SHAPING SUSTAINABLE FUTURE - Vincom Retail

SHAPINGSUSTAINABLE FUTURE

Annual Report2020

Shaping SustainableFuture

Table of Contents

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Vision, Mission and Core Values 2020 At a Glance 2020 Highlights Message from the Board of Directors

Financial and Operational Highlights 2015 – 2020

Vincom Retail’s Vision for Sustainability 2020 Sustainability Report

Sustainable Development Strategy

2020 Economy and 2021 Macroeconomic Outlook

Vincom Retail Operations and Financial Performance in 2020

Blueprint for 2021

Corporate Profile Corporate Milestones

Businesses

Corporate Structure

Board of Directors Management

Supervisory Board

Business Strategy

General Information Statement of the Management

Independent Auditors’ Report Consolidated Balance Sheet Consolidated Income Statement

Consolidated Cash Flow Statement

Notes to the Consolidated Financial Statements

Vincom Retail Governance Structure

Report of the Board of Directors

Report of the Supervisory Board

Governance Report

Internal Auditing Report

Risk Management

Share Price Information and Investor Relations

About Vincom Retail

ConsolidatedFinancial Statements

CorporateGovernance

Vincom Retail 2020 and Message from the Board of Directors

Sustainabledevelopment

Management Report on 2020 Business Performance and 2021 Plan of Action

4 5

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Vincom Retail 2020 and Message from the Board of Directors

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Vision, Mission and Core Values

2020 At a Glance

2020 Highlights

Message from the Board of Directors


VINCOM RETAIL ANNUAL REPORTVincom Center Landmark 81, Ho Chi Minh City

6 7Vincom RetailAnnual report 2020

Chapter 1Vincom Retail 2020 and Message from the Board of Directors

Vision, Mission and Core Values

As a member of Vingroup, Vincom Retail inherits and promotes Vingroup’s vision, mission and core values.

Vincom Retail develops, operates and manages a leading retail mall platform in many provinces and cities in Vietnam. The Company’s dominance is based on its scale, speed of development, international standards and quality of service.

Vincom Retail delivers retail, entertainment and dining experiences that help shaping lifestyles for the people of Vietnam.Vincom Retail and its retail partners are bringing modern shopping, quality products and premium services to Vietnam, introducing consumers to the latest trends in retail experiences.

Vincom Retail vigorously protects its Credibility as one would protect his honor, continuously strengthening its deployment readiness and execution competences; and spares no effort in delivering its commitments.

Vincom Retail values Speed and Efficiency as the principles of its Decision-making – “Fast To Decide, Fast To Invest, Fast To Deploy, Fast To Sell, Fast To Change, and Fast To Adapt”.

Integrity lays the foundation for Vincom Retail where we strictly respect and comply with the laws and ethical standards, putting the interests of our customers first.

Vincom Retail’s commitment to high quality in its operations is expressed as “Best in People, Best in Products and Services, Best in Quality of Life, and delivering the Best in Society.”

Vincom Retail sees Creativity as its vitalizing catalyst for growth, embracing the entrepreneurial spirit to build an enterprise of constant learning.

Vincom Retail nurtures its relationships with Compassion, treasuring human capital as its most valuable asset and harmonizing all the stakeholders’ benefits on the basis of fairness, integrity and solidarity.

CREDIBILITY SPEED

INTEGRITY QUALITY

CREATIVITY COMPASSION

Vincom Retail shares with Vingroup the six core values of CREDIBILITY, INTEGRITY, CREATIVITY, SPEED, QUALITY, and COMPASSION.

Vision

Mission

Core values Logo

Vincom Retail’s logo shows a bird in flight toward the sun, expressing both our goal of reaching new heights and our determination to achieve new levels of success. The V-shape of the bird’s wings refers to Vietnam’s national pride and to “Victory” in our competitive markets.

Vincom Center Tran Duy Hung, Hanoi



2020 At A Glance 6.0

2.480

43

1.7 MILLION SQUARE METERS

TRILLIONVND

VND TRILLION

Gross retail floor area(GFA)

Revenue from leasing

Profit before tax from leasing

Retail malls

Cities and provinces

Vincom Center Pham Ngoc Thach, Hanoi

Vincom RetailAnnual report 2020


1110

2020 highlights

Vincom Retail was honored as one of the Top 10 Leading Brands in Vietnam in 2020 by Forbes Vietnam with a brand value of USD 168.8 million, an increase of USD 13.2 million over 2019.

Vincom Retail was honored among the Top 10 Leading Brands in Vietnam voted by Forbes

Vincom Retail solidified its position as the leading developer, owner and operator of retail malls in VietnamAs of December 31, 2020, Vincom Retail owned 80 retail malls in 43 out of 63 cities and provinces. Its gross retail floor area reached about 1.7 million m²

Launched on 11 December and covering a total floor area of over 56,000 m2, the four-story Vincom Mega Mall Ocean Park would deliver modern and unique experience in shopping, dining and entertainment for residents in Hanoi and surrounding areas.

01

02

Vincom Retail continues to be a trusted partner of well-known international brands expanding their business in Vietnam. In

2020, famous brands such as Uniqlo, H&M, Mango, Cotton:On, Haidilao Hot Pot and Pizza 4P’s expanded their chain of stores

at Vincom retail malls across the country.

Vincom Retail has been a trusted partner of international tenants

expanding their chain stores in Vietnam

03

Trung tâm thương mại (“TTTM”)

80

1.7

Retail malls

Gross retail floor area

MILLION M2

ABOUT



2020 highlights (continuous)

Accompanying and supporting tenants’ amid the challenges posed by Covid-19 pandemic

Delivered excellent customer services and created safe shopping destinations for the community

Promoting digital transformation to manage operations and tenant profiles

Vincom Retail is a key strategic partner of its tenants, providing support during periods of challenge. In 2020, Vincom Retail provided a support package amounting to VND 865 billion to tenants affected by the pandemic, including rental rebates during social distancing and organizing large-scale marketing programs with diverse activities to stimulate customer activities after social distancing periods.

With the motto of “What comes from the heart will go to the heart”, Vincom Retail successfully developed the “Customer Services Excellence” program through extensive training activities. In 2020, 790 staff members were awarded the stars of “Service from the Heart” for their customer – oriented actions. 93% of them were awarded Vincom Certificates which help to improve the services quality across Vincom retail malls network.

Vincom Retail has also pro-actively strengthened a complete set of Covid – 19 prevention measures to provide a safe shopping environment to the customers nationwide.

In June 2020, Vincom Retail implemented the Facility Management (FM) system – a powerful supporting tool for over 2,000 staffs in work management and service quality maintenance. The first phase of CRM system – the online tenant portal, was put into operation for real time and automatically centralized management thousand of potential tenant profiles.

04

05

06

865to tenants affected by the pandemic

Vincom Retail provided a support package amounting to

VND

BILLION



Tran Mai HoaBoard member and Chief executive officer

Message from the Board of Directors

During 2020, Vietnam’s economy continued to achieve positive growth of 2.91% in spite of the challenges posed by the pandemic. The Economist (August 2020) rated Vietnam as one of the 16 most successful emerging economies in the world, providing an optimistic view of its prospects.

The domestic retail market transformed its structure to adapt to the new situation. By the end of 2020, thanks to the country’s successful containment of the pandemic, Vietnam’s retail market achieved positive growth. Retail sales were estimated at USD 172.8 billion. Market size increased by USD 11 billion, an increase of 6.8% over 2019, the highest growth rate in Southeast Asia.

Dear Valued Shareholders,

On behalf of the Board of Directors and Management of Vincom Retail Joint Stock Company, I send our warmest greetings and best wishes for your health and success.



SHAPING THE FUTUREThe commitment to excellence in 2020 will help Vincom Retail prepare for its ambitious business plans in 2021.

Vincom Retail expects to add nearly 100,000 m2 of retail GFA in 2021. This means reaching nearly 1.8 million m2 across the network, while maintaining its position as Vietnam’s largest developer, owner and operator of retail malls.

In addition to leading the market in terms of scale, Vincom Retail aims to pioneer dynamic new business models and diverse experiences to stay ahead of global trends. In 2021, Vincom Retail is the first retail property developer in Vietnam to adopt the retail-tainment model with a chain of commercial shops in the 24 by 7 Grand World Phu Quoc, at a mega “hospitality and entertainment destination Phu Quoc United Center” – a “sleepless” complex located at the northern end of Phu Quoc Island.

In product offerings, Vincom Retail will focus on developing the large-scale Vincom Mega Mall (VMM) in big cities such as Hanoi and Ho Chi Minh City, as well as in Tier 1 cities with high economic growth rates, large populations, and high income per capita. These will be strategic projects, representing many well-known domestic and international brands, including brands making their debut in Vietnam and serving as a place where Vincom Retail introduces new shopping trends and address the locales’ need for excellent services.

Development of strategic partnerships and tenant relationships is central to our business plan for 2021. Vincom Retail will further expand its network of new tenants into three groups: international anchor tenants, brands with the potential to become chain tenants, and Vietnamese tenants. As part of its role to connect and lead the market, Vincom Retail will jointly develop with tenants the collaborative policies and business solutions that will drive market recovery in 2021 by offering impactful promotional programs.

Regarding operational management, Vincom Retail focuses on building a smart internal management and operational excellence. Thanks to its solid foundation and digital tools deployed in 2020, the management system will be further streamlined through automation and simplification of work processes. In its on-site operation, Vincom Retail will deliver new energy and technology solutions for operational optimization to meet energy-saving goals.

With its people-focused approach, Vincom Retail targets elite talent through extensive training programs for 50 key management positions in the Operations Division.

Ladies and Gentlemen,

Moving into 2021 with high-potential opportunities ahead, Vincom Retail will launch a new journey to shape the future, grounded by sustainable development practices and powered by a goal to build businesses connections and lead market recovery trends. Vincom Retail strives to become the leading and most trusted business partner of tenants, offer unique and smart products that drive shopping trends, and maintain a safe and secure destination for the community.

On behalf of the Board of Vincom Retail, I express my sincere gratitude for your past support and I look forward to a successful partnership as we continue to reach our lofty goals.

I wish you the best of health, happiness and success.

Sincerely,

Vincom Retail also won the trust of customers, partners and the community through its community development efforts. Vincom Retail was honored as one of the Top 10 leading brands in Vietnam 2020 by Forbes.

In its internal operations, Vincom Retail produced breakthrough improvements in its management system and operations in 2020. In the first phase, Vincom Retail put into operation new tools to optimize the management process: Facility Management — FM application, an effective application for operational and asset management; Customer Relationship Management — CRM, a centralized management system for tenants that streamlines the workflow between stores and on-site management.

At the retail malls, the smart car parking system was successfully tested, providing a solution for automated basement parking, convenient payments and improved customer service. In addition, an AI camera system was piloted for the first time to analyze visitor data. This system will be used to provide data for new project development and marketing programs.

Vincom Retail also made significant achievements during 2020 in operational optimization. Cost-saving and system efficiency measures included: deployment of a Building Management System – BMS for air conditioning, installation of solar panels, standardized processes for operational activities, and the outsourcing of services and consumable materials.

SUSTAINABLE INTERNAL STRENGTHS

In 2020, Vincom Retail continued to solidify its position as the leading retail property developer in Vietnam. The Company managed and operated 80 retail malls in 43 provinces and cities nationwide. Gross retail floor area at the end of 2020 reached nearly 1.7 million m2. Vincom Mega Mall Ocean Park, launched in December 2020, was rated the most outstanding retail property project in Hanoi. Located within Vinhomes Ocean Park, this mega mall serves the shopping, service and entertainment needs of Vinhomes residents as well as customers in Eastern Hanoi and neighboring locales.

Despite the challenges of the pandemic, Vincom Retail affirmed its position as a pioneer. The Company recorded net revenue of VND 8.329 trillion and profit after tax of VND 2.382 trillion in 2020. These results were achieved through three initiatives: partnership development, brand building and effective corporate governance.

