annual report

Transcription

annual report

VINGROUP JOINT STOCK COMPANY
No. 7, Bang Lang 1, Vincom Village, Long Bien, Hanoi, Vietnam
Tel: (84 4) 3974 9999; Fax: (84 4) 3974 8888
Email: [email protected]; [email protected]
Website: www.vingroup.net
2012
ANNUAL REPORT
TABLE OF CONTENTS
CORPORATE PROFILE
Vision, Missions and Core Values
Message from the Chairman of the Board of Management
Corporate Milestones
Business Sectors
Organisational Structure
Board of Management
Inspection Committee
Board of Directors
06
08
10
14
20
22
25
26
OPERATIONS IN 2012
30
32
34
38
42
45
46
2010 - 2012 Financial Summary
2012 Operational Highlights
Board of Management’s Report
Board of Directors’ Report
Corporate Governance
Shareholder and Investor Relations
Shareholder Information
STRATEGIC DIRECTION OF VINGROUP
50
51
52
A Differentiating Vingroup
Business Strategy
Risk Management
HUMAN RESOURCE
55
56
59
Number of Employees
Labour and Welfare Policies
Corporate Culture
CORPORATE SOCIAL RESPONSIBILITY
61
62
Social Responsibility
Environmental Protection
CONSOLIDATED FINANCIAL STATEMENTS
VAS Consolidated Financial Statements
Summary of IFRS Consolidated Financial Statements
Reconciliation between VAS and IFRS Consolidated Income Statement
02 TABLE OF CONTENTS
VINGROUP ANNUAL REPORT 2012
68
134
140
03
CORPORATE PROFILE
Vingroup Joint Stock Company (“Vingroup”) is a leading private economic corporation in
Vietnam, engaging in the fields of tourism and high-end real estate with two strategic brands,
Vinpearl and Vincom.
Joining the market in 2002, Vincom spared no efforts to become Vietnam’s premier upmarket real
estate brand with a number of shopping mall, office and apartment complexes, and large-scale
modern mixed-use townships, spearheading the trend of high-end ecological urban zones in
Vietnam. In the current downturn economy, Vingroup’s projects still stand out from the market thanks to
the Group's commitment to progress and quality, which has established its strong brand and excellent
reputation.
After joining the market in 2001, Vingroup’s hospitality brand, Vinpearl, soon became the flagship of
the Vietnamese tourism sector, featuring five-star and five-star plus hotels and resorts, as well as
beachfront villas, amusement parks and golf courses under the Vinpearl Resort, Vinpearl Luxury and
Vinpearl Villas brands. Vingroup also aims to develop ten hotel, resort and recreation complexes at
the most popular tourist destinations in Vietnam over the next half-decade.
In addition to the two above-mentioned strengths, Vingroup has recently begun operating top quality
healthcare, and fitness and beauty care facilities under two new strategic brands, Vinmec and
Vincharm. The first Vinmec International Hospital in Hanoi, featuring 600 single in-patient rooms
and clinics, was officially inaugurated in January 2012.
Vingroup has always played the role of the pioneer and driver of consumer trends in all its business
sectors through offering top quality and five-star international standard products.
In January 2012, Vinpearl JSC was merged into Vincom JSC, marking the official operation of
Vingroup Joint Stock Company, ranking among the top major companies on Vietnam’s stock market
in terms of market capitalisation.
Vingroup is also known on the international capital market as the first Vietnamese enterprise to have
successfully issued international convertible bonds listed on the Singapore Exchange (SGX). By
2012, the Group had raised a total of US$400 million.
Operating with four strategic brand names: Vincom, Vinpearl, Vinmec and Vincharm, owning and
controlling interests in numerous high-end real estate and tourism projects, Vingroup has become
one of the leading private economic groups in Vietnam, boasting dynamic and sustainable growth as
well as significant potential for integration into Asia and the world.
VISION, MISSIONS, CORE VALUES
VISION
MISSIONS
True to its pioneering passion, Vingroup aims to
become one of the leading private multi-sector
business groups in Vietnam and the region, and
establish itself as an international brand through its
investment strategies and goals for sustainable
development.
Towards Market
Vingroup also aspires to create a Vietnamese
brand that represents the country’s national pride
in the international arena.
Towards Shareholders and partners
To provide unique, creative, premium products and services that meet
international standards and incorporate local culture, and to ensure all our
products and services are of outstanding quality and meet our customers’
expectations, while upholding Vietnamese cultural values.
Vingroup highly appreciates the cooperative spirit of mutual development
and aims to commit itself to becoming the “Number 1 Companion” of our
partners and shareholders, always offering them attractive and sustainable
investment value.
Towards Employees
To build a professional, creative, dynamic, and humanistic working environment
providing all employees equal opportunities for income growth and career
development.
Towards Society
To demonstrate the corporate social responsibility and national pride by
harmonising the corporate benefits and contributing to the community.
LOGO
The VINGROUP logo shows a bird flying towards the sun, representing
our strong desire to reach new heights and our determination to achieve
great success;
The bird’s wings are in the shape of the letter V to stand for Vietnam
and Vingroup’s national pride, as well as for “Victory” - the goal that
Vingroup is consistently pursuing;
The five stars below the bird represent Vingroup’s “five-star standard”
criteria and principles; and
The two colours, red and yellow are from Vietnam’s national flag, again
expressing Vingroup’s pride in the Vietnamese identity, spirit and
intelligence.
SLOGAN
Vingroup - Where the best gather and grow
Vingroup is where talented people meet and work towards the ultimate
goals of success and human development;
Vingroup employs people who are highly talented and qualified in their
specific fields;
All members of the Vingroup family are treated equally, given opportunities and placed in the most favourable conditions to maximise their
individual talents; and
CORE VALUES
“CREDIBILITY - INTEGRITY - CREATIVITY SPEED - QUALITY - HUMANITY”
Credibility: Vingroup puts a premium on Credibility,
our competitive weapon to instil trust in our partners
and customers and promote Company pride;
Integrity: Integrity is one of the main foundations
of our business; we always strictly observe the law
and maintain the highest level of professional and
social ethics;
Creativity: We highly value creativity as leverage
in our development to establish unique identities
for each of our products and services;
Speed: Vingroup considers “speed and efficiency
in every activity” as the guiding principle in our
pioneering development and always bears in mind
that “Punctuality brings Victory”;
Quality: We aim for lean corporate governance
with talented, forward thinking staff and to contribute
to building a good society; and
Humanity: Vingroup promotes harmony based on
impartiality, honesty and generosity, while encouraging teamwork, solidarity, discipline and loyalty.
The Company aims to build the Best People - Best Products & Services
- Best Life - Best Society.
06 CORPORATE PROFILE
07
MESSAGE FROM THE CHAIRMAN OF THE BOARD OF MANAGEMENT
Vingroup maintained growing incomes from Vinpearl Nha Trang and Vinpearl Luxury Da Nang, establishing Vinpearl as the most
attractive and leading brand in high-end tourism, recreation and resorts, fully deserving its reputation as Vietnam’s Holiday Paradise.
We have also improved the quality of its operations, designed attractive service packages, and created polices tailored to our customers’
needs, which has helped us enhance Vinpearl status as the most favourable tourism destinations, even during economic distress.
Vinmec International Hospital and Vincharm Spa, which are still in the initial stages of development, have also shown very positive
results.
Vingroup has always been ranking Top 5 largest companies by market capitalisation on the Vietnam’s securities market and its shares
account for considerable proportion in the portfolios of foreign investment funds. We also affirmed international investors’ trust in
Vingroup when we successfully issued US$300 million convertible bonds, the largest and best deal in Vietnam for 2012, confirming
our position as a pioneer in integrating into the international capital market.
In terms of corporate governance, the Group not only successfully merged two leading brands in Vietnam: Vincom and Vinpearl, being
the largest merger in the country in recent years, but was also able to take advantage of opportunities during the economic crisis to
restructure our organisation by streamlining the system, rearranging management teams, reforming administration and enhancing
operational efficiency throughout the Group. All of these measures were conducted intensively in every division and department.
To accomplish our development goals, the devoted Vingroupers have used their extensive experience, determination and strong will
to steer the Group along a steady course towards success based on our six "golden" core values: "Credibility - Integrity - Creativity Speed - Quality - Humanity”. Our results and achievements represent the industriousness and creativity of Vingroup staff, the flexibility
and business acumen of the management, and the Group’s outstanding reputation and position in the market, proving that Vingroup
truly deserves the title Vingroup - Where the best gather and grow.
Dear Valued Shareholders,
As a consequence of the long lasting economic crisis since early this decade, 2013 is forecasted to be another very arduous and
challenging year. It will be even more challenging for Vingroup as it is a “sprinting” year given our goal of opening multiple projects in
Hanoi. However, with our track record and capability as a pioneer, Vingroup management and employees are determined to overcome
all difficulties and challenges to further consolidate the Group as a powerful corporation on its path of development.
On behalf of the Board of Management, once again, I would like to express our gratitude to you for your trust, support and partnership.
We believe that our sustainable development strategy and phase-based solutions will help us achieve our goals and plans for 2013
and the years to come; elevate Vingroup’s position and development to a new height; protect and increase our shareholders’
long-term benefits; and contribute more to the society.
Dear Valued Shareholders,
Sincerely yours,
On behalf of the Board of Management (BOM) and Board of Directors (BOD), I would like to extend our warmest greetings
and wish you good health, happiness and success!
We all have experienced a very hard year, even the hardest year for the economy in the last decade, with a frozen real estate market,
increasingly stagnant inventories, a substantial decrease in market confidence, and thousands of inevitable company bankruptcies.
Operating in the fields of real estate, tourism and hospitality, which are considered to be in the “eye of the storm”, Vingroup has been
striving to cope with many challenges to sustain our investments, maintain our business operations, and continue pursuing international integration with a desire to become one of the leading economic groups in Vietnam and Asia.
In addition to exploiting effectively Vincom Center shopping malls in Hanoi and Ho Chi Minh City in 2012, Vingroup focused its
resources on building and completing key development townships, including Royal City, Times City and Vincom Village, for on-time
delivery to keep our promises to our customers and quickly recover capital. We also managed to open Vinmec International Hospital
in Times City, Hanoi, and Vincom Center A Ho Chi Minh City on schedule.
Chairman of the Board of Management
Pham Nhat Vuong
09
CORPORATE MILESTONES
Vinpearl Joint Stock Company (Vinpearl), formerly known as
Hon Tre Tourism and Trading Investment and Development
Limited Liability Company, was established on July 25, 2001 in
Nha Trang, Khanh Hoa province, and is primarily engaged in
the resort, tourism, hospitality and recreation sector. The
Company’s portfolio includes projects in popular tourism
destinations across Vietnam such as Nha Trang, Da Nang,
Phu Yen, and Da Lat.
Vincom Joint Stock Company was founded in Hanoi on May 3,
2002 as the Vietnam General Commercial Joint Stock Company.
Its operations mainly involve in real estate business, including
shopping malls, offices, and high-end luxury apartments and
villas. The Company owns large-scale complexes in major
cities of Vietnam.
In January 2012, Vinpearl JSC was merged into Vincom JSC,
raising its total charter capital to approximately VND5,500
billion, and a development strategy was approved for Vingroup
to focus on four strategic brand names: Vincom (real estate),
Vinpearl (tourism and recreation), Vinmec (high quality healthcare services) and Vincharm (fitness and beauty care services).
JULY 2001: Hon Tre Tourism
and Trading Limited Liability
Company was based in the
coastal city of Nha Trang, Khanh
Hoa province - a destination rich
in tourism potential, natural
endowment, a stunning location
on Nha Trang Bay and near a
number of famous tourist attractions such as Van Phong Bay
and Nha Phu Pond. The
Company’s first development
was the five-star Vinpearl Resort
Nha Trang on Hon Tre Island.
2001
DECEMBER 2003: The
225-room, five-star standard
Vinpearl Resort Nha Trang
on Hon Tre Island was
opened.
2002
MAY 2002: The Vietnam
General Commercial JSC
was founded with VND196
billion in charter capital to
develop the first shopping
mall and office complex
project in Hanoi: Vincom
City Towers - Tower A and
Tower B (recently renamed
Vincom Center Ba Trieu) at
191 Ba Trieu Street, Hai Ba
Trung District.
IN 2006 Vinpearl Land
began operations, turning
the arid Hon Tre Island into
a splendid and luxurious
Vinpearl - the symbol of
the rapid growing tourism
sector in Nha Trang Khanh Hoa and Vietnam
in general.
2003
2004
NOVEMBER
2004:
Vincom Center Ba Trieu Towers A and B, the first
international
standard
complex in Hanoi, was
launched.
2006
The Company successfully
organised and hosted the
Miss Vietnam Pageant 2006
at Vinpearl Land Nha Trang
and affirmed its capability to
host major political, social and
cultural events including: the
APEC Finance Ministers and
Deputies Meetings; the 21st
Century Women Contest; the
Morning Star Rendezvous - a
national singing contest; and
the 16th Charming Vietnam
Gala.
The 3,320 metre Vinpearl
cable car system crossing the
sea and linking Phu Quy Pier
and Hon Tre Island was
launched in March and
became the new symbol of
Nha Trang tourism.
The year also saw the opening
of the deluxe building at
Vinpearl Resort Nha Trang,
raising the total number of
five-star guest rooms to 485.
In addition, Vingroup successfully organised the first Miss
Vietnam World Pageant at
Vinpearl Nha Trang, establishing Vinpearl’s reputation as
“the island for beauty and
events”.
2007
JULY 19, 2007: Vingroup
officially listed its shares on
Ho Chi Minh City Stock
Exchange with the securities
code VIC.
AUGUST 2009: The retail component
of Vincom Center Ba Trieu - Tower C
was put into operation, connecting
with to Vincom Center Ba Trieu Towers A and B, making the Vincom
Center Ba Trieu high-end mixed-use
development of shopping malls,
offices, apartments, an international
kindergarten, spa and sports facilities,
one of the most luxurious and highly
trafficked spots in Hanoi.
NOVEMBER 2009: Vingroup became
the first Vietnamese Company to
successfully issue US$100 million in
convertible bonds listed on the Singapore Exchange (SGX).
2008
2009
JANUARY 31, 2008: Vinpearl
JSC officially became a listed
company on the Ho Chi Minh
City Stock Exchange (HOSE).
Its securities, coded VPL,
were considered a blue chip
stock in the tourism sector and
the Company ranked among
Top 10 companies by market
capitalisation.
11
APRIL 30, 2010: The luxurious, contemporary
Vincom Center B Ho Chi Minh City, with 26
aboveground and six underground floors,
was opened in Vietnam’s biggest economic
centre, Ho Chi Minh City.
OCTOBER 2010: Vingroup completed the
Vincom Financial Tower in District 1, Ho Chi
Minh City, and soon sold it to book a profit
from the deal in the fourth quarter of the
year.
The Company also successfully hosted the
Miss Vietnam World and Miss Earth
Pageants in Vinpearl Nha Trang.
MARCH 2011: Vingroup
introduced
the
Vincom
Center and Vincom Mega
Mall chains of large and
high-class shopping malls in
Vietnam, which will be built in
major cities across the
country.
JUNE 2011: Most of the
US$100 million international convertible bonds
issued in 2009 were
successfully converted into
shares and a small amount
of the shares were fully
redeemed.
2010
2011
MAY 28, 2011: The five-star
plus Vinpearl Luxury Nha Trang
and the Vinpearl Golf Club, the
first coastal island golf course in
Vietnam, were opened concurrently, marking the further
expansion of Vinpearl Nha
Trang - the first tourism complex
that Vinpearl has been enthusiastically developing over the
past decade.
JULY 3, 2011: Five-star-plus
Vinpearl Luxury Da Nang was
opened, marking another significant step in the development
strategy of the Vinpearl chain in
Vietnam and solidifying the
impressive
presence
of
Vingroup in Da Nang - the
country’s third largest city.
JANUARY 7, 2012: After just
10 months and eight days of
construction, the International
Vinmec Hospital, Vietnam’s
leading five-star hotel hospital
began operations.
BETWEEN APRIL AND JULY, 2012: Vingroup
successfully issued US$300 million in international convertible bonds, which was honoured
the “Best Deal, Vietnam” by the world’s
financial media agencies.
OCTOBER 10, 2012: The emminent Vincom
Center A Ho Chi Minh City shopping mall was
put into operation.
In this year, Vingroup won double victories at
the Southeast Asia Property Awards 2012 in
Singapore with the “Best Villa Development Vincom Village” and the prestigious title of
“Best Developer - Vingroup”.
2012
NOVEMBER 2011:
The
Extraordinary General Shareholders’ Meeting approved the
plan for merging Vinpearl JSC
into Vincom JSC.
DECEMBER 2011: The last
month of the year celebrated the
inauguration of the Vincom
Center Long Bien shopping mall
at Vincom Village township, in
Long Bien, Hanoi. Vingroup also
relocated its Head Office to this
large ecological urban complex
at the same time.
QUARTER 1, 2012: The merger of Vinpearl JSC into
Vincom JSC was successfully completed. Following
the merger, Vinpearl JSC was converted to Vinpearl
One Member Limited Liability Company. Vincom was
then renamed Vingroup JSC. The Group then recognised
the increase of its charter capital to approximately
VND5,500 billion and approved the strategy to develop
four strategic brand names: Vincom (real estate),
Vinpearl (tourism and recreation), Vinmec (high quality
healthcare services) and Vincharm (fitness and beauty
care services).
13
BUSINESS LINES
With charter capital of approximately VND9,300
billion and market capitalisation of over
VND62,000 billion (as at February 28, 2013),
Vingroup is one of the leading private economic
groups in Vietnam, owning and holding controlling
interests in 30 large-scale real estate projects at
prime locations in major cities and popular
tourism destinations across the country.
Vingroup is now focusing on developing its four
strategic brands: Vincom (real estate), Vinpearl
(tourism and recreation), Vinmec (high quality
healthcare services) and Vincharm (fitness and
beauty care services).
VINCOM
OFFICES
Vincom is an upmarket real estate brand that represents Vingroup's most competitive strength and holds the absolute advantage over
the Group’s other business lines. Vincom branded developments in key cities drive consumer trends and illustrate the prestige of a
professional developer and real estate manager of the largest luxury shopping mall, office, and apartment complexes in Vietnam.
SHOPPING MALLS
APARTMENTS AND VILLAS
Vingroup has two brand names in its development strategy for
shopping mall chains. Vincom Centers include international standard
shopping malls of less than 100,000m2, located on sought-after sites
in big cities. Vincom Mega Malls are “all in one” shopping malls larger
than 100,000m2, featuring top quality shopping, recreational and
dining spaces.
The strategic products of the Vincom brand are upper
mid-end to high-end apartments and villas designed and
built to international standards, offering modern comfort
and opulence in a variety of architectural styles that
harmonise with the environment and promise a new
contemporary lifestyle.
Vincom Center Ba Trieu (Hanoi)
Vincom Center Ba Trieu Apartments (Hanoi)
Vincom Center Long Bien (Hanoi)
Vincom Center B Ho Chi Minh City Apartments
Vincom Center B Ho Chi Minh City
(Ho Chi Minh City)
Vincom Center A Ho Chi Minh City
Vincom Village Villas (Hanoi)
Vincom Mega Mall - Royal City (Hanoi)
Royal City Apartments (Hanoi)
Vincom Mega Mall - Times City (Hanoi)
Times City Apartments (Hanoi)
Vincom office buildings are located in the major financial and
economic centres and are designed to maximise natural light,
save energy and create a modern, professional and efficient
working environment. The properties have been chosen as the
headquarters of banks and embassies, as well as established
Vietnamese and foreign organisations.
Office Tower A of Vincom Center Ba Trieu, 191 Ba Trieu,
Hanoi (sold to the Bank for Investment and Development of
Vietnam - BIDV in 2006);
Office Tower B of Vincom Center Ba Trieu, 191 Ba Trieu,
Hanoi (sold to the Vietnam Technological and Commercial
Joint Stock Bank - Techcombank in 2012);
Vincom Financial Tower, 180-192 Nguyen Cong Tru, District
1, Ho Chi Minh City (sold to the Vietnam Maritime Commercial
Joint Stock Bank - Maritime Bank in 2010); and
Office component of Vincom Center B Ho Chi Minh City.
15
3
VINPEARL
After more than 11 years of development, Vinpearl has achieved the leading
position in Vietnam’s international standard tourism segment, and is widely known
by tourists for its unique premium products and services.
Vinpearl carries the Vinpearl Resort (five-star standard) and Vinpearl Luxury
(five-star-plus standard) luxury hotel and resort brands. The Group expects to
have 10 Vinpearl hotel and resort complexes nationwide within the next five years
with the tagline “Vietnam’s Holiday Paradise”.
Vinpearl Resort Nha Trang (1)
Vinpearl Luxury Nha Trang (2)
5
1
Vinpearl Luxury Da Nang (3)
Vinpearl Land (Nha Trang) (4)
Vinpearl Golf Club - Nha Trang (5)
Beach Villas - Vinpearl Luxury Da Nang (6)
2
4
6
17
VINMEC
VINCHARM SPA
Established as a high-quality healthcare brand, Vinmec is not just an investment
of Vingroup, but also a realisation of the corporate desire to be involved in
healthcare activity for the community. The first project in this strategy is the
Vinmec International Hospital at 458 Minh Khai Street, Hanoi, which was
opened in January 2012 and is reputed to be the top five-star hotel hospital in
Vietnam.
Vincharm has been developed as a brand of professional
fitness and beauty care services and is proud to offer outstanding
fitness programs and enjoyable relaxation at its spacious,
modern gyms and well-appointed spas, including customised
fitness schedules and classes, luxurious beauty treatments and
healthful therapies. Vincharm Spas are part of every Vingroup
townships, shopping malls and resorts across the country,
adding premium lifestyle value to its high-end development
projects.
The hospital consists of 18 departments and 31 specialty centres, in addition to
intensive and high-tech supporting units with compatible, state-of-the-art
equipment and facilities. Its large scale of 600 single in-patient rooms and
clinics, together with dedicated, highly qualified and experienced medical
professionals, doctors and technicians with extensive experience in their fields,
ensures Vinmec's ability to provide international standard healthcare services to
improve the quality of life for a more civilised and modern Vietnam.
Vinmec International Hospital (Hanoi)
Vincharm Spa Ba Trieu (Hanoi)
Vincharm Spa Long Bien (Hanoi)
Vincharm Spa Vinpearl Luxury Da Nang
Vincharm Spa Vinpearl Luxury Nha Trang
Vincharm Health Club (Ho Chi Minh City)
19
ORGANISATIONAL STRUCTURE
GENERAL SHAREHOLDERS’ MEETING (GSM)
The General Shareholders’ Meeting (GSM) is the Company’s supreme governing body, including all
voting shareholders and their proxies. It has full rights to make decisions on all Company activities and
performs the following key functions:
GENERAL
SHAREHOLDERS’ MEETING
Approving the Company's charter and business orientation;
Deciding the type and volume of new shares to be issued;
Deciding annual dividends for each type of share based on reports and proposals from the BOM;
Approving the Company’s annual financial statements;
BOARD OF MANAGEMENT
CHAIRMAN
PHAM NHAT VUONG
Electing, exempting or replacing members of the BOM and Inspection Committee (IC) as needed;
Approving the Company’s applications for liquidation, dissolution or reorganisation in accordance with
Vietnamese bankruptcy laws, and appointing liquidators and/or taking analogous actions; and
INSPECTION COMMITTEE
Head - Nguyen The Anh
Other duties as defined in the Company’s charter and statutory regulations.
Councils
DEPUTY GENERAL
DIRECTOR - PROJECT
DEVELOPMENT, VINPEARL
GENERAL DIRECTOR
DANG THANH THUY
DEPUTY GENERAL
DIRECTOR - GENERAL
ADMINISTRATION
MAI HUONG NOI
DEPUTY GENERAL
DIRECTOR - PROJECT
CONSTRUCTION
PHAM VAN KHUONG
Personnel &
Training Department
Management of
Project Construction
Real estate sales
Department & Divisions
Directors & Deputy
Directors - Project
Development
Security Department
Bidding Department
Vincom Real Estate
Trading Center
Vinpearl
Fire Safety Department
Designing Department
Vinpearl Hotels
& Resorts Management
Offices
Administration &
Logistics Department
Construction
Economics Department
Vinpearl Amusement
Park Management
Shopping Malls
IT Department
Project Progress
Control Department
Vinpearl Golf Club
Management
Residentials
DEPUTY GENERAL
DIRECTOR - REAL
ESTATE BUSINESS
NGUYEN DIEU LINH
Specialised
Committees
GENERAL DIRECTOR
LE THI THU THUY
DEPUTY GENERAL
DIRECTOR HOSPITALITY
VU TUYET HANG
Management of
Vinpearl Hotels &
Services
PROPERTY
MANAGEMENT
HEAD
PHAN THU HUONG
Vincom Buildings
Management
HO CHI MINH CITY
BRANCH
DIRECTOR
HOANG BACH DUONG
Ho Chi Minh City
Branch
Department of
Finance & Accounting
Investment
Department
Legal Department
Department of
Public Relations
Department of
Marketing & Event
Technical
Department
Other subsidiaries
(excluding Vinpearl)
21
BOARD OF MANGEMENT
CHAIRMAN OF THE BOARD OF MANAGEMENT
Mr. Pham Nhat Vuong was appointed to the Board of Management (BOM) in May 2002 and elected as its
Chairman in November 2011. Chairman Pham Nhat Vuong has a long track record as an entrepreneur both
inside and outside Vietnam, which is reflected in his establishment and development of the Vincom (premier
high-end real estate) and Vinpearl (tourism, hospitality and recreation) brands. Prior to the Group’s establishment in 2002, he was the founder and honourary Chairman of the Technocom Limited Company
(Ukraine) from 1993 to 2009. He graduated with a Bachelor’s degree in Geological Economic Engineering
from the Moscow Geology University in Russia in 1992. The Group believes its growth and development
have benefited significantly from Chairman Pham Nhat Vuong’s leadership and influence.
23
BOARD OF MANGEMENT (BOM)
The BOM is appointed by the GSM and entrusted with the full power to
decide and exercise all the rights and responsibilities on the
Company’s behalf, except those relegated to the authority of the GSM.
The BOM comprises nine members with the following key rights and
duties:
Deciding the Company's development and business plans and
finalising the annual budget;
INSPECTION COMMITTEE (IC)
MEMBERS OF THE BOM
- Mr. Pham Nhat Vuong, Chairman of the BOM
- Ms. Pham Thuy Hang, Vice Chairwoman of the BOM
- Ms. Pham Thu Huong, Vice Chairwoman of the BOM
- Ms. Le Thi Thu Thuy, Vice Chairwoman of the BOM
- Ms. Nguyen Dieu Linh, Vice Chairwoman of the BOM
Establishing operational goals pursuant to the strategic goals
approved by the GSM;
- Ms. Vu Tuyet Hang, Vice Chairwoman of the BOM
Reporting to the GSM on the Company's business performance,
planned dividends, financial statements, business strategies and
general business conditions;
- Mr. Nguyen Trong Hien, Member of the BOM
Developing the Company's organisational structure and operational
rules; and
Other rights and duties in accordance with statutory regulations, the
Company’s charter and resolutions of the GSM.
- Mr. Le Khac Hiep, Vice Chairman of the BOM
- Mr. Ling Chung Yee Roy, Member of the BOM
- Ms. Mai Huong Noi, Member of the BOM
The IC is appointed by the GSM and currently has five members, each of
whom serves a term of five years. The IC is responsible for the following:
Supervising the conduct of the BOM and BOD in the management and
running of the Company;
Inspecting the reasonableness, legality, honesty and diligence of the
management, business operations, the organisation of accounting and
statistical tasks, and preparation of financial statements;
Appraising the Company's business performance reports, interim
condensed and full-year financial statements, and the BOM’s management evaluation reports; and submitting appraisal reports on these
issues to the GSM at its annual meetings;
MEMBERS OF THE IC
- Mr. Nguyen The Anh - Head of the IC
- Mr. Dinh Ngoc Lan - Member of the IC
- Ms. Nguyen Thi Van Trinh - Member of the IC
- Ms. Do Thi Hong Van - Member of the IC
- Ms. Hoang Thuy Mai - Member of the IC
Proposing amendments, improvements or supplementations to the
Company's organisational structure and/or the management, business
operations to the BOM and/or GSM; and
Other rights and duties in accordance with the Company’s charter and
statutory regulations resolutions of the GSM.
25
BOARD OF DIRECTORS
2
3
4
5
6
8
1
BOARD OF DIRECTORS (BOD)
GENERAL DIRECTOR
The BOD is appointed and dissolved by the BOM. As of December
31, 2012, the BOM consisted of a General Director and five Deputy
General Directors. The Deputy General Directors support the
General Director by fulfilling the tasks entrusted to them. The BOD’s
key responsibilities include:
Ms. Le Thi Thu Thuy was appointed as the General Director of
Vingroup on June 14, 2012. Prior to the appointment, Ms. Thuy
worked at the Credit Programme of the European Commission
in Vietnam from 1996 to 1998 and served as Vice President of
Lehman Brothers in Japan, Thailand and Singapore from 2000
to 2008. Ms. Thuy was appointed as Head of the Company’s
Investment Department in November 2008 and as a member of
the BOM in November 2011.
LIST OF MEMBERS OF THE BOD
She graduated with a Bachelor’s degree in Economics from
the Foreign Trade University of Hanoi and received a Master
of Business Administration in Finance (MBA) from International University of Japan. She is also a Chartered Financial
Analyst (CFA).
6. Mr. Dang Thanh Thuy - Deputy General Director, Project Development
Organising the implementation of GSM and BOM resolutions,
especially those related to the Group's annual business and
investment plans; and
Deciding day-to-day matters related to the Group's business
activities that do not require resolutions from the BOM.
The General Director also has the following responsibilities:
Managing and supervising the Group's day-to-day operations;
and
Executing contracts and other obligations on the Group’s behalf.
1. Ms. Le Thi Thu Thuy - General Director
2. Ms. Mai Huong Noi - Deputy General Director, General Administration
3. Ms. Nguyen Dieu Linh - Deputy General Director, Real Estate Business
4. Ms. Vu Tuyet Hang - Deputy General Director, Hospitality
5. Mr. Pham Van Khuong - Deputy General Director, Project Construction
7. Mr. George Edward Royle - Chief Financial Officer1
8. Ms. Nguyen Thi Thu Hien - Chief Accountant
1
Mr. George Edward Royle was exempted from this position as of February 6, 2013 under a decision by the BOM.
27
OPERATIONS IN 2012
2010 - 2012 FINANCIAL SUMMARY
NET REVENUE, EBITDA AND PROFIT AFTER TAX FOR 2010 - 2012
Source: Vingroup VAS Audited Consolidated Financial Statements for 2010, 2011, and 2012.
2012
2011
2010
Net revenue
7,904,472,849,072
2,313,739,781,730
3,872,979,781,266
Cost of goods sold
4,092,056,174,334
1,306,236,537,557
927,026,108,077
Gross profit
3,812,416,674,738
1,007,503,244,173
2,945,953,673,189
Operating profit
2,563,499,467,407
1,245,865,772,324
2,969,827,481,648
Profit before tax
2,655,063,125,963
1,471,471,446,573
3,143,054,802,940
Profit after tax
1,846,667,924,525
1,073,560,198,764
2,432,014,997,377
EBITDA
3,906,553,356,182
1,785,332,153,225
3,203,423,606,418
Current assets
28,796,286,198,535
20,039,498,304,151
13,326,421,549,479
Non-current assets
27,028,589,606,142
15,473,136,819,333
12,820,427,697,940
Total assets
55,824,875,804,677
35,512,635,123,484
26,146,849,247,419
Total liabilities2
44,951,244,544,495
27,260,458,138,945
16,593,209,101,230
Loans & Borrowings3
21,828,665,659,871
10,034,080,671,840
11,484,666,820,275
Total owner’s equity
10,873,631,260,181
8,252,176,984,539
9,553,640,146,189
Owner’s equity
10,556,569,188,706
6,501,237,900,575
6,842,651,283,995
317,062,071,475
1,750,939,083,964
2,710,988,862,194
Gross profit margin (%)
48.23
43.54
76.06
Operating profit margin (%)
32.43
53.85
76.68
Net profit margin (%)
23.36
46.40
62.79
241.63
-40.26
96.16
72.01
-55.86
120.74
2.51
1.85
1.64
Profit after tax/Owner’s equity (ROE) (%)
19.31
12.6
25.46
Earnings per share (EPS) (VND/share)
1.819
2.238
6.837
7,904
Indicator (VND)
Minority’s interests
3,906
3,873
3,203
2,432
2,314
1,847
1,785
1,074
2010
2011
Net revenue (VND billion)
2012
EBITDA (VND billion)
Profit after tax (VND billion)
TOTAL ASSETS, LOANS & BORROWINGS AND OWNER’S EQUITY FOR 2010 - 2012
Financial Ratios
Net revenue growth (%)
Profit after tax growth (%)
Total liabilities4/Owner’s equity (times)
55,825
2012
21,829
10,874
35,513
2011
10,034
8,252
26,147
2010
2
Including down payments of VND17,687,188,960,951 from customers purchasing residentials at Royal City, Times City and Vincom Village
as of December 31, 2012.
