 of the Ministry of Finance)
31/12/2019 1/1/2019 31/12/2019 1/1/2019 Code Note Code Note VND VND VND VND
ASSETS B. LONG-TERM ASSETS (200 = 220 + 250) 200 45,138,225,404 43,518,364,109
A. CURRENT ASSETS (100 = 110 + 130) 100 3,500,673,340,378 2,866,183,002,522 II. Fixed assets 220 9,500,208,093 7,260,048,806
I. Financial assets 110 3,497,231,542,048 2,863,465,908,737 1. Tangible fixed assets 221 13 6,639,081,050 7,260,048,806
1. Cash and cash equivalents 111 5 66,603,610,333 101,389,635,384 - Cost 222 51,748,842,200 51,333,140,211
1.1. Cash 111.1 66,603,610,333 101,389,635,384 - Accumulated depreciation 223a (45,109,761,150) (44,073,091,405)
Financial assets at fair value through profit or 3. Intangible fixed assets 227 14 2,861,127,043 - 2. 112 7(a) 2,121,753,401,683 1,869,576,404,133 loss (FVTPL) - Cost 228 26,970,378,001 23,733,828,001 4. Loans 114 7(b) 1,188,983,355,732 794,389,521,057 - Accumulated amortisation 229a (24,109,250,958) (23,733,828,001) 5. Available-for-sale financial assets 115 7(c) 8,010,876,000 8,069,913,000 V. Other long-term assets 250 35,638,017,311 36,258,315,303 7. Accounts receivable 117 8 45,612,313,119 38,765,963,139 1. Long-term deposits and collaterals 251 3,895,550,455 3,275,147,775 7.1. Receivables from sale of financial assets 117.1 - 479,360,000 2. Long-term prepaid expenses 252 12(b) 1,742,466,856 2,983,167,528 Receivables and accrued dividends, interest 7.2. 117.2 45,612,313,119 38,286,603,139 from financial assets 4. Deposits at Payment Support Fund 254 16 20,000,000,000 20,000,000,000
7.2.2. Accrued dividends and interest not due 117.4 45,612,313,119 38,286,603,139 5. Other long-term assets 255 10,000,000,000 10,000,000,000
8. Prepayment to suppliers 118 2,411,173,997 1,380,711,754 TOTAL ASSETS (270 = 100 + 200) 270 3,545,811,565,782 2,909,701,366,631
Receivables from services provided by the 9. 119 9 17,019,713,376 6,023,104,204 securities company
12. Other receivables 122 10 50,630,884,149 47,392,955,181
Allowance for impairment of accounts 13. 129 11 (3,793,786,341) (3,522,299,115) receivable
II. Other current assets 130 3,441,798,330 2,717,093,785
1. Advances 131 15,152,000 10,000,000
2. Office equipment, tools and supplies 132 1,277,031,546 992,592,700
3. Short-term prepaid expenses 133 12(a) 2,149,314,784 1,714,201,085
4. Short-term deposits and collaterals 134 300,000 300,000
62 ANNUAL REPORT 2019 www.vcbs.com.vn 63 Form B01 - CTCK STATEMENT OF FINANCIAL POSITION (Issued under Circular No. 334/2016/TT-BTC as at 31 December 2019 (continued) dated 27/12/2016 of the Ministry of Finance) OFF-BALANCE SHEET ITEMS
31/12/2019 1/1/2019 31/12/2019 1/1/2019 Code Note Code Note VND VND VND VND
C. LIABILITIES (300 = 310 + 340) 300 2,005,688,892,752 1,489,244,524,525 ASSETS OF THE COMPANY AND ASSETS MANAGED UNDER A. COMMITMENTS I. Current liabilities 310 1,813,393,991,917 1,483,837,492,855
1. Short-term borrowings and finance lease liabilities 311 17 1,160,593,598,660 913,154,581,963 4. Bad debts written off 004 174,689,225 -
1.1. Short-term borrowings 312 1,160,593,598,660 913,154,581,963 Financial assets of the Company listed/registered 8. for trading at Vietnam Securities Depository 008 23(a) 199,538,590,000 297,834,490,000 4. Short-term bonds issued 316 22 - 213,600,000,000 (“VSD”) 6. Payables for securities trading activities 318 18 3,034,522,551 3,236,094,908 Financial assets of the Company deposited at 9. 009 23(b) 200,000 40,000 8. Accounts payable to suppliers - short-term 320 19 6,799,839,164 3,664,743,314 VSD but not yet traded