Vincom Retail has been a trusted partner of more than 1,000 well-known leading domestic and international brands. In 2020, many major international brands, including Uniqlo, H&M, Decathlon, Haidilao Hot Pot, Pizza 4P’s, selected Vincom Retail as a partner to expand their chains nationwide by launching new stores in Hanoi and Ho Chi Minh City.

Vincom Retail further affirmed its reputation as a leading leasing partner by promptly proposing support packages through rental rebates to share in the impact of pandemic challenges. After the government’s successful containment of the pandemic in Vietnam, Vincom Retail pioneered to lead and jointly develop with retail tenants large-scale promotional campaigns to boost consumer spending. Vincom launched the Red Sale Festival 2020 last July — a promotional month sponsored by the Ministry of Industry and Trade — with promotions worth up to 100%. In November 2020, the biggest promotional event of the year, Vincom Black Friday attracted many shoppers. All programs were warmly welcomed by customers, a positive signal for the retail market in 2021.

To emphasize its customer-centric strategy, Vincom Retail designed shopping, dining and entertainment spaces to address customer needs. Throughout 2020, the Company delivered the Customer Service Excellence program with intensive training courses nationwide. Nearly 800 staff members attended and were awarded a Vincom Certificate – a standardized certificate of Vincom’s excellent customer service from the heart once they completed their training. The Customer Service Excellence program has been specially designed to help staff deliver a positive customer experience. In addition, to protect public health, Vincom retail malls proactively implemented multiple layers of disease prevention while encouraging safe and responsible shopping habits for customers throughout the country.

Tran Mai HoaBoard member and

Chief executive officer

ON BEHALF OF THE BOARD OF DIRECTORS




Revenue from leasing activities Vincom Retail mall network (1)

HANOI

HO CHI MINH CITY

(trillion VND)

2.427

3.805

4.455

5.506

7.017

6.008

2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020

883

1,026

1,173

1,448

1,5991,654

22

32

46

66

7980

GFA (thousand m²) Number of malls

CAGR (2)

GFA (thousand m²)

Number of malls

29%

1. As of 31 December 2020 2. Compounded Annual Growth Rate

Key Locations

The network

The network created by Vincom Retail encompasses prime business locations throughout Vietnam. As of 31 December 2020, Vincom Retail is operating in 43 cities and provinces. In 2020, more than 70% of Vincom Retail’s revenue came from the rental income at the retail malls in Hanoi and Ho Chi Minh City and accounted for more than 60% of the total GFA in 2020.

Paracel Islands

Spratly Islands

Vincom Center

Vincom Mega Mall

Vincom Plaza

Total

Vincom Center

Vincom Mega Mall

Vincom Plaza

Vincom+

Total

2

1

7

3

13

5

3

3

11

13%



02

About Vincom RetailCorporate Profile

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Corporate Profile

Corporate Milestones

Businesses

Corporate Structure

Board of Directors

Management

Supervisory board

Business Strategy

VINCOM RETAILVincom Center Landmark 81, Ho Chi Minh city ANNUAL REPORT

22 Chapter 2About Vincom Retail Corporate Profile

23Vincom RetailAnnual report 2020

Corporate ProfileVincom Retail has been the leading

developer, owner and operator in

Vietnam in terms of network and

coverage. Vincom Retail has been the leading developer, owner and operator in Vietnam in terms of network and coverage.

Vincom Retail Joint Stock Company (“Vincom Retail” or “the Company”) was established on April 11, 2012 under Business Registration Certificate No. 0105850244 issued by the Hanoi Authority for Planning and Investment. The Certificate was amended several times, most recently on January 2, 2019.

Vingroup began developing its retail network in 2004 under the “Vincom” brand. Since 2013, Vincom Retail became the subsidiary designated to develop and operate Vingroup’s network of retail malls, and was converted to a joint stock company on May 14, 2013. Since its inception, Vincom Retail has led Vietnam’s retail market, with 80 malls in 43 cities and provinces. The Company operates four distinct formats: Vincom Center, Vincom Mega Mall, Vincom Plaza and Vincom+.

The full company name is Vincom Retail Joint Stock Company, abbreviated as Vincom Retail JSC.

On October 25, 2017, the Company was listed on the Ho Chi Minh City Stock Exchange (HOSE) under Decision No. 379-QDSGDHCM. On November 6, 2017, Vincom Retail’s shares were first traded under ticker symbol VRE.

Vincom Retail’s headquarters is located at No.7 Bang Lang 1, Vinhomes Riverside Ecological Urban Area, Viet Hung Ward, Long Bien District, Hanoi, Vietnam.

Telephone: (+84) 24 3974 9999 Fax: (+84) 24 3974 8888 Website: vincom.com.vn

Vincom Mega Mall Thao Dien, Ho Chi Minh City

Chapter 2About Vincom Retail Corporate Profile

24 25

CorporateMilestones

• Vincom Retail Limited Company was established

• Converted into a joint stock company

• Acquired malls from Vingroup including Vincom Center Ba Trieu, Vincom Center Dong Khoi, Vincom Mega Mall Royal City and Vincom Plaza Long Bien

• Received an investment of USD 200 million from Warburg Pincus III B.V. and Credit Suisse AG Singapore

• Acquired Vincom Mega Mall Times City from Vingroup

• Opened Vincom Plaza Ha Long – the first retail mall outside Hanoi and Ho Chi Minh City

• At year-end 2014, Vincom Retail owned and managed six retail malls

• At year-end 2015, Vincom Retail owned 21 retail malls with a total retail gross floor area of 850,000 m2. Ten were newly opened this year, including, most prominently, the Vincom Mega Mall Thao Dien

• Received an additional investment of USD 100 million from Warburg Pincus Investments III B.V.

• Vincom+ retail mall format was launched

• Zara opened its first store in Vietnam at Vincom Center Dong Khoi

• At year-end, Vincom Retail owned 31 retail malls with total retail gross floor area of one million square meters

• Handed over the Vinhomes Nguyen Chi Thanh mixed-use project with 378 luxury apartments

• Pre-sold 700 shophouses, condotels, and shop-offices in five provinces

• Received capital contributions of USD 390 million from Vingroup

• Vincom Retail launched 15 new retail malls

• At year-end, Vincom Retail’s 46 malls contained 1.2 million square meters of retail gross floor area in 24 cities and provinces of Vietnam

• H&M, Pull&Bear, Massimo Dutti and Stradivarius opened their first retail stores in Vietnam at Vincom Center Dong Khoi

• Zara and H&M opened stores in Hanoi at Vincom Center Ba Trieu and Vincom Mega Mall Royal City

• Vincom Retail pre-sold more than 1,200 apartments, condotels, and shophouses in eight cities and provinces

• Opened 20 new retail malls, a record number in the Company’s 14-year history, for a combined total of 66, served 38 cities and provinces with a total retail gross floor area of 1.5 million m2

• Attracted more than 1,000 domestic and international tenants representing established F&B, fashion, entertainment and cultural brands

• Opened Vincom Center in Landmark 81, Vietnam’s tallest building, with outlets representing nearly 100 domestic and international brands

• Honored in Top 15 Vietnam’s Most Valuable Brands by Forbes

• Opened 13 new malls, raising the total retail gross floor area to nearly 1.6 million m2 in 43 cities and provinces nationwide

• Put Landmark 81 SkyView into operation — the Southeast Asia’s highest observatory tower

• Vincom Center Landmark 81 Sky View was honored in both Best Retail Development–Asia Pacific and Best International Retail Development, a part of the International Property Awards 2019

• Named one of the Top 10 Vietnam’s Most Valuable Brands by Forbes Vietnam, with a brand value of USD 155.6 million

• Vincom Mega Mall Ocean Park was launched on December 11 and covers a gross floor area of over 56,000 m2. The four-story retail mall will deliver unique experience in shopping, dining and entertainment for Hanoi residents and those from surrounding areas

• Honored among the Top 10 brands in Vietnam by Forbes Vietnam, with a brand value of USD 168.8 million, an increase of 13.2 million compared to 2019

2012 2013 2014 2015 2016 2017 2018 2019 2020



Vincom is a leading developer, owner, and operator of retail malls in Vietnam

Vincom Retail has four distinct formats: Vincom Center, Vin-com Mega Mall, Vincom Plaza, and Vincom+.

With a nationwide presence, Vincom malls provide a wide range of retail, dining, cultural and entertainment offerings, and are the first to offer the latest consumer trends, making them the most popular retail destinations for tenants and customers in Vietnam. Vincom Retail stands as the leading developer, owner, and operator of retail malls with its extensive network of retail malls in Vietnam.

Businesses

Vincom Center Nguyen Chi Thanh, Hanoi



Vincom Center malls are situated in high-density, high-traffic areas at the heart of major cities with a variety of aspirational domestic and international brands. The Company currently owns and operates seven Vincom Center retail malls across Vietnam – five in Hanoi and two in Ho Chi Minh City.

Vincom Plaza malls are designed for families living in and around smaller cities and outside the central core of large cities like Hanoi and Ho Chi Minh City. Vincom Retail currently operates 54 Vincom Plaza malls in 40 cities and provinces across Vietnam.

Vincom Mega Malls are large-scale lifestyle malls located in integrated, mixed-use developments in key cities. They are “fortress malls” and contain thousands of retail, entertainment, family-friendly facilities, food and beverage options, targeted at addressing the lifestyle needs of families across all income segments. There are now four Vincom Mega Malls nationwide, in which three in Hanoi and one in Ho Chi Minh City.

Since 2021, Vincom Mega Malls have been designed to provide a seamless experience and best-in-class services. The new properties will focus on increasing architectural space with modern facilities and technology while further improving service quality. The result will provide the most unique and exciting shopping and entertainment experiences.

The Vincom+ network of community retail malls includes malls in medium-density non-central locations in Hanoi and Ho Chi Minh City and also in the central core of towns and provinces with population of more than 30,000 people. There are currently 15 Vincom+ retail malls in 11 cities and provinces throughout Vietnam.

Vincom Retail develops and sells shophouses mostly in the vicinity of Vincom Plaza and Vincom+ malls, and condominium units and office towers at Vincom Center projects. Cash flow from the sale of inventory properties helps finance the development of its malls.

Vincom Center Vincom Plaza

Vincom Mega Mall Vincom+

Properties for Sale

SYMBOL OF HIGH QUALITY COMMUNITY DESTINATIONS

SYMBOL OF THE NEW CONSUMER LIFESTYLE MODERN SHOPPING EXPERIENCES TO LOCAL COMMUNITIES

01 03

02 04

05



GENERAL MEETING OFSHAREHOLDERS

BOARD OF DIRECTORS

SUPERVISORY BOARD

Research &DevelopmentDepartment

SalesDepartment

NorthernRegion

CentralRegion

SouthernRegion

LegalDepartment

ITDepartment

MallManagement

Offices

MallManagement

Offices

MallManagement

Offices

MarketingDepartment

SALE AND MARKETINGDIVISION

OPERATIONALDIVISION

INSPECTION – SECURITY,SAFETY AND FIRE

PREVENTION DIVISION

MANAGEMENT

HUMAN RESOURCESAND TRAINING DIVISION

AccountingDepartment

AdministrationDepartment

FINANCE ANDADMINISTRATION

DIVISION

Departmentof

Optimization

Corporate Structure

No. Subsidiary name Head office address Key Business Percentage of holding (%)

1 North Vincom Retail LLC No. 72A, Nguyen Trai street, Thuong Dinh ward, Thanh Xuan district, Hanoi

Sale of inventory properties 100.00%

2 South Vincom Retail LLC No. 72, Le Thanh Ton street and No. 45A Ly Tu Trong street, Ben Nghe ward, District 1, Ho Chi Minh City


3 Suoi Hoa Urban Development and Investment JSC

Km1+200, Tran Hung Dao street, Suoi Hoa ward, Bac Ninh city, Bac Ninh province


4 Ha Thanh Real Estate Development and Investment Company Limited

No. 7, Bang Lang 1 street, Vinhomes Riverside Ecological Urban Area, Viet Hung ward, Long Bien district, Hanoi


List of subsidiariesas of 31 December 2020



Board of Directors

Ms. Le Mai Lan Board member

Ms. Tran Mai HoaBoard member and Chief Executive Officer

Ms. Nguyen Thi DiuBoard member

Mr. Fong, Ming Huang ErnestIndependent board member

Mr. Sanjay Vinayak Independent board member

Ms. Le Mai Lan was elected to the Board in 2017. She is currently Chairperson of VinSchool LLC, a subsidiary of Vingroup and Chairperson of VinUni University Council. Previously, she was CEO of Bank Training and Consultancy Joint Stock Company from 2005 to 2013. From 2001 to 2005, she was an independent financial advisor at the International Finance Corporation of the World Bank and a lecturer at the Hanoi University of Science and Technology. She was previously Business Manager of ABN Amro Bank from 1997 to 2001. Ms. Le Mai Lan holds the degree of Master of Business Administration from Berlin TU University in Germany.