3
Loans & Borrowings from credit agencies and other organisations; Loans & Borrowings = short-term loans & borrowings + long-term loans
& borrowings.
4
Excluding down payments from customers purchasing residentials at Royal City, Times City, Vincom Village projects as of December 31,
2012.
30 OPERATIONS IN 2012
11,485
9,554
Total Assets (VND billion)
Loans & Borrowings (VND billion)
Owner’s Equity (VND billion)
31
2012 OPERATIONAL HIGHLIGHTS
Despite the massive difficulties lying in the Vietnamese and world economies in general, and the real estate
sector in particular, Vingroup made a number of encouraging impressions and significant milestones in 2012
thanks to its tremendous efforts.
1
Inauguration of Vinmec International Hospital - Vingroup’s start in
the healthcare sector
On January 7, 2012, the Vinmec International Hospital was put into operation,
marking Vingroup’s official presence in the high-end healthcare sector. Heading
towards the goal of sustainable development, the Vinmec hospital demonstrates Vingroup’s strong desire to contribute to community healthcare and
improve the local health sector’s image and infrastructure.
After one year of operation following the five-star hotel hospital model, Vinmec has
gained some significant initial achievements, consolidating its strategy to become
the leading International General Hospital in Vietnam and Southeast Asia.
2
Merger, restructuring, and building comprehensive strength
3
US$300 million deal and its echoes in the Asian financial market
The merger of Vinpearl JSC into Vincom JSC in April 2012 to form the Vingroup
Joint Stock Company was the largest M&A deal in Vietnam in recent years. As
a result, Vingroup officially became one of the largest private economic corporations in Vietnam with the capacity to successfully compete and integrate into
the international market. Immediately, the Group decided to increase its charter
capital to VND7,004.62 billion and began drastic restructuring towards
“Simplification - Concentration - Dynamism”.
After issuing US$185 million convertible bonds in March 2012, Vingroup successfully issued an additional US$115 million tap in July, accomplishing its plan of
US$300 million bond issuance. This achievement brought the Group a solid
reputation in the international financial investment community, particularly the
Asian financial market. Given the current economic difficulties in the Vietnamese and world markets, fulfilling 100% of our fund raising plan at a reasonable
interest rate and important advantages was truly a remarkable achievement.
This success is a solid proof of Vingroup’s international reputation, stature and
potential for strong growth in the future.
The US$300 million bond issuance also earned Vingroup a number of awards
from three of the world’s financial media agencies including “Triple A Country
Awards 2012 - Best Deal, Vietnam” from The Asset, “Best Vietnam Deal” from
FinanceAsia, and “Vietnam Capital Markets Deal of the Year” from the International Financing Review Asia (Thomson Reuters).
4
Appointment of Key Executives
Vingroup made some notable changes in its management during 2012 including
appointing new key executives. Aiming to accelerate the Group’s international
integration, especially in preparation for listing its shares on the international
stock exchange, Ms. Le Thi Thu Thuy, an internationally reputable and very
experienced financial expert in Asian property investment, was appointed as
General Director. Since she joined Vingroup as Head of the Investment Department, and later held the position of Vice Chairwoman in charge of Investment,
Ms. Thuy has made substantial contributions to the Group through direct
involvement in numerous important deals between Vingroup and foreign
partners. In addition to nominating a new General Director, the Group also took
on board Mr. George Edward Royle as the new Chief Financial Officer (CFO)5
in September 2012.
5
5
Development Vision until 2030
To further enhance its professionalism, competitiveness, and international
integration capability in its new stage of development, the Group has invited
McKinsey & Company, a world-leading international investment management
consultancy, to research and map out a development strategy with a vision to
2030. Accordingly, Vingroup aims to become one of the leading real estate
companies in Asia and be included in the list of world’s top corporations.
McKinsey & Company has diligently conducted various studies and surveys,
and highly appreciates Vingroup’s foundation. It firmly believes that Vingroup
is well-positioned to successfully realise its aspirations for international
integration.
6
Vincom Center A Ho Chi Minh City inaugurated
Vincom Center A Ho Chi Minh City shopping mall was officially inaugurated in
October 2012. It is the most luxurious shopping mall, recreation and restaurant
complex in Vietnam, and the fifth in the Vincom Center shopping mall chain.
Vincom Center commenced construction in 2011 and was completed in just 19
months, recording a very impressive 95% occupancy rate, eight months after
the lease was launched. Together with Vincom Center B Ho Chi Minh City, it
has created a unique international-standard luxury shopping and entertainment
destination in the heart of this major city.
7
“Best Developer” and “Best Villa Development” Awards
The year also witnessed another significant milestone of Vingroup with its
double victories at the 2012 Southeast Asia Property Awards in Singapore.
The Group received “Best Villa Development - Vincom Village” and “Best
Developer - Vingroup” awards, affirming its international recognition and once
again consolidating its pre-eminent position in the Vietnamese high-end real
estate market.
8
Intensive international integration
At the end of 2012, Vingroup was officially upgraded to a Founding Member of
the World Economic Forum (WEF) among aprroximately 1,000 leading companies globally. The membership took effect on January 1, 2013. This promotion,
along with international recognition through a series of significant awards,
proves that Vingroup is well positioned to realise its international integration
and its goal to become one of the premier property companies in Asia listed
among the world’s largest corporations.
Mr. George Edward Royle was exempted from this position as of February 6, 2013. Vingroup is currently seeking a replacement.
33
REPORTS FROM THE BOARD OF MANAGEMENT
In spite of the influence of the ailing economy, Vingroup completed a huge
workload in 2012, culminating in a variety of impressive achievements and
milestones.
The macro-economy in 2012
Bearing the heavy burden of the economic crisis that has lasted
since early this decade, 2012 presented many challenges with
downturn in almost all sectors and the GDP growth rate falling
to 5.2%, the lowest level in the last decade.
A hard year for real estate
The year 2012 was also the gloomiest year for the Vietnamese
real estate sector, which witnessed dramatic drop in property
prices. Despite the various attractive support packages offered
by developers, the market still showed almost no liquidity in all
segments.
In the area of retail space leasing, from being the most attractive
investment market in Asia, Vietnam was dropped from the Top
30 best investment markets in 2012, resulting in fierce competition among real estate developers. Due to the increasing supply
of retail space in contrast to decreasing demand and purchasing power, a number of tenants and shopping centres had to
close down temporarily, which pulled market average rental
rates down.
Office leasing saw the supply increase sharply while the
demand did not show any positive signals and, given the declining occupancy rate, a number of A-class buildings in the central
business districts of Ho Chi Minh City had to reduce their rents
by 10-30%, hoping to attract more tenants.
Apartments and villas continued to suffer from poor liquidity, low
demand, high interest rates and difficulties in mobilising capital.
Residential prices also kept falling in all categories, from villas
to townhouses and condominiums. The huge wave of pricedropping, bail-outs, and cutting losses has influenced many
decisions in the real estate market, especially regarding the
condominium segment. Throughout this turmoil, intolerable
financial pressure and deficient liquidity, only a few developers
were capable of standing their ground to continue construction
and meet their promised project schedules.
Tourism and hospitality
According to statistics provided by the Vietnam National Administration of Tourism, the country’s tourism industry maintained
an impressively high growth rate in 2012, registering a 13.86%
increase over 2011 in the total number of tourists to 6,847,678.
Taking into account that Europe, the main market for Vietnam-
ese tourism, was suffering a severe economic crisis, this growth
represented great success and consolidated Vietnam’s reputation as an attractive, safe and friendly tourist destination.
The 2012 Vietnam Hotel Survey released by Grant Thornton
showed that room occupancy in all segments experienced
significant improvement this year, specifically, 66.4% for threestar hotels, 58.9% for four-star hotels, and 57.4% for five-star
hotels, compared to less than 50% in all segments during the
2008 - 2009 world economic recession. This also attested to
Vietnam’s amazing recovery.
The United States Tour Operators Association (USTOA) was
quoted in Buenos Aires on December 25, 2012, predicting that
Vietnam would rank second among the top new emerging
destinations for international tourists in 2013.
Healthcare services
Vietnam currently has approximately 1,040 hospitals with a total
of 150,000 beds for the entire national population of almost 90
million people, equivalent to 16.8 beds per 10,000 patients. The
quality of healthcare services is generally poor, especially in
rural and remote areas.
With a huge potential market, increasing per capita income, and
an annual average growth of 17.9% in healthcare expenditure
during 2009-2014, the Vietnamese health sector needs to
determine how to improve people’s access to standard health
services and raise the quality of healthcare, including medical
infrastructure, equipment, facilities and services.
Operations in 2012
Vingroup’s 2012 net revenue hit VND7,904 billion, with profit after
tax of VND1,847 billion, representing a 242% and 72% increase
compared to 2011, respectively; accounting for 70% and 60% of
its revenue and profits after tax budgets, respectively.
Despite unexpected results in every business activity, Vingroup
stood firm during the crisis and continued to steadily implement
all its investment and business plans, demonstrating the
Company’s strong economic potential as a dynamic and
creative private corporation.
Vingroup’s activities in its four strategic areas gained certain
accomplishments, thanks to the great efforts by Vingroup staff
and the leadership of the Group’s management.
Being aware of the market cruxes, the Group exerted itself to
accelerate construction and ensure the quality of all its real estate
projects. In Vincom Village, special attention was paid to all
common facilities and services to make it the best first-class
residential complex in Vietnam. Despite the debilitating recession
and delays of other projects across the nation, the Royal City and
Times City construction sites still saw thousands of labourers
working day and night to build the towers higher and higher and
produce numerous other changes and progress to boast public
admiration for Vingroup’s internal strength and determined will.
In 2012, our shopping centres properties maintained high
occupancy rates, including 100% for Vincom Center Ba Trieu and
93% at Vincom Center B Ho Chi Minh City. Another success in this
field was the inauguration of Vincom Center A Ho Chi Minh City,
which is an architectural landmark as well as a thriving shopping
mall. It has been touted as the premier luxury shopping complex in
Vietnam, with an occupancy rate in excess of 90%. In Hanoi,
Vincom Mega Mall Royal City has pre-committed 80% of its retail
space, even though it is still under construction, once again attesting to Vingroup’s reputation and position as the market leader in
shopping mall and leasing in Vietnam.
Vinpearl continued to consolidate its position as the flagship of the
Vietnamese tourism industry in 2012 with impressive year-on-year
revenue growth of 25%, and an 18% increase in the number of
guests staying at Vinpearl hotels and resorts. Vinpearl Resort Nha
Trang and Vinpearl Luxury Da Nang were also awarded Vietnam’s
Top Ten Five Star Hotel Awards this year.
The Group’s new venture into healthcare has also made considerable progress. During the first year of operation, Vinmec doctors
and staff conducted health check-ups and provided treatment for
50,000 patients, in addition to performing more than 1,300 surgeries. Vinmec quickly put in place Vingroup’s distinctive core values
in order to become a premium humanity-focused healthcare brand
for the community.
The year marked a significant milestone in Vingroup’s interna-
tional integration with the very successful issuance of a total
US$300 million international convertible bonds in March and
July, which earned the Group an enviable reputation in the
Asian and world financial markets. This was Vingroup’s
second capital mobilisation in the international market since
2009, when it became the first Vietnamese enterprise to
issue US$100 million convertible bonds on the Singapore
Exchange.
Vingroup’s real estate business was internationally recognised with two highly esteemed prizes: the “Best Developer Vingroup” and “Best Villa Development - Vincom Village”
awards at the 2012 Southeast Asia Property Awards in
Singapore. Vingroup also became an official Founding
Member of the World Economic Forum, starting January 1,
2013.
The Group concentrated on drastic organisational restructuring
in 2012, focusing on developing an elite team, bringing its
cultural values into full play, and enhancing training at all
levels. Additionally, Vingroup has established a core value
system based on its “golden” philosophy “Credibility Integrity - Creativity - Speed - Quality - Humanity” the main
guidelines for building strong solidary and a distinctive corporate culture.
Finally, in April 2012, Vingroup entered a contract with McKinsey & Company - the world’s leading management consulting
firm - to involve them in the Group's project of strategic
business plan review. Under this contract, McKinsey &
Company has provided Vingroup with strategic analyses and
proposals for short, medium and long-term business development strategies, with a vision to 2030, in order to realise
Vingroup’s goal of becoming the leading real estate corporation in Southeast Asia and secure a rank among the world’s
35
The Group’s specific goals include:
To complete all major projects and putting them into
operation on time, including Royal City and Times City;
To continue developing business and leasing activities in
Vincom Centers and Vincom Mega Malls across the
country; to advance the management capability of
operational properties, constantly improving service
quality to create momentum for developing other largescale projects in the future;
To enhance marketing and advertising to attract domestic
and international tourists; to increase revenues from
Vinpearl hotels, resorts and recreational complexes such
as Vinpearl Resort Nha Trang, Vinpearl Land, Vinpearl
Luxury Nha Trang, Vinpearl Golf Club - Nha Trang, and
Vinpearl Luxury Da Nang;
To invest in human resources to improve the capacity of
the Group’s personnel, especially senior managers;
To expand cooperation proactively with major, highly
capable and experienced partners;
To amplify and implement effective domestic and
international fund raising plans to finance the Group’s
projects;
To affirm the Group's sustainable business development
strategy in parallel with positive contributions to the
community and social activities; and
To become the number one real estate developer and
one of the largest private corporations in Vietnam in
terms of scale and stature.
largest companies.
Challenges in 2013
According to the World Bank, even though the financial markets
have improved, the global economy in 2013 will continue to
experience tremendous difficulties in regaining its momentum
for growth. Therefore, the World Bank has decided to cut the
growth forecast for this year.
The Vietnamese government will continue to implement tight
monetary and fiscal policies in 2013, giving priority to stabilising
the macro-economy and controlling the inflation rate at the
practicably lowest level. Settling bad debts in the banking
sector, unfreezing the real estate market and carrying out
organisational restructuring in state-owned enterprises are
among the major measures to encourage economic growth in
Vietnam during the year. Enormous challenges lie ahead;
however, the Vietnamese economy has shown some positive
signals with comprehensive measures from the government,
including solutions to overcome stagnant production, such as
reducing tax and fees; unfreezing the real estate market; and
settling bad debts, especially those in the banking sector.
Orientations for 2013
2013 will be a significant year for Vingroup with two important
projects in Hanoi, Royal City and Times City, nearing completion and hand-over. Vietnam’s leading premium large-scale
shopping and recreation complexes at these projects will be put
into operation, which requires optimum effort. With that in mind,
Vingroup’s overriding goal for 2013 is to utilise all its resources
to keep the projects up to their schedules for timely hand-over
and inauguration. The Group will also focus on improving the
quality of its human resources, and refining its system, aiming
to become a leading private corporation in Vietnam and Asia.
The 2013 real estate market is predicted to be challenging, but
there is still room for opportunities thanks to the government’s
positive macro-economic adjustments, demographic features,
and the real local demand for housing.
37
BOARD OF DIRECTORS’ REPORT
2012 performance versus budget
In 2012, Vingroup’s net revenue from sale of
properties and rendering of services was
VND7,904 billion, representing an increase of
242% compared to the previous year; finance
income was VND1,178 billion. Accordingly,
total revenue reached VND9,083 billion,
equivalent to 70% of the plan. 2012 Profit after
tax increased by 72 % to VND1,847 billion
against VND1,471 billion in 2011, accomplishing 60% of the Group’s budget. The failure to
meet total revenue and profit budgets was
mainly attributable to the ailing market, which
influenced the progress of customer
payments and, subsequently, residential
handovers and the developer’s revenue
recognition plan. The outstanding revenues
and profits will be recognised in 2013
Indicator
Actual
(VND billion)
Budget
(VND billion)
%
accomplishment
Revenue
9,083
13,017
70
Net revenue
7,904
Finance income
1,178
Costs
6,445
8,743
74
Profit before tax
2,655
4,275
62
Profit after tax
1,847
3,055
60
Net Revenue by Sector
1.8% 0.2%
15.0%
15.5%
67.5%
Indicator
Amount (VND)
Weight (%)
Net Revenue from sale of inventory properties 5,333,744,304,037
67.5%
Net Revenue from leasing activities
1,225,842,939,796
15.5%
Net Revenue from hospitality &
amusement park
1,178,085,197,874
15.0%
147,590,588,627
1.8%
Net Revenue from hospital &
healthcare services
Net Revenue from fitness & beauty care services 19,209,818,738
0.2%
Total
100%
7,904,472,849,072
Gross Profit by Sector
-2.4%
1.1%
10.5%
21.6%
70.2%
Indicator
Amount (VND)
Weight (%)
Gross profit from sale of inventory properties 2,678,084,319,487
70.2%
Gross profit from leasing activities
822,767,122,963
21.6%
Gross profit from hospitality &
amusement park
401,905,954,490
10.5%
Gross profit from hospital &
healthcare services
(92,855,051,199)
(2.4)%
2,514,328,997
0.1%
3,812,416,674,738
100%
Gross profit from fitness & beauty care services
Total
The Group’s operating revenue comprised of: VND1,226 billion in revenue from leasing shopping centres and offices, accounting
for 15.5% of total net revenue and a 30% increase compared to 2011; VND1,178 billion from rendering hospitality and amusement
park, accounting for 15%; VND147 billion from healthcare and related services, accounting for 1.8%; VND19 billion from fitness,
beauty care and related services, accounting for 0.2%; and VND5,334 billion from sale of properties, accounting for 67.5%.
Net revenues augmented strongly compared to 2011, with leasing offices and retail spaces up VND284 billion, mostly from the new
Vincom Center A Ho Chi Minh City and Vincom Center Long Bien shopping centres; sale of inventory properties up VND3,963 billion,
attributable to the transfer of villa land plots at Vincom Village, villas at Vinpearl Luxury Da Nang and the office component of Vincom
Center Ba Trieu. After the merger of Vinpearl JSC into Vincom JSC, the Company consolidated its income from hospitality, healthcare,
fitness and beauty care services.
Vingroup’s total assets as of December
31, 2012 amounted to VND55,825
billion, representing a year-on-year
growth of over VND20,300 billion. This
augmentation is fundamentally attributable to properties under construction at
Vincom Center A Ho Chi Minh City,
Royal City, Times City, and Vincom
Village, Vinpearl’s assets, and its
subsidiaries after the merger. Total
costs for villa and apartment construction increased by closely 91% since the
beginning of the year and are being
booked under the inventory section
because these projects are still under
construction and the villas and
apartments were yet to be handed-over
to customers.
Indicator
Unit
2011
2012
Non-current assets/Total assets
%
48.42
43.57
Current assets/Total assets
%
51.58
56.43
Total Liabilities6 /Total Liabilities and Owners’ Equity
%
80.52
76.76
(Short-term borrowings + Long-term borrowings)/
Total Liabilities and Owners’ Equity
%
39.10
28.25
Owner’s equity/ Total Liabilities and Owners’ Equity
%
19.48
23.24
Quick ratio
times
0.43
0.50
Current ratio
times
1.12
0.93
Return on assets
%
3.31
3.02
Net profit margin
%
23.36
46.40
Return on equity
%
16.98
13.01
Asset structure
Liabilities and Owners’ Equity
Liquidity
Return ratios
6
Including down payments of VND17,687,188,960,951 from customers purchasing properties
in Royal City, Times City, and Vincom Village as of December 31, 2012.
Total down payments made by customers in accordance with villa and apartment sale and purchase contracts recorded on the
balance sheet were VND17,600 billion as of December 31, 2012, of which the total down payments in 2012 alone were approximately
VND9,000 billion. Vingroup expects to receive an additional VND14,000 billion from buyers in 2013.
Vingroup’s total liabilities to banks and other institutions as of December 31, 2012 were more than VND21,800 billion, of which shortterm and long-term loans and borrowings accounted for approximately VND3,000 billion and VND18,800 billion, respectively. Thus,
with total equity amounting to VND55,825 billion, the Debt to Total Assets ratio was approximately 39.1% and the Net Debt to Total
Assets ratio was 36.1%. Total loans and borrowings increased by over VND11,700 billion compared to 2011, due to the successful
issuance of US$300 million in international convertible bonds with a five-year tenor in the second and third quarters of the year and
the consolidation of Vinpearl’s loans and borrowings after the merger.
39
Changes in shareholders’ equity and dividend distribution
On 17 January 2012, Vingroup completed the merger with Vinpearl JSC through issuing 158,233,412 additional ordinary shares to
swap for all 205,498,489 outstanding shares of Vinpearl JSC. This merger increased the Group’s shareholders’ equity by
VND1,582,334,120,000 (equivalent to 158,233,412 shares with par value of VND 10,000/share) and as a result increased the share
premium by VND1,396,730,102,564;
This merger also raised the Group’s treasury shares by VND1,712,520,574,501 since these were the carrying value of the Group’s
shares held by subsidiaries of Vinpearl JSC as of the merger date;
In accordance with the resolution of General Shareholders Meeting dated April 25, 2012, the GSM approved the plan to pay stock
dividends totalling VND1,510,787,500,000 from the profits of fiscal year 2011 and the first quarter of 2012. Accordingly, the number
of additional shares issued was 151,078,750, which increased the Group’s shareholders’ equity by VND1,510,787,500,000 (at a par
value of VND10,000/share). This stock dividend was completed on June12, 2012; and
In accordance with the resolution of General Shareholders Meeting dated January 3, 2013, the GSM approved the plan to pay bonus
shares for existing shareholders, from the share premium, with rate of 1,000:325, which increased the Group’s shareholders’ equity
by VND2,276,482,600,000. Accordingly, the Group’s share capital was VND9,281,103,150,000 since February 8, 2013.
Treasury shares
As of December 31, 2012, the Group’s total treasury shares held by its subsidiaries and associates were as follows:
Royal City Real Estate Development & Investment Joint Stock Company, a subsidiary, held 17,929,266 shares;
PFV Investment and Trading JSC, a subsidiary, held 11,561,507 shares;
Vinpearl Hoi An One Member Limited Liability Company, a subsidiary, held 5,504,060 shares; and
Dai An Investment and Construction JSC, an associate, held 12,431,898 shares.
Significant share transactions
On June 29, 2012, the Group disposed of its 40% equity interest in Green City, a subsidiary, thereby reducing its equity interest in
this company to 34%. Accordingly, this company became an associate of Vingroup;
Action plan for 2013
Vingroup’s revenue and profits in 2013 will consist of
recurring income from operational properties and sale of
properties. The stable and growing incomes are mainly from
the Vincom Center shopping malls and office (Vincom Center
Ba Trieu, Vincom Center Long Bien, and Vincom Center B
Ho Chi Minh City); the Vinpearl chain of hospitality, tourism
and recreational services (Vinpearl Resort Nha Trang,
Vinpearl Land, Vinpearl Luxury Nha Trang, Vinpearl Golf
Club - Nha Trang, and Vinpearl Luxury Da Nang); the Vinmec
International Hospital; and the Vincharm fitness and beauty
care services. Revenue from sales of inventory properties is
expected to ramp up as a result of the large number of sale
and purchase contracts for Royal City and Times City
apartments being settled as well as sales of properties in
Vincom Village.
service standards at Vincom Village to make it the foremost
ecological urban zone in Asia.
Vingroup will continue improving and standardising coordination with its subsidiaries and within various departments.
Vingroup also aims to consider and implement effective
plans to mobilise capital from domestic and overseas
sources.
The Group will promote training activities for all departments
to continuously enhance staff performance; introduce
policies to attract new talents; emphasise discipline and
individual ability; and bring into play its corporate culture Vingroup - Where the best gather and grow.
Vingroup’s property portfolio in 2013 will increase sharply as
a series of new projects is to be put into operation including
Vincom Mega Mall Royal City, expected to be launched in
July; and Vincom Mega Mall Times City, which is scheduled
to be opened in December.
Vingroup will continue to refine its management procedures,
improve the quality of service and facilities at Vincom properties, Vinpearl hotels and recreational parks, and the Vinmec
International Hospital; and upgrade the public utilities and
In October 2012, the Group acquired an additional 18% voting rights in Sai Dong Investment and Development JSC. This transaction increased the Group’s voting rights in Sai Dong to 79%;
In November and December 2012, the Group acquired an additional 22.93% equity interest in PFV Investment and Trading JSC.
This transaction increased the Group’s voting rights in PFV to 97.34%; and
In December 2012, the Group acquired 60 million shares, equivalent to 40% voting rights, in Dai An Investment and Construction
JSC, and Dai An became an associate Vingroup.
Outstanding bonds
Vingroup successfully issued a five-year convertible bond and then an additional tap in 2012 with a total value of US$300 million. It
also issued a four-year convertible loan of US$25 million that is convertible into shares of a subsidiary (to be established in the future
to own and operate the Vinmec International Hospital). As there were no elements of structured capital tools in the above convertible
bonds and convertible loan (due to the impossibility in determining the number of shares to be converted from bonds), the Board of
Directors decided to recognise the entire amount of the bonds and loans as financial liabilities.
Vingroup’s outstanding shares as of December 31, 2012 are listed below:
Bond 1: VND2,000 principal, due May 6, 2013, bearing a floating interest rate;
Bond 2: VND1,000 principal, due May 11, 2015, bearing a floating interest rate;
Bond 3: VND500 principal, due May 6, 2013, bearing a floating interest rate;
Bond 4: VND1,000 principal, due March 18, 2014, bearing a floating interest rate;
Bond 5: VND1,000 principal, due October 12, 2014, bearing a floating interest rate;
Bond 6: VND2,000 principal, due June 21, 2017, bearing a floating interest rate;
Bond 7: VND1,000 principal, due July 16, 2017, bearing a floating interest rate;
Bond 8: VND1,000 principal, due February 28, 2017 and VND1,000 principal, due April 18, 2016, bearing floating interest rates;
Five-year convertible bonds with a total value of US$300 million, issued on April 3, 2012 and July 6, 2012: these are unsecured
bonds, bearing a fixed interest rate of 5% per year to be paid every two years. According to the terms of these bonds, bond holders
have the right to bonds to ordinary Group shares at a conversion rate subject to adjustment every six months.
41
CORPORATE GOVERNANCE
1. BOM performance
In 2012, the BOM held 35 meetings, issued various resolutions to ratify important policies and amendments regarding
the Company’s business activities and development orientations, including:
Preparing capital resources for ongoing development
projects;
Leading and directing the 2012 Annual General Shareholders Meeting on April 25, 2012;
Remuneration, salaries, bonuses, and other forms of
compensation to BOM members and the General Director;
Directing to strictly comply with regulations regarding the
Financial Statements 2011, quarterly and semi-annual
Financial Statements, and Financial Statements 2012;
The establishment of the Vinpearl One Member Limited
Liability Company based on its conversion from Vinpearl
JSC after the merger;
Supervising the implementation of resolutions issued by
the BOM and GSM, and reviewing BOD management in all
business activities;
The plan to issue international convertible bonds;
Summiting the 2012 Annual General Shareholders Meeting;
Implementing dividend distribution in 2011 and the first
quarter of 2012; depositing and listing additional shares;
and
Issues related to the transfer of the office component in
tower B, Vincom Center Ba Trieu, to the Vietnam Technological and Commercial Joint Stock Bank (Techcombank);
Conducting and seeking GSM’s written opinions to add
more business lines, and to issue shares to increase shareholders’ equity from share premium.
The Development Strategy Consulting Contract between
Vingroup and McKinsey & Company;
Capital contribution to establish the Vincom Retail Limited
Company;
Increasing the Company’s charter capital (as a result of
issuing additional shares to pay dividends) and amending
the Company’s charter;
Appointment of a new General Director to be the legal
representative of Vingroup;
Appointment of the Chairman of the Times Trading Investment and Development One-member Company Limited
and an authorised representative to manage contributed
capital;
Appointment of the Chairman of the Future Investment and
Trading Services One-member Limited Liability Company
and an authorised representative to manage contributed
capital;
Amendments to the scale and function of apartments in the
shopping centre, services, hotel, office, luxury apartment
and underground parking complex at 72 Le Thanh Ton
Street and 47 Ly Tu Trong Street, District 1, Ho Chi Minh
City;
Foreign loan mobilisation; and
Approving and authorising a number of tasks for the
Chairman of the BOM and Legal Representative of
Vingroup JSC.
2. BOM’s supervision over BOD activities
The BOM's supervision over BOD's activities always complies
with the provisions in the Company’s charter, corporate
governance code, internal management rules and applicable
statutory laws. The supervision covered the following:
Monitoring the execution of all Vingroup’s projects;
In 2012, the total remuneration of the BOM and BOD members was VND18,346,091,905.
Company management and staff. The BOD strictly followed
the policies and guidelines set out by the BOM in its administrative operations to ensure and maintain the highest
standards of corporate governance.
The IC worked closely with the BOM and BOD in a constructive and supportive manner. It carefully monitored BOM
resolutions and the BOD's management and conducted
regular internal inspections to ensure these resolutions were
issued and implemented according to the laws and internal
governance regulations.
5. Changes in the BOM, IC and BOD during 2012
Changes in the BOM
Ms. Mai Huong Noi was appointed as a BOM member on
August 10, 2012.
Changes in the BOD
Ms. Nguyen Dieu Linh was exempted from the position as
a Deputy General Director on April 16, 2012;
Ms. Mai Thu Thuy, Mr. Dang Thanh Thuy, and Mr. Tran Anh
Tuan were appointed as Deputy General Directors on April
16, 2012;
Ms. Mai Huong Noi was exempted from the position as a
General Director on June 14, 2012 and was appointed as
Deputy General Director on June 14, 2012;
Ms. Le Thi Thu Thuy was appointed as General Director on
June 14, 2012. She officially took over the position on June
19, 2012, in accordance with the Company’s 40th amended
Business Registration Certificate, issued by Business
Registration Office - Hanoi’s Department of Planning and
Investment;
Ms. Mai Thu Thuy, Ms. Hoang Bach Duong and Mr. Tran
Anh Tuan were exempted from the positions as Deputy
General Directors on October 25, 2012; and
Ms. Nguyen Dieu Linh and Ms. Vu Tuyet Hang were
appointed as Deputy General Directors on October 25,
2012.
3. Inspection Committee (IC) activities:
The IC performed the following tasks in 2012:
Completing the IC operational regulations after consulting
with the BOM;
Inspecting and evaluating BOM and BOD management
and administration practices;
Participating in BOM meetings and proposing amendments and administrative practices;
Reviewing the Company’s quarterly and annual financial
statements, audit reports and lists of entry adjustments
from independent audit companies;
Discussing and reviewing issues related to the Company's
financial reports and accounting policies;
Reviewing the Company’s business performance reports
submitted at the GSM;
Organising quarterly meetings to discuss any outstanding
issues; and
Inspecting and reviewing monthly transactions of related
parties.
The IC discovered no irregularities or issues of concern that
required additional investigation during its inspection of the
Company’s business activities in 2012.
4. Coordination between the BOM, IC and BOD
The BOM organised meetings to establish policies on risk
management and direct the administration in uncovering defects
in order to enhance the Company's effectiveness. All of the
BOM's decisions and notifications to the BOD were circulated to
43
SHAREHOLDER AND INVESTOR RELATIONS
Shareholder and investor relations are inseparable from the
Group’s business development, and are always given the
utmost priority. Vingroup strictly complies with all current share
laws and regulations in its operations. In addition to disclosing
compulsory information as regulated, the Group also actively
addresses all concerns of investors, as well as financial and
operational information that may potentially positively affect
investors’ decisions. The Group’s goal is to build a positive
long-term relationship with the investor community, and the
Group’s leaders believe it is essential to commit to abiding by
all international standards of corporate governance to ensure
sustainable business achievements and maximise long-term
shareholder benefits.