9. Advances from customers - short-term 321 785,600,000 235,600,000 10. Financial assets awaiting for settlement 010 23(c) 3,716,800,000 500,000,000 10. Taxes and others payable to the State Treasury 322 20 13,866,447,422 14,760,386,557 12. Financial assets not yet custodied at VSD 012 23(d) 61,327,190,000 49,827,190,000 11. Payables to employees 323 29,212,644,891 32,457,199,117 ASSETS AND PAYABLES ON ASSETS MANAGED UNDER B. 12. Employees’ benefits payables 324 - 58,480,750 COMMITMENTS WITH CUSTOMERS 13. Accrued expenses - short-term 325 21 4,715,676,164 9,081,964,795 Financial assets of investors listed/ registered for 1. 021 23(e) 39,014,612,420,000 34,106,592,010,000 17. Other short-term payables 329 602,955,912 533,382,915 trading at VSD
19. Bonus and welfare fund 331 24,130,291,461 14,607,438,607 a. Freely transferred and traded financial assets 021.1 29,628,399,620,000 28,870,424,550,000 Government bonds under sale and repurchase 20. 332 569,652,415,692 278,447,619,929 b. Financial assets restricted for transfers 021.2 293,704,440,000 200,719,260,000 agreements
II. Long-term liabilities 340 192,294,900,835 5,407,031,670 c. Pledged financial assets 021.3 8,946,981,870,000 4,951,500,390,000
4. Long-term bonds issued 346 22 182,300,000,000 - d. Blocked financial assets 021.4 190,000,000 190,000,000
14. Deferred tax liabilities 356 15 9,994,900,835 5,407,031,670 e. Financial assets awaiting for settlement 021.5 145,336,490,000 83,757,810,000
D. EQUITY (400 = 410) 400 1,540,122,673,030 1,420,456,842,106 Financial assets of investors custodied at VSD but 2. 022 23(f) 17,297,190,000 15,166,370,000 I. Owner’s equity 410 1,540,122,673,030 1,420,456,842,106 not yet traded
1. Capital 411 1,000,000,000,000 1,000,000,000,000 Freely transferred financial assets deposited at a. 022.1 8,960,000,000 7,316,290,000 VSD but not yet traded 1.1. Contributed capital 411.1 1,000,000,000,000 1,000,000,000,000 Financial assets custodied at VSD but not yet 2. Fair value reserve 412 (143,299,200) (96,069,600) b. 022.2 8,337,190,000 7,850,080,000 traded and restricted for transfers 4. Reserve to supplement charter capital 414 21,199,307,334 13,919,618,247 3. Financial assets awaiting settlement of investors 023 23(g) 87,112,390,000 62,456,400,000 5. Financial and operational risk reserve 415 63,134,033,294 55,854,344,207 7. Deposits of customers 026 1,020,626,055,116 1,217,012,869,286 6. Other reserves 416 30,762,096,449 30,762,096,449 Deposits of investors for securities transactions 7. Retained profits 417 425,170,535,153 320,016,852,803 7.1. 027 23(h) 834,721,235,761 974,421,061,569 managed by the Company 7.1. Realised profits 417.1 433,917,917,110 327,625,567,500 Collective deposits for securities transactions for 7.2. 028 23(h) 159,245,842,721 163,610,833,436 7.2 Unrealised losses 417.2 (8,747,381,957) (7,608,714,697) customers TOTAL LIABILITIES AND EQUITY (440 = 440 3,545,811,565,782 2,909,701,366,631 300 + 400)
64 ANNUAL REPORT 2019 www.vcbs.com.vn 65 Form B01 - CTCK Form B02 - CTCK STATEMENT OF FINANCIAL POSITION (Issued under Circular No. 334/2016/TT-BTC STATEMENT OF INCOME (Issued under Circular No. 334/2016/TT-BTC as at 31 December 2019 (continued) dated 27/12/2016 of the Ministry of Finance) for the year ended 31 December 2019 dated 27/12/2016 of the Ministry of Finance)
31/12/2019 1/1/2019 2019 2018 Code Note Code Note VND VND VND VND