Ms. Tran Mai Hoa was elected to the Board in 2017. She is also CEO of Vincom Retail. She joined Vincom Retail in 2014, serving through 2016 as Project Director of Vincom Mega Mall Times City and Vincom Mega Mall Royal City, and Deputy CEO of Vincom Retail. Prior to joining Vincom Retail, she was the Chief Financial Officer of Gami Commercial Joint Stock Company in 2013. From 2003 to 2013, she held various management positions at An Du Investment Corporation, the Vietnamese distributor of Mercedes-Benz vehicles, including Deputy CEO from 2009 to 2013, CFO from 2009 to 2011 and Chief Accountant from 2005 to 2009. She received a bachelor’s degree in Accounting from the National Economics University and a degree in English from the Hanoi Foreign Language University.

Ms. Nguyen Thi Diu was elected to the Board in 2017. She is currently CEO of One Mount Group, a subsidiary of Vingroup. From 2013 to 2014, she was Executive Director responsible for Vietnam at UBS. From 1996 to 2008, she was Chairwoman and CEO of AFH Investment Finance Consultant JSC, and Director of Investment Banking at JP Morgan Bank Vietnam. She is a graduate from the University of Hawaii with a Master of Business Administration degree and a major in Finance.

Mr. Fong, Ming Huang Ernest was elected to the Board on 26 May 2020. He has extensive experience in Finance and Real estate. Before joining Vincom Retail, Mr. Fong served as the CEO in Asia Pacific market of Credit Suisse Group AG from 2010 to 2019 and Analyst in charge of Singapore Real Estate for Credit Lyonnais Securities Asia (CLSA) from 1995 - 1998. Mr. Fong, Ming Huang Ernest earned his Bachelor degree in National University of Singapore.

Mr. Sanjay Vinayak was elected to the Board on 05 January 2021. He has deep knowledge and experience in Finance and Corporate Banking. Before joining Vincom Retail, he was Managing Director at Deutsch Bank, Executive Director at ABN Amro Bank, and Manager at Credit Lyonnais Commercial Bank. He is currently a founder and CEO of Connect and Heal Global Pte Ltd. – Singapore.

Ms. Thai Thi Thanh HaiChairperson of the board

Ms. Thai Thi Thanh Hai was elected to the Board in 2018. She was the Chief Executive Officer (“CEO”) of VinCommerce General Commercial Services JSC. Before joining Vincom Retail, she worked for Deloitte Vietnam from 1994 to 2014. She received her bachelor’s degree in Economics from Hanoi University of Finance and Accounting.

Ms. Thai Thi Thanh Hai was elected Chairperson of the Board in June 2018.



Management

Ms. Tran Mai Hoa Board member and Chief Executive Officer

Ms. Pham Thi Thu HienDeputy CEO

Futher details can be found in Vincom Retail’s Annual Report 2020, About Vincom Retail – Board of Directors

Ms. Pham Thi Ngoc Ha Chief accountant

Ms. Pham Thi Ngoc Ha was appointed as Chief Accountant of the Company since March 26, 2021. Before joining Vincom Retail, Ms. Pham Thi Ngoc Ha worked at Deloitte Vietnam Co., Ltd. from 2005 to 2017 as a Senior Audit Manager. From August 2018 to February 2021, she held many managerial positions at Vingroup’s subsidiaries including Head of Finance and Planning at VinTech, Chief Financial Officer at Vietnam VinSmart Technology Development Joint Stock Company, and Head of Optimization and Efficiency Department at the Finance Division of Vingroup. Ms. Ha holds a bachelor degree in Accounting and Auditing from National Economics University and a Master of Business Administration from South Columbia University. Ms. Pham Thi Ngoc Ha holds the Certificate of Vietnamese Practicing Auditor (CPA Vietnam) in 2010, the Certificate of Vietnam Tax Practitioner in 2014 and the Certificate of Chief Accountant in 2017.

Mr. Nguyen Anh Dung Deputy CEO

Mr. Nguyen Anh Dung was placed in charge of Security, Safety and Fire Prevention in June 2018. He has worked for Vincom Retail since 2013 as Head of Inspection and Quality Control, Set up Director, Regional Operation Director, and in management positions for Vingroup since 2000. Mr. Nguyen Anh Dung holds a bachelor’s degree in English from Phuong Dong University.

Ms. Pham Thi Thu Hien was born in 1977. She holds a bachelor degree in Banking and Finance from Banking Academy and a master degree in Business Administration for SME - under VCCI. Ms. Hien has more than 10 years of experience working at An Du – an official distributor of Mercedes - Benz Vietnam, where she held a position of Business Director. From 2009 to 2013, Ms. Hien was Project Manager at Savills Vietnam before becoming CEO of Kaiserdom JSC Vietnam which focuses on retail real estate. She joined Vincom Retail in 2014. During her seven years working at the Company, Ms. Hien held the position of Business Director responsible for chain tenants, large and international tenants. She also holds an important role in bringing flagship international brands such as Zara, Uniqlo, MUJI, Haidilao Hot pot, Pizza 4P’s into Vincom retail malls and oversees major tenants including ACFC, Mai Son, Golden Gate, CGV, Lotteria, BHD, California Fitness, and Elite Fitness, etc. Ms. Pham Thi Thu Hien was appointed Deputy Director of the Company from March 16, 2021.

Ms. Hien is very knowledgeable in retail market with deep experience in assisting tenants with their business strategies and expansion plans across the Vincom network.



Supervisory board

Ms. Do Thi Quynh Trang Chairperson

Ms. Tran Thanh TamMember

Ms. Nguyen Thu PhuongMember

Ms. Do Thi Quynh Trang was appointed Chairperson of the Supervisory Board in 2017. She is currently Head of Finance Division at Vingroup. Prior to joining Vincom Retail, Ms. Do Thi Quynh Trang held various positions at E&Y Vietnam, including Auditor from 2010 to 2013, Audit Team Leader from 2007 to 2010 and Audit Assistant, from 2005 to 2007. In Vingroup’s Finance Department, she was Head of Financial Control from 2017 to 2018, Deputy Head of Financial Control from 2014 to 2017, and Head of Financial Planning and Analysis from 2013 to 2014. Ms. Do Thi Quynh Trang holds a bachelor’s degree in Accounting and Auditing from National Economics University.

Ms. Tran Thanh Tam was appointed to the Supervisory Board in 2017. She is the chief of General Accountants in the Accounting Department at Vinhomes JSC. Prior to that, she was General Accountant at Ericsson Vietnam Limited from 2009 to 2010, Chief Accountant of FIT Financial Investment Company from 2007 to 2009, General Accountant at Float Glass Company Limited Vietnam from 2005 to 2007 and as an accountant at Shell Vietnam (lubricant business) from 2001 to 2005. Ms. Tran Thanh Tam graduated from Financial Institute of Vietnam in 2001 with a bachelor’s degree in Accounting.

Ms. Nguyen Thu Phuong was appointed to the Supervisory Board in 2017. She is currently a specialist in the Finance and Planning Department at Vingroup. Ms. Phuong was an audit assistant in charge of Nexia ACPA Auditing and Consulting Co., Ltd from 2009 to 2010. Previously, she held several positions at E&Y Vietnam Ltd, including Auditor and Audit Team Leader from 2010 to 2013. She graduated from Financial Institute of Vietnam with a bachelor’s degree in Finance.



Vietnam recorded a GDP positive growth rate of 4.48% in the fourth quarter of 2020 and outperformed other regional countries thanks to its success in containing the pandemic.

Total retail sales reached VND 584.7 trillion, according to Savills, equivalent to USD 25.2 billion in 2020, up 2.7% compared to previous year. The year-on-year retail sales growth was 10% to reach VND 383.9 trillion, with the sales in household appliances, tools and equipment to grow by 23.2%, followed by food and garment retail sales, up by 14.4% and 15.1%, respectively.

Vietnam’s retail market has the potential to grow rapidly with a compound annual growth rate (CAGR) over 10% and annual household consumption growth of 10.5% per annum. This proves that Vietnam is an attractive destination for investment with political stability and a relatively young population. The competition among domestic and international retailers will be more intense as they strive to expand their presence in Vietnam.

The midterm development strategy of Vincom Retail is to further expand the network of retail malls focusing on two models: Vincom Mega Mall and Vincom Center. These are shopping destinations in prime locations such as centers of major cities and provinces, or within Vinhomes mega residential projects. Vincom Retail also develops retail podiums on the ground floors of Vinpearl hotels. This provides shoppers with comprehensive services and leverages the Group’s rich customer base, including Vinhomes residents as well as neighboring locales.

In 2021, Vincom Retail plans to launch three retail malls and increase a total GFA to nearly 1.8 million m2 across the network

Business Strategy

01

03In 2021, Vincom Retail plans to launch

RETAIL MALLS

Business Strategy

Leveraging its deep market knowledge and in-depth research to better understand consumer needs in Vietnam, Vincom Retail has built a modern and all-in-one retail model. Each mall is an attractive and popular destination where shoppers experience global trends in fashion, F&B and technology.

Overview Vincom Retail aims to solidify its leading position in the Vietnam retail property market by driving market trends and addressing changing consumer tastes nationwide.

The midterm developmentstrategy of Vincom Retail is to further

expand the network of retail malls focusing on two models: Vincom Mega

Mall and Vincom Center



Product Diversification

02 While maintaining the quality and operational standards of the current 80 Vincom retail malls, Vincom Retail will focus on developing the large-scale Vincom Mega Mall (VMM) in big cities such as Hanoi and Ho Chi Minh City, as well as in Tier 1 cities with high economic growth rates, large populations, and high income per capita. These will be strategic projects, representing many well-known domestic and international brands, including brands making their debut in Vietnam and serving as a place where Vincom Retail introduces new shopping trends and address the locales’ need for excellent services.

With the large-scale malls, Vincom Retail will focus on distinctive designs, architecture, and landscapes, in order to use creative interior design and modern technology to enhance the customer’s shopping experience and optimize the operational efficiency.

Vincom Retail will also upgrade and renovate its existing retail malls by restructuring retail tenants mix with the idea of remaining the trusted partner of world-class brands in Vietnam.

Vincom Retail is also the first retail property developer in Vietnam to adopt the retail-tainment model with a chain of commercial shops in the 24 by 7 Grand World Phu Quoc, at a mega “hospitality and entertainment destination Phu Quoc United Center” – a “sleepless” complex located at the northern end of Phu Quoc Island.



Vincom Retail’s relationship with tenants is central to its business plan for 2021. New tenants will be divided into three groups: international anchor tenants, tenants with the potential to become chain-wide tenants, and Vietnamese brands.

Vincom Retail is committed to support tenants in their business operations with professional management and dedicated staff, thus quickly addressing tenants’ specific needs and increase the business efficiency.

Tenant Collaboration

03



To promote its services and enhance revenues, Vincom Retail will continue to receive support from other subsidiaries within the Group.

Vincom Retail will work with VinID to analyze consumer habits and needs in order to facilitate promotional campaigns and effective targeted marketing tactics

Cooperation within the Vingroup Ecosystem

05

Given its customer-centric strategy, Vincom Retail malls need to be more than shopping centers. They connect communities and become cultural hubs where people meet to enjoy entertainment and dining as well as shopping.

Vincom Retail and its retail partners are bringing modern shopping environments, quality products, and premium services to the Vietnamese market, using inspirational events to introduce the latest retail trends.