Vingroup’s shareholder and investor relations focus on:
Timely and full disclosure of reliable and accurate information to shareholders and investors;
Vingroup’s investor relations improved significantly in 2012.
The Group organised meetings with over 300 individuals and
institutions who are existing and potential domestic and foreign
investors, and enhanced its approach to investors via direct
meetings, conference calls, investor workshops, road shows
and project site visits. In August 2012, the Company successfully organised the first Vingroup Tour for representatives from
more than 40 different securities companies and investment
funds. The four-day tour, was a valuable opportunity for the
participants to directly explore almost every Vingroup projects
in Hanoi, Da Nang, Nha Trang, and Ho Chi Minh City.
Moreover, the Group always maintains a positive relationship
with domestic and international brokers, investment banks,
independent credit rating agencies, investment funds and
securities companies, and supports them in accessing our
information and producing relevant analytical reports.
Optimising public understanding of Vingroup and improving
its image recognition via positive and timely media publicity;
Prioritising open communication with existing and potential
shareholders;
Actively participating in forums, conferences and international awards;
Timely responses and constant updates on Vingroup for
shareholders and investors at [email protected]; and
Constantly improving and developing the Vingroup website
with comprehensive financial information, annual reports,
and news releases.
45
SHAREHOLDER INFORMATION
As of December 31, 2012
Substantial shareholders as of December 31, 2012
Charter capital (VND):
Total number of outstanding shares:
Par value (VND/share):
Market price (VND):
Market capitalisation (VND):
7,004,620,550,000
700,462,055
10,000
80,000
56,036,964,400,000
Name
1. Internal shareholders, substantial shareholders, and transactions by key executives and related parties in 2012
(according to the latest List of Shareholders)
Internal shareholders as of November 2, 2012
Name, position
Number of
restricted shares
Number of freely
traded shares
Number of Shareholding
shares held
(%)
Mr. Pham Nhat Vuong
193C Ba Trieu, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi 214,809,509
Ms. Pham Thu Huong
193C Ba Trieu, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
37,041,405
5.29
Vietnam Investment
Group JSC
191 Ba Trieu, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
94,480,546
13.49
Ecology Investing and
Development JSC
191 Ba Trieu, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
63,396,136
9.05
Name
0
214,809,509
214,809,509
30.67
Ms. Pham Thuy Hang, Vice Chairwoman
0
24,737,667
24,737,667
3.53
Ms. Pham Thu Huong, Vice Chairwoman
0
37,041,405
37,041,405
5.29
Ms. Le Thi Thu Thuy, Vice Chairwoman
0
2,964
2,964
0.00
Ms. Nguyen Dieu Linh, Vice Chairwoman
0
56,828
56,828
0.01
Ms. Vu Tuyet Hang, Vice Chairwoman
0
7,851
7,851
0.00
Mr. Le Khac Hiep, Vice Chairwoman
0
0
0
0.00
Mr. Nguyen Trong Hien, Member
0
35,343
35,343
0.00
Mr. Ling Chung Yee Roy, Member
0
0
0
0.00
Ms. Mai Huong Noi, Member
0
65,664
65,664
0.01
Ms. Le Thi Thu Thuy, General Director
0
2,964
2,964
0.00
Ms. Mai Huong Noi, Deputy General Director
0
65,664
65,664
0.01
Mr. Pham Van Khuong, Deputy General Director
0
2,368,275
2,368,275
0.34
Ms. Nguyen Dieu Linh, Deputy General Director
0
56,828
56,828
0.01
Ms. Vu Tuyet Hang, Deputy General Director
0
7,851
7,851
0.00
Mr. Dang Thanh Thuy, Deputy General Director
0
71,792
71,792
0.01
Mr. George Royle, Chief Accountant
0
0
0
0.00
Mr. Nguyen The Anh
0
3,006
3,006
0.00
State-owned shareholders
Mr. Dinh Ngoc Lan
0
408
408
0.00
Founding shareholders
Ms. Nguyen Thi Van Trinh
0
0
0
Ms. Do Thi Hong Van
0
0
Ms. Hoang Thuy Mai
0
0
Board of Directors
shares
%
shares
%
Rationale
Green City
Development JSC
Mr. Nguyen Trong Hien, Chairman is the Chairman of Green
City Development JSC;
Ms. Hoang Bach Duong is the
General Director of Green City
Development JSC
6,933,495
1.26
3,158,495
0.57
To reclaim
investment
Green City
Development JSC
Mr. Nguyen Trong Hien, Chairman is the Chairman of Green
City Development JSC;
Ms. Hoang Bach Duong is the
General Director of Green City
Development JSC
4,027,0817
0.57
0
0.00
To reclaim
investment
Hanoi Southern City
Development JSC
Ms. Mai Huong Noi is a BOM
member of Hanoi Southern
City Development JSC
8,025,315
1.15
0
0.00
To reclaim
investment
Vietnam Investment
Group JSC
Mr. Pham Nhat Vuong is a
shareholder holding more
than 50% of Vietnam Investment Group JSC
100,333,747
14.32
94,480,546
13.49
To reduce
shareholding
2. Shareholder structure as of November 2, 2012
Category
Domestic Shareholders
Foreign Shareholders
Total
shares
%
shares
%
shares
628,832,020
89.78
71,630,035
10.22
700,462,055
100
0
0
0
0
0
0
2,974,724
0.43
0
0
2,974,724
0.43
0.00
Substantial shareholders (holding above 5%) 415,580,797
59.33
0
0
415,580,797
59.33
0
0.00
Shareholders holding from 1% to below 5%
132,433,252
18.91
43,159,103
6.16
175,592,355
25.07
0
0.00
Shareholders holding below 1%
77,843,247
11.11
28,470,932
4.06
106,314,179
15.17
Company’s Labour Union
0
0
0
0
0
0
Treasury shares
0
0
0
0
0
0
Inspection Committee
Total owner’s equity
Chief Accountant
0
26
26
0.00
0
56,828
56,828
0.01
Authorised announcer
30.67
Number of shares held
after the transaction
Number of shares held
prior to the transaction
Relationship with
internal shareholders
Mr. Pham Nhat Vuong, Chairman
Ms. Nguyen Dieu Linh
Shareholding
(%)
Transactions by key executives and related parties in 2012
Board of Management
Ms. Nguyen Thi Thu Hien
Number of
shares held
Address
7
%
This number increased compared to that of the previous term because Green City Development JSC received 868,586 dividend shares
for the fiscal year 2011 and Quarter 1 of 2012.
47
STRATEGIC DIRECTION OF VINGROUP
A DIFFERENTIATING VINGROUP
BUSINESS STRATEGY
1. Focus onhigh-quality, large-scale mixed-use developments in prime locations and expand further into
select strategic cities
2. Grow the Group’s recurring revenue across
consumer segments and enhance inventory property
turnover
Leverage expertise and experience in identifying and
securing prime sites;
Develop a substantial portfolio of commercial buildings
(including office, retail and resort properties):
Target mid- to high-end markets;
Provide a source of stable, recurring income;
Deliver on the need for high-quality retail and residential space through mixed-use developments that
increase consumer appeal; and
Potential for capital gains.
Develop high-quality resorts and villas.
Largest developer in
Vietnam with premium
brand names in commercial and residential
properties, tourism and
hospitality properties,
recreational services,
high quality healthcare
services and beauty
care services
Fully Integrated
Realestate owner
and developer with
exposure in key
consumer segments
Unique Vingroup
Membership
platform that
strategically unites
targeted high value
consumers
Effective capital
recycling model that
has been successfully demonstrated
3. Diversify and Enhance Property Income Stream
These elements are Vingroup’s competitive advantages
Commence large-scale projects near
high-growth areas;
Expansion into the upper mid-end segment:
Expand addressable market by providing more
affordable units.
Strong brand equity that
attracts premium tenants
and clientele;
Premium pricing for new
projects focused on upper
and
middle
class
Vietnamese consumers.
Significant growth potential in the healthcare,
retail, leisure, education
and residential sectors;
Fully leveraged to ride
with the expansion of the
upper
and
middle
classes.
50 STRATEGIC DIRECTION OF VINGROUP
Realises synergies between
Vingroup consumer focused
segments;
Able to target different tiers
of high value consumers
through
a
variety
of
exclusive
membership
programmes.
Target the growing disposable income of upper and
middle class consumers by delivering on their various
needs.
Higher
percentage
of
recurring revenues over
time thanks to adding
strong growing operational
properties to the Company
portfolio;
Stable & Defensive Two pronged approach:
Develop properties for sale;
4. Further Develop in-house Sales and Leasing,
Project Management and Property Management
Capabilities
Develop internal capabilities to enhance efficiency and
support its portfolio of prime commercial investment
properties:
Sales and Leasing;
Project management; and
Property management.
Operate properties for stable, recurring income.
Pre-sales reduces the need to raise capital.
Asset sales allow recycling
capital
into
more
consumer driven business
segments.
51
RISK MANAGEMENT
The Group’s exposure to liquidity risks arises primarily from
mismatches between the maturities of financial assets and liabilities.
The Group monitors such risks by arranging long-term credit facilities
from the banks and long-term corporate bonds to ensure that these
loans/bonds will be settled once the Group completes the development of its properties and put them into commercial operation.
The Group’s risk management policy was reviewed, consolidated and uniformly applied to all its business operations. A system of controls has been developed to ensure a reasonable balance between
the cost of incurred risks and the cost of risk management. Management continually monitors the risk
management process to ensure a reasonable balance between risk and risk control.
Macro-economic risks
Interest rate and credit risks
The global economic slowdown and turmoil and uncertainty in the
international financial markets precipitated by events such as the
fiscal crisis in Europe, the downgrade of the United States’ sovereign rating, or signs of cooling in the Chinese economy and similar
events may have a negative impact on Vietnam’s economy,
adversely affecting the Vietnamese property market and slowing
consumer spending, which, in turn, could have a negative effect
on the Group’s financial condition and business operations.
In the context of the 2008 global financial crisis, the
Vietnamese government applied a series of stimulus
measures and relaxed monetary and fiscal policies to help
the national economy out of temporary difficulties. However,
the consequences of these policies are seen in the instability
of macro-economic factors that the country has been and
will be facing, particularly the strong fluctuation of interest
and inflation rates.
All of the Group’s operations are conducted in Vietnam and all of
its revenues are generated in the country. The Group is also
subject to a political, economic, legal and regulatory environment
in Vietnam that differs in certain significant respects from that in
many other countries.
Market risk resulting from changes in interest rates is primarily
related to the Group’s long-term debt with floating interest
rates. Vingroup manages interest rate risk by closely monitoring the situation in relevant markets, including money markets
and the domestic and international economies, and uses this
information to estimate and adjust its financial leverage and
strategies for the current given situation.
From time to time, the Vietnamese government adjusts its macroeconomic control policies to encourage or restrict development in
the private property sector through measures related to, amongst
other things, land grants, pre-sales of property, bank financing and
taxation. These policies may reduce consumer interest in the
Group’s property products.
52 STRATEGIC DIRECTION OF VINGROUP
Liquidity risks
Liquidity risks occur if the Group encounters difficulty in
meeting its financial obligations due to a shortage of funds.
Foreign exchange risks
Risks related to foreign exchange appear when the fair value of future
cash flows of a financial instrument fluctuates due to changes in the
foreign exchange rates. The risk of changes in foreign currency rates
relates primarily to its operating activities (a small portion of revenue
and borrowings that originated in foreign currency). However, this risk
is estimated in any issuance and the Group has an active mechanism
to prevent this through adjusting rents in line with the CPI and other
foreign currency income (if any).
Property sector risks
Vingroup’s business is heavily dependent on the performance of the
Vietnamese property market because all of its properties and development projects are based in Vietnam. Therefore, any adverse developments in the Vietnamese property market, such as reduced demand or
downward movement of rental yields and property prices, could
materially adversely affect the Group’s business operations and
financial situation. Meanwhile, the economic crisis has reduced the
demand for real estate products and freezed the market for a long
time, presenting major difficulties for the industry.
for the raw materials used by its contractors and, if the
prices of these materials fluctuate beyond a particular
threshold, they must be renegotiated.
The Group manages its commodity price risks by
keeping a close watch on relevant information and the
situation of the commodity market in order to properly
manage the timing of purchases, construction plans and
inventory levels.
Key manager risks
The Group’s success and growth depends largely upon
its ability to identify, hire, train and retain an adequate
number of skilled and qualified employees, including key
management personnel. Certain key personnel, as well
as qualified, experienced workers and managers, are
essential for running the business and executing
projects, and its ability to fulfil expansion plans depends
on continuing to attract such personnel and increase its
general workforce in the future.
Building a strong management team and maintaining
continuity is crucial to ensuring the Group’s future
sustainable development.
Material and commodity price risks
The Group is affected by the volatility of the prices for certain commodities and materials used in the construction of its real estate projects.
These prices are subject to domestic and international supply and
demand, import/export tariffs and duties, domestic duties and various
other factors. Most of its construction contracts utilise fixed unit prices
53
NUMBER OF EMPLOYEES
HUMAN RESOURCE
Vingroup focuses on respecting every employee's potential and distinction, as well as creating a dynamic,
creative, humane and professional working environment offering favourable welfare policies, high incomes
and equal development opportunities for all its staff.
Vingroup is proud to be a real estate development group with young, experienced, and talented staff. It has developed and constantly
improved its team of professionals with extensive and intensive involvement in all areas of the real estate sector including investment,
land acquisition, fund mobilisation, design, project execution and monitoring, sales, marketing and property management.
In 2012, the number of personnel grew significantly after the merger of Vinpearl JSC to form Vingroup JSC and the Group began
officially operating under the Group model. Vingroup also became involved in the new field of high-quality healthcare services early in
the year when Vinmec International Hospital, the leading five-star hospital in Vietnam, was put into operation with a workforce of more
than 300 medical professors, doctors and nurses.
The BOD decided to increase the number of personnel in various departments and divisions, particularly property management and
project construction management, in order to meet the Group’s ever-expanding scale of business operations.
As of December 31, 2012, Vingroup had 5,562 employees, a year-on-year increase of 159% compared to 2011.
Personnel Growth 2010 - 2012
159
5,562
Personnel
Number of employees
(persons)8
Growth rate
(%)
135
31/12/2010
936
75
75
31/12/2011
2,150
135
936
31/12/2012
5,562
159
2,150
2011
2010
8
Including employees of Vingroup Joint Stock Company and
companies in which Vingroup holds controlling or significant
interests.
Number of employees (persons)
2012
Growth rate (%)
Average Employee Income Growth 2010 - 2012
Year
9
54 HUMAN RESOURCE
VINGROUP (excluding Vinpearl)
VINPEARL (including Nha Trang and Da Nang)
Average Income9
(VND/person/month)
Growth rate (%)
Average Income
(VND/person/month)
Growth rate (%)
2010
8,500,000
13
3,940,689
16
2011
9,100,000
7
4,733,237
20
2012
10,086,847
11
5,702,979
20
Net income
55
LABOUR AND WELFARE POLICIES
Basic management skills training (supervisory skills, personnel management skills, communication and evaluation skills).
Depending on the certain work positions, other professional
training courses are also offered regularly to supplement,
update, and improve employee knowledge and skills.
The courses are conducted by Group leaders and managers
and/or senior experts from prestigious professional training
institution in the country or from overseas.
Remuneration, bonuses and welfare policies
Working policies
Working hours: Vingroup's work schedule is eight hours per
day, 5.5 days per week for the white-collar employees and
six days per week for the blue-collar workers. In the case of
tight deadlines, the Company may require employees to
work overtime and offers adequate compensation and
ensures their rights under national statutes.
All employees are entitled to public holidays, vacation time,
and paid personal leave days in accordance with the
provisions of the National Labour Law.
Working conditions: Vingroup is committed to creating a
professional working environment and a safe common home
for all employees so they can freely devote their best efforts
to their work. White-collar employees are provided with
uniforms, comfortable, modern and airy offices, and periodical health checks. Blue-collar workers are supplied with all
essential labour safety and sanitation equipment needed for
their jobs. The Group adheres strictly to all labour safety
principles and regulations.
Recruitment and training policies
Recruitment: Following its slogan of Vingroup - Where the
best gather and grow, the Company has developed a
refined, forward thinking, highly capable team with extensive
abilities in various fields.
It aims to attract competent, qualified candidates who are
interested in a dynamic work environment focused on speed,
creativity and efficiency. Here in Vingroup, every individual
can bring their creativity and expertise into full play.
Every position has its own specific criteria, while sharing the
same basic requirements: appropriate qualifications,
determined career development, a strong sense of responsibility and solid discipline. Managers must be committed to the
56 HUMAN RESOURCE
The Group has designed a compensation and reward policy for
every staff position, skill and qualification in order to assess
their competence and performance in an accurate manner. It
also aims to motivate employees to demonstrate their best
abilities and responsibility for greater productivity, quality and
efficiency.
Group’s six core values of "Credibility - Integrity - Creativity Speed - Quality - Humanity" and be willing to learn; have a strong
pro-active and creative spirit; and possess solid teamwork,
management and leadership skills. The requirements for senior
positions are very stringent, including relevant work experience,
logical thinking, sensitivity in judgment, flexibility and decisiveness, as well as excellent analytical and problem-solving skills.
Training Policy: Vingroup focuses on developing its human
resources through staff training to enhance employee knowledge
and professional skills. Establishing 2012 as the "Year of
Training", Vingroup budgeted a significant amount on extensive
training courses for all Group employees to improve their skills
and contribute to the quality of the Vietnamese labour force.
Types of training:
In-class training courses at each unit and centralised training
courses for each area;
On the job training, including in-house training (at the employees’ work location) and cross-training (sending employees to
work in other divisions to enhance their knowledge and skills);
and
Short and long-term courses, conferences, and study tours to
learn, exchange, and gain experience in real situations.
Compulsory training courses:
Orientation (including Group culture, rules and regulations, and
general information about the Group‘s products and services, as
well as basic fire fighting and prevention procedures and
occupational safety);
Vocational training on service skills for the tourism and hotel
businesses;
Salaries and insurance: Vingroup maintains a pay policy
which offers higher salaries than the average of other
businesses in the same market sector. In 2012, it raised
employee salaries based on their work results and contributions
to the Group. The Group also has particularly competitive
salary policy for excellent staff who have extensive experience
in related fields, on the one hand to retain long-term employees,
on the other hand to to attract new talents from various sources.
The Group pays all social and medical insurance premiums in
accordance with provisions under Vietnamese laws. It also
purchases additional life insurance and 24/7 accident insurance
for all its staff members.
Initiative rewards: for staff who propose initiatives that
produce benefits for the Group, or contribute to improving the
Group’s business performance, prestige and image;
“Good people, Good deeds” commendations: for staff who
prevent potential disasters, handle emergencies well, rescue
people from hazardous situations, or return lost property to its
owners; and
Periodic commendations and rewards: such as Employee of
the Month; Department of the Quarter (for Customer
Services, Housekeeping, Technical, and Security Departments); the Year-end Award for Excellence; and the annual
Group Anniversary Award for Outstanding Performance.
Key forms of commendation: Certificates of Merit, cash,
domestic and/or overseas tour packages, promotions, and
salary reviews.
Welfare policy: The Group emphasises staff interests,
benefits and social life. It has developed a detailed welfare
policy that is revised and amended regularly by the management to provide high-quality welfare conditions, encourage staff
to capitalise on their capabilities, and motivate them to contribute more to the Group’s development.
Staffs are given presents on important occasions such as
birthdays, weddings and maternity leave and receive visits
during extended sick leave, in addition to periodical medical
check-ups. On occasions such as New Year and Tet Holiday
(Lunar New Year), the Group’s Anniversary, International
Women's Day (March 8th), International Children's Day (June
1st), Lunar Mid-Autumn Festival, and National Day, staff are
Bonuses: The Group has developed and applied bonus
policies at all of its establishments, under which all staff’s
achievements, contributions to their division’s performance will
be to recognised, commended and rewarded. Bonus policies
with all its content and forms are circulated to all of the
Group’sleaders, managers and employees for implementation.
Key types of commendations:
Extraordinary achievement awards: for staff who deliver
excellent performance, contribute considerably in creating
economic benefit; improving work efficiency at their department; boosting the Group’s reputation and image. This award
is also for staff and departments who actively participate in
sporting and community activities, promoting the corporate
culture;
Successful completion of projects and/or campaigns:
Commendations and rewards will be made to staff and departments that make significant contributions to the successful
completion of projects and campaigns;
Soft skills training, including effective communication, professional sales, client counselling, and negotiation skills; and
57
CORPORATE CULTURE
The strength of Vingroup lies in its discipline and it
always upholds the team spirit, the power of solidarity, discipline and loyalty, while actively engaging in
community contribution activities and representing
citizen responsibility and national pride.
presented with gifts and attend festivals and common activities
organised by the Group. Summer vacations are also organised
for staff members and their families to take trips and relax.
Particularly, the Group has a policy to honour and reward
employees’ children who gain significant achievements in their
studies, sports, and artistic activities, in addition to organising
summer camps and life skills training programs. These
activities encourage the children to improve their performance
and make their parents proud, which in turn encourage creates
Company loyalty among the parents.
Vingroup has built a separate multifunctional sport complex in
an attractive setting with full-scale amenities, where all employees can exercise regularly and play sports. With the spirit
“Healthy Body - Refreshed Spirit - Agile Manners”, all staff
enthusiastically participate in the activities of the “Festival of
Healthy Living” every Friday, which include: Flash Mob
dancing, game shows, volleyball, football, tennis, table tennis,
and badminton. The “Monthly Festival” and “Quarterly Festival”
programmes also feature art performances and culinary
58 HUMAN RESOURCE
festivals that provide a relaxing, fun and refreshing get-together
time for employees and their relatives.
The Group also established a "Support Fund for Staff in Difficulties" to assist and support employees and their family members
(one time or long-term) if they are troubled by extreme
hardship, unfortunate accidents, dangerous diseases, natural
disasters, or fires. The fund’s mechanism is widely publicised to
all the staff. In addition, employees are entitled to preferential
treatment when using the Group's services including the
Vinpearl Resort, Vinpearl Luxury, and Vincharm Spa, as well as
medical services at the Vinmec International Hospital.
Unions: Vingroup has established a trade union and a Communist
Party cell to create an environment for thorough communication, solidarity, and motivation, and uphold the Group’s culture
and prestige. The Group’s Party cell was evaluated as a strong
and sound unit and its trade union earned the Outstanding
Union Award for Hai Ba Trung District and Hanoi.
After more than 10 years of development and growth, Vingroupers
together have established their own traditions, spiritual values,
and unique culture, which has contributed to the Group’s
success today.
With discipline being the utmost value, Vingroup’s culture has
been built on professionalism and high trust, which is
cohesively translated in the six core values: "Credibility Integrity - Creativity - Speed - Quality - Humanity". Our working
culture is associated with speed, efficiency and orderliness,
creating a special synergy that help Vingroup strongly developed in all fields.
The determination and passion in Vingroup’s work culture is
also a prominent essential in its other social activities.
To promote the "Healthy Body - Refreshed Spirit - Agile Manners"
campaign, in 2012, Vingroup began setting aside Friday
afternoons to organise “Festivals of Healthy Living” for all
employees to participate in sport and entertainment activities
such as team dancing (Flash Mobs, Gangnam Style, etc.) and
game shows (Catchword, Golden Bell Shaking, etc.), as well as
competition (volleyball, soccer, tennis, table tennis, and
badminton). It also encourages both its leaders and staff to use
the stairs instead of elevators every day to create a healthy
lifestyle and prevent “office diseases.”
The Group also holds programmes and special events where
popular singers and staff members perform at its Quarterly and
Year-End Festivals, as well as on International Women's Day,
International Children's Day, the Lunar Mid-Autumn Festival,
Christmas and Lunar New Year are unique corporate festivals,
with the presence of popular singers and artists as well as staff
performers themselves. Employees and their families really enjoy
these events when they can fully relax, refresh and have fun.
The Group has launched various campaigns, such as the
"Good People, Good Deeds," "Effective,
Economical
Practices” and “Five-star Quality Service" to promote its six
core values of "Credibility - Integrity - Creativity - Speed Quality - Humanity". These movements aim to help the entire
staff change their ways of thinking and working to save time,
effort, and manpower yet be able to improve the speed, quality
and efficiency of their work.
In order to ensure timely communication corporate updates as
well as movements and activities across the country, the internal
magazine "Vingroup House" was introduced and is published
quarterly, featuring a wide range of interesting and useful topics.
The Group will also build a Vingroup’s tradition room to house
objects and materials which marked important milestones on its
path of establishment and development, and help the staff
understand and appreciate the Group’s impressive history.
59
SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
Vingroup’s corporate philosophy places a high value on
the pioneering spirit and takes pride in the intelligence,
resolve and humanity of the Vietnamese people. Vingroup
has always been considerate towards its employees’
living conditions and largely engaged in communitybuilding and environmental protection activities.
It is essential for all prestigious companies to recognise the
importance of contributing to the society and community, and
actively taking part in social and charity activities, in their paths
towards sustainable development. The Group engages in
activities that support the poor; show gratitude to the families of
war invalids and martyrs; care for Vietnamese Heroic Mothers;
subsidise social beneficiaries and orphans in difficult circumstances; contribute in the medical sector; and sponsor educational programmes.
Dong Sports Festival 2010-2011; the 2010 National Youth
Football Championships - Yamaha Cup; and the 2010 JC
President's Cup.
Vingroup understands that business development goes along
with humanitarian, social and charitable activities and it will
always continue to carry out strongly such programs.
In addition to embracing the slogan "Where there is hardship,
Vingroup will be there", the Group also built facilities which
effectively benefit the community as part of its long-term vision.
The Phat Tich Custodian Care Facility (Phat tich Centre) is
home to orphans, the lonely elderly, social beneficiaries from
across the country. The Facility was established and
sponsored by the Vingroup Kind Heart Foundation, located in
Tien Du District of Bac Ninh province, and is currently home to
21 elderly people and 86 orphans. This is one of the Group’s
numerous long-term charitable endeavours that contribute to
the State’s social work, education, training and fostering movements for children become useful citizens of the community.
Vingroup also sponsored the Promotion Fund for Vietnamese
Football Talent (PVF), which was set up in 2010 to develop an
effective model of training young footballers, as there is
currently no such professional training centre in Vietnam. The
PVF football team has consistently won important champions
including the 2012 National U10 Championship - Viettel Cup;
the 2011 National Children's Football Championship - Yamaha
Cup; the Grade 6 and 7 Student Football Championship - Phu
60 CORPORATE SOCIAL RESPONSIBILITY
61
ENVIRONMENTAL PROTECTION
The gardens are designed in a contemporary style consistent with Vietnamese values and lifestyles.
Times City, with a total site area of more than 36 hectares,
is designed on the concept of a modern eco-friendly urban
area in the island nation of Singapore with a green and lake
coverage of nearly 100,000m2 being arranged in harmony
with the overall project. Times City will make profound impact
by creating a clean, green living space, helping to change the
face of the landscape in the south of the capital and providing
residents with a contemporary, youthful lifestyle.
Vinmec International Hospital is a green hospital situated
within the Times City Project at 458 Minh Khai Street, Hai Ba
Trung District, Hanoi. It has emerged as the first international
standard general hospital in Vietnam modelled on hospital hotel facilities and has been highly commended for being
clean and environment-friendly.
As a pioneering real estate and tourism company aiming for sustainable development, Vingroup understands
the importance of protecting the environment through its designs, construction and exploitation of its tourism
complexes, shopping malls, offices and apartment towers. All the developments constructed by Vingroup,
from the the first tower of Vincom Center Ba Trieu to urban complexes such as Royal City, Times City, and
Vincom Village, as well as Vinpearl Resorts… are “energy efficient buildings”, green ecological urban areas
and tourism sites. The “green” principle is applied in all of our projects throughout Vietnam.
classification of refuse and has built high-quality and compatible medical and domestic waste dumps that comply with the
medical sector’s most stringent standards for a green,
environmentally friendly hospital.
Vincom Village - the Peaceful Land was designed based on
the model of the beautiful, luxurious and seductive city of
Venice, Italy. Featuring a system of clean and clear canals,
diverse ecological botanical gardens imbrued with the
colours of nature, and modern public facilities and architectural designs, Vincom Village offers its residents a perfect,
well-furnished, romantic and close-to-nature lifestyle. The
developer also released various species of fish and birds to
enrich the area’s eco-system.
The room systems were designed and installed with modern
equipment to meet the standards set out by the World Health
Organisation. The Central Sterilising Department operates
as a one-way chain to ensure the optimal restriction of
cross-infection during the sterilisation of medical equipment
and supplies. In addition to conventional sterilisation technology, Vinmec has invested in plasma technology to ensure the
perfect sterilisation of all medical supplies, equipment and
consumables. The hospital's water is filtered through activated
charcoal and disinfected by ozone and UV systems, to ensure
safety for users and minim spread of water-borne diseases.
Along with the water treatment system, Vinmec also focuses on
VINGROUP’S OPERATIONAL AND UNDER-DEVELOPMENT PROJECTS FOCUSING ON ENVIRONMENTAL
PROTECTION INCLUDE:
Vincom Center Ba Trieu, specially designed to make full
use of natural light and artificial energy, received the “Energy
Efficient Building” award. Three towers of the complex were
equipped
with
an
integrated
computer-controlled
air-conditioning system designed to minimise energy waste.
The ventilation system is placed on the roof top, which
continually ciculate air in the towers and stabilises the
temperature and humidity in different areas.
Vincom Center B Ho Chi Minh City is the first “green”
energy saving building in Ho Chi Minh City and Vietnam
built according to “green architecture” standards - one of
the criteria to evaluate world leading construction works. In
addition to creating greenery spaces both inside and
outside the building, the developer also used Low-E glass
- a fuel and energy saving type of glass which is becoming
increasingly popular in developed countries. All the facilities
at Vincom Center B Ho Chi Minh City used advanced energy
saving and environment-friendly technologies including solar
water heating systems, non-polluting water treatment
systems, energy saving ventilation and air-conditioning
(manufactured by Trane - USA), and a smart control system
produced by Johnson Control - USA.
Royal City is highlighted by green botanical parks and a
square covering 70,000m2, and is the first urban project in
Hanoi with a unique Sky Yang Sheng garden. The
estimated total area of the sky gardens is 10,000m2, with
various zones such as a Tai Chi practice garden, promenade, pavilion, lounge, and flower and zen gardens. Each
garden covers 1,000 - 2,000m2 depending on the terrain,
and is surrounded by glass walls to ensure complete safety.
63
Vinpearl Nha Trang is an ecological, environment friendly five-star and five-star
plus resort and tourism destination located on one of the world’s most beautiful
bays. It has developed a 1,000m3 seawater filtration system with technology and
equipment imported from the US, as well as a million cubic meter rainwater
reservoir. These two water sources allow Vinpearl to have a completely autonomous fresh water supply for all of its activities on the island.
The large scale water and waste treatment systems and the
closed domestic and irrigation water supply utilise the most
advanced technology. Vinpearl has also complied with 10R
international environmental protection standards to promote
sustainable development, prevent pollution, and recycle waste
water for irrigation.
Because the island’s natural soil is mostly infertile, Vinpearl
arranged for machines to dig deep down and fertilise the soil
with nutrients before planting trees. More than 40 different
kinds of trees were planted on the island, including perennial
species and tropical fruits such as longans, mangos, rambutans, and coconuts, which help create a natural landscape and
increase the greenery. All the newly planted trees are under a
regimen of special care.
Vinpearl has also sponsored environmental campaigns, tree
planting and water preservation activities in conjunction with
prestigious beauty pageants such as Miss Earth 2007 and
2010, Miss Universe 2008, and Miss Vietnam World 2010 to
promote ecological and environmental protection.
In addition to planting trees, Vinpearl Land has also developed
the breeding of a variety of animal species. Every three
months, Vinpearl brings a number of bird species to the island
and there are currently tens of thousands of birds of about 50
different species that have been released back to nature on
Hon Tre Island, Nha Trang. The indigenous fauna on the island
are also strictly protected and their populations have been
increasing.
The Vinpearl Aquarium has made considerable contributions to
the protection and restoration of rare marine animal species.
Seven rare species of sharks were raised here, three of which
were listed in the World Red Data Book, including cat sharks
(also known as zebra sharks), stone sharks, and leopard
sharks. All the sharks are very gentle and eat mainly invertebrates that are low on the food chain. In 2010, Vinpearl
released 25 cat sharks (Chiloscylliumpunctatum) into the sea,
in hope to help conserve the natural resources and biological
diversity of Nha Trang Bay.