Deposits for clearance and settlement of securities OPERATING REVENUE 7.3. 029 23(h) 3,946,173,827 3,938,637,403 transactions 1.1. Gains from financial assets at FVTPL 01 236,305,861,683 213,485,592,740 Deposits for clearance and settlement of a. 029.1 2,320,833,786 2,316,372,919 a. Gains from sale of financial assets at FVTPL 01.1 24(a) 77,887,389,088 105,489,549,170 securities transactions of domestic investors Gains from revaluation of financial assets at b. 01.2 26 16,834,016,067 (3,502,872,302) Deposits for clearance and settlement of FVTPL b. 029.2 1,625,340,041 1,622,264,484 securities transactions of foreign investors c. Dividends, interest from financial assets at FVTPL 01.3 24(b) 141,584,456,528 111,498,915,872
7.4. Deposits from securities issuers 030 23(i) 22,712,802,807 75,042,336,878 1.2. Gains from held-to-maturity investments 02 24(b) - 7,405,160,000 Payables to customers on deposits for securities 8. 031 23(j) 998,202,019,900 1,142,262,136,871 1.3. Income from loans and receivables 03 24(b) 101,922,012,431 109,639,116,278 transactions managed by the Company 1.4 Gains from available-for sale financial assets 04 59,037,000 120,087,000 Payables to domestic investors on deposits for 8.1. 031.1 872,277,583,693 986,798,548,801 1.6. Revenue from securities brokerage service 06 24(c) 120,292,679,986 154,532,997,320 securities transactions managed by the Company Revenue from securities underwriting and Payables to foreign investors on deposits for 1.7. 07 24(c) 26,054,528,940 15,549,652,369 8.2. 031.2 111,614,433,411 109,416,548,189 issuance agency services securities transactions managed by the Company 1.9. Revenue from securities custody service 09 24(c) 17,607,618,644 16,184,283,842 8.3 Payables for margin deposits from investors 031.3 14,310,002,796 46,047,039,881 1.10. Revenue from financial consulting services 10 24(c) 11,405,090,909 8,653,184,554 Payables on dividends, principals and interest of 12. 035 23(k) 22,424,035,216 74,750,732,415 1.11. Other operating revenue 11 24(c) 14,277,118,631 56,344,693,334 bonds Total operating revenue 20 527,923,948,224 581,914,767,437
II. OPERATING EXPENSES
29 February 2020 2.1. Losses from financial assets at FVTPL 21 42,699,115,289 33,736,463,056
a. Losses from sale of financial assets at FVTPL 21.1 25 23,739,248,604 44,247,958,771 Prepared by: Approved by: Losses from revaluation of financial assets at b 21.2 26 18,257,350,142 (10,965,671,692) FVTPL
c. Transaction costs of financial assets 21.3 702,516,543 454,175,977
Allowance for impairment of financial assets and 2.4. 24 (1,535,372) - doubtful debts, and borrowing costs
2.6. Expenses for securities trading 26 10,104,280,512 13,204,579,255
2.7. Expenses on securities brokerage activities 27 79,463,597,107 88,858,231,501
Expenses for securities underwriting and issuance 2.8. 28 10,458,450,220 9,248,812,587 Le Thu Hien Le Thi Ngoc Tram Le Viet Ha agency services General Accountant Chief Accountant Deputy Director
66 ANNUAL REPORT 2019 www.vcbs.com.vn 67 Form B02 - CTCK STATEMENT OF INCOME (Issued under Circular No. 334/2016/TT-BTC for the year ended 31 December 2019 (continued) dated 27/12/2016 of the Ministry of Finance)
2019 2018 2019 2018 Code Note Code Note VND VND VND VND 2.10. Expenses on securities custody service 30 20,455,608,657 21,459,321,475 INCOME TAX EXPENSES 100 39,826,162,587 47,631,706,325 2.11. Expenses for financial consulting services 31 6,452,478,979 10,679,508,702