As part of its role in building connections and leading the market, Vincom Retail cooperates with tenants to develop policies and business solutions that will drive market recovery in 2021 through impactful promotions. With chain tenants and large anchor tenants, Vincom Retail creates program to optimize trade marketing activities. With strong support from partners and local authorities, Vincom Retail hosts festive activities and thousands of large-scale marketing events.

Attracting customers

04



03

Management Report on 2020 Business Performance and 2021 Plan of Action

50

54

60

The Economy in 2020 and the Macroeconomic Outlook for 2021


Blueprint for 2021

VINCOM RETAILVincom Mega Mall Thao Dien, Ho Chi Minh City ANNUAL REPORT


48 Chapter 3Management Report on 2020 Business Performance and 2021 Plan of Action

The Economy in 2020 and the Macroeconomic Outlook for 2021

During 2020, the global economy faced the challenges of the pandemic. Around the world, millions of people died. Supply chains and business operations were hit with massive disruptions. Specific industries, notably aviation and tourism, were paralyzed.

The General Statistics Office (GSO) reported that retail sales were strongly impacted, with annual growth in wholesale and retail sales of just 5.53%, contributing 0.61 percentage points. Specific categories, such as accommodations and catering, declined by 14.68%, lowering their contribution to retail sales by 0.62 percentage points.

Due to prompt action by the Vietnamese Government, the economy of Vietnam demonstrated substantial resistance to the impact of the pandemic. According to the GSO, 2020 GDP grew by 2.91%, the lowest growth rate of the previous ten years. At the same time, Vietnam achieved one of the highest GDP growth rates of any nations. During the last few months of 2020, Vietnam’s trade and consumer services recovered. The Ministry of Industry and Trade reports that total retail sales and consumer services for the year reached VND 5,059.8 trillion, equivalent to year-on-year growth of 2.6%. Excluding price changes, year-on-year growth in 2020 was 1.2%, compared to 9.5% growth in 2019.

From a socioeconomic perspective, Consumer Price Index (“CPI”) remained stable at 3.23% compared to 2019. It was below the 4% target set by the National Assembly. Vietnam inflation rate remained low, which enabled economic recovery.

The retail property market in Vietnam continued to have high growth potential.

Toward the end of 2020, the retail property market in Hanoi and Ho Chi Minh City showed signs of recovery from the impact of social distancing restrictions imposed during the second quarter of 2020.

Vincom Retail saw existing tenants expand their store count at Vincom malls. Uniqlo opened two new stores at Vincom center Pham Ngoc Thach and Vincom Center Metropolis. Haidilao Hot pot added four new stores at Vincom center Pham Ngoc Thach, Vincom center Tran Duy Hung, Vincom Mega Mall Times City, and Vincom Mega Mall Ocean Park.

According to CBRE, the supply of retail space in Hanoi and Ho Chi Minh City was limited during 2020 due to fewer new mall openings. The only new mall during the year was Vincom Mega Mall Ocean Park, which opened in December.

Macroeconomy

Retail Property

2020 Economic Environment

2.91%

3.23%

2020 GDP grew by

Consumer Price Index remained stable at



Challenges and Opportunities in 2021

Challenges and Opportunities in 2021Vietnam is forecast to have the fastest recovery in GDP of any country in the Asia Pacific region, due to its success in containing the pandemic and the Government’s stimulus policies. The International Monetary Fund (IMF) has forecast 6.5% GDP growth for 2021 as local and international activities are normalized.

A more conservative forecast comes from the Central Institute for Economic Management (CIEM), with a forecast of 5.98% GDP growth.

The driving force for growth in retail sales, according to Fitch Solutions, is the expected 9.6% growth in household spending, or 0.5% higher than the forecast for 2020. McKinsey estimates 9.2% growth in the size of Vietnam’s middle class, the fastest growth in the region. This would mean that, by 2035, half of Vietnam’s population would be middle class, providing a strong demographic foundation for the consumer economy’s long-term growth.

While the retail property market is expected to face continuing challenges during the first half of 2021, CBRE maintains an optimistic view of its growth in the second half of the year when vaccines are available and consumer confidence recovers. Vietnam has begun deploying Covid-19 vaccines for nearly 28,000 people as of mid-March 2021. By the end of the year, Vietnam will have provided vaccines for more than one third of its population.

Investor actions will stimulate consumer demand that will strengthen the recovery. Vincom Retail has made plans to work with its tenants to launch joint marketing and promotional campaigns throughout 2021 to attract shoppers and to meet their entertainment and shopping needs.

The demand for retail space with new concepts and formats is expected to increase. The range of tenants is also becoming more diversified, including automotive, luxury goods, furniture, and home décor. Retail mall operators are developing large-scale malls that can offer comprehensive experiences for shoppers. Complex projects are expected to boost spending as well as traffic. Retail rental and occupancy rates are expected to rise in both Hanoi and Ho Chi Minh City.

Macroeconomic Forecast

Retail Property

Outlook for 2021

Chapter 3Management Report on 2020 Business Performance and 2021 Plan of Action


Vincom Mega Mall Ocean Park, Hanoi

With the addition of Vincom Mega Mall Ocean Park in 2020, Vincom Retail has a total of 80 malls open in 43 cities and provinces. Total retail GFA was nearly 1.7 million square meters at the end of 2020.

The new VMM model emphasizes modern and elegant architectural mall designs, with simple space planning and properly-arranged facilities to create unique shopping and entertainment experiences for shoppers.

Vincom has successfully used clear development plans and continuous renovations to bring more than 1,000 brands to its malls, including international brands Uniqlo, H&M, Decathlon, Watsons, Matsumoto Kyoshi, Kohnan, Haidilao Hot Pot, and Pizza 4Ps, among others.

Modern and well-structured Vincom Shophouses, handed over in Bac Lieu and My Tho have become attractive investment properties and have transformed the appearance of these cities.

MALLS


80

MILLION SQUARE METERS

BRANDS

1.7

1,000+in 43 cities

and provinces

Total of

Vincom Mega Mall Ocean Park, Hanoi

Total retail GFA

was nearly



Discussion and Analysis of the Income Statement for the Year Ending 31 December 2020

Indicators 2020(VND trillion)

2019(VND trillion)

% change

Revenue from leasing of properties and rendering related services 6.008 7.017 -14%

Revenue from sale of the inventory properties 2.149 2.027 6%

Others 172 215 -20%

Total revenues 8.329 9.259 -10%

Leasing net operating income (*) 4.280 4.955 -14%

Profit before tax 2.993 3.576 -16%

Profit after tax 2.382 2.852 -16%

Source: VAS audited consolidated financial statements for 2019 and 2020(*) Estimated data

57

Total revenue rose to VND 8.329 trillion in 2020. Of this amount, Revenue from Leasing Activities and Rendering of Related Services was VND 6.008 trillion. Revenue from the Sale of Inventory Properties was VND 2.149 trillion and Other Revenue was VND 172 billion. Revenue from Leasing of Properties and Rendering of Related Services decreased by VND 1.009 trillion, or 14% below 2019, due to the pandemic impact, to VND 4.280 trillion in 2020.

Revenue from the Sale of Inventory Properties in 2020 was attributable mainly to the delivery of shophouse projects in My Tho, Bac Lieu, Cam Pha, Soc Trang, and Kon Tum. Profit After Tax for 2020 reached VND 2.382 trillion, an increase of 16% compared to 2019.

8.329

2.382

in 2020

Total revenue rose to

Profit After Tax

TRILLIONVND

VND TRILLION



Vincom Plaza Imperia, Hai Phong

Indicators Unit 2020 2019

Asset structure: Non-current assets/Total assets % 82.39 85.85

Current assets/Total assets % 17.61 14.15

Resource structure:

Total liabilities/Total assets % 26.32 24.79

Owners’ equity/Total assets % 73.68 75.21

Liquidity ratios: Quick ratio Times 1.81 0.61

Current ratio Times 1.98 1.06

Profitability ratios: Return on Assets % 5.98 7.96

Profit after tax/Net revenue % 28.60 30.80

Return on Equity % 8.12 10.58

Key Financial Indicators

Source: Audited consolidated financial statements for 2019 and 2020

For the fiscal year ending 31 December 2019, the Current Ratio of Vincom Retail rose from 1.06 to 1.98 because Current Assets increased while Current Liabilities decreased. Current Assets grew due to collections from bond issuance. At the same time, Current Liabilities declined due to the repayment of payables due on properties transferred. The Company’s Quick Ratio increased from 0.61 to 1.81 times, reflecting the proceeds from bond issuance.

Total liabilities/Total assets

26.32%Owners’ equity/

Total assets

73.68%

The ratio of Total Liabilities to Total Assets, and Owners’ Equity to Total Assets had slight fluctuations at 26.32% and 73.68%, respectively, compared to 2019.

Discussion and Analysis of the Balance Sheet for the Year Ending 31 December 2020

Indicators 2020(VND trillion)

2019(VND trillion)

% change

Current assets 7.012 5.070 38%

Non-current assets 32.804 30.768 7%

Total assets 39.816 35.839 11%

Total liabilities 10.481 8.885 18%

Where:Total loan and debts (short and long-term)

5.726 2.785 106%

Statutory obligations 322 295 9%

Owners’ equity 29.336 26.954 9%

Source: VAS audited consolidated financial statements for 2019 and 2020

Current assests increased by VND 1.942 trillion, from VND 5.070 trillion in 2019 to VND 7.012 trillion at year-end 2020, due largely to changes in Cash and Cash Equivalents and Investments Held to Maturity, which reflected cash flow from the year’s business activities. Capital expenditures for project construction and deposits for project investments during the year were covered mainly through the issuance of corporate bonds. Cash and Cash Equivalents rose by VND 1.663 trillion. Investments Held to Maturity increased by VND 1.105 trillion.

Non-Current Assets increased by VND 2.036 trillion from VND 30.768 trillion in 2019 to VND 32.804 trillion at the end of 2020, largely due to changes in Other Non-Current Assets reflecting preparations for future project investments.

Vincom Retail’s total loans and debts increased by VND 2.941 trillion from VND 2.785 trillion at the end of 2019 to VND 5.726 trillion at the end of 2020, due to the Company’s private placement of bonds and public bond offerings.

Owners’ equity at the end of 2020 increased by VND 2.382 trillion from VND 26.954 trillion at the end of 2019 to VND 29.336 trillion at the end of 2020, due to an increase in Retained Earnings of VND 2.852 trillion, despite the pandemic challenge.

Statutory Obligations increased from VND 295 billion at the end of 2019 to VND 322 billion at the end of 2020. During 2020, the Company accrued at total of VND 1.130 trillion of tax payables and paid a total of VND 1.103 to the State Budget.

39.816

29.336

Total assets

Owners’ equity

TRILLION

TRILLION

VND

VND



Following the successful launch of Vincom Mega Mall Ocean Park, Vincom will focus on developing and expanding the large-scale VMM model in Vinhomes mega mixed-use developments. Vincom Mega Mall Smart City is scheduled to open during the third quarter of 2021.

Vincom plans to launch two new Vincom Plaza (VCP) projects during 2021. These malls are in prime locations with nearby blocks of shophouses. VCP is one of the Vincom mall formats, an appealing destination in a city center that will drive changes in consumer shopping trends.

Vincom Retail’s marketing strategy includes its branding approach for the period from 2021 to 2023. Vincom Retail will solidify its leading position in the retail property market by building effective partnerships, consumer confidence, and the unique customer experience. With its customer-centric practices, the Company will take the lead in delivering best-in-class service culture which inspiring local business communities.

During 2021, all Vincom Retail malls throughout the country will remain safe and exciting destinations for shopping, dining and entertainment. By promoting public health and safety, Vincom is working proactively to prevent the spread of the pandemic and continue shaping a safe shopping habit for customers.

Blueprint for 2021

During 2021, Vincom Retail intends to solidify its leading position in the modern retail property market in terms of scale and market share, while delivering excellent service and a customer experience of high quality.