In addition to training its staff to preserve and protect the
environment, Vinpearl also actively aims to raise visitors’
awareness through promoting the reuse of towels and bed
linens to save water and separating and recycling organic and
inorganic waste. These measures have been widely received
by guests and help keep the environment at Vinpearl fresh,
clean, with well-deserved stellar reputation as a five-star resort.
Embracing the strategy to become the flagship Vietnamese
Group in the high-end real estate and hospitality sector,
Vingroup focuses on researching and developing effective
solutions and highlights for each of its projects, from the initial
design to construction, operation and management. All of the
Group’s high-end real estate projects are designed according
to energy efficiency principles to be environment-friendly and
make the maximum use of natural light, space, and greenery.
Beyond its designs, Vingroup also uses modern, international
standard technology in its construction to ensure the best
quality and progress of its projects. The Vincom Center B Ho
Chi Minh City and Royal City projects both utilise top-down
construction technology to protect the safety and stability of
earthen walls and ensure the project’s rapid progress and
economic efficiency.
65
CONSOLIDATED FINANCIAL STATEMENTS
GENERAL INFORMATION
COMPANY
MANAGEMENT
Vingroup Joint Stock Company (“the Company”), previously known as Vincom Joint Stock Company, is a joint stock company
established in Vietnam in accordance with the Business Registration Certificate No. 0103001016 issued by the Hanoi Department of Planning and Investment on 3 May 2002 and the Business Registration Certificate No. 0101245486 re-issued on 12 May
2010. In accordance with the 39th amended Business Registration Certificate dated 12 April 2012, the Company changed its
name to Vingroup Joint Stock Company. The Company also subsequently received the 43rd amended Business Registration
Certificate dated 5 February 2013.
Members of the Management during the year and at the date of this report are:
The Company’s shares were officially listed on the Hoc Chi Minh City Stock Exchange (“HOSE”) from 19 September 2007 in
pursuant to Decision No.106/QD-TTGDHCM issued by the Director of HOSE on 7 September 2007.
Pham Van Khuong
Deputy General Director
Nguyen Dieu Linh
The principal activities of the Company are to construct and provide retail outlets, commercial offices for lease, residential units
for lease and for sale, to provide entertainment services, to carry out investment activities and to conduct other businesses as
stipulated in its business registration certificate.
The Company’s head office is registered at No. 7, Bang Lang 1, Vincom Village, Viet Hung ward, Long Bien district, Hanoi,
Vietnam. The Company’s business address is at No. 191, Ba Trieu street, Hai Ba Trung district, Hanoi, Vietnam. Its branch is
located at No. 72, Le Thanh Ton and No. 45A, Ly Tu Trong, Ben Nghe ward, district 1, Ho Chi Minh city, Vietnam.
Le Thi Thu Thuy
General Director
Appointed on 14 June 2012
Mai Huong Noi
General Director
Resigned on 14 June 2012
Appointed on 14 June 2012
Resigned on 16 April 2012
Reappointed on 25 October 2012
Hoang Bach Duong
Resigned on 25 October 2012
Mai Thu Thuy
Appointed on 16 April 2012
Dang Thanh Thuy
Tran Anh Tuan
Vu Tuyet Hang
Appointed on 25 October 2012
THE BOARD OF DIRECTORS
Members of the Company’s Board of Directors during the year and at the date of this report are:
LEGAL REPRESENTATIVE
Pham Nhat Vuong
Chairman
Le Khac Hiep
Vice-chairman
The legal representative of the Company during the period from 1 January 2012 to 18 June 2012 is Ms Mai Huong Noi and from
19 June 2012 to the date of this report is Ms. Le Thi Thu Thuy.
Pham Thuy Hang
Vice-chairwoman
Pham Thu Huong
Vice-chairwoman
Le Thi Thu Thuy
Vice-chairwoman
Nguyen Dieu Linh
Vice-chairwoman
Vu Tuyet Hang
Vice-chairwoman
Nguyen Trong Hien
Member
Ling Chung Yee Roy
Member
Mai Huong Noi
Member
AUDITORS
The auditor of the Company is Ernst & Young Vietnam Limited.
Appointed on 10 August 2012
BOARD OF SUPERVISION
Members of the Board of Supervision during the year and at the date of this report are:
Nguyen The Anh
Head of Board of Supervision
Reappointed on 25 April 2012
Dinh Ngoc Lan
Member
Do Thi Hong Van
Member
Hoang Thuy Mai
Member
Nguyen Thi Van Trinh
Member
68 UNDER VIETNAMESE ACCOUNTING STANDARDS (VAS)
69
REPORT OF MANAGEMENT
Management of Vingroup Joint Stock Company (“the Company”) is pleased to present its report and the consolidated financial
statements of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2012.
MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS
The management is responsible for the consolidated financial statements of each financial year which give a true and fair view
of the consolidated state of affairs of the Group and of the Group’s consolidated results and consolidated cash flows for the year.
In preparing those consolidated financial statements, management is required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the consolidated financial statements; and
prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group
will continue its business.
Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at
any time, the consolidated financial position of the Group and to ensure that the accounting records comply with the applied
accounting system. It is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Management confirmed that it has complied with the above requirements in preparing the accompanying consolidated financial
statements for the year ended 31 December 2012.
INDEPENDENT AUDITORS’ REPORT
To: The Shareholders of Vingroup Joint Stock Company
We have audited the consolidated financial statements of Vingroup Joint Stock Compnay (“the Company”) and its subsidiaries
(collectively referred to as the “Group”) as set out on pages 5 to 86 which comprise the consolidated balance sheet as at 31
December 2012, the consolidated income statement and the consolidated cash flow statement for the year then ended and the
notes thereto.
The preparation and presentation of these consolidated financial statements are the responsibility of the management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audit.
Basis of opinion
We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit
provides a reasonable basis for our opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group
as at 31 December 2012, and of the consolidated results of its operations and its consolidated cash flows for the year then ended
in accordance with the Vietnamese Accounting Standards and System and comply with the relevant statutory requirements.
STATEMENT BY MANAGEMENT
Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair view
of the consolidated financial position of the Group as at 31 December 2012 and of the consolidated results of its operations and
its consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and
comply with the relevant statutory requirements.
For and on behalf of management:
Ernst & Young Vietnam Limited
Le Thi Thu Thuy
General Director
Bui Anh Tuan
Certificate No. N.1067/KTV
Trinh Xuan Hoa
Auditor
Certificate No. 0754/KTV
Hanoi, Vietnam
Hanoi, Vietnam
1 March 2013
1 March 2013
71
CONSOLIDATED BALANCE SHEET
as at 31 December 2012
Currency: Vietnam dong
CODE
ASSETS
NOTES
ENDING BALANCE
BEGINNING BALANCE
100
110
111
112
A. CURRENT ASSETS
I. Cash and cash equivalents
1. Cash
2. Cash equivalents
28,796,286,198,535
1,616,855,174,935
199,602,965,155
1,417,252,209,780
20,039,498,304,151
1,231,728,589,840
656,243,958,622
575,484,631,218
120
121
129
II. Short-term investments
1. Short-term investments
2. Provision for short-term investments
3,864,844,010,638
3,884,414,354,916
(19,570,344,278)
4,174,887,714,583
4,195,988,849,590
(21,101,135,007)
130
131
132
135
139
III Current accounts receivable
1. Trade receivables
2. Advances to suppliers
3. Other receivables
4. Provision for doubtful debts
3,809,236,408,686
1,226,873,098,007
2,106,084,921,176
488,614,532,023
(12,336,142,520)
5,135,497,476,935
1,096,924,061,390
2,041,076,551,154
1,999,876,495,659
(2,379,631,268)
140
141
149
IV. Inventories
1. Inventories
2. Provision for decline in value of inventories
17,784,890,526,442
17,794,010,357,437
(9,119,830,995)
9,282,402,573,172
9,295,702,390,616
(13,299,817,444)
150
151
152
154
158
V. Other current assets
1. Short-term prepaid expenses
2. Value-added tax deductible
3. Tax and other receivables from the State
4. Other current assets
1,720,460,077,834
39,627,501,766
234,961,212,193
5,241,073,421
1,440,630,290,454
214,981,949,621
42,081,292,302
149,110,589,727
2,025,026,959
21,765,040,633
200
220
221
222
223
227
228
229
230
B. NON-CURRENT ASSETS
I. Fixed assets
1. Tangible fixed assets
Cost
Accumulated depreciation
2. Intangible fixed assets
Cost
Accumulated amortisation
3. Construction in progress
27,028,589,606,141
10,748,359,371,487
4,550,753,937,051
5,321,617,094,523
(770,863,157,472)
579,850,048,763
638,289,648,823
(58,439,600,060)
5,617,755,385,673
15,473,136,819,333
6,508,942,834,720
1,772,577,005,816
1,799,883,929,788
(27,306,923,972)
169,407,501,624
195,651,739,147
(26,244,237,523)
4,566,958,327,280
240
241
242
II. Investment properties
1. Cost
2. Accumulated depreciation
15
6,643,474,111,936
6,959,670,305,956
(316,196,194,020)
3,960,676,144,502
4,181,585,332,122
(220,909,187,620)
250
252
258
259
III. Long-term investments
1. Investments in associates
2. Other long-term investments
3. Provision for long-term investments
17
3,163,564,921,117
1,612,499,800,170
1,551,065,120,947
-
2,069,242,276,169
868,978,280,751
1,200,263,995,418
-
260
261
262
268
IV. Other long-term assets
1. Long-term prepaid expenses
2. Deferred tax assets
3. Other long-term assets
18
35.2
1,150,141,062,636
1,104,994,130,073
45,141,892,563
5,040,000
669,453,466,072
650,698,913,075
8,237,287,997
10,517,265,000
269
V. Goodwill
19
5,323,050,138,965
2,264,822,097,870
270
TOTAL ASSETS
55,824,875,804,676
35,512,635,123,484
5
6
7
8
9
10
11
12
13
14
CODE
RESOURCES
300
310
311
312
313
A. LIABILITIES
I. Current liabilities
1. Short-term loans and borrowings
2. Trade payables
3. Advances from customers
- Downpayment from customers for purchase
of residential properties
- Advances from other customers
4. Statutory obligations
5. Payables to employees
6 Accrued expenses
- Accrued bond and loan interests
- Accrual for construction costs
- Other accrued expenses
7. Other payables
- Downpayment from customers under loan agreements
- Other payables
314
315
316
319
NOTES
330
333
334
335
II. Non-current liabilities
1. Other long-term liabilities
2. Long-term loans and debts
3. Deferred tax liabilities
400
B. OWNERS’ EQUITY
410
411
412
414
418
420
I. Capital
1. Share capital
2. Share premium
3. Treasury shares
4. Financial reserve fund
5. Undistributed earnings
439
C. MINORITY INTERESTS
440
TOTAL LIABILITIES AND OWNERS’ EQUITY
20
21
22
23
24
25
26
35.2
27.1
27.1
27.1
27.4
27.1
27.1
28
ENDING BALANCE
BEGINNING BALANCE
44,951,244,544,495
25,644,122,141,113
3,066,159,014,913
1,704,259,748,134
17,800,274,073,366
17,688,105,060,951
27,260,458,138,945
21,630,198,244,261
4,625,302,442,156
538,965,024,625
12,044,721,660,330
12,029,175,654,585
112,169,012,415
306,493,773,895
30,759,366,050
1,695,346,182,076
856,659,033,476
766,430,547,605
72,256,600,995
1,040,829,982,679
762,562,552,450
278,267,430,229
15,546,005,745
309,186,664,447
29,405,109,761
1,873,523,133,596
568,864,039,182
1,248,285,918,261
56,373,176,153
2,209,094,209,346
1,478,811,373,801
730,282,835,545
19,307,122,403,382
441,757,284,418
18,762,506,644,958
102,858,474,006
5,630,259,894,684
200,266,208,059
5,408,778,229,684
21,215,456,941
10,556,569,188,706
6,501,237,900,575
10,556,569,188,706
7,004,620,550,000
3,974,286,534,624
(1,397,646,730,489)
12,845,114,930
962,463,719,641
6,501,237,900,575
3,911,498,930,000
2,395,153,738,480
(720,199,415,988)
7,845,114,930
906,939,533,153
317,062,071,475
1,750,939,083,964
55,824,875,804,676
35,512,635,123,484
ENDING BALANCE
BEGINNING BALANCE
1,424,392
3,600
159,000
470
67,682
106
-
OFF BALANCE SHEET ITEMS
ITEMS
Foreign currencies
- United States dollar (US$)
- Euro (EUR)
- Japanese Yen (JPY)
- Australian dollar (AUD)
Ngo Nguyet Hang
Preparer
Nguyen Thi Thu Hien
Chief Accountant
Le Thi Thu Thuy
General Director
1 March 2013
73
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2012
for the year ended 31 December 2012
CODE
ITEMS
01
NOTES
CURRENT YEAR
PREVIOUS YEAR
1. Revenue from sale of goods and rendering of services
29.1
7,908,016,426,443
2,313,739,781,730
02
2. Deductions
29.1
(3,543,577,371)
-
01
10
3. Net revenue from sale of goods and rendering
of services
29.1
7,904,472,849,072
2,313,739,781,730
11
4. Cost of goods sold and services rendered
(4,092,056,174,334)
(1,306,236,537,557)
20
5. Gross profit from sale of goods and rendering of services
3,812,416,674,738
1,007,503,244,173
02
03
04
05
05
21
6. Finance income
1,178,267,763,042
1,687,365,816,306
22
23
7. Finance expenses
- In which: Interest expense
(1,241,485,700,398)
(1,097,254,164,113)
(904,700,560,196)
(807,484,484,862)
24
8. Selling expenses
(204,739,744,706)
(100,146,853,126)
25
9. General and administrative expenses
(980,959,525,269)
(444,155,874,833)
30
10. Operating profit
2,563,499,467,407
1,245,865,772,324
31
11. Other income
33
114,330,587,641
130,414,885,097
32
12. Other expenses
33
(40,209,407,607)
(101,520,550,542)
40
13. Other profit
74,121,180,034
28,894,334,555
45
14. Shares in profit of associates
17,442,478,522
196,711,339,694
50
15. Profit before tax
2,655,063,125,963
1,471,471,446,573
51
16. Current corporate income tax expenses
35.1
(841,200,729,285)
(387,964,312,769)
52
17. Deferred income tax income/(expenses)
35.2
32,805,527,847
(9,946,935,040)
60
18. Net profit after tax
Attributable to
18.1. Minority interests
18.2. Equity holders of the parent
1,846,667,924,525
1,073,560,198,764
275,356,238,037
1,571,311,686,488
252,274,322,805
821,285,875,959
1,819
1,752
1,137
1,137
61
62
80
29.2
32
17.1, 30
19. Earnings per share
- Basic
- Diluted
Ngo Nguyet Hang
Preparer
31
28
27.1
37
Nguyen Thi Thu Hien
Chief Accountant
CODE
ITEMS
NOTES
CURRENT YEAR
PREVIOUS YEAR
2,655,063,125,963
1,471,471,446,573
473,956,758,653
4,065,415,576
(3,763,603,143)
(1,915,923,059)
(393,757,169,880)
127,845,062,118
12,221,478,840
26,908,645,760
5,404,084,760
(872,623,487,485)
(17,442,478,522)
(753,816,756,152)
1,097,254,164,113
-
(196,711,339,694)
(785,058,983,719)
807,484,484,862
(11,546,465,640)
426,042,633,583
71,472,052,144
3,485,686,167,132
(349,157,912,285)
(7,010,548,606,730)
4,198,969,712,254
(146,267,807,240)
(2,341,608,899,245)
(898,948,679,962)
10,512,225,001
656,866,978,519
962,424,433,108
(4,364,830,317,207)
8,678,060,560,809
(381,406,532,855)
(1,192,631,581,884)
(1,030,085,134,846)
(30,187,169,243)
(3,051,363,801,075)
3,298,211,236,401
(2,921,880,550,078)
(1,466,116,187,077)
22
23
23
24
24
25
25
26
26
27
Purchase, construction of fixed assets and other
long-term assets
Proceeds from disposals of fixed assets
Disbursement of loans
Short-term deposits
Collection of loans
Withdrawal of short-term deposits
Acquisition of additional shares in subsidiaries
Payments for equity investments in other entities
Proceeds from disposals of subsidiaries, net of cash disposed
Proceeds from disposals of equity investments in other entities
Interest and dividend received
Cash balance of Vinpearl JSC and its subsidiaries as at
merger date
948,248,820,753
(1,550,000,000,000)
(3,357,448,555,556)
3,114,080,252,864
2,170,970,555,556
(5,009,116,876,000)
(1,237,044,601,500)
798,153,571,786
1,949,485,000,000
868,351,572,675
22,227,863,252
207,235,846,450
(700,000,000,000)
(1,033,825,000,000)
1,106,419,943,518
800,000,000,000
(3,197,651,000,000)
(316,359,158,903)
1,246,756,815,786
1,099,481,278,073
861,951,861,434
-
30
Net cash flows used in investing activities
(4,203,972,946,248)
(1,392,105,600,719)
I. CASH FLOWS FROM OPERATING ACTIVITIES
05
05
06
Profit before tax
Adjustments for:
Depreciation and amortisation
Changes in provisions
Unrealised foreign exchange (gain)/loss
(Gain)/loss on disposal of fixed assets
Gain from disposal of equity investments in other
entities
Share in profit of associates
Interest and dividend income
Interest expenses
Negative goodwill due to acquisition of additional
shares in subsidiaries
Goodwill amortization
08
09
10
11
12
13
14
15
Operating profit before changes in working capital
(Increase)/decrease in receivables
(Increase) in inventories
Increase in payables
Increase in prepaid expenses
Interest paid
Corporate income tax paid
Other cash inflows/(outflows) from operating activities
20
Net cash flows (used in)/from operating activities
12,13,15
29.2, 32
33
29.2
30
29.2
32
19
35.1
II. CASH FLOWS FROM INVESTING ACTIVITIES
21
Le Thi Thu Thuy
General Director
1 March 2013
75
CONSOLIDATED CASH FLOW STATEMENT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2012
CODE
ITEMS
NOTES
CURRENT YEAR
PREVIOUS YEAR
282,413,000,000
1,133,344,359,000
13,708,303,304,616
(7,412,562,003,299)
(71,035,327,899)
274,487,652,842
2,868,261,067,533
(3,186,066,741,944)
(2,146,068,000,765)
7,640,463,332,418
(2,189,386,022,334)
385,126,585,095
(283,280,386,652)
1,231,728,589,840
1,515,008,976,492
1,616,855,174,935
1,231,728,589,840
III. CASH FLOWS FROM FINANCING ACTIVITIES
31
33
33
34
35
Capital contribution from minority interest
Proceeds from re-issue of treasury shares
Proceeds from bond issue and drawndown of borrowings
Repayment of borrowings
Dividends paid to equity holders of the parent
40
Net cash flows from/(used in) financing activities
50
Net increase/(decrease) in cash and cash equivalents
60
Cash and cash equivalents at the beginning of the year
70
Cash and cash equivalents at the end of the year
28
5
1. CORPORATE INFORMATION
Vingroup Joint Stock Company (“the Company”), previously known as Vincom Joint Stock Company, is a joint stock company
established in Vietnam in accordance with the Business Registration Certificate No. 0103001016 issued by the Hanoi Department of Planning and Investment on 3 May 2002 and the Business Registration Certificate No. 0101245486 re-issued on 12 May
2010. In accordance with the 39th amended Business Registration Certificate dated 12 April 2012, the Company changed its
name to Vingroup Joint Stock Company. The Company also subsequently received the 43rd amended Business Registration
Certificate dated 5 February 2013.
The Company’s shares were officially listed on the Ho Chi Minh City Stock Exchange (“HOSE”) from 19 September 2007 in
pursuant to Decision No.106/QD-TTGDHCM issued by the Director of HOSE on 7 September 2007.
The principal activities of the Company are to construct and provide retail outlets, commercial offices for lease, residential units
for lease and for sale, to provide entertainment services, to carry out investment activities and to conduct other businesses as
stipulated in its business registration certificate.
The Company’s head office is registered at No. 7, Bang Lang 1, Vincom Village, Viet Hung Ward, Long Bien District, Hanoi,
Vietnam. The Company’s business address is at No. 191, Ba Trieu Street, Hai Ba Trung District, Hanoi, Vietnam. Its branch is
located at No. 72, Le Thanh Ton and No. 45A, Ly Tu Trong, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam.
Corporate structure
As at 31 December 2012, the Company has 22 subsidiaries. The information on these subsidiaries, along with the Company’s
voting rights and equity interest in each subsidiary are as follows:
NO. NAME
Ngo Nguyet Hang
Preparer
Nguyen Thi Thu Hien
Chief Accountant
Le Thi Thu Thuy
General Director
EQUITY
REGISTERED
INTEREST (%) OFFICE’S ADDRESS
PRINCIPAL ACTIVITIES
1
PFV Investment and Trading
Joint Stock Company
97.34
97.34
191 Ba Trieu Street, Le Dai
Hanh Ward, Hai Ba Trung
District, Hanoi
Investing, developing and
trading real estate
properties
2
Hai Phong Land
Development and Investment
Joint Stock Company
90.00
88.91
4 Le Thanh Tong Street,
May To Ward, Ngo Quyen
District, Hai Phong
trading real estate
properties
3
Royal City Real Estate
Development & Investment
Joint Stock Company
98.36
98.36
72a Nguyen Trai, Thuong
Dinh Ward, Thanh Xuan
District, Hanoi
trading real estate
properties
4
Sai Dong Urban
Development & Investment
Joint Stock Company
79.00
79.00
No. 7, Bang Lang 1, Vincom
Village, Viet Hung Ward,
Long Bien District, Hanoi
trading real estate
properties
5
Hanoi Southern City
Development JSC
97.90
88.47
No. 458, Minh Khai Street,
Vinh Tuy Ward, Hai Ba
Trung District, Hanoi
trading real estate
properties
Provide hospital services
6
Ho Tay Real Estate
Development and Investment
Joint Stock Company
70.00
70.00
No. 69b Thuy Khue Street,
Tay Ho District, Hanoi
trading real estate
properties
7
Viet Thanh - Sai Dong
Company Limited
73.51
58.08
No. 13, Hai Ba Trung Street,
Trang Tien Ward,
Hoan Kiem District, Hanoi
trading real estate
properties
8
Vinpearl One-member Limited
Liability Company
100.00
100.00
Hon Tre Island, Vinh
Nguyen Ward, Nha Trang
City, Khanh Hoa Province
trading hospitality services
1 March 2013
VOTING
RIGHT (%)
77
VOTING
RIGHT (%)
EQUITY
REGISTERED
INTEREST (%) OFFICE’S ADDRESS
NO.
NAME
9
Tay Tang Long Real Estate
Company Limited
59.00
58.73
No. 72, Le Thanh Ton, Ben
Nghe Ward, District 1, Ho
Chi Minh
trading real estate
properties
10
Hon Mot Tourism JSC
83.64
83.64
trading hospitality
services
11
Vinpearl Da Nang
One-member Limited Liability
Company
100.00
100.00
Hoa Hai Ward, Ngu Hanh
Son District, Da Nang City,
Vietnam
trading hospitality
services
12
Vinpearl Hoi An One-member
Limited Liability Company
100.00
100.00
Phuoc Hai Block, Cua Dai
Ward, Hoi An City, Quang
Nam Province
trading hospitality
services
13
Vincharm Development and
Services One-member Limited
Liability Company
100.00
100.00
District, Hanoi
Provide beauty caring
services
58 Tay Ho Street, Quang An
Ward, Tay Ho District, Hanoi
trading hospitality
services
Truong Sa Road, Hoa Hai
Ward, Ngu Hanh Son
District, Da Nang City
trading hospitality
services
70.00
70.00
Future Property Invest Limited
Company
100.00
100.00
16
Vincom Retail Limited
Company
100.00
96.32
District, Hanoi
trading real estate
properties
17
Bai Dai Tourism and
Investment Company JSC
90.00
90.00
trading hospitality
services
18
Cam Ranh Tourism and
Trading JSC
90.00
90.00
trading hospitality
services
Hon Tre Tourism and Services
JSC
90.00
trading hospitality
services
Chi Minh
trading real estate
properties
14
Tay Ho View Hotel and
Tourism Limited
15
19
90.00
100.00
Times Trading Investment and
Development
One-member Company
Limited
100.00
21
Future Investment and Trading
Services
One-member Limited Liability
Company
100.00
100.00
Chi Minh
trading real estate
properties
22
Vinmec International Hospital
Joint Stock Company
100.00
88.53
No. 458, Minh Khai Street,
Vinh Tuy Ward, Hai Ba
Trung District, Hanoi
Health care, medical and
related services
20
As at 31 December 2012, the Company also has investments in associates as presented in Note 17.1
2. BASIS OF PREPARATION
2.1 Accounting standards and system
The consolidated financial statements of the Company and its subsidiaries (the “Group”), which are expressed in Vietnam dong
(“VND”), are prepared in accordance with the Vietnamese Accounting System and Vietnamese Accounting Standards issued by
the Ministry of Finance as per:
Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards
on Accounting (Series 1);
Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards
Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards
Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on
Accounting (Series 4); and
No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on
Accounting (Series 5).
The accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and related
notes, including their utilisation are not designed for those who are not informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations and cash flows
in accordance with accounting principles and practices generally accepted in countries other than Vietnam.
For the purpose of preparing the consolidated balance sheet, the Group has also supplemented details of certain line items in
the balance sheet, i.e. “Advances from customers” (Code 313), “Accrued expenses” (Code 316) and “Other short-term payables”
(Code 319). The purpose of presenting these additional details in the consolidated balance sheet is to provide more relevant
information to the users of these consolidated financial statements. These changes were approved by the Ministry of Finance in
accordance with the Official Letter No. 5966/BTC/CDKT dated 4 May 2012 on supplementing details to the forms of the financial
statements.
2.2 Applied accounting documentation system
The Company’s applied accounting documentation system is the General Journal system.
2.3 Fiscal year
The Group’s fiscal year applicable for the preparation of its consolidated financial statements starts on 1 January and ends on
31 December.
2.4 Accounting currency
The consolidated financial statements are prepared in VND which is also the Company’s accounting currency.
2.5 Basis of consolidation
The consolidated financial statements comprise the financial statements of the parent company and its subsidiaries for the year
ended 31 December 2012.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continued
to be consolidated until the date that such control ceases.
The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent
accounting policies.
All intra-company balances, income and expenses and unrealised gains or losses result from intra-company transactions are
eliminated in full.
79
Minority interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the
consolidated income statement and within equity in the consolidated balance sheet, separately from parent shareholders’ equity.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Change in accounting policies and disclosures
The accounting policies adopted by the Group in the preparation of the consolidated financial statements are consistent with
those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2011.
3.1.1 Effects of Changes in Foreign Exchange Rates
For the year ended 31 December 2012, the Group adopts Circular 179/2012/TT-BTC providing guidance on recognition,
measurement, treatment for foreign exchange differences issued by the Ministry of Finance on 24 October 2012 (“Circular 179”)
in addition to Vietnamese Accounting Standard No. 10 - Effects of Changes in Foreign Exchange Rates (the “VAS 10”) adopted
in prior years.
Following Circular 179, at the end of the year, monetary assets and liabilities denominated in foreign currencies are translated
into VND using buying exchange rate announced by the commercial bank where the Group maintains bank accounts. In 2011,
inter-bank exchange rates ruling at the balance sheet date was used for this translation.
Circular 179 is applied from 2012 on prospective basis. Impacts of the change from using interbank exchange rate to buying
exchange rate announced by the commercial bank for the year end translation to the financial statement as at and for the year
ended 31 December 2012 are insignificant.
3.2 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and short-term, highly liquid investments with an original
maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant
risk of change in value.
3.3 Inventories
The perpetual method is used to record the costs of other inventories, in which construction materials are valued at the cost of
purchase, on a first in first out basis.
Provision for obsolete inventories
An inventories provision is created for the estimated loss arising due to the impairment of value (through diminution, damage,
obsolescence, etc.) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence
of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost
of goods sold account in the consolidated income statement.
3.4 Receivables
Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other
debtors, after provision for doubtful debts.
The provision for doubtful debts represents amounts of outstanding receivables at the balance sheet date which are doubtful of
being recovered. Increases and decreases to the provision balance are recorded as general and administrative expense in the
consolidated income statement.
3.5 Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation.
The cost of a tangible fixed asset comprises of its purchase price and any directly attributable costs of bringing the tangible fixed
asset to working condition for its intended use. Expenditures for additions, improvements and renewals are added to the carrying
amount of the assets and expenditures for maintenance and repairs are charged to the consolidated income statement as
incurred. When tangible fixed assets are sold or retired, their costs and accumulated depreciation are removed from the consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement.
3.6 Intangible fixed assets
Intangible fixed assets are stated at cost less accumulated amortisation.
Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital
appreciation, is held as inventory and is measured at the lower of cost and net realisable value.
The cost of an intangible fixed asset comprises of its purchase price and any directly attributable costs of preparing the intangible
fixed asset for its intended use. Expenditures for additions, improvements are added to the carrying amount of the assets and
other expenditures are charged to the consolidated income statement as incurred. When intangible fixed assets are sold or
retired, their costs and accumulated amortisation are removed from the consolidated balance sheet and any gain or loss resulting
from their disposal is included in the consolidated income statement.
Cost includes:
3.7 Depreciation and amortisation
Inventory property
Freehold and leasehold rights for land;
Amounts paid to contractors for construction; and
Borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfer
taxes, construction overheads and other related costs.
Net realisable value is the estimated selling price in the ordinary course of the business, based on market prices at the reporting
date and less costs to completion and the estimated costs of sale.
The cost of inventory recognised in profit or loss on disposal is determined with reference to the specific costs incurred on the
property sold and an allocation of any non-specific costs based on the relative size of the inventory property sold.
Other inventories
Inventories are carried at the lower of cost incurred in bringing each product to its present location and condition and net realisable value.
Depreciation and amortisation of tangible and intangible fixed assets are calculated on a straight-line basis over the estimated
useful life of each asset as follows:
Buildings and structures
Other structures
Machineries and equipment
Motor vehicles
Office equipment
Computer software
Copy rights
Land use rights with definite term
Land rental rights
Others
25 - 50 years
10 - 20 years
3 - 15 years
3 - 12 years
4 - 8 years
3 - 8 years
4 - 8 years
45 - 48 years
20 years
8 - 15 years
No amortisation is charged on land use rights with indefinite terms.
Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs to
complete and the estimated costs necessary to make the sale.
81
3.8 Investment properties
Property acquisitions and business combinations
Investment properties are stated at cost including transaction costs less accumulated depreciation.
The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether the acquisition
represents the acquisition of a business. The Group accounts for an acquisition as a business combination where an integrated
set of activities is acquired in addition to the property. More specifically, consideration is made of the extent to which significant
processes are acquired and, in particular, the extent of ancillary services provided by the subsidiary (e.g., maintenance, cleaning,
security, bookkeeping, hotel services, etc.). The significance of any process is judged with reference to the guidance in Vietnamese Accounting Standard No. 5 about ancillary services.
Subsequent expenditure relating to an investment property that has already been recognized is added to the net book value of
the investment property when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing investment property, will flow to the Group.
Depreciation and amortisation of investment properties are calculated on a straight-line basis over the estimated useful life of
each asset as follows:
Land use rights
Buildings
Others
46 - 48 years
30 - 47 years
8 - 15 years
When the acquisition of subsidiaries does not represent a business, it is accounted for as an acquisition of a group of assets and
liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and
no goodwill or deferred tax is recognised.
Changes in ownership interest in subsidiaries without loss of control
Land use rights presented as investment properties include definite land use rights granted to the Group for the development of
its investment properties. Such definite land use rights are amortised over the use term.
When the Company acquires a minority interest in an existing subsidiary, the difference between the consideration paid and the
carrying value of net assets acquired is presented as goodwill in the consolidated balance sheet.
Investment properties are derecognised when either they have been disposed of or when the investment properties are permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal
proceeds and the carrying amount of the assets is recognised in the consolidated income statement in the year of retirement or
disposal.
Where there is a partial disposal of ownership interest in an existing subsidiary without loss of control, a gain or loss is recognised
in the consolidated income statement at the difference of the consideration received and the carrying value of net assets
disposed.
Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owneroccupation, commencement of an operating lease to another party or ending of construction or development. Transfers are made
from investment properties when, and only when, there is change in use, evidenced by commencement of owner-occupation or
commencement of development with a view to sale. The transfer from investment property to owner-occupied property or inventories does not change the cost or the carrying value of the property for subsequent accounting at the date of change in use.
3.9 Borrowing costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing
costs are recorded as expense during the year in which they are incurred, except to the extent that they are capitalized as
explained in the following paragraph.
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily take a
substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset.
3.10 Prepaid expenses
Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated balance sheet and amortised
over the period for which the amount are paid or the period in which economic benefit are generated in relation to these
expenses.
Long-term prepaid expenses include prepaid land rental, bond issue costs and other long-term expenses that bring future
economic benefits for more than one year period.
3.11 Business combinations and goodwill
Business combinations involving entities or businesses under common control
Business combinations involving entities or businesses under common control are accounted for as follows:
The assets and liabilities of the two combined entities are reflected at their carrying amounts on the date of business
combination;
No goodwill is recognised from the business combination;
The consoldated income statement reflects the results of the combined entities from the date of the business combination; and
Any difference between the consideration paid and the net assets of the “acquiree” is recorded in equity.
3.12 Investment in associates
The Group’s investment in its associate is accounted for using the equity method of accounting. An associate is an entity in
which the Group has significant influence that is neither subsidiaries nor joint ventures. The Group generally deems they have
significant influence if they have over 20% of the voting rights.
Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post acquisition changes in the
Group’s share of net assets of the associates. Goodwill arising on acquisition of the associate is included in the carrying amount
of the investment and is amortized over 10-year period. The consolidated income statement reflects the share of the postacquisition results of operation of the associate.
The share of post-acquisition profit/(loss) of the associates is presented on face of the consolidated income statement and its
share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. Dividend/profit sharing received or receivable from associates reduces
the carrying amount of the investment.
Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the
fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs
directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business
combination are measured initially at fair values at the date of business combination.
The financial statements of the associates are prepared for the same reporting year as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost the business combination
over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost
of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized
directly in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortization. Good will is amortized over 10-year period on a straight-line basis.
Investments in securities and other investments are stated at their acquisition costs. Provision is made for any diminution in
value of the marketable investments at the balance sheet date representing the excess of the acquisition cost over the market
value at that date in accordance with the guidance under Circular 228/2009/TT-BTC issued by the Ministry of Finance on 7
December 2009. Increases and decreases to the provision balance are recorded as finance expense in the consolidated income
statement.
3.13 Investments in securities and other investments
83
3.14 Payables and accruals
Revenue from sale of inventory property
Payables and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed
to the Group. Payables to contractors are recorded based on interim work certificates between two parties, regardless of whether
or not billed to the Group.
Revenue from sale of inventory property is recognised when the significant risks and rewards of ownership of the properties have
passed to the buyer.
3.15 Accrual for severance pay
The severance pay to employee is accrued at the end of each reporting year for all employees who have more than 12 months
in service up to 31 December 2008 at the rate of one-half of the average monthly salary for each year of service up to 31 December 2008 in accordance with the Labour Code, the Law on Social Insurance and related implementing guidance. Commencing 1
January 2009, the average monthly salary used in this calculation will be revised at the end of each reporting year following the
average monthly salary of the 6-month period up to the reporting date. Any changes to the accrued amount will be taken to the
consolidated income statement.
This accrued severance pay is used to settle the termination allowance to be paid to employee upon termination of their labour
contract following Article 42 of the Labour Code.
Revenue from leasing of investment properties
Rental income arising from leased investment properties is accounted for on a straight line basis over the lease terms of ongoing
leases.
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually upon
the delivery of the goods.
Rendering of services
Revenue from hotel, amusement park, hospital and other relating services is recorded when the services are rendered.
3.16 Foreign currency transactions
Sale for golf membership card
The Group follows the guidance under VAS 10 in relation to foreign currency transactions as applied consistently in prior years.
In addition to VAS 10, starting from 2012, the Group adopts Circular 179 in relation to foreign currency transaction which impacts
are presented in Note 3.1.1.
Revenue from sale of golf course membership card is recorded into the consolidated income statement on a straight-line basis
during the term of membership.
Transactions in currencies other than the Group’s reporting currency of VND are recorded at the exchange rates ruling at the
date of the transaction. At the end of the year, monetary assets and liabilities denominated in foreign currencies are translated at
buying exchange rate announced by the commercial bank where the Group maintains bank accounts at the balance sheet date.
All realised and unrealised foreign exchange differences are taken to the consolidated income statement.
3.17 Treasury shares
Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss
is recognised in profit or loss upon purchase, sale, issue or cancellation of the Group’s own equity instruments.
3.18 Appropriation of net profits
Net profit after tax is available for appropriation to investors after approval in the annual general meeting, and after making appropriation to reserve funds in accordance with the Company’s Charter and Vietnam’s regulatory requirements.
The Group maintains the financial reserve fund which is appropriated from the Group’s net profit as proposed by the Board of
Directors and subject to approval by shareholders at the annual general meeting. Financial reserve fund set aside to protect the
Group's normal operations from business risks or losses, or to prepare for unforeseen losses or damages for objective reasons
and force majeure, such as fire, economic and financial turmoil of the country or elsewhere.
3.19 Customers’ deposits
Payments received from customers as deposits for the purchase of residential properties in the future that do not meet the conditions for revenue recognition, are recognized and presented as “Advances from customers” in the liability section of the consolidated balance sheet.
Payments received from customers under loan agreements are recognized and presented as “Other short-term payables” in the
liability section of the consolidated balance sheet.
3.20 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding trade discount,
rebate and sales return. The following specific recognition criteria must also be met before revenue is recognised:
Gains from securities trading/capital transfer
Gains from securities trading and capital transfer are determined as the excess of selling prices against the cost of securities
sold. Such gain is recognized on the trade date when the relevant contracts are executed.
Interest
Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.
Dividends
Income is recognised when the Group’s entitlement as an investor to receive the dividend is established.
3.21 Taxation
Current income tax
Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted as at
the consolidated balance sheet date.
Current income tax is charged or credited to the consolidated income statement, except when it relates to items recognised
directly to equity, in which case the current income tax is also dealt with in equity.
Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to set off current tax
assets against current tax liabilities and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred income tax
Deferred tax is provided using the liability method on temporary differences at the consolidated balance sheet date between the
tax base of assets and liabilities and their carrying amount for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the
related transaction affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporarily differences associated with investments in subsidiaries and associates, and interests in joint
ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
85
Deferred tax assets are recognised for all deductible temporary differences, carried forward unused tax credit and unused tax
losses, to the extent that it is probable that taxable profit will be available against which deductible temporary differences, carried
forward unused tax credit and unused tax losses can be utilised, except:
where the deferred tax asset in respect of deductible temporary difference which arises from the initial recognition of an asset
or liability which at the time of the related transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporarily differences associated with investments in subsidiaries, associates, and interests in joint
ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Previously unrecognised deferred income tax assets are re assessed at each balance sheet date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset
realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date.
Deferred tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to
equity, in which case the deferred tax is also dealt with in the equity account.
Deferred tax assets and liabilities are offset when there is a legally enforceable right for the Group to off-set current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority on:
either the same taxable entity;
or when the Group intends either settle current tax liabilities and assets on a net basis or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to
be settled or recovered.
3.22 Financial instruments
Financial instruments - subsequent re-measurement
There is currently no guidance in relation to subsequent re-measurement of financial instruments. Accordingly, financial
instruments are subsequently carried at cost.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance sheet if, and only if,
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or
to realise the assets and settle the liabilities simultaneously.
3.23 Convertible bond/ loan
Bonds/loans that are convertible by the holder into a fixed number of ordinary shares of the entity are separated into financial
liability (a contractual arrangement to deliver cash or another financial asset) and equity instrument (a call option granting the
holder the right, for a specified period of time) based on the terms of the contract. In cases where the numbers of ordinary shares
to be converted is not fixed, the entire convertible bonds are classified as a financial liability.
On issuance of the convertible bond/loan, the fair value of the liability component is determined using a market rate for an equivalent
non-convertible bond/loan. This amount is classified as a financial liability measured at amortised cost (net of transaction costs)
until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is
recognised and included in shareholders’ equity. Transaction costs are deducted from equity, net of associated income tax. The
carrying amount of the conversion option is not re-measured in subsequent years.
Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation
of proceeds to the liability and equity components when the instruments are initially recognised.
In 2012, the Group issued US$300 million convertible bonds with a term of 5 years and a US$25 million loan convertible into
ordinary shares of a subsidiary (to be formed in the future) with a term of 4 years. Management has assessed that there is no
equity component in these convertible bonds and convertible loan (since there is no known fixed number of shares to be
converted on issue date) and as a result, has recognized the entire convertible bonds and convertible loan as financial liabilities.
Financial instruments – initial recognition and presentation
Financial assets
Financial assets within the scope of Circular 210 are classified, for disclosures in the notes Financial assets within the scope of
Circular 210/2009/TT-BTC issued by the Ministry of Finance on 6 November 2011 guiding the application of the International
Accounting Standards on presentation of financial statements and disclosures of financial instruments (“Circular 210”), are
classified, for disclosures in the notes to the consolidated financial statements, as financial assets at fair value through profit or
loss, held-to-maturity investments, loans and receivables or available-for-sale financial assets as appropriate. The Group
determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at cost plus directly attributable transaction costs.
The Group’s financial assets include cash and short-term deposits, trade and other receivables, loan receivables, quoted and
unquoted financial instruments.
Financial liabilities
Financial liabilities within the scope of Circular 210 are classified, for disclosures in the notes to the consolidated financial
statements, as financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost as appropriate.
The Group determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at cost plus directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, corporate bonds, convertible bonds, convertible loans, loans
and borrowings.
4. BUSINESS COMBINATIONS
Merger with Vinpearl Joint Stock Company (“Vinpearl”)
Vinpearl Joint Stock Company was previously a limited liability company operating under the name Hon Tre Tourism and Trading
Limited Liability Company. On 26 July 2006, this company was transformed into a joint stock company under the name Vinpearl
Tourism and Trading Joint Stock Company in accordance with the Business Registration Certificate No. 3703000217 issued by
the Khanh Hoa’s Department of Planning and Investment. On 8 May 2009, this company changed its name into Vinpearlland
Tourism Joint Stock Company in accordance with the Amended Business Registration Certificate and Tax Registration No.
4200456848. Subsequently, it received 14th Amended Business Registration Certificate dated 28 June 2010 to change its name
into Vinpearl Joint Stock Company.
Vinpearl’s principal activities are to develop and operate a complex of five-star hotels, resorts, golf court, tourist villages and
amusement parks in Hon Tre sland, Nha Trang City, Khanh Hoa Province, Vietnam and to provide related tourism, transportation
and entertainment services. Vinpearl is also engaged in trading of investment properties and real estates, provision of civil and
industrial construction services, and in financial investment activities. Vinpearl’s head office is located in Hon Tre Island, Vinh
Nguyen Ward, Nha Trang City, Khanh Hoa Province, Vietnam.
On 14 and 15 November 2011, the General Shareholders of Vincom Joint Stock Company (previous name of Vingroup Joint
Stock Company) and Vinpearl Joint Stock Company have approved the merger between two companies. In accordance with the
Merger Contract dated 19 December 2011, the two companies agreed on the merger plan in which Vincom JSC would issue new
ordinary shares to swap with all 205,498,489 existing Vinpearl shares, at the swap rate of 1 Vinpearl share for 0.77 Vincom
share. Upon the completion of the merger process, Vinpearl Joint Stock Company would be transformed into an one-member
limited company.
On 17 January 2012, the merger had been completed and Vinpearl received a new Business Registration Certificate to change
its legal form to an one-member limited liability company, under the name Vinpearl One-member Limited Liability Company,
owned by Vincom Joint Stock Company.
87
The Group’s management has assessed that this is a business combination involving two entities under common control and
therefore, has elected to use the pooling of interest method in accounting for this transaction. The effects are as follows:
Assets and liabilities of Vinpearl and its subsidiaries were consolidated at their carrying values on the date of business
combination;
The difference between market price and face value of Vincom shares was recorded as an increase to “Share premium“ in equity;
The difference between total consideration transferred and the net assets acquired was charged to “Shares premium“;
No goodwill is recognised from the business combination;
The consolidated income statement reflected the results of Vinpearl and its subsidiaries from the date of business combination.
5. CASH AND CASH EQUIVALENTS
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
Cash on hand
Cash in banks
Cash equivalents
4,295,667,308
195,307,297,847
1,417,252,209,780
2,970,504,259
653,273,454,363
575,484,631,218
TOTAL
1,616,855,174,935
1,231,728,589,840
Moreover, as presented in Note 17.1, the merger has indirectly turned Green City Development JSC, previously an associate of
both the Group and Vinpearl JSC, into a subsidiary of the Group with 74% equity interest.
Cash equivalents include term deposit in Vietnam dong with term of 1 week to 3 months and earn interest rates from of 2% to
9% per annum (31 December 2011: term deposit in Vietnam dong with term of 1 week to 1 month and earn interest rates from
of 6% to 14% per annum).
Acquisition of additional interest in Sai Dong Urban Development & Investment Joint Stock Company (“Sai Dong
Land“), an existing subsidiary
6. SHORT-TERM INVESTMENTS
During the year, the Group acquired an additional 18% equity interest in Sai Dong Land, an existing subsidiary, and thereby,
increasing its equity interest in this subsidiary to 79%. Concurrentlly, this transaction also increased the Group’s equity interest,
indirectly through Sai Dong, in other existing subsidiaries as follows:
Hanoi South, from 80.39% to 88.47%;
Vincom Retail Limited Company (“Vincom Retail”), from 91.42% to 94.02%; and
Viet Thanh - Sai Dong, from 44.84% to 58.08%.
Total consideration for this acquisition was VND1,674,708,300,000. The carrying value of the additional net assets of Sai Dong
Land, Hanoi South, Vincom Retail and Viet Thanh - Sai Dong acquired was VND350,056,085,513. The difference of
VND1,324,652,214,487 between the consideration paid and the additional net assets acquired was recognised as goodwill on
the consolidated balance sheet.
Acquisition of additional equity interest in Hanoi Southern City Development JSC (“Hanoi South“), an existing subsidiary
During the year, the Group has made a step-up acquisition in Hanoi South by acquiring an additional 31.57% equity interest in
this subsidiary through Sai Dong, another subsidiary. This step-up acquisition increased the Group’s voting right in Hanoi South
to 97.9%. Total cash consideration for this acquisition was VND3,161,735,500,000, in which the Group’s share was
VND1,928,658,655,000. The carrying value of the additional net assets acquired was VND381,529,910,896. The difference of
VND1,547,128,744,105 between the consideration paid and the additional net assets acquired was recognised as goodwill on
the consolidated balance sheet.
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
Loans to related parties (Note 36)
Short-term financial investment under trust investment contract (i)
Loans to other (ii)
Reclassification from other long-term loans (Note 17.2)
Short-term deposit (iii)
Short-term investments in securities (iv)
10,937,569,375
300,000,000,000
234,499,225,349
170,086,023,192
3,136,522,425,000
32,369,112,000
50,000,000,000
700,000,000,000
638,557,330,809
119,140,943,009
1,833,825,000,000
854,465,575,772
Total short-term investments
Provision for decline in value of short-term investments (v)
3,884,414,354,916
(19,570,344,278)
4,195,988,849,590
(21,101,135,007)
3,864,844,010,638
4,174,887,714,583
(i) Represents trust investment contract with a term of 3 months in which the Group will receive a fixed rate of return at 14% per
annum of the total contract value. This trust investment contract is not secured;
(ii) Represent three loans to individuals and corporate entities with interest rates ranging from 12% per annum to 18% per
annum. Two of these loans are not secured, and the remaining loan has collateral asset;
(iii) Represents deposits at banks and other financial institutions with interest rates ranging from 7.8% to 14% per annum;
Acquisition of additional interest in PFV Investment and Trading Joint Stock Company (“PFV“), an existing subsidiary
(vi) Represents the investment in shares of PetroVietnam Fertilizer and Chemicals Corporation (“DPM”); and
During the year, the Group acquired an additional 22.93% equity interest in PFV, an existing subsidiary, and thereby, increasing
its equity interest in this subsidiary to 97.34%. Concurrentlly, this transaction also increased the Group’s equity interest, indirectly
through PFV, in other existing subsidiaries as follows:
(v) The provision for short-term investment was made in accordance with the guidance under Circular 228/2009/TT-BTC issued
by the Ministry of Finance on 7 December 2009.
Hai Phong Land Development and Investment Joint Stock Company (“Hai Phong Land”), from 79.51% to 88.91%;
Vincom Retail, from 94.02% to 96.32%; and
7. TRADE RECEIVABLES
ENDING BALANCE
BEGINNING BALANCE
Receivables from transfer of inventory properties
Receivables from leasing properties and provision of related services
Receivables from rendering hotel and related services
Receivables from providing hospital and related services
1,058,654,410,189
106,803,408,049
25,752,653,113
35,662,626,656
1,026,679,316,473
70,244,744,917
-
TOTAL
1,226,873,098,007
1,096,924,061,390
In which:
Trade receivables
Receivables from related parties (Note 36)
1,167,506,819,443
59,366,278,564
258,724,061,390
838,200,000,000
Tay Tang Long Real Estate Company Limited (“Tay Tang Long”), from 56.44% to 58.73%.
Total consideration for this acquisition was VND565,570,474,049. The carrying value of the additional net assets of PFV, Hai
Phong Land, Vincom Retail and Tay Tang Long acquired was VND166,801,348,329. The difference of VND398,769,125,720
between the consideration paid and the additional net assets acquired was recognised as goodwill on the consolidated balance
sheet.
Changes in equity interest in Green City Development JSC (“Green City”), a former subsidiary
On 29 June 2012, the Group has disposed 40% equity interest in Green City, a former subsidiary, and thereby, reducing its equity
interest in this company to 34%. This company became an associate to the Group.
Currency: VND
89
Receivables from sales of inventory properties as at 31 December 2012 mainly include receivable from the transfer of land use
right and infrastructures of the villa component at Vincom Village project, the transfer of villas at Vinpearl Da Nang Luxury project,
and the transfer a part of a retail component at Vincom Center A Ho Chi Minh City.
8. OTHER RECEIVABLES
Currency: VND
ENDING BALANCE
Receivables from disposals of equity investment
Interest receivables
Receivables from disposal of Nguyen Cong Tru project
Receivables from Hanoi Electronics (i)
BEGINNING BALANCE
-
1,649,485,000,000
102,568,670,036
232,717,060,018
18,632,219,545
18,923,474,012
205,200,000,000
-
-
89,961,451,246
Others (ii)
162,213,642,442
8,789,510,383
TOTAL
488,614,532,023
1,999,876,495,659
Other receivables
260,891,664,067
1,878,624,371,075
Other receivables from related parties (Note 36)
227,722,867,956
121,252,124,584
Dividend receivable
In which:
(i) Represents an dividend advance made to Hanoi Electronics, a major shareholder of Sai Dong Land, a subsidiary of the
Company.
(i) Completed inventory properties represent costs of residential apartment units at Vincom Center B Ho Chi Minh City, costs of
other apartments units acquired for re-sale in Ho Chi Minh City and land use right and assets on land acquired for resale at
the An Vien Project.
(ii) Inventory properties under construction represent costs of infrastructures of villa area for sale at Vincom Village, costs of
residential apartment units at Royal City, Times City projects; costs of villas at the Vinpearl Hoi An hotel and resort project,
at the Vinpearl Danang Luxury, at the Vinpearl Nha Trang Golf villas project and at the Square villas project in Nha Trang,
Vietnam. These projects are still under development as at 31 December 2012.
(iii) Raw materials for construction mainly comprise of metal, steel and other construction materials purchased and stored for the
construction of the Group’s real estate projects.
(iv) Provision for inventories represent the difference between the net realisable value of apartment units acquired for re-sale in
Hochiminh city and its costs as at 31 December 2012.
Note 26 provides additional details on completed inventory properties and inventory properties under construction which are
used as collaterals for loans and corporate bonds of the Group.
10. SHORT-TERM PREPAID EXPENSES
Currency: VND
ENDING BALANCE
Bond issue costs
10,547,134,431
-
Others
29,080,367,335
25,158,931,468
39,627,501,766
42,081,292,302
11. OTHER CURRENT ASSETS
Currency: VND
ENDING BALANCE
Completed inventory properties (i)
BEGINNING BALANCE
80,784,074,276
99,035,611,908
17,638,940,436,641
9,179,144,455,054
Raw materials for construction (iii)
55,341,303,762
17,294,991,666
Merchandise goods for hospital
12,182,647,361
-
Inventory properties under construction (ii)
Merchandise goods for hotel and spa
2,942,118,360
-
Tools and supplies
3,517,484,300
227,331,988
302,292,737
-
17,794,010,357,437
9,295,702,390,616
(9,119,830,995)
(13,299,817,444)
17,784,890,526,442
9,282,402,573,172
Goods in transit
Provision for decline in value of inventories (iv)
TOTAL
16,922,360,834
Tools and equipments
(ii) Include an advance of VND129 billion to a counterparty in accordance with the share purchase agreement dated 15 August 2012.
This agreement was subsequently cancelled according to the agreement signed between two parties on 26 November 2012.
9. INVENTORIES
BEGINNING BALANCE
Currency: VND
ENDING BALANCE
Advances to employees
Short-term deposits (i)
BEGINNING BALANCE
2,990,304,254
4,724,347,426
1,437,639,986,200
17,040,693,207
1,440,630,290,454
21,765,040,633
(i) Short-term deposits include an escrow amount of US$60 million deposited at Credit Suisse AG, Singapore Branch. This
deposit is an integral part of the Investor Subscription Agreement signed between the Company and Credit Suisse AG,
Singapore Branch on 3 July 2012 in relation to the issue of US$115 million 5 percent convertible bond due 2017. This deposit
is used as a security for Credit Suisse for certain equity swap agreements that Credit Suisse has entered into with certain
bondholders for and on behalf of the Group. This deposit will fall due on 5 August 2013 and bears no interest.
91
(3,653,093,136)
(17,600,268,131)
(6,450,316,358)
(28,574,517,796)
(465,877,265)
(6,431,079,334)
(11,886,288,480)
5,627,837,704
2,768,723,078,238
1,384,897,505,481
830,042,297,197
216,740,782,925
29,416,686,912
66,265,588,841
(1,279,609,994)
(224,067,533)
21,478,088,972
37,618,361,896
(1,503,677,527)
8,672,815,500
59,096,450,868
283,006,371,766
(1,549,103,151)
(3,126,000)
(13,322,883,126)
14,244,820,058
4,874,989,237
240,672,172,336
(1,552,229,151)
38,089,502,412
259,791,981,631
MOTOR
VEHICLES
49,117,941,366
19,766,329,612
36,885,078,443
(25,431,519)
(74,401,080)
14,964,830,199
9,819,642,390
(99,832,599)
12,200,438,453
24,784,472,589
86,003,019,809
(49,592,727)
(4,373,197,174)
(198,156,404)
36,419,428,001
5,684,487,719
16,354,320,653
198,961,676
(4,620,946,305)
31,966,768,065
22,237,770,048
OFFICE
EQUIPMENT
250,463,203,395
37,127,969,964
37,127,969,964
Ending balance
237,714,978,760
-
153,269,702,677
162,487,603,728
136,500,000,000
-
-
-
-
136,500,000,000
136,500,000,000
136,500,000,000
PROJECT
DEVELOPMENT
RIGHT (II)
522,706,583
-
1,554,754,287
1,386,807,454
167,946,833
1,554,754,287
2,077,460,870
1,547,102,470
530,358,400
2,077,460,870
COPYRIGHT
14,714,690,779
6,919,897,896
12,467,448,760
5,523,661,887
3,150,820,677
3,792,966,196
8,674,482,564
27,182,139,539
9,267,973,881
7,201,301,566
10,712,864,092
16,469,275,447
COMPUTER
SOFTWARE
131,274,629,041
57,661,998
45,181,554,052
(278,401,469)
18,650,815,880
26,698,097,514
(278,401,469)
111,042,127
45,348,913,394
176,456,183,093
(41,986,641)
(92,541,861)
(149,864,783)
2,167,379,398
3,185,690,654
171,218,802,201
(134,528,502)
168,704,125
176,571,872,253
OTHERS
579,850,048,763
169,407,501,624
58,439,600,060
19,469,293,788
12,726,068,749
26,244,237,523
32,195,362,537
638,289,648,823
10,815,076,351
431,822,833,325
195,651,739,147
442,637,909,676
TOTAL
Currency: VND
4,550,753,937,051
1,772,577,005,816
770,863,157,472
(2,029,986,407)
(2,189,244,913)
320,697,272,274
427,078,192,546
(4,219,231,320)
27,306,923,972
747,775,464,820
5,321,617,094,523
(5,759,652,920)
(28,404,544,639)
(18,630,429,103)
-
100,039,608,672
156,339,163,536
3,317,329,717,684
773,665,141
45,636,364
(52,794,626,662)
1,799,883,929,788
3,574,527,791,397
TOTAL
Currency: VND
See Note 26 for detail of intangible fixed asset which are used as collaterals for loans and corporate bonds of the Group.
(ii) Project development right represents the right to develop Hon Mot Tourism Project at Hon Mot Island, Vinh Nguyen Ward, Nha Trang City as approval by Khanh Hoa People
Committee in accordance to Official letter No 4526/UBND dated 27 August 2010.
(i) Land rental rights represent the right to lease a land area of 9,125m2 for a period of 30 years (from 1999 to 2029) of Hai Phong Land, a subsidiary.
37,127,969,964
-
Net carrying amount:
Beginning balance
Ending balance
-
Ending balance
31,669,172,378
9,217,901,051
-
3,340,923,396
9,407,301,239
-
12,748,224,635
22,451,271,327
9,217,901,051
12,748,224,635
-
184,938,875,055
-
184,938,875,055
LAND RENTAL
RIGHT (I)
Accumulated amortisation:
Beginning balance
Additions
In which:
Amotisation during the year
From merger with Vinpearl
250,463,203,395
250,463,203,395
37,127,969,964
DEFINITE LAND
USE RIGHTS
Cost:
Beginning balance
Increases
In which:
Newly purchased
INDEFINITE LAND
USE RIGHTS
13. INTANGIBLE FIXED ASSETS
See Note 26 for the details of tangible fixed asset which are used as collaterals for borrowings and corporate bonds of the Group.
Ending balance
893,294,030,097
Beginning balance
(724,944,894)
(849,872,401)
(762,502,430)
366,175,401,001
169,470,228,720
192,506,575,012
(1,574,817,295)
96,133,308,503
160,435,515,734
(762,502,430)
256,355,535,135
5,773,414,564
361,976,803,732
549,213,328
256,568,824,237
1,751,072,906,482
77,942,921,497
46,206,772,426
846,765,356,390
574,703,465
45,636,364
(27,703,677,625)
102,071,711,219
2,042,319,066,104
(18,783,245,079)
3,025,078,613,373
835,815,711,761
971,535,390,142
MACHINERIES &
EQUIPMENT
893,843,243,425
2,144,390,777,323
BUILDINGS &
STRUCTURES
Ending balance
Accumulated depreciation:
Beginning balance
Additions
In which:
Depreciation during the year
Decreases
In which:
Sold, disposed
Other reduction
Ending balance
Cost:
Beginning balance
Increases
In which:
Newly purchased
Newly constructed
Transfer from investment property
Other additions
Decreases
In which:
Sold, disposed
Reclassification to prepaid expenses
Other reduction
Reclassification
12. TANGIBLE FIXED ASSETS
93
14. CONSTRUCTION IN PROGRESS
15. INVESTMENT PROPERTIES
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
Vincom Center A Ho Chi Minh City project (i)
1,680,642,158,293
2,324,358,781,337
Royal City project (iii)
2,217,216,426,501
1,289,221,745,407
79,505,700,000
-
Times City project (ii)
Vincom Village project (iv)
Future Property Invest project (v)
Vinpearl Hoi An’s hotel and resort project (vi)
Ho Tay project
Vincom Hai Phong project
Tay Ho View project
Spa Area - Vinpearl Nha Trang
Dolphin show area - Vinpearl Nha Trang
Hon Mot project
Others
1,020,277,035,705
363,367,725,009
70,468,057,656
543,290,422,846
352,345,951,494
-
43,734,225,818
43,439,922,545
32,621,812,236
-
13,540,127,507
11,787,651,507
-
24,555,644,392
-
19,922,102,625
23,801,868,962
-
28,102,500,969
2,513,852,144
5,617,755,385,673
4,566,958,327,280
(i) Includes capital expenditures for hotel area of the Vincom Center A Ho Chi Minh City, which is a commercial centre, hotel
and underground car park complex located at the current Eden quadrant area (surrounded by Dong Khoi, Le Thanh Ton,
Nguyen Hue and Le Loi Street).
(ii) Includes capital expenditures for retails and supporting facilities of Times City project, which is an office, apartment and other
support facilities complex located at the 458 Minh Khai Street, Hai Ba Trung istrict, Hanoi. This project is developed by Hanoi
South, a subsidiary.
(iii) Includes capital expenditures for retails, entertainment areas and supporting facilities of Royal City project, which is an office,
apartment and other support facilities complex located at the 72A Nguyen Trai Street, Thanh Xuan istrict, Hanoi. This project
is developed by Royal City, a subsidiary.
(iv) Includes capital expenditures for hospital and supporting facilities of Vincom Village project, which is a complex of villas,
apartments and other support facilities located at Viet Hung, Phuc Loi, Giang Bien Ward, Long Bien District, Hanoi. This
project is developed by Sai Dong Land, a subsidiary.
(v) Includes initial capital expenditures for a project on Truong Sa road, Hoa Hai Ward, Ngu Hanh Son District, Da Nang City.
This project is developed by Future Property Invest, a subsidiary.
(vi) Includes capital expenditures for hotel component of Vinpearl Hoi An’s hotel and resort project at Phuoc Hai Ward, Cua Dai
District, Hoi An City, Quang Nam Province. This project is developed by Vinpearl Hoi An, a subsidiary.
See Note 26 for details of construction in progress which are used as collaterals for loans and corporate bonds of the Group.
Construction in progress for inventory properties is presented in Note 9.