2.12 Expenses for other services 32 - 1,690,178,862 10.1. Income tax expense - current 100.1 30 35,226,486,022 49,500,122,529
Total operating expenses 40 169,631,995,392 178,877,095,438 10.2. Income tax expense/(benefit) - deferred 100.2 30 4,599,676,565 (1,868,416,204) III FINANCIAL INCOME ACCOUNTING PROFIT AFTER TAX XI. 200 145,593,781,732 171,918,625,633 3.1. Realised and unrealised foreign exchange gains 41 27 9,422,486 51,696,690 (200 = 90 - 100) Revenue, accrued dividends and interest in the 3.2. 42 27 1,484,215,249 2,500,571,316 OTHER COMPREHENSIVE INCOME year XII. AFTER TAX Total financial income 50 1,493,637,735 2,552,268,006 Losses from revaluation of available-for-sale IV. FINANCIAL EXPENSES 12.1 301 (47,229,600) (96,069,600) financial assets 4.1. Realised and unrealised foreign exchange losses 51 28 12,211,271 16,294,184 TOTAL COMPREHENSIVE INCOME 400 145,546,552,132 171,822,556,033 4.2. Interest expense 52 28 88,667,574,044 89,499,765,339
Total financial expenses 60 88,679,785,315 89,516,059,523
GENERAL AND ADMINISTRATION 29 February 2020 VI. 62 29 86,555,557,206 96,777,326,189 EXPENSES
OPERATING PROFIT Prepared by: Approved by: VII. 70 184,550,248,046 219,296,554,293 (70 = 20 + 50 - 40 - 60 - 62)
VIII. OTHER INCOME AND EXPENSES
8.1. Other income 71 883,727,273 260,086,756
8.2 Other expenses 72 14,031,000 6,309,091
Total results of other activities (80 = 71 - 72) 80 869,696,273 253,777,665
TOTAL ACCOUNTING PROFIT BEFORE IX. 90 185,419,944,319 219,550,331,958 TAX (90 = 70 + 80) Le Thu Hien Le Thi Ngoc Tram Le Viet Ha 9.1. Realised profit 91 186,843,278,394 212,087,532,568 General Accountant Chief Accountant Deputy Director 9.2. Unrealised profit 92 26 (1,423,334,075) 7,462,799,390
68 ANNUAL REPORT 2019 www.vcbs.com.vn 69 Form B03 – CTCK STATEMENT OF CASH FLOWS (Issued under Circular No. 334/2016/TT-BTC for the year ended 31 December 2019 (Indirect method) dated 27/12/2016 of the Ministry of Finance)
2019 2018 2019 2018 Code Note Code Note VND VND VND VND
I. CASH FLOWS FROM OPERATING ACTIVITIES - Decrease in other payables 50 418,000,640 (2,491,501,127) 1. Profit before tax 01 185,419,944,319 219,550,331,958 - Other payments for operating activities 52 (16,978,271,034) - 2. Adjustments for 02 45,878,370,140 52,640,133,314 Net cash flows from operating activities 60 (537,826,848,378) 499,710,047,686 - Depreciation of fixed assets 03 4,340,660,087 10,076,768,874 II. CASH FLOWS FROM INVESTING ACTIVITIES - Allowances and provisions 04 271,487,226 1,507,789,637 - Unrealised foreign exchange losses/(gains) 05 2,061,242 (33,674,263) 1. Payments for purchases of fixed assets 61 (6,580,819,374) (5,197,571,800)
- Interest expense 06 88,667,574,044 89,499,765,339 Proceeds from disposals of fixed assets and 2. 62 879,909,091 218,181,818 other assets - Gains from investment activities 07 (2,364,124,340) (10,123,913,134) - Accrued interest income 08 (45,039,288,119) (38,286,603,139) 4. Receipts from other investments 65 1,484,215,249 12,898,231,316