60

VINCOM RETAIL

04

Corporate Governance

64

64

66

68

69

69

70




Governance Report

Internal Audit Report

Risk Management


Vincom Center Ba Trieu, Hanoi ANNUAL REPORT


Chapter 4Corporate Governance

Introduction of the Board of Directors

During 2020, the Board issued eight resolutions, including the following:

Participation of Board Members in Corporate Governance Programs

Board Meetings and the Announcement of Major Decisions

Since 26 May 2020, the Board of Directors (“the Board” or “the BOD”) of Vincom Retail consists of six members. It is chaired by one Chairperson and includes two independent Directors.

With the exception of two members of the Board of Directors based overseas, all remaining members and Management are fully engaged in corporate governance training.

During 2020, the BOD followed the Company’s Charter and Corporate Governance, internal management rules, and the law, as follows:

• Supervised the implementation and prepared resources for the Company’s ongoing projects

• Led, directed, and successfully organized the Annual General Meeting of Shareholders (“the GMS”) on 26 May 2020

• Implemented the financial reports of 2020, annual report, the quarterly and semi-annual financial reports

• Supervised the implementation of decisions made by the GMS and BOD, and supervised the business activities of the Management

• Supervised information disclosure to ensure transparency and timeliness appropriate to a large publicly-listed company, and

• Supervised the work of the Management to improve business performance and to accomplish planned goals.

The Board of Directors has not established subcommittees directly under the Board.

Further details can be found in Vingroup’s Annual Report 2020, Corporate Governance – Vingroup Governance Structure.



Content Number of Resolutions

Issuance of Corporate bonds 04

Organization of the Annual General Meeting of Shareholders 02

Related parties’ transactions 01

Change in the Board of Directors’ membership 01




Assessment of the financial situation of the Company

Assessment of compliance with the law and implementation of decisions made by the Annual General Meeting of Shareholders and the Board of Directors

Assessment of compliance with the Company’s internal management guidelines

The Supervisory Board approves the consolidated financial statements of 2020 as audited by KPMG Vietnam Limited. The financial statements give a true and fair view of the financial position of the Company as of 31 December 2020 and the results of operations and cash flows for the year 2020 in accordance with the provisions of the Company’s accounting system.

The Supervisory Board evaluates the Company’s activities as sustainable and in compliance with existing law. The implementation of decisions of the Annual General Meeting and the Board is closely monitored to ensure full compliance. The Supervisory Board believes the Annual General Meeting, the Board and related departments have completed all of their assigned duties.

Thanks to thorough implementation of corporate governance regulations by Management and staff, the Board of Directors was able to monitor and execute the Company’s business strategies in a timely manner, and make decisions related to the operations of the Company. During the past year, the Supervisory Board has increased its inspection and control of compliance, the quality of work and the level of independence in its monitoring activities, especially as they relate to material transactions and transactions with related parties.




Governance Report

2020 Governance Report

Compensation for Members of the Board of Directorsand Supervisory Board

Changes in the membership of the Board, Supervisory Board, and Management

During 2020, the Company remained in full compliance with regulations on corporate governance for public companies and information disclosure on the stock market.

After achieving positive outcomes from the 2019 restructuring, Vincom Retail continued to streamline its administrative processes and optimize resource allocation in order to maximize contribution and enhance the supervisory functions of the Board, as well as ensure a system-wide implementation of the principles and fortify the relationships between the Company and related parties.

• Remuneration for members of the Board was 1.4 billion VND, equivalent to 0.06% of 2020 profit after tax.

• Remuneration for the Supervisory Board was 0.9 billion VND, equivalent to 0.04% of 2020 profit after tax.

• Mr. Timothy Joseph Daly stepped down from the Board on 05 May 2020.

• Mr. Fong, Ming Huang Ernest was elected as an Independent member of the Board of Directors on 26 May 2020.

• Ms. Pham Ngoc Thoa stepped down from the position of Chief Financial Officer and was appointed as the Chief Accountant of the Company from 10 December 2020.

• Ms. Nguyen Thi Xuan Nghia stepped down from the position of Chief Accountant from 10 December 2020.

InternalAudit Report

Risk Management

In 2020, the Company has not implemented internal audit. The Company is preparing necessary procedures to carry out its internal audit from April 01, 2021 in accordance with Decree 05/2019/ND – CP.

The Vincom Retail Board of Directors works closely and frequently with various functional departments to manage risks. Vingroup’s risk management policies are adopted by Vincom Retail. The Company adopts Vingroup’s framework to create its own risk management mechanism, optimally balancing between the incident costs and the risk management costs.

Further details can be found in Vingroup’s Annual Report 2020, Corporate Governance – Risk Management

Vincom Retail’s Investor Relations function strives to provide transparent and timely communication with shareholders and investors. Vincom Retail is one of the few enterprises to issue financial reports in line with Vietnamese Accounting Standards (VAS) and International Financial Reporting Standards (IFRS). The financial reports of the Company and its affiliates are audited by KPMG Vietnam Ltd.




Vincom Retail Share Price During 2020 Shareholder structure (As of 14 December 2020) (*)

Ticker

VRE

Shares outstanding (as of 31 December 2020)

2,272,318,410 SHARES

Market capitalization (on 31 December 2020)

VND 71,350,798,074,000

Non-restricted shares

2,272,318,410 SHARES

Restricted sharesNone

Shar

e pr

ice

(VND

)

Transacted volume (m

illion shares)

Trading volume

Date Trading volume (‘000 shares)

Closing 31.12.2020 4,651

Low 07.01.2020 357

High 14.12.2020 17,930

Average daily trading volume 3,437

Price

Share Price Date Price (VND/share)

Closing 31.12.2020 31,400

Low 24.03.2020 17,700

High 03.01.2020 34,600

Volume-weighted average price (*) 27,291

No. Shareholder Number ofshares held (shares)

Ownership percentage (%)

Number of shareholders

Number of shareholders

Institutional Individual

1 State Ownership 0 0 0 0 0

2 Founding shareholders/FDI 0 0 0 0 0

- Domestic 0 0 0 0 0

- Foreign 0 0 0 0 0

3 Significant shareholder (holding 5% of shares or more)

1,370,934,393 58.87 3 3 0

- Domestic 1,370,934,393 58.87 3 3 0

- Foreign 0 0 0 0 0

4 Company’s Union 0 0 0 0 0

- Domestic 0 0 0 0 0

- Foreign 0 0 0 0 0

5 Preference shares(if any)

0 0 0 0 0

6 Treasury shares 56,500,000 2.43 1 1 0

7 Other shareholders 901,384,017 38.71 22,440 334 22,106

- Domestic 185,515,826 7.97 21,658 93 21,565

- Foreign 715,868,191 30.74 782 241 541

TOTAL 2,328,818,410 2,328,818,410 100 22,444 338

In which - Domestic 1,612,950,219 69.26 21,662 97 21,565

- Foreign 715,868,191 30.74 782 241 541

(*): Calculated using weighted average closing prices for 252 trading days in 2020. Source: Ho Chi Minh Stock Exchange and Bloomberg.

20

18

16

14

12

10

08

06

04

02

00

20.000

0

Vincom Retail Transacted volume Vincom Retail Share price VN Index rebased

40.000

(*) According to the Company’s list of shareholders as of December 14, 2020 for solicitation of members of the Board of Directors ’s writ-ten opinion on the stepping down and election of Board members for 2018 – 2023 tenure

Feb-20 Apr-20 May-20 Jul-20 Aug-20 Oct-20 Nov-20 Dec-20



Insider holdings (As of 14 December 2020)

Significant shareholder holdings (As of 14 December 2020)

Transactions by insiders (Members of the Board, Supervisory Board, Management)

Transactions by related parties of our insiders

Transaction of significant shareholders

Changes in Shareholders’ Equity

No. Name Position Number of shares held (shares)

Ownershippercentage (%)

BOARD OF DIRECTORS

1 Ms. Thai Thi Thanh Hai Chairperson of the Board 0 0

2 Ms. Tran Mai Hoa Board Member 0 0

3 Ms. Nguyen Thi Diu Board Member 0 0

4 Ms. Le Mai Lan Board Member 0 0

5 Brett Harold Krause (**) Independent Board Member 0 0

6 Fong, Ming Huang Ernest Independent Board Member 0 0

MANAGEMENT

1 Ms. Tran Mai Hoa CEO 0 0

2 Ms. Tran Thu Hien (**) Deputy CEO 61 0.000002

3 Mr. Nguyen Anh Dung Deputy CEO 0 0

4 Ms. Pham Ngoc Thoa (**) Chief Accountant 0 0

SUPERVISORY BOARD

1 Ms. Do Thi Quynh Trang Chairperson 0 0

2 Ms. Nguyen Thu Phuong Member 61 0.000002

3 Ms. Tran Thanh Tam Member 0 0

No. Shareholder Number of shares held (shares)

Ownership percentage (%)

1 Vingroup Joint Stock Company 427,715,101 18.37

2 Sai Dong Urban Development and Investment JSC 751,030,941 32.25

3 Hanoi Southern City Development and Trading LLC 192,188,351 8.25

Time Additional capital(VND)

Post-transactioncharter capital (VND)

Method

2013 0 2,944,200,000,000 Initial capital in the form of a joint stock company

July, 2013 2,829,600,000,000 5,773,800,000,000 Private placement of common shares and preference shares

December, 2013 3,530,000,000,000 9,303,800,000,000 Private placement of common shares and preference shares

April, 2014 2,706,780,000,000 12,010,580,000,000 Private placement of common shares and preference shares

June, 2015 9,098,000,000 12,019,678,000,000 Private placement of common shares

July, 2015 2,152,567,470,000 14,172,245,470,000 Private placement of preference shares

March, 2016 1,544,917,800,000 15,717,163,270,000 Private placement of common shares

May, 2016 1,254,223,147,829 16,971,386,417,829 Issuance to existing shareholders

October, 2016 117,851,002,171 17,089,237,420,000 Issuance to existing shareholders

December, 2016 4,002,487,530,000 21,091,724,950,000 Issuance to existing shareholders

September, 2017 419,200,000,000 21,510,924,950,000 Issuance of preference shares to convert convertible loans

September, 2017 (2,500,137,620,000) 19,010,787,330,000 Redemption of preference shares and cancellationConversion of preference shares into common shares

December, 2018 4,277,396,770,000 23,288,184,100,000 Issuance of shares from owners’ equity to existing shareholders

Transactions of Treasury share

No. Content Before change After change Reason

1 Number of treasury shares 0 56,500,000 Vincom Retail executed treasury shares buyback

None

None

None

(**) Mr. Brett Harold Krause has not been internal member of the Company since January 05, 2021Ms. Tran Thu Hien has not been internal member of the Company since March 16, 2021Ms. Pham Ngoc Thoa has not been internal member of the Company since March 26, 2021



Shareholders and Investor Relations Activities During 2020

2020 Investor Relations Calendar

Financial Calendar

Vincom Retail maintains an active investor relations program to respond to inquiries, distribute information and manage communications with shareholders, investors, analysts and other interested parties via our official website www.vincom.com.vn. The Company is committed to fair treatment to all shareholders, whether domestic or foreign, institutional or individual. Through its website, the Company provides timely and accurate information on its business to shareholders and members of the public. The information is presented in English as well as Vietnamese. Investor presentations, news, and financial reports are updated regularly and may be downloaded from Investor Relations section on our website.

In 2020, due to travel restriction resulted from Covid-19 pandemic, the Investors Relations Department shifted from in-person meeting to video conference and webinar to update shareholders with the Company’s performance on a timely manner. Vincom Retail held over 110 webinars, virtual meetings and site visits for investors and attended 8 investor conferences through video conference.

At the beginning of 2021, the Investors Relations Department and P&L in the Group to successfully organize the first Vingroup Virtual Investor Day, a live broadcast. This proved to be an excellent opportunity for shareholders, investors and analysts to better understand and communicate directly with Management about the ongoing digital transformation strategy at the Group and international expansion strategy with the smart electric vehicles industry.