Currency: VND
LAND USE
RIGHTS
BUILDINGS AND
STRUCTURES
MACHINERIES &
EQUIPMENT
TOTAL
2,635,088,134,327
1,755,000,245,396
330,194,204,822
90,594,265,242
4,181,585,332,122
2,939,569,194,706
116,048,180,914
1,612,853,752,632
882,985,292
84,943,369,288
116,931,166,206
2,791,771,805,988
20,316,776,882
5,781,534,968
(174,167,855,971)
(92,432,499,112)
2,615,311,150
2,152,599,512
174,167,855,971
(39,402,494,064)
22,932,088,032
7,934,134,480
(161,484,220,872)
(92,432,499,112)
-
(38,628,828,923)
(773,665,141)
(160,710,555,731)
(773,665,141)
2,280,628,449,345
4,123,488,024,640
555,553,831,971
6,959,670,305,956
36,741,551,213
23,181,010,244
88,043,333,515
58,437,500,772
96,124,302,892
55,829,276,422
220,909,187,620
137,447,787,438
23,181,010,244
(3,024,121,443)
56,047,198,133
2,390,302,639
(13,147,580,269)
54,561,984,214
1,267,292,208
(25,989,079,326)
133,790,192,591
3,657,594,847
(42,160,781,038)
(3,024,121,443)
(13,147,580,269)
(25,989,079,326)
(42,160,781,038)
56,898,440,014
133,333,254,018
125,964,499,988
316,196,194,020
Beginning balance
1,179,561,441,760
2,547,044,800,812
234,069,901,930
3,960,676,144,502
Ending balance
2,223,730,009,331
3,990,154,770,622
429,589,331,983
6,643,474,111,936
Cost:
Beginning balance
1,216,302,992,973
Additions
1,093,974,684,068
In which:
Newly constructed
Transferred from construction in
1,093,974,684,068
progress
From merger wtih Vinpearl
Other increases
Reclassification
Decreases
(29,649,227,696)
In which:
Disposed
(29,649,227,696)
Reclassified to tangible fixed assets
Ending balance
Accumulated depreciation:
Beginning balance
Additions
In which:
Amotisation during the year
Decreases
In which:
Disposed
Ending balance
Investment properties as at 31 December 2012 includes:
Land use right and the assets on the land for the retail area of Vincom Center Ba Trieu - Tower A and B at No. 191, Ba Trieu
street, Le Dai Hanh ward, Hai Ba Trung district, Hanoi;
Land use right and the assets on the land for the retail area of Vincom Center Ba Trieu - Tower C at No. 114, Mai Hac De Street,
Le Dai Hanh Ward, Hai Ba Trung District, Hanoi. This investment property is currently committed to be used as collateral for
the corporate bonds issued by Royal City Real Estate Development & Investment Joint Stock Company (see Note 26);
Land use right and the assets on the land of the office and retail components of Vincom Center B Ho Chi Minh City at 72 Le
Thanh Ton Street, Ben Nghe Precinct, District 1, Ho Chi Minh City. The office component of this investment property is used
as a pledge for the corporate bonds issued to Vietnam Technological and Commercial Joint Stock Bank (see Note 26.1.3);
95
Undertaking tourism services
Producing and wholeselling concrete
products
Investing, developing and trading real
estate properties
estate properties
estate properties
234 Nam Ky Khoi Nghia, district 3, Hochiminh
city
1st floor, 35-37 Chuong Duong Port, Nguyen
Thai Binh Ward, district 1, Ho Chi Minh City
72 Le Thanh Ton, Ben Nghe Precinct, district 1,
Ho Chi Minh City
191 Ba Trieu Street, Hai Ba Trung district, Hanoi
Road 5A, Dinh Du hamlet, Dinh Du commune,
Van Lam district, Hung Yen province
1,612,499,800,170
40.00
40.00
Dai An Investment and Construction JSC
5
35.00
35.00
Thang Long Real Estate Trading
Investment JSC
4
49.00
49.00
Green City Development JSC
3
30.00
30.00
Foreign Trade Concrete Joint
Stock Company
2
46.31
46.31
Vietnam Tourism Joint Stock
Company in Ho Chi Minh City
1
19,026,733,992
HEAD OFFICE
EQUITY
INTEREST (%)
VOTING
RIGHT (%)
(65,986,749,313)
(1,694,894,797)
(44,139,894,009)
17,442,478,522
225,008,808
345,306,405,602
-
868,978,280,751
1,170,000,000,000
434,703,321,618
42,820,138,903
- (1,154,929,287,107)
900,225,008,808
-
NAME
2,069,242,276,169
NO
3,163,564,921,117
-
Details of these associates and the voting rights held by the Group are as follow:
2,069,242,276,169
-
12,946,571,617
3,163,564,921,117
As at 31 December 2012
Provision for other long-term investments
868,978,280,751
1,200,263,995,418
3,561,775,667
Total long term investments
1,612,499,800,170
1,551,065,120,947
(1,694,894,797)
1,225,094,936
17.1
17.2
-
Other long-term investments
BEGINNING BALANCE
345,306,405,602
Investment in associates
ENDING BALANCE
17.1 Investment into associates
NOTE
-
Currency: VND
-
17. LONG-TERM INVESTMENTS
VIETNAM FOREIGN TRADE
CONCRETE
TOURISM (I)
During the year, the Group capitalized borrowing costs amounting to VND1,373,802,009,614. These costs relate to general
borrowings to finance the real estate projects of the Group. The capitalised borrowing costs are determined by applying a
capitalisation rate of 17.03% per annum. The capitalization rate used is the weighted average of the borrowings of the Group that
are outstanding during the construction period.
- (1,154,929,287,107)
16. CAPITALIZED BORROWING COSTS
18,257,811,627
-
GREEN CITY (II)
In March 2012, the Group completed the transfer of the office area, a portion of the retail area and the basement of Vincom
Center Ba Trieu - Tower B.
817,777,456,481
270,000,000,000
348,062,779,989
-
The shopping area located in Vinpearl Land: VND52 billion (USD2,500,000).
13,416,371,478
-
School area at Vincom Village: VND224.6 billion (USD10,800,000); and
As at 1 January 2012
19,526,641,165
Investment during the year
Increase from merger with Vinpearl
23,194,542,212
Reclassified from other long-term
investments
Reclassified to investment into
subsidiaries due to merger with Vinpearl
Reclassified from investment into
subsidiaries after partial disposal
Decrease due to disposal of a subsidiary
Dividends declared
Reclassified to other long-term investments
Share in profit/(loss) of associates
7,801,171,744
THANG LONG
Vincom Center Long Bien: VND499 billion (USD24,000,000);
629,779,130,632
Vincom Center B Ho Chi Minh City (office and retail area): VND9,235 billion (USD444,000,000);
50,522,355,121
Vincom Center A Ho Chi Minh City (retail area): VND6,573 billion (USD316,000,000);
(65,986,749,313)
(44,139,894,009)
3,860,505,002
Vincom Center Ba Trieu - Tower C (retail area only): VND998 billion (USD48,000,000);
768,922,365
VIETTRONICS
DONG DA (III)
Vincom Center Ba Trieu - Tower A and B (retail area only): VND1,518 billion (USD73,000,000);
-
Market value as at 31 December 2012 of the Group’s investment properties as determined by an independent valuer is as
follows:
-
Assets of the school component at Vincom Village, Phuc Loi, Viet Hung and Giang Bien wards, Long Bien district, Hanoi.
63,445,999,417
42,820,138,903
DAI AN (IV)
The shopping area located in Vinpearlland Amusement Park at Hon Tre island, Nha Trang, Khanh Hoa;
900,000,000,000
-
Land use right and the assets on the land of Vincom Center Long Bien at Viet Hung, Phuc Loi, Giang Bien Ward, Long Bien
District, Hanoi. This investment property is used as a pledge for the bonds issued to Vietnam Joint Stock Commercial Bank
for Industry and Trade (see Note 26.1.3);
-
Land use right and the assets on land of the retail component of Vincom Center A Ho Chi Minh City at 117 Dong Khoi and 116
Nguyen Hue, District 1, Ho Chi Minh City. This property is currently used as collateral for the long-term borrowings from
Vietnam Joint Stock Commercial Bank for Industry and Trade (see Note 26.1.3);
TOTAL
Currency: VND
97
(i) As at 31 December 2012, the Company directly, and indirectly through Vinpearl, held 46.31% voting rights in Vietnam
Tourism Joint Stock Company in Ho Chi Minh City.
(ii) As at 31 December 2012, the Company directly, and indirectly via Vinpearl, held 49% voting rights in Green City Development
JSC (”Green City”).
(iii) At 31 December 2011, the Company and Green City, an associate, held 19.95% and 25.6% voting rights, respectively in
Viettronics Dong Da JSC (”VDD”). After the merger with Vinpearl in January 2012, VDD became an associate of the Group.
After the partial disposal of Green City on 29 June 2012 (see Note 4), Green City was no longer a subsidiary of the Group
and thereby, the Group’s voting right in VDD was reduced to 19.95%, and VDD was no longer an associate of the Group.
(vi) In December 2012, the Company acquired 40% voting rights in Dai An Investment and Construction JSC (“Dai An”), and thus
Dai An became an associate of the Group.
17.2 Other long-term investments
Long-term loans
Loan to Hanoi Electronics Corporation (Note 36)
Loan to Thai Kieu Company Limited
Loan to Mai Son Joint Stock Company
Loan to Global Link Company Limited
Current portion of long-term loans (Note 6)
Investment in unlisted shares
Ecology Investing and Development JSC
Thanh Nien Media JSC
8/3 Investment JSC
Xavinco JSC
Viettronics Land JSC
Bank for Investment and Development of Vietnam
Vietnam Tourism in Hanoi JSC
Thanh Nien Real Estate JSC
Thuan Phong Energy Development JSC
Dong Da Electronics JSC (Note 17.1)
Tay Tang Long Real Estate Company Limited
Other long-term investments
Nguyen Van Huyen project
Hoang Cau project
Total
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
240,000,000,000
91,479,252,793
44,222,747,382
44,087,634,911
(170,086,023,192)
100,000,000,000
101,782,683,298
60,011,909,214
51,687,634,911
(119,140,943,009)
249,703,611,894
194,341,284,414
1,093,496,443,945
12,400,000,000
3,000,000,000
2,854,938,405
3,016,278,843
67,044,601,500
7,693,224,000
56,016,217,443
3,000,000,000
44,139,894,009
-
878,496,443,945
12,400,000,000
3,000,000,000
2,854,938,405
3,016,278,843
42,820,138,903
635,000,000
1,292,661,598,145
943,222,800,096
8,699,910,908
54,000,000,000
8,699,910,908
8,699,910,908
62,699,910,908
1,551,065,120,947
1,200,263,995,418
Long-term loans to Thai Kieu Company Limited, Mai Son JSC and Global Link Company Limited are provided as financial
supports to these entities, which are also retail tenants at various properties owned by the Group. These loans have terms
ranging from 1 to 4 years and interest rates ranging from 11.5% per annum to 25% per annum and will be revised based on the
lending interest rate offered by the Bank for Investment and Development of Vietnam. These loans are secured by the shares
owned by the major shareholders of these companies. As at 31 December 2012, a portion of these loans are also reclassified to
short-term investments.
Investment in unlisted shares and other long-term investments
As at 31 December 2012, the Group has the following investment in unlisted shares:
NAME OF INVESTEE
EQUITY INTEREST (%)
Thanh Nien Media JSC
8/3 Investment JSC
Xavinco JSC
Viettronics Land JSC
Bank for Investment and Development of Vietnam
Vietnam Tourism in Hanoi JSC
Thanh Nien Real Estate JSC
Thuan Phong Energy Development JSC
Viettronics Dong Da JSC
3.87
10.00
18.25
1.00
1.00
0.15
7.08
10.57
3.00
19.95
In addition, the Group also has a long-term investment in a potential estate project in Hoang Cau. This investment is presented
as long-term investment since it will be converted to shares of the entity that will be established to develop this project in the
future, or will be reimbursed to the Company should the project be cancelled or withdrawn.
18. LONG-TERM PREPAID EXPENSES
Bond issue costs
Prepaid land rentals
Commission fees
Mock houses
Corporate income tax prepayment
Other long-term prepaid expenses
TOTAL
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
329,641,230,566
104,788,946,910
268,562,315,268
24,416,629,260
322,341,443,796
55,243,564,273
38,549,822,764
109,740,014,614
279,874,424,972
15,503,868,738
179,475,800,316
27,554,981,671
1,104,994,130,073
650,698,913,075
Long-term loans
Loan to Hanoi Electronics Corporation (“Hanel”) is provided to Hanel for its capital contribution to Sai Dong Urban Development
and Investment JSC. This loan has a term of 5 years and earns interest rate of 14% per annum.
99
5,323,050,138,965
191,358,196,756
2,143,793,250,963
451,507,688,636
1,433,430,652,303
1,102,960,350,307
2,264,822,097,870
151,472,005,796
66,858,736,890
817,260,228,660
50,803,845,674
78,987,430,288
241,320,844,880
1,229,231,126,524
572,709,155,043
41,849,622,329
159,747,411,872
127,179,292,742
426,042,633,583
19,487,228,718
22,362,393,611
19,487,228,718
-
20. SHORT-TERM BORROWINGS
Convertible loan (i)
Short-term loan from banks (ii)
Current portion of long-term loans from banks (Note 26.1)
Other current portion of long-term loans and borrowings
Corporate bond (Note 26.2)
Loans from Vinpearl JSC
Loans from customers (iii)
Others (iv)
In which
Short-term loans
Short-term loans from related parties
Ending balance
Beginning balance
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
19,066,150,036
501,258,979,981
2,500,000,000,000
2,500,000,000,000
13,833,884,896
32,000,000,000
833,120,000,000
219,889,124,311
3,520,900,000,000
2,450,000,000,000
1,070,900,000,000
11,801,836,844
39,591,481,001
3,066,159,014,913
4,625,302,442,156
3,066,159,014,913
-
3,554,402,442,156
1,070,900,000,000
(i) Convertible loan from Credit Suisse International amounting to US$40,000,000 was repaid in full in 2012.
(ii) These are two loans from Bank for Investment and Development of Vietnam, details as follows:
Loan from Quang Trung branch of VND7,470,874,388, with a term of 1 month, bears an interest rate of 13% per annum
and is secured by a short-term deposit at this branch;
Loan from Khanh Hoa branch of VND11,595,275,648, with a term of 6 months, bears an interest of 17% per annum, and
is secured by collaterals presented in Note 26.1.
(iii) These are loans from customers who decided not to sign the sales and purchase contract at Times City project. These loans
are unsecured and have interest rate of 2% per annum.
(vi) This is an unsecured short-term loan from an individual which bears an interest rate of 2% per annum.
21. ADVANCES FROM CUSTOMERS
Downpayment from customers under real estates sales and
purchase agreements and business co-operation contracts
Royal City project
Times City project
Vincom Village project
Other projects
Others
Advance from customers for office and retail
Advance from hospital services
Advance from hotel and beauty care services
Ending balance
Accumulated amortisation:
Beginning balance
Amortization
Addition from merger with Vinpearl
Disposed
20,725,123,078
220,595,721,802
-
64,867,256,314
14,120,173,974
-
8,110,277,695
42,693,567,979
-
33,476,635,655
126,270,776,217
-
5,895,759,294,008
233,207,819,085
Ending balance
2,385,114,095,843
530,495,118,924
1,484,234,497,977
1,262,707,762,179
2,392,001,390,612
3,270,550,084,311
233,207,819,085
-
TOTAL
233,207,819,085
1,262,707,762,179
159,582,283,491
1,324,652,214,486
131,725,993,204
398,769,125,720
837,985,351,738
1,547,128,744,105
Cost:
Beginning balance
Additions
Addition from merger with Vinpearl
Disposed
19. GOODWILL
Goodwill on
acquisition of
Hanoi South
Goodwill
on acquisition
of PFV
Goodwill on
acquisition
of Sai Dong
Goodwill on
acquisition
of Royal City
Goodwill on
acquisition of
Vinpearl Da Nang
Currency: VND
TOTAL
In which:
Advance from customers
Advance from related parties (Note 36)
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
7,450,835,314,542
5,585,065,332,425
4,651,288,313,984
916,100,000
5,244,202,898,612
2,491,500,063,914
4,293,472,692,059
-
17,688,105,060,951
12,029,175,654,585
25,674,825,919
6,077,752,513
80,416,433,983
15,546,005,745
-
112,169,012,415
15,546,005,745
17,800,274,073,366
12,044,721,660,330
17,765,979,061,653
34,295,011,713
12,018,952,976,341
25,768,683,989
101
22. STATUTORY OBLIGATIONS
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
Corporate income tax (Note 35.1)
Value added tax
Personal income tax
Other taxes
250,047,955,686
49,125,554,521
6,468,467,080
851,796,608
211,982,169,448
76,779,430,139
3,889,695,336
16,535,369,524
TOTAL
306,493,773,895
309,186,664,447
23. ACCRUED EXPENSES
Accrued bond and loan interests
Accrued construction costs
Accrual for severance allowance
Other accrued expenses
TOTAL
In which:
Other accrued expenses
Accrued expenses to related parties
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
856,659,033,476
766,430,547,605
9,029,609,383
63,226,991,612
568,864,039,182
1,248,285,918,261
2,158,436,757
54,214,739,396
1,695,346,182,076
1,873,523,133,596
1,695,346,182,076
-
1,792,542,136,264
80,980,997,332
Others
Payables for investment activities (ii)
Dividends payable
Payables for share acquisitions
Deferred revenue to be realised within the next 12 months (Note 25)
Deposits from tenants to be refunded within the next 12 months
(Note 25)
Social insurance payables
Payable to customers who liquidated SPA
Other payables
TOTAL
In which:
Other short-term payables
Other short-term payables to related parties (Note 36)
Currency: VND
Deferred revenue
Deferred revenue to be realised within the next 12 months (Note 24)
Deposits from tenants
Deposits from tenants to be refunded within the next 12 months
(Note 24)
Other long term liabilities
ENDING BALANCE
BEGINNING BALANCE
92,692,408,566
(41,958,145,848)
29,453,827,284
(27,812,011,659)
50,734,262,718
474,093,543,654
(83,510,011,107)
1,641,815,625
239,675,828,179
(41,051,435,745)
390,583,532,547
439,489,153
198,624,392,434
-
441,757,284,418
200,266,208,059
26. LONG-TERM LOANS AND DEBTS
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
Long-term loans
Corporate bonds
4,522,506,644,958
14,240,000,000,000
2,208,778,229,684
3,200,000,000,000
TOTAL
18,762,506,644,958
5,408,778,229,684
26.1 Long-term loans
24. OTHER PAYABLES
Downpayment from customers under loan agreements (i)
Royal City project
Times City project
25. OTHER LONG-TERM LIABILITIES
Currency: VND
ENDING BALANCE
BEGINNING BALANCE
238,094,531,301
524,468,021,149
557,634,214,550
921,177,159,251
762,562,552,450
1,478,811,373,801
68,279,000,000
211,111,736
41,958,145,848
83,510,011,107
68,279,000,000
71,246,439,635
499,748,500,000
27,812,011,659
41,051,435,745
4,480,135,215
31,084,070,429
48,744,955,894
3,593,211,440
18,552,237,066
278,267,430,229
730,282,835,545
1,040,829,982,679
2,209,094,209,346
1,034,756,918,182
6,073,064,497
2,200,813,052,880
8,281,156,466
Currency: VND
LENDER
NOTE
ENDING BALANCE
BEGINNING BALANCE
Bank for Investment and Development of Vietnam Quang Trung Branch (“BIDV”)
Less: Current portion
Bank for Investment and Development of Vietnam Khanh Hoa Branch
Vietnam Joint Stock Commercial Bank for Industry and Trade
Joint Stock Commercial Bank for Foreign Trade of Vietnam
VIAC No. 1 Limited
26.1.1
841,023,773,243
1,134,350,212,547
26.1.2
(104,204,754,649)
344,191,988,595
(219,889,124,311)
-
(73,577,912,000)
2,700,000,000,000
(133,333,333,333)
613,749,863,101
(190,142,979,999)
524,800,000,000
-
1,290,422,064,615
3,895,076,833
4,522,506,644,958
2,208,778,229,684
5,023,765,624,939
(501,258,979,981)
2,428,667,353,995
(219,889,124,311)
In which
Long-term loans
Current portion (Note 20)
26.1.3
26.1.4
26.1.5
(i) Includes amounts collected under the loan agreements with customers for the real estate projects of the Group.
(ii) Includes deposit from third parties for the acquisition of the Group’s equity investments.
103
26.1.1 Bank for Investment and Development of Vietnam (“BIDV”) - Quang Trung Branch
26.1.3
Details of loans from BIDV - Quang Trung branch are as follows:
Details of loans from Viettinbank are as follows:
CONTRACT NUMBER
31 DECEMBER 2012
INTEREST RATE
(% PER ANNUM)
MATURITY DATE
Vietnam Joint Stock Commercial Bank for Industry and Trade (“Vietinbank”)
CONTRACT NUMBER
VND
31 DECEMBER 2012
INTEREST RATE
(%PER ANUM)
MATURITY DATE
VND
01/2011/HĐTD-Saidong
1,500,000,000,000
10 November
2018
Reference interest rate + 5.5%
and does not exceed the cap for
lending rate regulated by State
Bank of Vietnam and Vietinbank
This loan is secured by the land use right and the assets on the land, the medical equipments of Vinmec International General
Hospital at No. 458, Minh Khai Street, Vinh Tuy Ward, Hai Ba Trung, Hanoi and 11,475,000 Vingroup shares owned by a major
shareholder of the Group.
01/2011/HĐTD-VINGROUP
In which: current portion
1,200,000,000,000
(133,333,333,333)
24 December
2017
12-month VND savings rate
Vietinbank (interest paid
arrears) +5.5%
26.1.2 Bank for Investment and Development of Vietnam - Khanh Hoa Branch
In which:
Borrowings
Current portion
01/2012/2390074/HĐTD
TOTAL
841,023,773,243
(104,204,754,649)
18 January 2019
736,819,018,594
12 months’ VND saving rate
(interest paid in arrear) for
individual + 4.5%
Details of loans from BIDV - Khanh Hoa branch are as follows:
CONTRACT NUMBER
31 DECEMBER 2012
US$
(i) 01/2006/HĐTD dated 17 April 2006
(ii) 02/2006/HĐTD dated 17 April 2006
(iii) 04/2007/HĐTD dated 07 August 2007
(iv) 02/2006/HĐTD dated 17 April 2006
TOTAL
In which:
Long-term loans
Current portion
MATURITY DATE
VND
1,450,852
(720,000)
901,396
(200,400)
-
30,174,996,247
(14,961,600,000)
18,704,712,621
(4,164,312,000)
62,426,428,261
(8,000,000,000)
232,885,851,466
(46,452,000,000)
1,431,848
270,614,076,595
2,352,248
(920,400)
344,191,988,595
(73,577,912,000)
17 October 2014
12 March 2017
15 August 2017
12 March 2017
INTEREST RATE
(%PER ANUM)
12 months’ USD saving
rate + 3.5%
12 months’ USD saving
rate + 3.5%
12 months’ VND saving
rate + 4.5%
12 months’ VND saving
rate + 4.5%
These loans, together with the short-term loan (Note 20), and the 4th issue of corporate bond (Note 26.2) are secured by all
assets, land use rights, water surface use rights and associated assets owned by Vinpearl one-member limited liability company
under the following agreements:
Mortgage contract No. 01/2006/HDTC dated 22 December 2006 for the land use rights and related assets on the land;
2,566,666,666,667
at
in
2,700,000,000,000
(133,333,333,333)
Collaterals for the first loan (under contract No. 01/2011/HDTD-Saidong) include the followings:
All properties of Vincom Village project owned by Sai Dong Land, a subsidiary, including all upgrades and other assets already
constructed, or to be formed in future, excluding the villa area, the E3, E6, G1, G2 and a part of G3 area of this Project;
Assets on land at E3 area of Vincom Village project owned by Vietnam Investment Group JSC;
Land use right for the 145 hecta of land at Vincom Village project (equivalent to the whole project area excluding the villas) but
do not include E3, E6, G1, G2 and a part of G3 area of this project. All assets formed by the loan, including but are not limited
to machineries and other assets;
All asset rights, benefits, compensation and other payments in relation to Vincom Village project at present and in the future.
10,200,000 Vingroup shares owned by Royal City, a subsidiary of the Group;
Land use right and asset formed on land located at No. 7 Tran Phu, Nha Trang, Khanh Hoa owned by Hon Mot JSC, a subsidiary of the Group; and
All rights arising from the Land use rights and infrastructure transfer agreement between Sai Dong Land and certain secondary
investors.
Collaterals for the second loan (under contract No. 01/2011/HDTD-VINGROUP) and the second bond (Note 26.2) are all
assets/asset rights of/arising from the Vincom Center A Ho Chi Minh City project, which is the “Hotel - Shopping mall - Basement
complex at Eden quadrangle”, surrounded by the 4 roads: Dong Khoi, Le Thanh Ton, Nguyen Hue and Le Loi, according to the
following collateral agreements:
Assets mortgage contract No. 02/2006/HDTC dated 22 December 2006;
Collateral agreement for assets to be formed in future No 01/2010/HDTCTSHTTTL dated 11 May 2010;
Land use right mortage contract No. 01/2007/HĐTC dated 7 August 2007; and
Amendment to the collateral agreement for assets to be formed in future dated 24 December 2012 between the Group and
Vietinbank - Hanoi branch.
Land use rights mortgage contract No 01/2008/HDTC dated 26 September 2008.
In addition, these loans are also secured by:
According to the agreement with Vietinbank, the Company is also under an obligation to submit the land use right certificate of
the Vincom Center A Ho Chi Minh City project before 12 August 2013.
Mortage contract No. 01/2012/HĐCC dated 19 March 2012 for 14,490,630 Vingroup shares owned by a major sharesholder
of the Company;
Mortage contract No. 01/2009/HĐCC dated 11 March 2009 and Amendment No. 01/2012/PLHĐCC dated 19 March 2012 for
7,999,350 Vingroup shares owned by a major sharesholder of the Company.
105
26.1.4 Joint stock commercial Bank for Foreign Trade of Vietnam (“Vietcombank”)
Details of loans from Vietcombank are as follows:
CONTRACT NUMBER
31 DECEMBER 2012
US$
(i) 01/2010/HDTD/VCB-VPLDN dated
27 August 2010
(ii) 01/2010/HDTD/VCB-VPLDN dated
27 August 2010
(iii) 01/2010/HDTD/VCB-VPLDN dated
27 August 2010
(iv) 01/2010/HDTD/VCB-VPLDN dated
27 August 2010
TOTAL
In which:
Long-term loans
Current portion
MATURITY DATE
INTEREST RATE
(%PER ANUM)
17 September
2014
12 months’ VCB saving
rate + 3.8%
23 May 2021
rate + 4.0%
VND
-
263,456,428,259
-
(190,142,979,999)
317,507,336,900
897,938
18,702,261,827
676,197
14,083,836,115
-
-
1,574,135
423,606,883,102
17 September
2014
rate + 3%
23 May 2021
rate + 3.2%
613,749,863,101
(190,142,979,999)
The loans are secured by the land use rights and associated assets on the land of the Vinpearl Da Nang Luxury project owned
by Vinpearl Da Nang One-member Limited Liability Company.
26.1.5 Convertible loan with VIAC No.1 Company Limited (“VIAC No. 1”)
This represents a convertible loan of US$25 million from VIAC No. 1 Company Limited (“VIAC No. 1). This loan has a term of 4
years, with maturity date at 30 June 2016, bearing an interest rate of 6% per annum. The loan is secured by 11,602,500 Vingroup
shares owned by Vietnam Investment Group JSC, a related party.
According to the terms of this convertible loan agreement, if certain criteria are met, VIAC No. 1 has the right, or the obligation,
to convert the loan into shares of a company which will be established by carving-out the Vinmec International Hospital from
Hanoi South, a subsidiary of the Group.
26.2 Corporate bonds
Currency: VND
ENDING BALANCE
Corporate bonds
Corporate bonds issued
Current portion (Note 20)
BEGINNING BALANCE
16,740,000,000,000
(2,500,000,000,000)
5,650,000,000,000
(2,450,000,000,000)
14,240,000,000,000
3,200,000,000,000
As at 31 December 2012, the Group has the following bonds:
The first bond has a face value of VND2,000 billion, unsecured, with a maturity date of 6 May 2013. The interest rate of this
bond will be revised on an annual basis, equal to at the average 1-year saving rates of four banks, Agribank, Vietcombank,
BIDV and Vietinbank, plus 4%. The interest rate applicable for the period from 1 January 2012 to 5 May 2012 was 17.88% per
annum, and from 6 May 2012 to 31 December 2012 was 15.5% per annum. This bond is currently classified under short-term
loans and borrowings (Note 20);
The second bond has a carrying value of VND1,000 billion, issued on 11 May 2010 with a term of five years. The interest rate will
be revised on an semi-annual basis, equal to the average 1-year savings account rate of Vietnam Joint Stock Commercial Bank
for Industry and Trade - Hanoi branch (“Vietinbank”) + 5,5%. The interest rate applicable for the period from 1 January 2012 to
10 May 2012 was 19.5% per annum, and from 11 May 2012 to 31 December 2012 was 17.5% per annum. Details on the collaterals of this bond are presented on Note 26.1.3;
The third bond has a carrying value of VND500 billion, issued on 6 May 2008, comprising of 500 bonds, at a par value of VND1
billion each, and a maturity term of 5 years. Coupons are paid annually on 5 May, and interest will be determined based on the
average 12-month saving rates of 4 commercial banks + 4.5% p.a. The interest rate applicable for the period from 1 January
2012 to 5 May 2012 was 18.375% per annum, and from 6 May 2012 to 31 December 2012 was 16.5% per annum. This bond is
secured by 19,572,712 Vingroup shares owned by a major shareholder of the Company. This bond is currently classified under
short-term loans and borrowings (Note 20);
The forth bond has a carrying value of VND1,000 billion issued on 18 March 2009, comprising of 1,000 bonds, which will mature
in 5 years with floating coupon rate. Interest will be determined based on the most recent Government bonds’ interest rate + 3.5%
per annum or average 12-month VND saving rates of 4 commercial banks + 2.5% per annum, but not exceeding 1.5 times of
basis interest rate announced by the State Bank of Vietnam, as determined 7 days prior to the annual coupon payment date.
Coupon is paid on 18 March each year. Interest rate applicable for the year 2012 was 13.5% per annum. These corporate bonds
are secured by all assets, land use rights, water surface use rights and all assets on the land/water surface which were pledged
for the loans from BIDV - Khanh Hoa (Note 26.1.2);
The fifth bond has a carrying value of VND1,000 billion issued on 12 October 2009, comprising of 1,000 bonds with a maturity
term of 5 years. Coupons are paid semi-annually on 12 April and 12 October. Bond interest is determined based on the average
12-month saving rates of Bank for Industrial and Commerce of Vietnam + 3.5% p.a. The interest rate applicable for the period
from 1 January 2012 to 11 April 2012 was 17.5% per annum, and from 12 April 2012 to 31 December 2012 was 16.5% per
annum. These bonds are secured by land use rights and all assets to be formed on the land at Royal City project, except 10%
apartments of this project, which is located at 72A Nguyen Trai, Thuong Dinh Ward, Thanh Xuan District, Hanoi;
The sixth bond has a carrying value of VND2,000 billion, issued on 21 June 2012, comprising of 2,000 bonds, with a maturity
term of 3 years, bearing floating rate. The bond interest is determined based on the actual cost of fund of Techcombank (+)
bank’s compulsory reserve (+) a fixed margin. The fixed margin applicable for the first two years is 0% per annum and for the
third year is 8% per annum. At maturity, the Group is also required to make an additional interest payment of 26.65% face value
of each bond. The effective interest rate applicable for the year 2012 was 19.47% per annum. This bond is secured by the office
component of the shopping mall, hotel, office and luxury apartment and underground parking at the Vincom Center B Ho Chi
Minh City project, with a floor area of 78,653m2 with all rights associated, including 17 floors + 02 technical floors (from the 4th
to 20th floor + technical floor 1 + technical floor 2) except for the area of 4,461.70m2 (in which for private use of 3,598.70m2) on
the 19th floor and an area of 769.23m2 on the 17th floor which have already been sold;
The seventh bond has a carrying value of VND1,000 billion, issued on 16 July 2012, comprising of 1,000 bonds, with a maturity
term of 3 years, bearing floating rate. The bond interest is determined based on the actual cost of fund of Techcombank (+)
bank’s compulsory reserve (+) a fixed margin. The fixed margin applicable for the first two years is 0% per annum and for the
third year is 8% per annum. At maturity, the Group is also required to make an additional interest payment of 26.65% face value
of each bond. The effective rate applicable for the year 2012 was 19.47% per annum. This bond is secured by: (i) hotel component of Vinpearl Luxury Nha Trang; (ii) land use right and assets on land of twenty six (26) villas at Vinpearl Hoi An, located at
Cua Dai ward, Hoi An town, Quang Nam province and ownership over assets to be formed on the land for the hotel component
of this project; (iii) land lot No. KT-A1 and KT-A2 at the An Vien project, Vinh Nguyen - Vinh Truong ward, Nha Trang, Khanh Hoa;
(iv) land lot No. TM-A at the An Vien project, Vinh Nguyen - Vinh Truong ward, Nha Trang, Khanh Hoa owned by the Group; and
(v) commitment to mortage the retail component of Vincom Center Ba Trieu - Tower C.
The eighth bond has a carrying value of VND2,000 billion comprising of 2,000 bonds (in which 1,000 bonds were issued on 28
August 2012, with a maturity term of 4.5 years and 1,000 bonds were issued on 18 October 2012 with a maturity of 3.5 years),
bearing floating rate. The bond interest rate is determined based on the highest saving rate at Vietinbank (+) other cost of debt
(+) 6% per annum. The interest rates applicable for the year 2012 are 16.5% per annum and 18% per annum. This bond is
secured by the apartments of the 13 buildings (from T01 to T12 and T15) at the Times City project, together with all assets, or
assets to be formed in the future, associated to the mentioned apartments, except for certain apartments as specified at Amendment 1 of the Collaterals agreement No 01/2012/HDTCTS-NAMHANOI;
Convertible bond has a carrying value of US$300 million issued on 3 April 2012 and 6 July 2012, with a maturity term of 5 years.
This bond is unsecured, bears a fixed coupon of 5% per year. Coupons are paid twice a year. According to the terms of the
convertible bond, the bond holders have the right to convert the bonds into ordinary shares of the Company at a conversion price
which could be adjusted annually on 3 October, starting from and including 3 October 2012 until 3 October 2016.