3. Increase in non - cash expenses 10 18,257,350,142 (10,965,671,692) Net cash flows from investing activities 70 (4,216,695,034) 7,918,841,334 - Losses from revaluation of financial assets at 11 18,257,350,142 (10,965,671,692) III. CASH FLOWS FROM FINANCING ACTIVITIES FVTPL 4. Decrease in non-cash income 18 (16,834,016,067) 3,502,872,302 3. Proceeds from borrowings 73 37,560,007,393,648 37,504,727,069,351 - Gains from revaluation of financial assets at 19 (16,834,016,067) 3,502,872,302 3.2. Other borrowings 73.2 37,560,007,393,648 37,504,727,069,351 FVTPL 4. Payments to settle principals of borrowings 74 (37,052,749,875,287) (37,982,709,086,198) 5. Changes in working capital 30 (770,548,496,912) 234,982,381,804 Payments to settle other principals of - (Increase)/decrease in financial assets at FVTPL 31 (253,600,331,625) 29,748,178,212 4.3. 74.3 (37,052,749,875,287) (37,982,709,086,198) borrowings - Decrease in held-to-maturity investments 32 - 60,000,000,000 Net cash flows from financing activities 80 507,257,518,361 (477,982,016,847) - (Increase)/decrease in loans 33 (394,593,834,675) 159,959,677,914 - Decrease in receivables from sales of financial Net cash flows for the year 35 479,360,000 61,646,550,560 IV. 90 (34,786,025,051) 29,646,872,173 assets (90 = 60 + 70 + 80)
- Decrease in receivables and accrued dividends, Cash and cash equivalents at the beginning 36 37,713,578,139 50,744,016,929 V. 101 101,389,635,384 71,742,763,211 interest from financial assets of the year - Increase in receivables from services provided 37 (10,996,609,172) (2,187,585,781) Cash 101.1 101,389,635,384 71,742,763,211 - (Increase)/decrease in other receivables 39 (3,239,990,210) 72,954,795,207 Cash and cash equivalents at the end of the VII. 103 5 66,603,610,333 101,389,635,384 - Increase in other assets 40 (289,590,846) (10,952,994,900) year (103 = 90 + 101) - Decrease in prepayments 42 805,586,973 2,032,972,640 Cash 103.1 66,603,610,333 101,389,635,384 - Corporate income tax paid 43 (36,309,018,361) (51,461,176,210) - Interest paid 44 (92,947,568,576) (95,231,899,876) - Increase/(decrease) in payables to suppliers 45 2,104,633,607 (4,665,087,619) - Decrease in provision for employees’ benefits 46 (58,480,750) (13,240,300,536) - Increase/(decrease) in taxes and other payables to 47 188,593,204 (1,394,494,371) the State (excluding corporate income tax paid) - Decrease in payables to employees 48 (3,244,554,226) (20,478,769,238)
70 ANNUAL REPORT 2019 www.vcbs.com.vn 71 Form B03 – CTCK STATEMENT OF CASH FLOWS (Issued under Circular No. 334/2016/TT-BTC for the year ended 31 December 2019 (Indirect method - continued) dated 27/12/2016 of the Ministry of Finance)
CASH FLOWS OF CUSTOMERS FROM BROKERAGE AND UNDERWRITING ACTIVITIES
2019 2018 2019 2018 ITEMS Code ITEMS Code VND VND VND VND
Cash flows of customers from brokerage and Cash and cash equivalents of customers at the end I. III. 40 1,020,626,055,116 1,217,012,869,286 underwriting activities of the year (40 = 20 + 30)
1. Proceeds from sale of customers’ securities 01 316,401,374,701,350 344,083,766,653,043 Cash at banks at the end of the year: 41 1,020,626,055,116 1,217,012,869,286
2. Payments for purchases of customers’ securities 02 (369,013,069,734,857) (394,856,407,804,365) - Deposits of investors for securities transactions 42 834,721,235,761 974,421,061,569 managed by the Company Receipts of deposits of customers for securities 7. 07 52,599,054,409,296 50,733,417,333,360 transactions - Collective deposits of customers for securities transactions 43 159,245,842,721 163,610,833,436
8. Payment to settle securities transactions of customers 08 (120,267,880,101) (154,333,193,170) - Deposits for clearance and settlement of securities 44 3,946,173,827 3,938,637,403 transactions 11. Payments of securities custody fees of customers 11 (11,148,775,787) (9,124,556,595) - Deposits of securities issuers 45 22,712,802,807 75,042,336,878 14. Receipts from securities issuers 14 18,794,935,187,230 29,199,729,757,775
15. Payments to securities issuers 15 (18,847,264,721,301) (29,164,171,321,782) 29 February 2020 Decrease net cash during the year 20 (196,386,814,170) (167,123,131,734)
Cash and cash equivalents of customers at the II. 30 1,217,012,869,286 1,384,136,001,020 Prepared by: Approved by: beginning of the year
Cash at banks at the beginning of the year: 31 1,217,012,869,286 1,384,136,001,020
- Deposits of investors for securities transactions 32 974,421,061,569 998,325,808,317 managed by the Company
- Collective deposits of customers for securities transactions 33 163,610,833,436 260,459,470,686
- Deposits for clearance and settlement of securities 34 3,938,637,403 85,866,821,132 transactions Le Thu Hien Le Thi Ngoc Tram Le Viet Ha - Deposits of securities issuers 35 75,042,336,878 39,483,900,885 General Accountant Chief Accountant Deputy Director
72 ANNUAL REPORT 2019 www.vcbs.com.vn 73 Form B04 - CTCK STATEMENT OF CHANGES IN EQUITY (Issued under Circular No. 334/2016/TT-BTC for the year ended 31 December 2019 dated 27/12/2016 of the Ministry of Finance)
Opening balance Increases/decreases Closing balance
1/1/2018 1/1/2019 2018 2019 31/12/2018 31/12/2019 Increases Decreases (*) Increases Decreases (*) VND VND VND VND VND VND VND VND I. Changes in equity
1. Capital 1,000,000,000,000 1,000,000,000,000 - - - - 1,000,000,000,000 1,000,000,000,000
- Contributed capital 1,000,000,000,000 1,000,000,000,000 - - - - 1,000,000,000,000 1,000,000,000,000
2. Fair value reserve - (96,069,600) - (96,069,600) - (47,229,600) (96,069,600) (143,299,200)
3. Reserve to supplement charter capital 5,016,253,615 13,919,618,247 8,903,364,632 - 7,279,689,087 - 13,919,618,247 21,199,307,334
4. Financial and operational risk reserve 46,950,979,575 55,854,344,207 8,903,364,632 - 7,279,689,087 - 55,854,344,207 63,134,033,294
5. Other equity funds 30,762,096,449 30,762,096,449 - - - - 30,762,096,449 30,762,096,449
6. Retained profits 191,634,095,891 320,016,852,803 171,918,625,634 (43,535,868,722) 145,593,781,732 (40,440,099,382) 320,016,852,803 425,170,535,153
6.1. Realised profits 205,213,050,100 327,625,567,500 165,948,386,122 (43,535,868,722) 146,732,448,992 (40,440,099,382) 327,625,567,500 433,917,917,110
6.2 Unrealised profits/(losses) (13,578,954,209) (7,608,714,697) 5,970,239,512 - (1,138,667,260) - (7,608,714,697) (8,747,381,957)
TOTAL 1,274,363,425,530 1,420,456,842,106 189,725,354,898 (43,631,938,322) 160,153,159,906 (40,487,328,982) 1,420,456,842,106 1,540,122,673,030
II. Other comprehensive income
Losses in revaluation of available-for-sale 1. - (96,069,600) - (96,069,600) - (47,229,600) (96,069,600) (143,299,200) financial assets
TOTAL - (96,069,600) - (96,069,600) - (47,229,600) (96,069,600) (143,299,200)
(*) The decrease in realised profits during the period represents the amount appropriated to reserve to supplement charter capital, financial and operational risk reserve and bonus and welfare fund.
29 February 2020
Prepared by: Approved by:
Le Thu Hien Le Thi Ngoc Tram Le Viet Ha CONSOLIDATED FINANCIAL STATEMENT NOTES 2019 General Accountant Chief Accountant Deputy Director (Published in full at website: www.vcbs.com.vn)
74 ANNUAL REPORT 2019 www.vcbs.com.vn 75 VIETCOMBANK SECURITIES COMPANY LIMITED 12th & 17th Floor, Vietcombank Tower, 198 Tran Quang Khai, Ly Thai To Ward, Hoan Kiem District, Hanoi Tel: (84-24) 3936 6990 - Fax: (84-24) 3936 0262 www.vcbs.com.vn