107
(1,712,520,574,501)
-
1,217,475,953,580
10,556,569,188,706
(5,000,000,000)
962,463,719,641
5,000,000,000
12,845,114,930
-
-
-
-
-
-
- (12,524,194,495,619)
6,501,237,900,575
15,503,258,718,183
1,571,311,686,488
-
7,845,114,930
906,939,533,153
1,571,311,686,488
- (1,510,787,500,000)
(**) In accordance with the resolution of General Shareholders dated 25 April 2012, the shareholders had approved the plan to pay stock dividends with the amount of
VND1,510,787,500,000 from the profit of fiscal year 2011 and the first quarter of 2012. According to which, the number of additional shares issued was 151,078,750 and this
issue increased the Company’s share capital by VND1,510,787,500,000 (at a par value of VND10,000/share). This stock dividend was completed on 12 June 2012.
(*) On 17 January 2012, the Company completed the merger with Vinpearl JSC through the issue of new ordinary shares to swap all 205,498,489 outstanding shares of Vinpearl
JSC. This merger increased the Company’s share capital by VND1,582,334,120,000 (equivalent to 158,233,412 shares with par value of VND10,000/share) and increased the
share premium by VND13,920,924,598,183. In addition, the Company also recognised the difference between the consideration transferred and the net assets acquired,
amounting to VND12,524,194,495,619, in the “Share premium” account. This merger also increased the Group’s treasury shares by VND1,712,520,574,501 since these were
the carrying value of the Company’s shares held by subsidiaries of Vinpearl JSC as of merger date.
7,004,620,550,000
(1,397,646,730,489)
Ending balance
-
(1,712,520,574,501)
(720,199,415,988)
-
6,501,237,900,575
-
(720,199,415,988)
906,939,533,153
7,845,114,930
1,762,837,618
(1,762,837,618)
-
3,974,286,534,624
2,395,153,738,480
3,911,498,930,000
TOTAL
6,842,651,283,995
1,058,140,856,257
821,285,875,959
(3,525,675,236)
(2,217,314,440,400)
UNDISTRIBUTED
EARNINGS
Currency: VND
2,762,837,618
2,309,813,212,524
6,845,114,930
(6,845,114,930)
821,285,875,959
(1,762,837,618)
- (2,217,314,440,400)
OTHER FUNDS
(720,199,415,988)
-
1,035,073,260,000
-
1,522,259,442,223
872,894,296,257
-
3,726,252,370,000
185,246,560,000
-
SUPPLEMENTARY
TREASURY
CAPITAL
SHARES RESERVE FUND
Current year
3,911,498,930,000
Beginning balance
2,395,153,738,480
1,582,334,120,000 13,920,924,598,183
- Increase in the year (*)
- Profit for the year
1,510,787,500,000
- Increase from stock
dividends (**)
- Increase in treasury share due
to the business combination (*)
- (12,524,194,495,619)
- Decrease from business
combination (*)
- Reissue of treasury shares
182,402,693,580
- Financial reserve fund
-
Ending balance
Previous year
Beginning balance
- Increase in the year
- Financial reserve fund
- Profit for the year
- Disposal of subsidiary
- Dividend declared
SHARE PREMIUM
CONTRIBUTED
CHARTERED CAPITAL
27.1 Increase and decrease in owners’ equity
27. OWNERS’ EQUITY
27.2 Financial reserve fund
27.3 Ordinary and convertible preference shares
Number of shares registered to issue
Number of shares issued to public
Ordinary shares
Convertible preference shares
Number of outstanding shares
Ordinary shares
Convertible preference shares
ENDING BALANCE
BEGINNING BALANCE
Ending balance
Currency: VND
Financial reserve fund
12,845,114,930
7,845,114,930
Total
12,845,114,930
7,845,114,930
ENDING BALANCE
BEGINNING BALANCE
700,462,055
700,462,055
700,462,055
700,462,055
700,462,055
391,149,893
391,149,893
391,149,893
391,149,893
391,149,893
-
Face value of the outstanding ordinary share is VND10,000/share.
27.4 Treasury shares
As at 31 December 2012, the number of ordinary shares of the Company held by its subsidiaries and associates is as follows:
Royal City, a subsidiary, held 17,929,266 shares in which 10,200,000 shares are being used as a pledge for the loans from
Vietinbank (see Note 26.1.3), and 7,728,600 shares are used as a security for other payment obligations of Royal City and
Hanoi South;
PFV, a subsidiary, held 11,561,507 shares in which 4,648,481 shares are being used as a security for a Business Cooperation
Contract between Green City, an associate, with a counterparty;
Vinpearl Hoi An, a subsidiary, held 5,504,060 shares which are being used as a security for a Business Cooperation Contract
between Green City, an associate, with a counterparty; and
Dai An, an associate, held 12,431,898 shares.
28. MINORITY INTERESTS
Beginning balance
Capital contribution by minority interest
Share in profit from re-issue of treasury shares by subsidiaries
Share of post-acquisition profit
Share in consideration paid for the acquisition of additional equity interest in
existing subsidiary
Changes in minority interest due to acquisitions of additional equity interest
in existing subsidiary
Dividends declared to minority interest
Increase from subsidiaries formed in the merger with Vinpearl JSC
Decrease due to the disposal of a subsidiary
Decrease in minority interest in Royal City due to the merger with Vinpearl JSC
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
1,750,939,083,964
282,413,000,000
27,314,751,199
275,356,238,037
(1,233,076,845,000)
2,710,988,862,194
768,078,402,842
252,274,322,805
(520,649,805,000)
(5,741,446,689)
(1,216,726,323,614)
(9,843,750,000)
311,872,256,669
(261,057,839,578)
(821,113,377,127)
(243,026,375,263)
-
317,062,071,475
1,750,939,083,964
109
29. REVENUES
30. SHARES IN PROFIT OF ASSOCIATES
29.1 Revenues from sale of goods and rendering of services
Gross revenue
Revenue from sale of inventory properties
Revenue from leasing activities and rendering of related services
Revenue from rendering hotel, amusement park and related services
Revenue from rendering hospital and related services
Revenue from rendering beauty care and related services
Revenue from securities brokerage services and other investment
consulting activities
PREVIOUS YEAR
7,908,016,426,443
5,335,595,152,814
1,225,842,939,796
1,179,071,603,163
147,590,588,627
19,916,142,043
-
2,313,739,781,730
1,370,908,248,542
941,943,062,042
888,471,146
Less
Sales allowance
Revenue deduction
Net revenue
Revenue from sale of inventory properties
Revenue from leasing activities and rendering of related services
Revenue from rendering hotel, amusement park and related services
Revenue from rendering hospital and related services
Revenue from rendering beauty care service and related services
Revenue from securities brokerage services and other investment
consulting activities
CURRENT YEAR
PREVIOUS YEAR
1,225,094,936
3,561,775,667
7,801,171,744
3,860,505,002
225,008,808
768,922,365
1,618,063,710
(1,250,680,636)
32,068,911,013
159,099,337,037
4,421,468,169
754,240,401
17,442,478,522
196,711,339,694
CURRENT YEAR
PREVIOUS YEAR
Cost of inventory properties sold
Cost relating to the leasing activities and rendering of related services
Cost of rendering hotel, amusement park and related services
Cost of rendering hospital and related services
Cost of rendering beauty care and related services
Other cost of services rendered
2,655,659,984,550
403,075,816,833
776,179,243,384
240,445,639,826
16,695,489,741
-
975,851,565,265
329,134,460,566
1,250,511,726
TOTAL
4,092,056,174,334
1,306,236,537,557
Currency: VND
CURRENT YEAR
-
(3,543,577,371)
(3,543,577,371)
7,904,472,849,072
5,333,744,304,037
1,225,842,939,796
1,178,085,197,874
147,590,588,627
19,209,818,738
-
Foreign Trade Concrete JSC
Vinpearl Hoi An JSC
Green City Development JSC
Ecology Developing and Investment JSC
Vietnam Tourism in Hochiminh City JSC
Viettronics Dong Da JSC
Dai An Investment and Construction JSC
Thang Long Real Estate Trading Investment JSC
31. COST OF GOODS SOLD AND SERVICES RENDERED
2,313,739,781,730
1,370,908,248,542
941,943,062,042
888,471,146
the land use right with infrastructure at Vincom Village project to secondary investors;
office area, a part of the retail area and basement of Vincom Center Ba Trieu - Tower B to a corporate customer;
a portion of the retail area at Vincom Center A Ho Chi Minh City to a corporate customer.
29.2 Finance income
TOTAL
Currency: VND
32. FINANCE EXPENSES
Revenue from sale of inventory properties in the year was mainly from the transfer of:
Interest income
Unrealised foreign exchange gain
Realised foreign exchange gain
Income from investment activities
Gain from disposal of the equity interest in subsidiaries and associates
Others
Currency: VND
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
745,763,326,130
7,846,617,450
7,625,936,890
8,053,430,022
393,757,169,880
15,221,282,670
692,940,892,472
482,714,052
10,896,701,073
92,118,091,247
872,623,487,485
18,303,929,977
1,178,267,763,042
1,687,365,816,306
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
Loan interest
Unrealised foreign exchange loss
Realised foreign exchange losses
Provision for diminution in value of investments
Allocation of loan and bond issue fees
Other finance expenses
1,097,254,164,113
4,083,014,307
3,675,140,426
478,656,000
108,685,358,117
27,309,367,435
807,484,484,862
27,391,359,812
3,110,260,965
8,500,525,711
57,565,239,212
648,689,634
TOTAL
1,241,485,700,398
904,700,560,196
33. OTHER INCOME AND EXPENSES
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
Other income
Proceeds from disposal of assets
Contract penalty
Other income
114,330,587,641
3,503,880,942
85,783,061,495
25,043,645,204
130,414,885,097
63,254,854,569
47,379,388,913
19,780,641,615
Other expenses
Expenses from disposal of assets
Contract and other penalties
Other expenses
40,209,407,607
1,587,957,883
35,699,574,007
2,921,875,717
101,520,550,542
68,658,939,329
9,183,126,147
23,678,485,066
74,121,180,034
28,894,334,555
111
34. PRODUCTION AND OPERATING COSTS
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
Raw materials
Cost of inventory properties sold
Labour costs
Expenses for external services
Other expenses (including finance expenses)
152,306,108,341
2,655,659,984,550
645,802,427,791
923,449,556,524
368,824,010,512
1,773,199,056,989
975,851,565,265
195,218,941,341
191,010,245,411
196,552,666,039
1,196,606,407,656
TOTAL
6,519,241,144,707
2,755,239,825,712
35. CORPORATE INCOME TAX
The prevailing corporate income tax (“CIT”) rate applicable for the Company and its subsidiaries is 25%, with the following exceptions:
Vinpearl One-member Limited Liability Company (“Vinpearl”) is the investor in Hon Tre Island, Vinh Nguyen Ward, Nha Trang City,
Khanh Hoa Province. These projects have been granted with Investment Certificate and Investment Preferential Certificate. In accordance with the Investment Preferential Certificate No. 2498/UB issued by Khanh Hoa Province’s People’s Committee, Vinpearl has
the obligation to pay Corporate Income Tax ("CIT") at the rate of 20% of taxable profits, and is granted an exemption from CIT for 3
years commencing from the first year the Company makes a taxable profit, and a 50% reduction for the following 7 years. The project
is located in those areas which are qualified as territories of special economical and social difficulties in accordance with the Decree
124/2008/ND-CP dated 11 December 2008. In pursuant to Circular 130/2008/TT-BTC dated 26 December 2008 issued by the Ministry
of Finance that provides guidance on CIT, the Company is entitled to preferential tax rate of 10% during the first 15 years commencing
from the first revenue generating year, CIT exemption for 4 years commencing from the first year the Company makes a taxable profit
and a 50% reduction for the following 9 years for taxable profits derived from the projects in Hon Tre Island. Vinpearl’s first revenue
generating year was 2004 and its first profit making year was 2006, thus the effective CIT rate applicable for the year ended 31
December 2012 is 5%.
Vinpearl Da Nang One-member Limited Liability Company is granted an exemption in the first two years from the first profit making
year and a 50% reduction for the following 3 years for operating activities as stipulated in Investment Licence. This company pays CIT
at the rate of 15% of taxable profit for the first 12 years and 25% for the following years, thus the CIT rate applicable for the year ended
31 December 2012 is 15%.
Vinmec International General Hospital, a branch of Hanoi South, a subsidiary, is entitled to an incentive with tax rate of 10% for the
whole operation duration in accordance to Official Letter No. 29674/CT-HTr dated 24 November 2011 by the General Department of
Tax.
The current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted by the balance sheet date.
35.2 Current CIT
A reconciliation between the profit before tax and taxable profit is presented below:
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
Profit before tax
Adjustments to increase/(decrease)
Donations
Change in accruals of previously sold villas/apartments
Cost of inventory properties sold without sufficient supporting documents
Difference in (profit)/loss from disposal of equity interest in subsidiaries and
associate between consolidatied and separate financial statements
Amortization of goodwill
Amortization of land rental right
Dividend income
Shares in loss/(profit) of associates
Profit from re-issuing treasury shares held by subsidiaries
Revaluation of land use right for villa sold at Vinpearl Da Nang
Penalty for late payment of land use fee
Non-deductible costs related to transferred properties
Others
2,655,063,125,963
1,471,471,446,573
19,836,073,500
24,884,519,661
(225,816,388,077)
57,950,860,045
(68,766,602,788)
69,646,691,552
44,829,209,497
426,042,633,583
9,217,901,051
(28,335,443,080)
(17,442,478,522)
246,307,875,000
78,843,674,810
94,335,212,640
37,380,231,946
57,693,910,052
71,472,052,144
9,217,901,051
(92,118,753,847)
(196,711,339,694)
-
Adjusted net profit before loss carry forward and tax
Losses in subsidiaries
Tax loss carried forward
3,378,010,848,527
4,497,562,705
(5,174,149,291)
1,545,580,751,912
-
Estimated current taxable profit
In which:
Taxable profit subject to 25% tax rate (normal business activities)
Taxable profit subject to 25% tax rate (real estate activities)
Taxable profit subject to 10% tax rate (hospitality activities of Vinpearl)
Losses ineligible for off-set
3,377,334,261,941
1,545,580,751,912
820,106,328,242
2,757,874,931,664
94,509,197,656
(295,156,195,621)
999,417,501,631
546,163,250,282
-
178,589,287,379
The tax returns filed by the Company and its subsidiaries are subject to examination by the tax authorities. Because the application
of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the financial
statements could be changed at a later date upon final determination by the tax authorities.
Estimated current Corporate Income Tax
CIT incentive during the year
Adjustment for CIT from re-issue of treasury shares by subsidiaries recognised
directly to share premium
903,946,234,742
(4,725,459,883)
(61,576,968,750)
386,395,187,978
-
35.1 CIT expenses
Net estimated current Corporate Income Tax
Adjustment for under/(over) accrual of tax from previous years
837,643,806,109
3,556,923,176
386,395,187,978
1,569,124,791
841,200,729,285
211,982,169,448
61,576,968,750
15,520,749,576
(1,599,966,613)
143,075,304,765
(898,948,679,962)
(122,759,319,563)
387,964,312,769
695,553,737,318
(2,377,045,944)
160,926,300,151
(1,030,085,134,846)
-
250,047,955,686
211,982,169,448
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
Current corporate income tax expenses
Adjustment for under accrual of tax from previous years
Deferred corporate income tax (income)/ expenses
837,643,806,109
3,556,923,176
(32,805,527,847)
386,395,187,978
1,569,124,791
9,946,935,040
TOTAL
808,395,201,438
397,911,247,809
Adjusted net estimated current Corporate Income Tax
CIT payables at the beginning of the year
Adjustment for CIT from re-issue of treasury shares by subsidiaries
CIT payables increase from merger with Vinpearl
Other adjustments
Provisional CIT for downpayment collected from customers
CIT paid during the year
Net-off with refundable value added tax
CIT payable at the end of the year
113
(824,327,628)
954,864,869
(49,648,390)
-
-
954,864,869
-
(57,716,581,443)
Net deferred tax liabilities
Deferred tax liabilities, net
Deferred tax liabilities
Deferred tax assets
Reflected in the consolidated financial statements as follows:
Deferred tax income/(expense)
(12,978,168,944)
(57,716,581,443)
8,237,287,997
(21,215,456,941)
(102,858,474,006)
45,141,892,563
(12,978,168,944)
-
(27,206,362,002)
(54,739,363,439)
Temporary difference from revaluation of project development right of Hon Mot Resort
Differences on revaluation of subsidiaries’ assets at acquisition date
(21,215,456,941)
-
-
(20,912,748,565)
29,917,455,150
237,856,429
302,543,434
(9,946,935,040)
-
-
-
-
-
-
-
7,412,960,369
(17,359,895,409)
Previous year
35.3 Unrecognised deferred tax
32,805,527,847
6,918,637,998
20,117,294,047
302,708,376
(931,762,288)
1,548,551
6,316,212,312
824,327,628
7,412,960,369
-
13,729,172,681
Current year
31 December 2011
Difference between carrying amount and tax base of Vincom Center Ba Trieu - Tower C
Temporary difference from assets used as capital contribution to subsidiaries
Unrealised losses on revaluation of foreign currency denominated balances
Provision for severance allowance
Capitalisable interest expenses
Accrued advertising expenses
Accrued expenses for sold apartments
Currency: VND
CREDIT/(CHARGE) TO CONSOLIDATED
INCOME STATEMENT
31 December 2012
CONSOLIDATED BALANCE SHEET
The following are the deferred tax assets and liabilities recognised by the Group, and the movements thereon, during the current and previous years.
35.3 Deferred CIT
These are estimated tax loss as per the subsidiaries’ corporate income tax declarations which have not been audited by the local
tax authorities as of the date of these consolidated financial statements. No deferred income tax assets were recognised in
respect of the aforementioned accumulated tax losses because future taxable profit of these subsidiaries cannot be ascertained
at this stage.
Tax losses carried forward
The Company and its subsidiaries are entitled to carry each individual tax loss forward to offset against taxable profits arising
within five years subsequent to the year in which the loss was incurred. At 31 December 2012, the subsidiaries have aggregated
accumulated tax losses of VND393,158,642,608 available for offset against future taxable profits.
115
-
Associate of a company
under common owners
Major shareholder of Sai
Dong
Associate
Ecology Developing and
Investment JSC
Hanoi Electronics
Corporation
Green City
Common owners
Associate of a
company under
common owners
1,615,540,600
32,453,691,173
14,295,502,640
Common owners
Associate
Associate of a
company under
common owners
Major shareholder
of Sai Dong
Associate
Vietnam Investment
Group JSC
Vietnam Tourism in
Hochiminh City
Ecology Developing
and Investment JSC
Hanoi Electronics
Corporation
Green City
-
-
-
-
(65,000,000,000)
-
-
(7,135,940,593)
(2,783,315,775)
-
INTEREST
PAYABLE TO
RELATED PARTIES
-
(140,000,000,000)
-
-
-
-
(40,926,027,466)
(29,404,642,334)
1,391,200,256
14,583,143,615
-
-
-
-
3,647,500,000
-
-
-
752,336,876,000
-
-
PURCHASE
OF SHARES
Currency: VND
-
-
(752,336,876,000)
-
-
PAYMENT
FOR PURCHASE
OF SHARES
Currency: VND
-
-
-
(8,845,538,711)
(8,543,578,232)
OTHER
RECEIPTS
Currency: VND
-
-
(112,496,598,640)
(3,647,135,570)
-
DIVIDEND
RECEIVED FROM
RELATED PARTIES
-
-
-
2,322,484,137
18,576,045,544
OTHER
PAYMENTS
DIVIDEND
RECEIVABLES FROM
RELATED PARTIES
-
155,000,000,000
-
-
-
LENDING
-
(36,392,009,165)
-
(1,443,661,436)
(18,459,828,193)
INTEREST
INTEREST
PAID TO
RECEIVED FROM
RELATED PARTIES RELATED PARTIES
- (306,582,804,933)
-
-
-
-
RECEIPT OF
CAPITAL
CONTRIBUTION
-
241,067,009,166
-
7,189,849,638
8,535,983,096
OTHER
PAYABLES TO
RELATED PARTIED
During the year, the Group has not made provision for doubtful debts relating to amounts due from related parties (31 December 2011: nil). This assessment is undertaken each
financial period through the examination of the financial position of the related party and the market in which the related party operates.
During the year, the Group provided loans to related parties at interest rates ranging from 12.73% per annum to 19% per annum and was provided loans from related parties at
interest rate ranging from 11% per annum to 19.78% per annum.
Terms and conditions of transactions with related parties
-
RELATIONSHIP
-
-
RELATED PARTIES
Associate
-
-
101,895,076,833 (8,000,000,000)
-
-
INTEREST
RECEIVABLE FROM
RELATED PARTIES
Green City
Hanoi Electronics Major
shareholder of
Corporation
Sai Dong
Ecology
Developing and
Investment JSC
Vietnam Tourism Associate
in Hochiminh City
Vietnam
Investment
Group JSC
RELATED
PARTIES
-
Associate
Vietnam Tourism in
Hochiminh City
(846,120,000,000)
OTHER
RECEIVABLES FROM
RELATED PARTIES
LOAN PRINCIPAL
COLLECTED FROM
BORROWINGS RELATED PARTIES
7,920,000,000
Common owners
Vietnam Investment
Group JSC
LOAN PRINCIPAL
REPAYMENT TO
RELATIONSHIP RELATED PARTIES
SALES TO
RELATED PARTIES
RELATIONSHIP
RELATED PARTIES
COLLECTION
FROM SALE TO
RELATED PARTIES
Significant transactions with related parties during the year were as follows:
36. TRANSACTIONS WITH RELATED PARTIES
117
Amounts due to and due from related parties at the balance sheet date were as follows:
Details on loans to related parties are as following:
Currency: VND
RELATED PARTIES
Trade receivables
(Note 7)
Vietnam Investment Group
JSC
Vietnam Tourism in Ho Chi
Minh City
Other receivables
(Note 8)
Vietnam Tourism in
Ho Chi Minh City
Hanoi Electronics Corporation
Investment JSC
RELATIONSHIP
TRANSACTIONS
Common owners
Payments on behalf for construction
costs of E3
Provision of services
Associate
Associate
Major shareholder of Sai Dong
Associate of a company under
common owners
Proceeds from sale of Nguyen Cong
Tru project
Dividend advance and others
Family members of key
members of management
Downpayment for purchase apartments
at Royal City and Times City project
Downpayment for purchase apartments
at Royal City and Times City project
18,632,219,545
Associate
Key members of management
Office rental and meals expense
payables
Advance for purchasing
Downpayment under loan agreements
at Royal City and Times City Project
Downpayment under loan agreements
at Royal City and Times City Project
20,180,588,384
Associate of a company
under common owners
Long-term loans
(Note 17.2)
Hanoi Electronics
Corporation
Major shareholder of
Sai Dong
INTEREST
RATE %.P.A
MATURITY
DATE
16
24 January
2013
COLLATERAL
Contributed capital of
Ecology into Tay Tang
Long Real Estate
Company Limited
ENDING LOAN
BALANCE
10,937,569,375
10,937,569,375
14
22 March
2015
None
100,000,000,000
14
20 July
2017
None
140,000,000,000
240,000,000,000
Transactions with other related parties
Remuneration to members of the Board of Directors and Management
Currency: VND
CURRENT YEAR
PREVIOUS YEAR
Salaries and bonus
Other benefits
18,346,091,905
-
4,516,256,372
-
TOTAL
18,346,091,905
4,516,256,372
14,114,423,329
(2,651,800)
(398,870,500)
(1,825,355,469)
(3,846,186,728)
(6,073,064,497)
Short-term loans
(Note 6)
Investment JSC
3,369,863,034
205,200,000,000
520,785,377
34,295,011,713
Common owners
RELATIONSHIP
3,673,000
227,722,867,956
59,362,605,564
59,366,278,564
Advance from customers
(Note 21)
Other payables
(Note 24)
Vietnam Investment Group
JSC
Vietnam Tourism in
Ho Chi Minh City
AMOUNT
RELATED PARTIES
Currency: VND
37. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit after tax for the year attributable to ordinary shareholders
of the Group by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit after tax attributable to ordinary equity holders of the
Group (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
119
Commitments relating to construction in progress
The following reflects the income and share data used in the basic and diluted earnings per share computations:
CURRENT YEAR
Currency: VND
PREVIOUS YEAR
(restated)
Net profit after tax attributable to ordinary equity holders for basic earnings
Dillution effect
Interest on convertible bonds/loans
Net profit after tax attributable to ordinary equity holders of Vinpearl JSC
1,571,311,686,488
821,285,875,959
60,291,580,212
-
19,230,766,392
288,879,329,386
Net profit attributable to ordinary equity holders adjusted for the
effect of dilution
Weighted average number of ordinary shares (excluding treasury shares)
for basic earnings per share
Effect of bonus issues in 2012
Effect of bonus issues in January 2013
1,631,603,266,700
1,129,395,971,737
508,089,836
366,990,137
140,931,308
214,658,692
140,931,308
214,658,692
Restated weighted average number of ordinary shares (excluding
treasury shares) for basic earnings per share
Effect of dilution:
Convertible loan
Convertible bond
Additional share issuable due to the merger with Vinpearl JSC
863,679,836
722,580,136
67,843,881
-
5,722,560
158,233,412
Weighted average number of ordinary shares (excluding treasury
shares) adjusted for the effect of dilution
931,523,717
886,536,109
Basic earnings per share
1,819
1,137
Diluted earnings per share
1,752
1,137
The Group has entered into a number of contracts relating to the development of Vincom Center A Ho Chi Minh City project and
the outstanding commitment on these contracts amounted to approximately VND12.6 billion as at 31 December 2012.
Hanoi South, a subsidiary, has entered into a number of contracts relating to the development of the Times City project at No.
458, Minh Khai street, Hai Ba Trung district, Hanoi and at No. 25, Lane 13, Linh Nam street, Hoang Mai district, Hanoi. The
outstanding commitment on these contracts amounted to approximately VND6,151 billion as at 31 December 2012, in which
there is a commitment to pay land use fees of VND1,436 billion for the Times City land area.
Royal City, a subsidiary, has entered into a number of contracts relating to the development of the Royal City project at 72A
Nguyen Trai, Thuong Dinh Ward, Thanh Xuan District, Hanoi. The outstanding commitment on these contracts amounted to
approximately VND3,282 billion as at 31 December 2012.
Sai Dong Urban Development and Investment JSC (“Sai Dong Land”), a subsidiary, has entered into a number of contracts
relating to the development of the Vincom Village project at Phuc Loi, Viet Hung and Giang Bien Wards, Long Bien District,
Hanoi. The outstanding commitment on these contracts amounted to approximately VND6,100 billion as at 31 December 2012,
in which there is a commitment to pay land use fees of VND5,559 billion for the Vincom Village land area.
As at 31 December 2012, the Group has a commitment of approximately VND490 billion, which is principally related to the
construction contracts for the development of the golf course and villas of Vinpearl Nha Trang, hotel of Vinpearl Culture and
Ecotourism park Project in Bai Soi, Hon Tre Island, Nha Trang City, Khanh Hoa Province, hotel and villas of Vinpearl Da Nang,
hotel and villas of Vinpearl Hoi An and other projects, in which there is a commitment to pay land use fees VND12 billion for Tay
Ho View project.
Commitment under operating leases where the Group is a lessor
The Group, as lessor, leases office, retail and mixed use spaces under operating lease agreements. The minimum lease
payments under these agreements at 31 December are as follow:
Currency: VND
ENDING BALANCE
38. COMMITMENTS AND CONTINGENCIES
Capital commitments relating to investment activities
NAME OF INVESTEE
INVESTEE’S
CHARTERED CAPITAL
Viet Thanh - Sai Dong
Company Limited
Tay Ho View Hotel and
Tourism Limited Company
Future Property Invest
Limited Company
Tay Tang Long Real
Estate Company Limited
Vinmec International
Hospital
Currency: VND
THE COMPANY’S CAPITAL
CONTRIBUTION COMMITMENT
ACTUAL
CONTRIBUTED
CAPITAL
COMMITTED
CONTRIBUTED
CAPITAL
Less than 1 year
From 1-5 years
More than 5 years
1,380,893,989,628
3,032,369,338,697
629,633,014,778
5,042,896,343,103
Commitment under operating leases where the Group is a lessee
VND
Amount
VND
%
Amount
VND
Amount
VND
185,000,000,000
136,000,000,000
73.51
120,331,367,299
15,668,632,701
The Group, as lessee, entered into certain land rental agreements with duration of 50 years. The minimum lease payments under
these agreements at 31 December 2012 are as follow:
1,145,454,000,000
801,817,800,000
70
44,431,047,733
757,386,752,267
Currency: VND
1,056,000,000,000
1,056,000,000,000
100
85,062,420,050
970,937,579,950
300,000,000,000
177,000,000,000
59
635,000,000
176,365,000,000
1,200,000,000,000
1,200,000,000,000
100
-
1,200,000,000,000
250,459,835,082
3,120,357,964,918
3,370,817,800,000
ENDING BALANCE
Less than 1 year
From 1-5 years
More than 5 years
4,027,356,059
148,652,190,696
1,558,535,218,064
1,711,214,764,819
121
Other commitments
Commitment with Hanoi People’s Committee (“HPC”)
Commitments under Business Co-operation Contract with Hanel
In accordance with Decision No.1853/QD-UBND dated 22 April 2011 issued by the HPC, Sai Dong Land is obliged to return land lot
No. G4-HH16 (with an estimated area of 43,542m2) and land lot No. G4-NT (with an estimated area of 5,293m2) in the Vincom Village
project to the HPC for construction of a kindergarten.
In accordance with Business Co-operation Contract dated 5 September 2009 between Vincom JSC and Hanoi Electric Company
(“Hanel”), the Company agreed to provide a loan of VND660 billion to Hanel within the first 5 years since the date Hanel
completes each stage of capital contribution to the joint stock company and Hanel will use this loan to contribute to the chartered
capital of Sai Dong Urban Development and Investment JSC, a company which was newly established to develop Vincom Village
project. As at 31 December 2012, the commited amount under this agreement is VND300 billion. In addition, the Company also
commited to provide a total amount of VND146.4 billion in the next 5 years as financial support for Hanel.
Commitments under Business Co-operation Contract with Hanosimex
In accordance with the Business Co-operation Contract dated 2 April 2009 between the Group and Hanosimex and the
Commitment minute dated 10 March 2010, the Group also commits to hand over 2,575m2 land site in the Times City project
to Hanosimex.
Commitments under Business Co-operation Contract with Vinataba
In accordance with the Business Co-operation Contract dated 4 August 2008 between seven (7) parties, including Vincom Joint
Stock Company, Vietnam National Tobacco Corporation (“Vinataba”), Thang Long Vinataba Limited Company (“Vinataba Thang
Long”), Vinataba Trading & Investment Joint Stock Company (“Vinataba JSC”), Dream House Trading - Construction Corporation
(“Dream house”), Vietnam Engineering & Construction Joint Stock Company (“Vinaenco”) and An Binh Real Estate Development
& Investment JSC (“An Binh”), the Company committed to transfer a deposit of VND105 bilion to develop a project at 235 Nguyen
Trai Street, Thanh Xuan District, Hanoi. In addition, the Company also committed to compensate VND105 billion to Vinataba and
Vinataba Thang Long for site clearance, relocation and construction of new production facility. This committed amount will be
converted to Vincom’s equity interest in Thang Long Real Estate Trading Investment Joint Stock Company (“Thang Long”), a
company established to develop of the real estate project at 235 Nguyen Trai Street, Thanh Xuan District, Hanoi. As at 31
December 2012, the committed amount under this agreement is VND192.5 billion.
Commitments under Business Co-operation Contract with Hanoi Transerco and DVT
In accordance with agreement on compensation signed between Vincom JSC and Hanoi Transportation Service Company
(“Hanoi Transerco”) and Overseas Vietnamese Entrepreneur JSC (“DVT”) on 30 July 2010, the Company agreed to compensate
VND128 billion to Hanoi Transerco for site clearance for the real-estate project located at 69B Thuy Khue, Tay Ho District, Hanoi,
Vietnam. As at 31 December 2012, the committed amount under this agreement is VND86.7 billion.
Commitment with Vietinbank
On 10 May 2010, the Company and Vietnam Joint Stock Commercial Bank for Industry and Trade (“Vietinbank”) has signed an
agreement to accept Vietinbank as the guarantee for the issuance of a VND1,000 billion bond. According to which, the Company
is under an obligation to submit the land use right certificate for the “Hotel - Office - Basement complex at Eden quadrangle”
project as a pledge for the bond within nine months since issue date, 11 May 2010. Such deadline was then extended to 12
August 2013 by Vietinbank. If the Company can not meet this requirement, it is liable to a penalty equal to (=) the number of
bonds actually issued multiplied with 50% current bond coupon rate and multiplied with the overdue period. The overdue period
is determined as from the bond issue date to the date Vincom completes necessary procedures to submit the land use right
certificate as pledge asset to an agency authorized by laws for management of collateral asset and to the underwriter.
Commitment under Transfer Agreement with BIDV
On 31 July 2006, the Company had transferred certain parts of the land use right and the assets on the land of the Vincom City
Towers to the Bank for Investment and Development of Vietnam (“BIDV”). In accordance with the Transfer Agreement, the
Company has also committed to transfer the ownership of the following investment properties to BIDV on 20 July 2052:
(i) the ownership of half of the commercial center (from 1st floor to 6th floor of Vincom City Towers (the “Towers”), except for the
reception and elevator waiting area of 160m2 on the 1st floor); and
(ii) the ownership of 31.156% of the basement 1 and basement 2 of the Towers.
Commitment under contracts for interest expenses support to buyers of apartments at Royal City
Royal City, a subsidiary, has entered into certain trial party agreements with the buyers of the apartments at Royal City project and
with the certain banks (who are the lenders for these customers to finance for their apartment purchase). The key terms and conditions
of these agreements are as follow:
the banks will lend the customers to finance for the purchase of the apartments at Royal City;
Royal City will support the customers by paying on behalf of the customers interest to the bank, at the rate ranging from 7% to 10%
per annum during a period of 18 to 24 months after the date of loan agreement signed with Royal City; and
within the period of 18 to 24 months from the date of loan agreement, if the customers default on the loan with the banks, Royal
City might be required by the banks to buy back the apartments at a price no lower than 80% of the amount of downpayment
received by Royal City under the apartment sale agreement.
Commitment under guarantee contract for bonds issued by Thanh Nien Real Estate JSC
In the year 2011, Thanh Nien Real Estate JSC, an investee of the Group, has issued VND670 billion bonds to Vietnam Maritime Joint
Stock Commercial Bank (“Maritime bank”). The bonds have a term of 3 years.
According to the agreement dated 24 June 2011 between Thanh Nien Real Estate and Vinpearl Joint Stock Company and the Board
resolution No.14.1/2011/NQ-HĐQT-VP JSC of Vinpearl Joint Stock Company, a subsidiary of the Group, dated 24 June 2011, Vinpearl
JSC agrees to reimburse Thanh Nien Real Estate the amount that Thanh Nien Real Estate must pay Maritime Bank under the bond
purchase agreement between Thanh Nien Real Estate and Maritime Bank in case (i) Thanh Nien Real Estate does not repurchase
the bonds or does not fully pay the bonds’ principle and interest, (ii) the value of collaterals under the bond purchase agreement is not
enough to cover the bonds’ value. However, this reimbursement must be subject to approval by the General Shareholders of Vinpearl
and the related government authority. The term of this payment guarantee is from the bond issue date until when Thanh Nien Real
Estate fully repurchases the bonds, or when Vinpearl Joint Stock Company fully reimburses the amount committed.
39. SEGMENT INFORMATION
The operating businesses are organised and managed separately according to the nature of the products and services provided,
and consist of three business segments as following:
Real estate: including leasing of investment properties and rendering of related services, developing and trading apartments
and villas at real estate projects of the Group;
Hospitality and beauty care: including provision of hotel and related services at the hotels and resorts of the Group, as well as
beauty care and related services at service centers of the Group; and
Health care business: including provision of health care and related services at hospitals of the Group.
The Group manages operating results separately for each business segment for the purpose of making resourses allocation
decision and result assessment. Result of each segment will be assessed based on profit/loss and determined consistently with
profit/loss of the Group in the consolidated financial statements. However, financial activities of the Group (including finance
income and finance expenses) is managed centralisedly and not allocated for each business segment.
Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third
parties. Segment revenue, segment expense and segment result include transfers between business segments. Those transfers
are eliminated in preparation of the consolidated financial statements.
123
7,904,472,849,072
-
7,904,472,849,072
473,956,758,653
17,442,478,522
2,655,063,125,963
1,612,499,800,170
7,793,253,106,638
55,824,875,804,676
44,951,244,544,495
(101,894,403,376)
(101,894,403,376)
5,085,599,939
(58,132,337,417)
12,946,571,617
-
10,979,395,941,159
23,558,256,252,984
6,360,302,869
5,530,106,452,318
225,710,181,631
37,629,321,428,018
21,160,917,807,011
1,686,051,983,181
50,522,355,122
3,201,230,750,260
1,549,030,873,431
4,492,249,354,047
99,773,002,331
261,003,013,279
2,331,295,376,559
120,897,073,542
189,434,330,541
7,801,171,743
159,476,989,347
4,555,706,840
125,045,438,765
-
1,227,565,040,105
6,624,482,663,716
154,319,548,627
1,197,295,016,612
30,270,023,493
6,559,587,243,833
64,895,419,883
147,590,588,627
6,728,960,000
TOTAL
ADJUSTMENT AND
ELIMINATION
2. Segment profit does not include finance income (VND1,178,267,763,042), finance expenses (VND1,241,485,700,398), and share
in profit of associates that do not belong to the business segments (VND5,085,599,939).
3. Segment assets do not include goodwill (VND5,323,050,138,965), deferred tax assets (VND45,141,892,563), short-term investments (VND3,864,844,010,638), other receivables (VND307,768,670,036), long-term investments (VND1,425,644,657,339), and
investment in associates (VND12,946,571,617) because these assets are managed centrally.
4 Segment liabilities do not include long-term loans (VND18,762,506,644,958), statutory obligations (VND306,493,773,895), shortterm loans (VND3,066,159,014,913), other payables (VND463,579,311,736), accrued bond and loan interests
(VND856,659,033,476) and deferred tax liabilities (VND102,858,474,006) because these liabilities are managed centrally.
The Group’s financial liabilities comprise loans and borrowings, corporate bonds, convertible bonds and loans, trade and other
payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group also has various financial
assets such as trade and other receivables, loans receivables, quoted and unquoted securities, cash and short-term deposits, which
arise directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk.
HOSPITALITY AND
BEAUTY CARE
HEALTH CARE
1. Inter-segment sales are eliminated in consolidation.
40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
REAL ESTATE
Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable
balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group's
risk management process to ensure that an appropriate balance between risk and control is achieved.
Management reviews and agrees policies for managing each of these risks which are summarized below:
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such as equity
price risk. Financial instruments affected by market risk include loans and borrowings, corporate bonds, convertible bonds, deposits
and financial investments.
The sensitivity analyses in the following sections relate to the position as at 31 December 2012 and 31 December 2011.
The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the
debt and derivatives and the proportion of financial instruments in foreign currencies are all constant.
In calculating the sensitivity analyses, management assumed that the sensitivity of the relevant income statement item is the effect of
the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 December
2012 and 31 December 2011.
Total liabilities (4)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt
obligations with floating interest rates, as well as loan receivables with floating interest rates.
Total assets (3)
Assets
Investments into associates
Capital expenditure
Segment profit (2)
Results
Fixed assets depreciation
Share in profit of associates
Total revenue
Interest rate risk
Revenue
Sales to external customers
Inter-segment sales (1)
The following tables present revenue and profit and certain assets and liability information regarding the Group’s business segment.
Currency: VND
The Group manages its interest rate risk by keeping close watch on relevant market situation, including domestic and international
money market and economic, in order to contemplate and adapt its leverage level as well as financing strategies to the prevailing
situation.
125
Interest rate sensitivity
Equity price risk
The following table demonstrates the sensitivity to a reasonably possible change in interest rates expected over the following
financial year. With all other variables held constant, the Group’s profit after tax is affected through the impact on floating rate
borrowings as follows (impact to its equity is not significant):
The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainty about future values
of the investment securities. The Group manages equity price risk through the review and approval by the management on all
equity investment decisions.
INCREASE/DECREASE IN BASIS POINTS
For the financial year ended 31 December 2011
VND
VND
For the financial year ended 31 December 2012
VND
VND
Short term
Currency: VND
EFFECT ON
PROFIT BEFORE TAX
Medium term Long term
At the reporting date, the exposure to listed equity securities was insignificant.
Commodity price risk
+370
-370
+450
-450
+450
-450
(207,988,435,033)
207,988,435,033
The Group is affected by the volatility of certain commodities that are used for the construction of its real estate projects. The
Group manages its commodity price risk by keeping close watch on relevant information and situation of commodity market in
order to properly manage timing of purchases, construction plans and inventories level. The Group does not employ any derivative financial instruments to hedge its commodity price risk.
+400
-400
+400
-400
+400
-400
(333,109,533,067)
333,109,533,067
Credit risk
The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market
environment.
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or a customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivable) and from its financing activity, including deposits with banks and financial institutions and loans to other parties.
Foreign currency risk
Trade receivables from rendering hospitality services and leasing activities
Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Group’s exposure to the risk of changes in foreign currency rates relate primarily to the Group’s
operating activities such as deposits, borrowings and other operating activities originated in foreign currency.
For office and retail tenants, customer credit risk is managed when the Group generally requires customers to make deposits for
leasing of office and retail areas.
The Group has not entered into hedge derivatives to eliminate its currency exposures.
CHANGE IN VND/US$ RATE
Currency: VND
EFFECT ON
PROFIT BEFORE TAX
The Group regularly monitors outstanding trade receivables and closely monitors long outstanding balances. The Group
assessed if there is any impairment on the outstanding balance at each reporting date on an individual basis for major customers, which, as at 31 December 2012, is VND6,034,128,389.
Trade receivables from sale of real estate properties
For the year ended 31 December 2011
+8%
-8%
(77,731,536,066)
77,731,536,066
As presented in Note 7, the Group has outstanding receivables from transfer of real estate properties to corporate and individual
customers. The Group manages this credit risk by regularly monitoring the collection progress from these customers and assess
if there is any impairment on the outstanding balance, which, as at 31 December 2012, is nil.
For the year ended 31 December 2012
+1%
-1%
(55,420,073,344)
55,420,073,344
Other receivables
As presented in Note 8, the Group has other receivables from other entities and individuals. The Group manages this credit risk
by regularly monitoring the collection progress from these customers and assess if there is any impairment on the outstanding
balance, which, as at 31 December 2012, is VND6,302,014,131.
Loans to others/trust investments
As presented in Note 6 and Note 17.2, the Group has provided certain loans/trust investments to other entities. These balances
are not secured, or secured by unquoted securities. The Group manages this credit risk by regularly monitoring the collection
progress from these counterparties and assess if there is any impairment on the outstanding balance, which, as at 31 December
2012, is VND8,621,088,279.
127
4,070,009,395,240
4,928,891,311,212
3,959,880,996,441
4,781,813,484,204
NEITHER PAST DUE
NOR IMPAIRED
19,512,337,536
20,802,272,718
< 30 days
44,992,468,668
24,241,997,982
31-90 days
20,007,518,744
8,298,661,440
91-120 days
PAST DUE BUT NOT IMPAIRED
25,616,073,851
93,734,894,868
> 120 days
3,572,293,317,845
833,120,000,000
1,907,030,041,503
6,312,443,359,348
1,098,536,196,688
4,006,328,059,497
2,612,883,308,589
538,965,024,625
559,571,172,063
3,066,159,014,913
940,169,044,584
1,704,259,748,134
908,623,560,455
LESS THAN 1 YEAR
4,487,636,888,732
4,338,245,289,380
149,391,599,352
18,588,314,109,970
11,438,540,828,223
6,764,800,000,000
384,973,281,747
FROM 1 TO 5 YEARS
1,340,218,116,319
1,290,422,064,615
49,796,051,704
564,776,067,535
559,165,816,735
5,610,250,800
OVER 5 YEARS
13,238,834,561,087
9,200,960,671,840
833,120,000,000
538,965,024,625
2,665,788,864,622
25,772,301,545,591
15,063,865,659,871
6,764,800,000,000
1,704,259,748,134
2,239,376,137,586
TOTAL
Currency: VND
The Group evaluates the concentration of liquidity risk is on the repayment of bond principal that will fall due in 2013 and the obligations to the contractors engaged for the
development of its real estate projects. The Group is evaluating alternative financing sources to ensure that these obligations will be met.
31 December 2011
Loans and borrowings
Convertible loans and bonds
Trade payables
Other payables and accrued expenses
31 December 2012
Convertible loans and bonds
Trade payables
Other payables and accrued expenses
ON DEMAND
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual discounted payments:
The liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligation due to shortage of funds. The Group’s exposure to liquidity risk arises primarily
from mismatches of maturities of financial assets and liabilities. The Group monitors its liquidity risk by arranging long-term credit facilities from the banks and long-term corporate
bonds so that these loans/bonds will be settled once the Group completes the development of its properties and put these properties into commercial operations.
Liquidity risk
31 December 2012
31 December 2011
TOTAL
Currency: VND
Except for those financial assets which have been provided for in Note 6 and Note 7, the Group’s management evaluates all financial assets are neither past due nor impaired as
they related to recognized and creditworthy counterparties except for the following receivable and loan balances which are past due but not impaired as at 31 December 2012:
The Group's bank balances are mainly maintained with well-known banks in Vietnam. Credit risk from balances with banks and financial institutions is managed by Group’s treasury
in accordance with the Group’s policy, which is to place deposits with reputable banks and financial institutions. The maximum lending credit risk faced by the Group as to the items
in the balance sheet as at report date is carrying amount as presented in Note 5 and Note 6. The Group evaluates the concentration of credit risk in respect to bank deposit is low.
Deposits with banks and financial institutions
129
(10,949,256,000)
(6,034,128,389)
(6,302,014,131)
(8,621,088,279)
-
1,325,030,710,145
1,226,873,098,007
283,414,532,023
5,266,742,809,116
249,708,651,894
1,616,855,174,935
9,968,624,976,120
TOTAL
25,772,301,545,591
TOTAL
13,238,834,561,087
9,200,960,671,840
833,120,000,000
538,965,024,625
2,467,164,472,188
198,624,392,434
31 December 2011
8,722,339,950,104
854,465,575,880
1,096,924,061,390
1,999,876,495,659
2,328,563,966,917
1,210,781,260,418
1,231,728,589,840
Cost
Provision
(23,480,766,276)
(21,101,135,007)
(2,379,631,269)
-
31 December 2011
25,772,301,545,591
15,063,865,659,871
6,764,800,000,000
1,704,259,748,134
1,848,792,605,038
390,583,532,548
31 December 2012
Currency: VND
13,238,834,561,087
9,225,032,824,425
809,047,847,415
538,965,024,625
2,467,164,472,188
198,624,392,434
31 December 2011
Currency: VND
8,698,859,183,828
833,364,440,873
1,094,544,430,121
1,999,876,495,659
2,328,563,966,917
1,210,781,260,418
1,231,728,589,840
31 December 2011
FAIR VALUE
9,936,718,489,321
1,314,081,454,145
1,220,838,969,618
277,112,517,892
5,258,121,720,837
249,708,651,894
1,616,855,174,935
31 December 2012
FAIR VALUE
For loans/borrowings from banks and other financial liabilities whose fair value cannot be reliably determined due to the absence of an active market for these instruments, the
fair value is assumed to be the carrying value of these instruments.
For financial instruments and other investments whose fair value cannot be reliably determined due to the absence of an active market for these instruments, the fair value is
assumed to be the carrying value of these instruments; and
Fair value of quoted securities and debt instruments is based on market value at the reporting date;
Cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these
instruments;
The following method and assumption were used to estimate the fair values:
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other
than in a forced or liquidation sale.
15,063,865,659,871
6,764,800,000,000
1,704,259,748,134
1,848,792,605,038
390,583,532,548
Financial liabilities
Convertible bonds/loans
Trade payables
Other current liabilities
Other non-current liabilities
31 December 2012
COST
(31,906,486,799)
Provision
Cost
Financial assets
Listed and unlisted shares
Trade receivables
Other receivables
Other current financial assets
Other non-current financial assets
Cash and cash equivalents
31 December 2012
CARRYING AMOUNT
Set out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments that are carried in the financial statements.
41. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
131
42. SIGNIFICANT EVENTS DURING THE YEAR
43. EVENTS AFTER THE BALANCE SHEET DATE
On 17 January 2012, the Company completed the merger with Vinpearl JSC through the issue of new ordinary shares to swap
with the entire Vinpearl shares, at the swap rate of 1 Vinpearl share for 0.77 Vincom share. Accordingly, the Company issued
158,233,412 shares to swap with the all 205,498,489 outstanding shares of Vinpearl JSC, and thereby increased its share
capital by VND1,582,334,120,000 (equivalent to 158,233,412 shares with par value of VND10,000/share).
According to the General Shareholder Resolution dated 3 January 2013, the General Shareholders have approved a bonus
share issue plan for existing shareholders. The number of newly issued shares is 227,648,160 shares, and the issue was
completed on 30 January 2013.
In March 2012, the Group has completed the transfer of the office area, a part of the retail area and the basement of Vincom
Center Ba Trieu - Tower B.
In April 2012, the Group has completed the issue of US$185,000,000 convertible bond with a term of 5 years, fixed interest rate
of 5% per annum, which will mature in 2017. Subsequently, in July 2012, the Company has completed an additional issue of
US$115,000,000 of similar bonds. These bonds were registered for trading on the Singapore Stock Exchange.
In accordance with the resolution of General Shareholders dated 25 April 2012, the shareholders have approved the plan for
stock dividends, amounting to VND1,510,787,500,000, from the profit of the fiscal year 2011 and the first quarter of 2012. The
number of additional shares issued was 151,078,750. This issue increased the Group’s share capital by VND1,510,787,500,000
(at par value VND10,000/share) and the issue was completed on 19 June 2012.
In January 2013, the Group has received a credit facility of US$100 million with Credit Suisse A.G, Singapore. This unsecured
facility has a maturity term of 11 months and bears an interest rate determined by LIBOR plus a margin.
On 27 February 2013, the Group has increased its capital contribution in Future Investment and Trading Services One-member
Limited Liability Company to VND4,050 billion using the land use right and assets on the land of Vincom Center A Ho Chi Minh
City project. The Group has subsequently signed an agreement to dispose all of its equity interest in this subsidiary.
There has not been any other matter or circumstance that has arisen since the balance date that has affected or may significantly
affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent periods.
In October 2012, the Group acquired an additional 18% voting rights in Sai Dong Investment and Development JSC. This transaction increased the Group’s voting right in Sai Dong to 79%.
In November and December 2012, the Group acquired an additional 22.93% equity interest in PFV Investment and Trading JSC.
This transaction increased the Group’s voting rights in PFV to 97.34%.
Also in December 2012, the Group acquired 60 million shares, equivalent to 40% voting rights, in Dai An Investment and
Construction JSC, and thus Dai An became an associate of the Group.
Ngo Nguyet Hang
Preparer
Nguyen Thi Thu Hien
Chief Accountant
Le Thi Thu Thuy
General Director
1 March 2013
133
for the years ended 31 December 2012, 31 December 2011
Currency: VND
ITEMS
NOTES
Continuing operations
Rental income
Sale of inventory properties
Rendering of hospitality and beauty care services
Rendering of health care services
Revenue
Cost of sales
Gross profit
Valuation (loss)/gain from completed investment property
Valuation gain from investment property under construction
Other operating income
Selling and distribution costs
Administrative expenses
Other operating expenses
Operating profit
Finance income
Finance costs
Net gain/(loss) on financial liability at fair value through profit
or loss
Share of profit of associates
Profit before tax from continuing operations
Income tax expense
16
17
11.1
11.2
11.3
11.4
34.2
9
12
Profit for the year from continuing operations
134 UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
2012
2011
1,237,281,739,856
3,914,459,086,960
1,197,295,016,612
147,590,588,627
959,142,290,550
1,370,908,248,542
-
6,496,626,432,055
(3,797,047,346,585)
2,330,050,539,092
(1,198,310,582,715)
2,699,579,085,470
(1,212,893,076,446)
2,770,379,492,780
484,417,266,967
(184,481,581,672)
(554,654,351,364)
(25,300,126,522)
1,131,739,956,377
(67,035,533,804)
2,804,496,288,844
256,484,869,116
(332,571,152,663)
(367,969,362,847)
(32,829,421,938)
3,977,046,709,213
815,380,140,679
(1,465,297,759,069)
403,819,108,910
3,392,315,643,085
1,333,102,758,518
(1,028,647,696,576)
(499,344,041,662)
18,885,781,241
568,335,847,996
3,749,833,980,974
(957,946,130,599)
3,765,762,511,361
(1,206,925,037,886)
2,791,887,850,375
2,558,837,473,475
Currency: VND
ITEMS
Discontinued operation
Profit after tax for the year from discontinued operation
NOTES
28
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per share:
Basic, profit for the year attributable to equity holders of the
13
Diluted, profit for the year attributable to equity holders of the
Earnings per share for continuing operations:
Basic, profit from continuing operations attributable to equity
holders of the parent
Diluted, profit from continuing operations attributable to equity
holders of the parent
Profit for the year
Other comprehensive income/ (loss) for the year, net of tax
2011
350,971,321,853
328,632,222,837
3,142,859,172,228
2,887,469,696,312
2,836,657,778,666
2,536,911,806,227
3,284
3,511
2,822
3,370
2,878
3,056
2,445
2,999
3,142,859,172,228
2,887,469,696,312
306,201,393,562
parent
parent
2012
13
-
350,557,890,085
-
Total comprehensive income for the year, net of tax
3,142,859,172,228
2,887,469,696,312
Equity holders of the parent
2,836,657,778,666
2,536,911,806,227
3,142,859,172,228
2,887,469,696,312
Attributable to:
306,201,393,562
350,557,890,085
135
as at 31 December 2012, 31 December 2011
Currency: VND
ITEMS
NOTES
2012
2011
ASSETS
NON-CURRENT ASSETS
14
4,566,336,279,455
1,788,159,348,221
Completed investment property
16
18,970,440,497,857
14,013,398,002,561
18
2,500,888,138,501
1,238,649,099,611
Investment property under construction
Construction in progress
Investment in associates
Deferred tax assets
Long-term prepayments
Other non-current financial assets
15
17
Inventories
Trade receivables
Advances to suppliers
6,776,742,787,303
9
1,227,402,299,376
132,655,441,724
21
376,677,552,479
25
844,388,738,199
80,995,093,810
217,993,400,369
37,084,585,594,818
28,447,770,398,892
24
Short-term prepayment and other receivables
8,716,512,565,062
1,378,266,649,435
23
22
169,407,501,624
1,720,384,730,275
20
Financial assets at fair value through profit or loss
Loans to and receivables from related parties
813,057,867,848
12.2
Total non-current assets
CURRENT ASSETS
22,116,466,117,982
12,027,140,416,200
2,106,084,921,169
2,041,076,551,047
285,411,557,706
1,009,452,124,585
1,155,170,676,923
21,419,856,000
40
2,050,611,452,577
256,344,430,122
1,542,780,441,335
2,011,156,020,347
3,830,771,549,791
3,291,708,220,004
Total current assets
33,182,791,307,083
23,411,386,793,480
TOTAL ASSETS
70,267,376,901,901
51,859,157,192,372
Short-term investments
Cash and cash equivalents
ITEMS
NOTES
2012
2011
3,911,498,930,000
EQUITY AND LIABILITIES
Property and equipment
Intangible assets
Currency: VND
26
27
1,616,855,174,935
1,231,728,589,840
EQUITY
Issued capital
36.1
7,004,620,550,000
Treasury shares
36.2
(2,414,808,389,668)
Share premium
Other reserves
12,845,114,930
3,417,615,130,344
(720,199,415,986)
7,845,114,930
6,396,068,590,324
8,061,814,440,493
Equity attributable to equity holders of the parent
16,184,087,008,607
14,678,574,199,781
Total equity
16,296,632,457,157
16,700,422,914,058
5,387,424,733,308
Retained earnings
NON-CURRENT LIABILITIES
112,545,448,550
Interest-bearing loans and borrowings
35
17,018,765,317,897
Long-term deferred revenue
33
173,137,176,207
Long-term customers’ deposits
Deferred tax liabilities
Other long-term liabilities
CURRENT LIABILITIES
Short-term loans and borrowings
Financial liability at fair value through profit or loss
Trade payables
31
12.2
34.1
34.2
Deposits and downpayment from customers
32
Short-term deferred revenue
33
Payables to related parties
40
268,449,266,338
2,021,848,714,277
134,639,788,668
60,571,591,752
3,988,475,225,389
3,634,172,647,470
21,449,266,474,983
9,218,967,197,955
3,025,514,852,954
4,583,023,902,657
1,704,259,748,133
538,965,024,622
439,489,152
1,189,512,480,275
18,612,898,901,956
40,368,076,210
67,457,304,638
2,158,436,757
111,732,260
13,463,703,718,816
115,030,837,787
97,863,546,034
29
7,321,086,302,911
6,145,687,211,382
30
310,332,346,998
783,398,937,353
32,521,477,969,761
25,939,767,080,359
Total liabilities
53,970,744,444,744
35,158,734,278,314
TOTAL EQUITY AND LIABILITIES
70,267,376,901,901
51,859,157,192,372
Accruals
Corporate income tax payable
Other current liabilities
5,185,361,143,021
12.1
250,047,955,686
211,982,169,448
137
CONSOLIDATED STATEMENT OF CASH FLOWS
for the years ended 31 December 2012, 31 December 2011
Currency: VND
ITEMS
NOTES
2012
2011
OPERATING ACTIVITIES
Profit before tax from continuing operations
Profit before tax from discontinued operations
28
Provision
14,15
(Profit)/loss on disposal of property and equipment
other entities
(Increase)/decrease in fair value of financial assets at fair
profit or loss
34.2
Changes in amortized cost of loans and receivables
Changes in amortized cost of payables
Share of profit of associates
Valuation gains on investment property
9
16,17
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
2011
447,304,724,392
207,235,846,450
(2,921,880,550,078)
(1,466,116,187,035)
Short-term deposits for interest gain
(3,357,448,555,556)
(1,033,825,000,000)
(1,550,000,000,000)
(700,000,000,000)
Payment for equity investment in other entities
(1,237,044,601,500)
Redemption of short-term deposit for interest gain
2,170,970,555,556
Disbursement of loans
(316,359,158,903)
800,000,000,000
3,114,080,252,864
1,106,419,943,518
1,949,485,000,000
1,099,481,278,073
22,227,863,252
-
(393,757,169,880)
(102,847,706,215)
15,384,826,995
(604,523,380,228)
(403,819,108,910)
499,344,041,662
(32,292,038,837)
56,865,090,655
(753,816,756,152)
(785,058,983,719)
Proceeds from sale of treasury shares
(568,335,847,996)
Payment for acquisition of additional interest in existing subsidiaries
(5,009,116,876,000)
(3,197,651,000,000)
Repayment of borrowings
(7,412,562,003,299)
(3,186,066,741,944)
(71,035,327,899)
(2,146,068,000,765)
1,362,829,333
7,393,740,333
42,705,849,949
860,541,528,004
(2,737,460,755,040)
516,060,983,619
(7,135,403,508,962)
(4,364,830,317,223)
(170,013,678,377)
(151,452,332,447)
4,195,514,168,495
44,048,608,456
8,655,475,969,647
(35,438,919,637)
(898,948,679,962)
(1,030,085,134,846)
(2,033,540,226,460)
4,523,304,925,730
2,272,034,145,383
Purchase of property and equipment
26,908,645,760
(18,885,781,241)
12.1
Proceeds from sale of property and equipment
(3,763,603,143)
(1,557,486,416,334)
Increase in prepayments
Net cash flows (used in)/from operating activities
2012
23,612,388,366
(329,889,081,915)
(Increase)/ decrease in inventories
Income tax paid
NOTES
340,166,566,062
1,097,254,164,113
Working capital adjustments:
Other cash inflows/(outflows) from operating activities
4,213,067,235,753
183,927,464,873
Interest and dividend income
Interest expense
4,146,921,536,489
(362,747,153,806)
Profit from disposal of investments in subsidiaries and
(Gain)/loss on financial liabilities at fair value through
3,765,762,511,361
4,065,415,576
Unrealised foreign exchange (gain)/loss
value through profit or loss
3,749,833,980,974
397,087,555,515
Non-cash adjustment to reconcile profit before tax to net
ITEMS
INVESTING ACTIVITIES
Profit before tax
cash flows
Currency: VND
Collection of loans
Proceeds from disposals of equity investments in subsidiaries, net
798,153,571,786
of cash disposed
Proceeds from disposals of equity investments in other entities
Interest and dividend received
868,351,572,675
Cash balance of Vinpearl JSC and its subsidiaries on the merger date
Net cash flows from/(used in) investing activities
2,128,929,254,382
1,246,756,815,786
861,951,861,434
1,805,545,399,323
FINANCING ACTIVITIES
1,133,344,359,000
Capital contribution from non-controlling interest
282,413,000,000
Proceeds from borrowings
13,708,303,304,616
Interest paid
(2,341,608,899,245)
Dividends paid to equity holders of the parent
Net cash flows from/(used in) financing activities
289,737,557,173
Net increase/(decrease) in cash and cash equivalents
385,126,585,095
Cash and cash equivalents at 1 January
Impact of exchange rate fluctuation
Cash and cash equivalents at 31 December
2,868,261,067,533
(1,192,631,581,884)
(6,579,668,604,218)
(250,818,279,165)
1,231,728,589,840
1,482,546,869,005
1,616,855,174,935
1,231,728,589,840
-
27
-
274,487,652,842
-
139
RECONCILIATION BETWEEN VAS AND IFRS CONSOLIDATED INCOME STATEMENT
Currency: VND
NO.
ITEMS
I
Profit after tax of VAS
II
Adjustment for IFRS
1
Recognised revenue from reclassify deposit of customer
2
3
4
5
6
7
8
9
10
11
Gain/loss on measurement of investment properties, investment properties under construction at
1,557,486,416,335
in Vincom Center A Ho Chi Minh City
fair value
Net gain on financial liability at fair value through profit or loss
Finance cost arising from measurement of corporate bonds (issued locally) at amortised cost
Finance income/expenses arising from measurement of loans/customers' deposits/AR at
amortised cost
Finance expenses arising from measurement of convertible loan at amortised cost
Finance expenses arising from measurement of convertible bond at amortised cost
Finance expenses arising from measurement of listed shares at fair value
Share profit from associated
10.1 To revaluate financial instruments/AR held by associates
Deferred tax expenses
11.1 Deferred tax expenses incurred from measurement of investment properties, investment
11.2 Deferred tax income incurred this year
Other adjustments
12.1 Adjustment recognise commission fees, mock house expenses arising on sale of apartments
12.2 Revert depreciation of IP and amortisation of prepaid land fee
12.3 Reversal of goodwill amotisaton expenses
12.4 Reversal of CBRE expenses
12.5 Other expenses adjustment
Profit after tax of IFRS
INTERNATIONAL AWARDS WON BY
VINGROUP IN 2012
11,438,800,060
(680,341,245,525)
at Royal City, Times City in full in the consolidated income statement
III
1,846,667,924,525
Adjustment gain of disposal office, a part of parking in Vincom Center Ba Trieu, a part of Retail
properties under constructionat fair value
12
2012
403,819,108,910
9,599,801,474
18,952,044,982
(51,380,620,523)
(114,691,745,597)
(23,043,322,995)
1
2
3
4
5
6
1,443,302,719
(429,173,692,972)
6,726,114,975
13,957,708,775
139,635,839,484
426,042,633,583
6,300,454,259
(580,350,243)
3,142,859,172,228
1. “Best Developer (Vietnam)” at South East Asia Property Awards 2012.
2. “Best Villa Development (Vietnam)” award for the “Vincom Village” at South East Asia Property Awards 2012.
3. “Best Retail Developer in Vietnam” award by the Euromoney magazine.
3. “Best Deal from Vietnam for 2012” by The Asset.
4. “Vietnam Capital Markets Deal of the Year” by International Financing Review Asia (Thomson Reuters).
5. “Best Vietnam Deal” by FinanceAsia.
140 RECONCILIATION BETWEEN VAS AND IFRS CONSOLIDATED INCOME STATEMENT
141

annual report

Transcription

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