Vincom Retail’s Investor Relations Department plans an even greater number of events for investors. Our goal is to respond promptly to all investor and analyst inquiries. Investor Relations can be reached via email at:

Investors Relations DepartmentVincom Retail JSC No.7 Bang Lang 1, Viet Hung Ward, Long Bien District, HanoiEmail: [email protected]

Quarter I

Webinar updating business results in Quarter IV of 2019

Quarter II

Webinar updating business results in Quarter I of 2020

2020 Annual General Meeting of Shareholders

Citigroup – APAC Investors Conference 2020

Quarter III

Webinar updating business results in Quarter II of 2020

HOSE – Daiwa – Vietnam Corporate Day 2020

HSBC – Frontier Market Investor Webinar 2020

UBS – OneASEAN Webinar 2020

Quarter IV

Webinar updating business results in Quarter III of 2020

HSBC – Global Emerging Market Forum 2020

Credit Suisse – ASEAN and Asian Frontier Market 2020

HSC – Vietnam Market Conference 2020

Daiwa – Investment Conference 2020

For the financial year ending 31 December 2020

26 May 2020 2020 Annual General Meeting of Shareholders

28 April 2020 Release of Quarter I, 2020 Financial Statements

27 July 2020 Release of Quarter II, 2020 Financial Statements

28 October 2020 Release of Quarter III, 2020 Financial Statements

28 January 2021 Release of Quarter IV, 2020 Financial Statements

For the financial year ending 31 December 2020

April 2021 Proposed release of Quarter I, 2021 Financial State-ments

July 2021 Proposed release of Quarter II, 2021 Financial Statements

October 2021 Proposed release of Quarter III, 2021 Financial Statements

January 2022 Proposed release of Quarter IV, 2021 Financial Statements

* Except for the AGM, all above conferences are in webinar format

Vincom Center Metropolis, Hanoi



Chapter 5Sustainable development

76 77

VINCOM RETAIL

05

Sustainable development

78

78

81

Vincom Retail’s Vision for Sustainability

2020 Sustainability Report

Sustainable development strategy

Landmark 81, Ho Chi Minh City ANNUAL REPORT



78 79

Energy Savings and Environmental Protection Sustainability of Product Development

Exhibitions

Visitors

During 2020, Vincom Retail researched and implemented solutions for each retail mall format to better conserve energy and water by improving design and operating standards, well-controlled of operating maintenance and by applying systematic energy-saving approaches.

Vincom Retail has standardized its operational procedures on video, using FM software to manage maintenance schedules and regulations on equipment use, based on the needs of each retail mall. This standardization has saved energy to protect the environment. For example, inverters were installed in some air-conditioning systems, cooling towers and water pumps to address peak and off-peak demands or weather conditions in order to optimize equipment performance.

In 2020, Vincom Retail has worked with its solar panel system partners to further research and deploy at 38 retail malls in 2021. Vincom Retail also completed the application of hi-tech solutions, controlling the operation of air-conditioning systems (including chiller and cooling tower) via BMS systems, and connecting to a Central Control Room to obtain data. This made it easier to assess the system performance and make

2020 Sustainability Report

In June 2017, the Vincom Center for Contemporary Art (VCCA) was opened in Hanoi with the mission of supporting art dissemination to the general public. This is a large-scale not-for-profit center for the art developed and managed by Vingroup of which Vincom Retail is a subsidiary.

By the end of 2020, VCCA contributed to expressions of the creativity, personality, and ideology of the artists whose works have been exhibited at 32 exhibitions and 205 other art events and educational sessions, attracting nearly 400 artists of national and international fame. These events exhibited over 2,000 works of art to nearly 900,000 visitors.

During the consecutive years of 2017, 2018 and 2019, exhibitions including National Young Arts Festival 2017, Silk Paintings and Small – Medium Sculpture Exhibition 2018 and the Fine Artworks of Representative Asian Artists 2019, jointly organized by VCCA and the Department of Fine Arts – Photography – Exhibitions, have been selected among Top 10 Fine Arts and Photography Events by the Vietnamese Ministry of Culture, Sports and Tourism. The Third ASEAN Graphic Arts Exhibition in Vietnam during 2020 enhanced mutual understanding and solidarity within the ASEAN community. During 2020 Vietnam held the role of ASEAN Chair and promoted a number of information exchanges to celebrate achievements in graphics arts throughout the region.

32

900,000

Vincom Center for Contemporary Art

Further details can be found in Vingroup’s Annual Report 2020, Vingroup’s Vision for Sustainability

Vincom Retail’s Vision for Sustainability

timely adjustments for stable operations, contributing to the reduction of energy costs. During 2020, Vincom Retail explored partnership opportunities with Singapore-based companies to improve air-conditioning systems using new algorithms that minimize the effects on building occupants.

Simultaneously, Vincom Retail applies cooling water treatment technology for Chiller system: replacing existing chemical wastewater treatment system with E-Water cooling water treatment technology at all Vincom retail malls across the country in 2021.

In addition, Vincom Retail malls initiated a conservation program named “Say no to plastic waste” to manage hygiene and to protect the environment. Waste is sorted on site into organic waste and other types, namely inorganic, hazardous, and recycled. Waste is sent to designated collection points and divided into dry, wet, recycled and hazardous categories for contractors to collect, remove from the site and process every day in accordance with waste collection and sorting procedures.



80 81

Employment policies Vincom Retail complies fully with all employment laws and regulations to ensure that jobs are protected, income is improved, and employee morale is safeguarded.

Further details can be found in Vingroup’s Annual Report 2020, Sustainability Report – Ongoing Development of Human Capital

Sustainability of Human Resources

In order to attract talented employees and to reward long-term commitment, Vincom Retail has created a comprehensive compensation policy that covers all employees, skills, and organizational levels. This policy tracks the contributions of each individual employee.

Delivering transparency

In order to deliver transparency in business and management activities while avoiding any disruptions to the operations of the Company, Vincom Retail developed The Transparency Policy. Targeting all employees at Vingroup and its subsidiaries, such as Vincom Retail (including employees on probation period and trainees) who are tasked to perform activities governed by the Policy, as well as Suppliers, and Related Persons as regulated therein. The policy provides measures on transparency, prevention of money laundering, prevention of bribery and corruption, internal related parties controls, and notes on sanctions laws of other countries to be aware/complied with in order to avoid any impacts on the Company’s operations.

Details of the Transparency Policy are presented in Vingroup 2020 Annual Report, Sustainable Development Chapter - Delivering Transparency Section

11.2The average monthly income per employee during 2020

MILLION/MONTH

VND

Sustainable development strategy

Sustainable development orientationsThe Company’s sustainability strategy requires Vincom Retail to strike a balance among the interests of stakeholders, following the four principles:

1. Economic Optimization for Sustainable Growth

• Ensure economical productivity and maximize a sustainable growth

• Lead and solidify the leading position in the retail property market

• Make sustainable contributions to the economy

• Strengthen corporate governance and management capability

• Accompany and support partners, especially domestic partners

2. Sustainable Human Resources Development

• Protect employee rights and equality

• Develop a strong culture and solidarity

• Focus on education and sustainable development of the human resources

• Foster team spirit by organizing union and community activities

3. Responsibilities to Society

• Raise level of social well-being in areas where the Company operates

• Demonstrate a sense of social responsibility towards business partners, customers, colleagues and the community

• Become a destination for culture, arts and entertainment

4. Environmental Protection

• Promote energy efficiency and the shift towards green energy sources

• Focus on research and implementation of solutions to minimize negative impacts on the environment

Employee structure

Employee distribution by gender

100%56.77% (1,753 people)Unskilled worker

67.78% (2,093 people)Male

25.03% (773 people)University and higher

32.22% (995 people)Female

18.20% (562 people)College, vocational training

100%

(3,088 people)

(3,088 people)



82 83

Engaging stakeholders Vincom Retail aims to balance the interests of its stakeholders, in order to develop long-term sustainable partnerships based on mutual trust, transparency, and corporate ethical standards. To facilitate innovations in governance, product development, and service quality for economic growth, social responsibilities, and environmental protection, Vincom Retail remains attentive and responsive to stakeholders’ feedback on its activities.

Stakeholders Value added by Vincom Retail

Shareholders and Investors • Maximize the business and investment performance;

• Transparent and fair corporate governance to protect shareholder interests;

• Facilitate meetings between investors and the Company’s management to better understand of Company strategy through frequent meetings/webinars, official website, mailbox [email protected], and Investor Relations quarterly earnings presentations.

Customers • Commitment to service quality and customer experience enhancement;

• Regular organization of large-scale events to attract more footfalls;

• 24/7 hotline to provide information and assistance to customers.

Local community • Environmental and community impact assessment studies prior to implementation of project developments;

• Frequent dialogues with local authorities to improve the local environment;

• Mobilization of local work force by creating new jobs, raising level of social well-being and local economy where the Company operates.

Regulators • Participation in conferences and seminars with regulators;

• Participation in trade associations including the World Economic Forum (“WEF”) and Foreign Investment Association;

• Contribution of comments on the drafts of policies and legal documents.

Employees • Further details can be found in Chapter 5: Sustainable Development – Sustainability Report

Business partners and suppliers • Relationships maintenance with suppliers and business partners based on fairness, transparency and mutual benefit;

• Suppliers selection based on criteria including law compliance as well as commitment to environmental protection and sustainability.

To achieve these objectives, the Company is taking the actions outlined below:

I. Environmental

II. Social

III. Management

• Improve policies on environmental protection to add quantitative objectives and regular periodic assessments with adjustments as needed;

• Apply clean technology solutions to reduce environmental impacts;

• Establish robust environmental management systems to monitor implementation and evaluate performance;

• Promote research and development of environmental solutions;

• Strengthen policies on human rights, policies for employees, partners, customers, and local communities on human rights, equality, and anti-discrimination to add defined quantitative objectives and periodic re-assessments with adjustments, as needed;

• Establish robust environmental management systems to monitor implementation and evaluate performance.

• Improve managerial capability to ensure transparency, fairness, the rights and interests of shareholders and related parties;

• Establish robust internal control systems and risk management frameworks accompanied by monitoring and evaluation mechanisms;

• Define transparent criteria for the selection of reputable international auditing firms.


06

Consolidated Financial Statements

88

89

90

91

95

97

99

Corporate Information

Statement of the Management

Independent Auditor’s Report

Consolidated Balance Sheet

Consolidated Statement of Income

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

VINCOM RETAILVincom Center Tran Duy Hung, Hanoi ANNUAL REPORT

Chapter 6Consolidated Financial Statements

86 87

Vincom Retail Joint Stock Company and its subsidiaries

Consolidated Financial Statements for the year

ended 31 December 2020



88 89

Corporate Information

Statement of the Management

Enterprise Registration Certificate No.

Registered Office

Auditor

010585024411 April 2012

The Company’s Enterprise Registration Certificate has been amended several times, the most recent of which is dated 2 January 2019. The Company’s Enterprise Registration Certificate was issued by the Department of Planning and Investment of Ha Noi City.

No. 7, Bang Lang 1 Street, Ecological Residence of Vinhomes RiversideViet Hung Ward, Long Bien DistrictHanoi cityVietnam

KPMG LimitedVietnam

Board of Directors

Ms. Thai Thi Thanh Hai Chairwoman

Ms. Tran Mai Hoa Member

Ms. Le Mai Lan Member

Ms. Le Mai Lan Member

Mr. Sanjay Vinayak Member (from 5 Jan 2021)

Mr. Fong Ming Huang Ernest Member (from 26 May 2020)

Mr. Timothy J. Daly Member (until 5 May 2020)

Mr. Brett Harold Krause Member (until 5 Jan 2021)

Management

Ms. Tran Mai Hoa General Director

Mr. Nguyen Anh Dung Deputy General Director

Ms. Pham Thi Thu Hien Deputy General Director (from 16 March 2021)

Ms. Tran Thu Hien Deputy General Director (until 16 March 2021)

Ms. Pham Ngoc Thoa Chief Finance Officer (until 10 December 2020)

Board of Supervision

Ms. Do Thi Quynh Trang Head of Board of Supervision

Ms. Nguyen Thu Phuong Member

Ms. Tran Thanh Tam Member

The Management of Vincom Retail Joint Stock Company (“the Company”) presents this statement and the accompanying consolidated financial statements of the Company and its subsidiaries for the year ended 31 December 2020.

The Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting. In the opinion of the Board of Management:

The Management has, on the date of this statement, authorized the accompanying consolidated financial statements for issue.

Tran Mai HoaGeneral Director

(a) the consolidated financial statements set out on pages 5 to 60 give a true and fair view of the consolidated financial position of the Company and its subsidiaries as at 31 December 2020, and of their consolidated results of operations and consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting; and

(b) at the date of this statement, there are no reasons to believe that the Company and its subsidiaries will not be able to pay its debts as and when they fall due.

On behalf of the Management

Hanoi, 25 March 2021



90 91

Independent auditor’s report Consolidated balance sheetTo the ShareholdersVincom Retail Joint Stock Company

We have audited the accompanying consolidated financial statements of Vincom Retail Joint Stock Company and its subsidiaries, which comprise the consolidated balance sheet as at 31 December 2020, the consolidated statements of income and cash flows for the year then ended and the explanatory notes thereto which were authorised for issue by the Company’s Management on 25 March 2021, as set out on pages 5 to 60.

Management’s Responsibility

The Company’s Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting, and for such internal control as the Board of Management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Company’s Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor’s Opinion

In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated financial position of Vincom Retail Joint Stock Company and its subsidiaries as at 31 December 2020 and of their consolidated results of operations and their consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting.

KPMG Limited VietnamAudit Report No.: 20-01-00203-21-2

Ha Vu Dinh Practicing Auditor RegistrationCertificate No. 0414-2018-007-1Deputy General Director

Pham Thi Thuy LinhPracticing Auditor RegistrationCertificate No. 3065-2019-007-1

Hanoi, 25 March 2021

Form B 01 – DN/HN(Issued under Circular No. 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

as at 31 December 2020

Code Note 31/12/2020VND million

1/1/2020VND million

ASSETS

Current assets (100 = 110 + 120 + 130 + 140 + 150) 100 7,012,397 5,070,409

Cash and cash equivalents 110 5 3,050,907 1,388,344

Cash 111 1,030,907 1,368,344

Cash equivalents 112 2,020,000 20,000

Short-term financial investments 120 1,894,314 788,537

Held-to-maturity investments 123 6 1,894,314 788,537

Accounts receivable – short-term 130 1,446,089 724,237

Accounts receivable from customers – short-term 131 7 817,997 431,915

Prepayments to suppliers – short-term 132 8 97,136 121,081

Other short-term receivables 136 9(a) 545,422 182,697

Allowance for doubtful debts 137 10 (14,466) (11,456)

Inventories 140 11 519,889 985,989

Inventories 141 519,889 986,800

Allowance for inventories 149 - (811)

Other current assets 150 101,198 1,183,302

Short-term prepaid expenses 151 17(a) 69,513 80,316

Deductible value added tax 152 31,150 37,488

Taxes and other receivables from

State Treasury 153 535 498

Other current assets 155 12 - 1,065,000

The accompanying notes are an integral part of these consolidated financial statements



92 93Form B 01 – DN/HN(Issued under Circular No. 202/2014/TT-BTC

dated 22 December 2014 of the Ministry of Finance)



1/1/2020VND million

Long-term assets (200 = 210 + 220 + 230 + 240 + 260) 200 32,804,035 30,768,281

Accounts receivable – long-term 210 8,308 8,659

Other long-term receivables 216 9(b) 8,308 8,659

Fixed assets 220 450,233 473,832

Tangible fixed assets 221 13 430,206 450,446

Cost 222 595,633 580,540

Accumulated depreciation 223 (165,427) (130,094)

Intangible assets 227 14 20,027 23,386

Cost 228 54,391 49,787

Accumulated amortisation 229 (34,364) (26,401)

Investment property 230 15 27,732,173 28,063,677

Cost 231 33,710,220 32,702,792

Accumulated depreciation 232 (5,978,047) (4,639,115)

Long-term work in progress 240 959,231 654,380

Construction in progress 242 16 959,231 654,380

Other long-term assets 260 3,654,090 1,567,733

Long-term prepaid expenses 261 17(b) 514,162 554,712

Deferred tax assets 262 18 16,032 9,243

Other long-term assets 268 12 2,789,702 597,000

Goodwill 269 19 334,194 406,778

TOTAL ASSETS (270 = 100 + 200) 270 39,816,432 35,838,690


1/1/2020VND million

RESOURCES

LIABILITIES (300 = 310 + 330) 300 10,480,616 8,885,183

Short-term liabilities 310 3,537,868 4,780,265

Accounts payable to suppliers – short-term 311 20 788,362 2,055,465

Advances from customers – short-term 312 21 429,835 470,926

Taxes and other payables to

State Treasury 313 22 321,533 294,967

Payables to employees 314 204 801

Accrued expenses 315 23 1,009,332 964,902

Unearned revenue – short-term 318 24(a) 164,209 116,291

Other payables – short-term 319 25(a) 786,519 830,810

Short-term bonds and finance lease liabilities 320 26(a) 19,887 19,415

Provisions – short-term 321 27 15,091 23,792

Bonus and welfare fund 322 2,896 2,896

Long-term liabilities 330 6,942,748 4,104,918

Unearned revenue – long-term 336 24(b) 86,181 129,524

Other payables – long-term 337 25(b) 1,072,229 1,129,871

Long-term bonds and finance lease liabilities 338 26(b) 5,706,162 2,765,306

Deferred tax liabilities 341 18 78,176 80,217

Consolidated balance sheetas at 31 December 2020

(continued)



94 95

Consolidated statement of income

Form B 01 – DN/HN(Issued under Circular No. 202/2014/TT-BTC





1/1/2020VND million

EQUITY (400 = 410) 400 29,335,816 26,953,507

Owners’ equity 410 28 29,335,816 26,953,507

Share capital 411 29 23,288,184 23,288,184

- Ordinary shares with voting rights 411a 23,288,184 23,288,184

Share premium 412 46,983 46,983

Treasury shares 415 (1,954,258) (1,954,258)

Other equity funds 420 (53,420) (53,420)

Undistributed profits after tax 421 7,974,003 5,592,148

-Undistributed profits after tax brought forward 421a 5,592,148 2,740,668

- Net profits after tax for the current year 421b 2,381,855 2,851,480

Non-controlling interest 429 34,324 33,870

TOTAL RESOURCES (440 = 300 + 400) 440 39,816,432 35,838,690

Code Note 2020VND million

2019VND million

Revenue from sales of goods and provision of services 01 32 8,328,918 9,259,257

Revenue deductions 02 32 - -

Net revenue (10 = 01 - 02) 10 32 8,328,918 9,259,257

Cost of sales 11 33 4,507,631 4,855,637

Gross profit (20 = 10 - 11) 20 3,821,287 4,403,620

Financial income 21 34 275,859 265,083

Financial expenses 22 35 467,092 302,500

In which: Interest expense 23 463,586 299,007

Selling expenses 25 36 330,040 371,960

General and administration expenses 26 38 398,568 448,658

Net operating profit{30 = 20 + (21 - 22) - (25 + 26)}

30 2,901,446 3,545,585

Other income 31 38 123,527 70,729

Other expenses 32 39 32,253 40,372

Results of other activities (40 = 31 - 32) 40 91,274 30,357

Accounting profit before tax (50 = 30 + 40) 50 2,992,720 3,575,942

Current corporate income tax expense 51 41 619,241 724,603

Deferred corporate income tax benefit 52 41 (8,830) (594)

25 March 2021 Prepared by

Pham Ngoc ThoaChief Accountant


Approved by

for the year ended 31 December 2020

Consolidated balance sheetas at 31 December 2020

(continued)



96 97

Consolidated statementof income

Consolidated statement of cash flowsfor the year ended 31 December 2020 (Indirect method – continued)


2019VND million

Net profit after tax (60 = 50 - 51 - 52) 60 2,382,309 2,851,933

Attributable to:

Equity holders of the Company 61 2,381,855 2,851,480

Non-controlling interest 62 454 453

VND VND

Earnings per share

Basic earnings per share 70 42 1,048 1,226


2019VND million

CASH FLOWS FROM OPERATING ACTIVITIES

Accounting profit before tax 01 2,992,720 3,575,942

Adjustments for

Depreciation and amortisation 02 1,482,557 1,447,324

Allowances and provisions 03 (6,502) 7,322

Profits from investing activities 05 (262,413) (244,005)

Interest expense and bonds issuance costs 06 463,586 299,007

Operating profit before changes in working capital 08 4,669,948 5,085,590

Change in receivables and other assets 09 (250,952) 132,354

Change in inventories 10 471,505 (62,234)

Change in payables and other liabilities 11 43,194 (1,194,687)

Change in prepaid expenses 12 67,739 106,573

5,001,434 4,067,596

Interest paid 14 (386,355) (258,031)

Corporate income tax paid 15 (592,703) (662,851)

Net cash flows from operating activities 20 4,022,376 3,146,714

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for additions to fixed assets and other long-term assets

21 (4,377,225) (3,492,372)

Collections on investment deposits 21 - 1,596,000

Proceeds from disposals of fixed assets 22 112 701

Payments for granting loans and placement of term deposits 23 (2,875,936) (33,941)

Receipts from collecting loans and proceeds from sale of debt instruments

24 1,750,000 1,780,000

Collections of investments in other entities 26 - 2,000

Receipts of interest 27 243,664 382,787

Net cash flows from investing activities 30 (5,259,385) 235,175


Form B 02 – DN/HN(Issued under Circular No. 202/2014/TT-BTC



(continued)

for the year ended 31 December 2020




Approved by



98 99Form B 03 – DN/HN(Issued under Circular No. 202/2014/TT-BTC



2019VND million

CASH FLOWS FROM FINANCING ACTIVITIES

Payments for shares redemptions 32 - (1,954,258)

Proceeds from borrowings 33 2,920,483 -

Payments to settle finance lease liabilities 35 (20,911) (19,452)

Payments of dividends 36 - (2,451,216)

Net cash flows from financing activities 40 2,899,572 (4,424,926)

Net cash flows during the year (50 = 20 + 30 + 40) 50 1,662,563 (1,043,037)

Cash and cash equivalents at the beginning of the year 60 1,388,344 2,431,381

Cash and cash equivalents at the end of the year (70 = 50 + 60)

70 5 3,050,907 1,388,344

These notes form an integral part of and should be read in conjunction with the accompanying consolidated financial statements.

Notes to the consolidated financial statements for the year ended 31 December 2020


1. Reporting entity

Ownership structure Vincom Retail Joint Stock Company (“the Company”) is incorporated as a joint stock company in Vietnam. The consolidated financial statements of the Company for the year ended 31 December 2020 comprise the Company and its subsidiaries.

Principal activities The current principal activities of the Company and its subsidiaries are to invest in and develop shopping centers for lease and inventory properties for sale.

Normal operating cycleThe Company and its subsidiaries’s normal course of business cycle of inventory properties for sale business starts at the time of application for investment certificate, commencement of site clearance, construction, and ends at the time of completion, thus, the normal course of real estate development activities is from 12 months to 36 months. The Company and its subsidiaries’s normal course of business cycle of other business activities is 12 months.

(a)

(b)

(c )




Approved by

Consolidated statement of cash flowsfor the year ended 31 December 2020 (Indirect method – continued)

(continued)




100 101Vincom Retail Joint Stock Company and its subsidiaries Consolidated balance sheet as at 31 December 2020 (continued)



1. Reporting entity (continued) 3.Summary of significant accounting policies

2. Basis of preparation

Company structureAs at 31 December 2020, the Company had 4 directly owned subsidiaries (1/1/2020: 4 directly owned subsidiaries). Details of subsidiaries are as follows:

Statement of compliance The consolidated financial statements have been prepared in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting.

Basis of measurementThe consolidated financial statements, except for the consolidated statement of cash flows, are prepared on the accrual basis using the historical cost concept. The consolidated statement of cash flows is prepared using the indirect method.

Annual accounting period The annual accounting period of the Company and its subsidiaries are from 1 January to 31 December.

Accounting and presentation currency The Company and its subsidiaries’s accounting currency is Vietnam Dong (“VND”). The consolidated financial statements are prepared and presented in million of Vietnam Dong (“VND million”).

Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Company. The financial statements of the subsidiaries are consolidated in the consolidated financial statements from the date that control commences until the date that control ceases.

Non-controlling interests

Non-controlling interests (“NCI”) are measured at the proportionate share of the acquiree’s identifiable net assets at date of acquisition.

Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners. The difference between the change in the Company’s share of net assets of the subsidiary and any consideration paid or received is recorded directly in undistributed profits after tax under equity.

Transactions eliminated on consolidation

Intra-group transactions, balances from the Company and its subsidiaries and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Asset acquisition and business combination

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

Under the purchase method, the assets and liabilities of the acquired entity are consolidated using their fair values. Cost of business combination consists of the aggregate fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Company and its subsidiaries in exchange for control of the acquiree, and transaction costs. Goodwill represents the excess of the cost of business combination over the Company and its subsidiaries’ interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquired entity. When the excess is negative, it is recognised immediately in the consolidated statement of income.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Company and its subsidiaries incurred in connection with business combinations included any costs directly attributable to the business combination, such as professional fees paid to accountants, legal advisers, valuers and other consultants to effect the business combination. Transaction costs are capitalised into the cost of business combination. General administrative costs and other costs that cannot be directly attributed to the particular business combination being accounted for are not included in the cost of the business combination, they are recognised as an expense when incurred.

The Company and its subsidiaries acquire subsidiaries that own real estate projects. At the date of acquisition, the Company and its subsidiaries consider whether the acquisition represents the acquisition of a business. The Company and its subsidiaries account for an acquisition as a business combination where an integrated set of activities is acquired.

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 income tax is recognised.

(d)

(a)

(b)

(c )

(d)

(a)

(i)

(ii)

(iii)

(iv)

Name Principal activities Address

Percentage ofeconomic interests and

voting rights as at31/12/2020 and 1/1/2020

South Vincom Retail Limited Liability Company

Leasing malls, offices and providing related services, and trading real estate property and entertainment services.

No. 72, Le Thanh Ton Street and No. 45A, Ly Tu Trong Street, Ben Nghe Ward,

100,00%

North Vincom Retail Limited Liability Company


No. 72A, Nguyen Trai Street, Thuong Dinh Ward, Thanh Xuan District, Hanoi City, Vietnam.

100.00%

Suoi Hoa Urban Development and Investment Joint Stock Company


Km1 + 200, Tran Hung Dao Street, Suoi Hoa Ward, Bac Ninh City, Bac Ninh Province, Vietnam.

97.27%

Ha Thanh Real Estate Development and Investment Company Limited


No. 7, Bang Lang 1 Street, Ecological Residence of Vinhomes Riverside, Viet Hung Ward, Long Bien District, Hanoi City, Vietnam

100.00%

All subsidiaries are incorporated in Vietnam.

As at 31 December 2020, the Company had 695 employees (1/1/2020: 1,076 employees).

The following significant accounting policies have been adopted by the Company and its subsidiaries in the preparation of these consolidated financial statements.





3.Summary of significant accounting policies (continued)

Business combinations involving entities or business under common control

Business combination where the same group of shareholders (“the Controlling Shareholders”) control the combining companies before and after the business combination meets the definition of business combination under common control because there is a continuation of the risks and benefits to the Controlling Shareholders. Such common control business combination is specifically excluded from the scope of Vietnamese Accounting Standard 11 – Business Combination and in selecting its accounting policies with respect to such transaction, the Company and its subsidiaries have considered Vietnamese Accounting Standard 01 – Framework and Vietnamese Accounting Standard 21 – Presentation of Financial Statements. Based on these standards, the Company and its subsidiaries have adopted the followings.

• 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 consolidated statement of income reflects the results of the combined entities from the date of the business combination;

• Any difference between the cost of acquisition and net assets value acquired is treated as a deemed distribution to or contribution from shareholders and recorded in equity.

Foreign currency

Transactions in currencies other than VND during the year have been translated into VND at actual rates of exchange ruling at the transaction dates.

Monetary assets and liabilities denominated in currencies other than VND are translated into VND at the account transfer buying rate and account transfer selling rate, respectively, at the end of the annual accounting period quoted by the com-mercial bank where the Company or its subsidiaries most frequently conduct transactions as at the end of annual account-ing period.

All foreign exchange differences are recorded in the consolidated statement of income.

Cash and cash equivalents

Cash comprises call deposits and cash in transit. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Investments

Held-to-maturity investments

Held-to-maturity investments are those that the Company and its subsidiaries have the intention and ability to hold until maturity. Held-to-maturity investments include term deposits at bank. These investments are stated at costs less allow-ance for diminution in value.

Accounts receivable from customers and other receivables

Accounts receivable from customers and other receivables are stated at cost less allowance for doubtful debts.

(b)

(c )

(d)

(e)

(f)

(i)

(g)

(i)

(ii)

(ii)

Inventories

Inventory properties

Properties constructed for sale in the ordinary course of business or for long-term lease qualified for recognition of outright sales, rather than for rental or capital appreciation, are recorded as inventory and are measured at the lower of cost incurred in bringing the inventories to their present location and condition, and net realisable value.

Cost includes:

• Freehold, leasehold rights for land, and land development costs;

• Construction costs payable to contractors; and

• Borrowing costs, consultancy and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, directly attributable construction overheads and other related costs.

Net realisable value is the estimated selling price of inventory items, less the estimated costs of completion and direct selling expenses.

The cost of inventory properties recognised in consolidated statement of income on sales is determined with reference to the specific costs incurred on the properties sold and an allocation of any non-specific costs based on an appropriate basis.

Other inventories

Other inventories are carried at the lower of cost incurred in bringing each product to its present location and condition and net realisable value.

Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs to completion and the estimated costs of sale.

The perpetual method is used to record the costs of other inventories on a weighted average basis.

Tangible fixed assets

Cost

Tangible fixed assets are stated at cost less accumulated depreciation. The initial cost of a tangible fixed asset comprises its purchase price, including import duties, non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition for its intended use. Expenditure incurred after tangible fixed assets have been put into operation, such as repair, maintenance and overhaul cost, is charged to the consolidated statement of income in the year in which the cost is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of tangible fixed assets beyond their originally assessed standard of performance, the expenditure is capitalised as an additional cost of tangible fixed assets.

Depreciation

Depreciation is computed on a straight-line basis over the estimated useful lives of tangible fixed assets. The estimated useful lives are as follows:

buildings, structures 5 – 15 years

machinery and equipment 2 – 15 years

motor vehicles 4 – 15 years

office equipment 3 – 10 years

other assets 3 – 15 years






Intangible fixed assets

Software

Cost of acquiring new software, which is not an integral part of the related hardware, is capitalised and treated as an intangible asset. Software cost is amortised on a straight-line basis over 3 to 8 years.

Investment properties held to earn rental

Cost

Investment property held to earn rental is stated at cost less accumulated depreciation. The initial cost of an investment property held to earn rental comprises its purchase price, cost of land use rights and any directly attributable expenditures of bringing the property to the condition necessary for it to be capable of operating in the manner intended by the Board of Management. Expenditure incurred after the investment property held to earn rental has been put into operation, such as repairs and maintenance, is charged to the consolidated statement of income in the year in which the expenditure is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in future economic benefits in excess of the originally assessed standard of performance of the existing investment property held to earn rental, the expenditure is capitalised as an additional cost of the investment property.

Depreciation

Depreciation is computed on a straight-line basis over the estimated useful lives of investment property. The estimated useful lives are as follows:

The Company and its subsidiaries have contributed capital to cooperate in the investment, construction and development of shopping centers. Under business co-investment contracts, the Company and its subsidiaries have the right to control the shopping centers when the shopping centers are handed over to the Company and its subsidiaries from the counterparties for commercial operations. Accordingly, the shopping centers are recognised by the Company and its subsidiaries as investment properties in the consolidated balance sheet upon the hand over of these properties.

Construction in progress

Construction in progress represents the costs of construction and machinery which have not been fully completed or installed. No depreciation is provided for construction in progress during the year of construction and installation.

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 amounts are paid or the period in which economic benefits are generated in relation to these expenses.

Prepaid rentals

Prepaid rentals under operating lease terms are stated at their costs and amortised on a straight-line basis over lease terms.

Overhaul expenditures

Overhaul expenditures include major repair and maintenance prepaid expenses which are stated at their costs and amortised on a straight-line basis over a usual period of 3 years from the overhaul completion.

(h)

(i)

(i)

(ii)

(j)

(k)

(i)

(ii)

(iii)

(iv)

(v)

(vi)

(l)

(m)

(n)

Tools and supplies

Tools and supplies include assets held for use by the Company and its subsidiaries in the normal course of business and not qualified for recognition as fixed assets under prevailing regulations. Costs of tools and supplies are amortised on a straight-line basis not exceeding 3 years.

Prepaid land costs

Prepaid land costs comprise prepaid land lease rentals, including those for which the Company and its subsidiaries obtained land use rights certificate but are not qualified as intangible fixed assets under prevailing regulations by Minister of Finance and other costs incurred in conjunction with securing the use of leased land. These costs are recognised in the consolidated statement of income on a straight-line basis over the term of the lease contract.

Selling expenses

Selling expenses comprise commission fees and gift vouchers that are directly related to sale of inventory properties and lease of shopping malls. These expenses are capitalised under the prepaid expenses account in the consolidated balance sheet and subsequently expensed when the Company and its subsidiaries recognise revenue from the sale of the related inventory properties and lease of shopping malls.

Committed profits

Committed profits include prepayments to customer under business cooperation contracts and apartment management service program. Committed profits are capitalised under the prepaid expenses account in the consolidated balance sheet and subsequently expensed when the Company and its subsidiaries recognise revenue from service rendered over the term of management service program.

Goodwill

Goodwill arises on the acquisition of subsidiaries and associates. Goodwill is measured at cost less accumulated amortisation. Cost of goodwill represents the excess of the cost of the acquisition over the Company and its subsidiaries’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess is negative (gain from bargain purchase), it is recognised immediately in the consolidated statement of income.

Goodwill arising on acquisition of a subsidiary is amortised on a straight-line basis over 10 years.

In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment and is not amortised.

Accounts payable to suppliers and other payables

Accounts payable to suppliers and other payables are stated at their cost.

Provisions A provision is recognised if, as a result of a past event, the Company and its subsidiaries have a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provision for warranty expenses for apartments and shop-houses

The provision for warranties relates to sold standard-designed apartments and shop-houses. The provision is based on estimates derived from historical warranty data associated with the repair expenses of apartments and shop-houses sold in the past.

land use rights and buildings, structures 5 – 50 years

machinery and equipment 5 – 25 years






Share capital and share premium

Ordinary shares

Ordinary shares are recognised at issuance price less costs not directly attributable to the issue of shares, net of tax effects. Such costs less taxes directly related to the issue of shares are recognised as a deduction from share premium.

Repurchase of ordinary shares (treasury shares)

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, net of tax effects, is recognized as a reduction from equity. Repurchased shares are classified as treasury shares under equity.

Bond issued

At initial recognition, straight bonds are measured at cost which comprises proceeds from issuance net of issuance costs. Any discount, premium or issuance costs are amortised on a straight-line basis over the term of the bond.

Taxation

Income tax on the consolidated profit for the year comprises current and deferred tax. Income tax is recognised in the consolidated statement of income except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the end of the annual accounting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted or substantively enacted at the end of the annual accounting period.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(o)

(i)

(ii)

(p)

(q)

(r)

(i)

(ii)

(iii)

(iv)

(s)

Revenue and other income

Revenue from sale of inventory properties

Revenue from transfer of standard-designed apartments and shophouses which do not require significant customisation for each customer is recognised when the significant risks and rewards of ownership of the properties have been passed to the buyer.

Revenue from sale of inventory properties also includes long-term lease of real estate properties qualified for recognition of outright sales. If the lease-term is greater than 90% of the asset’s useful life, the Company and its subsidiaries will recognise the revenue for the entire prepaid lease payment if all of the following conditions are met:

• Lessee is not allowed to cancel the lease contract during the lease term, and the lessor is not responsible for reimbursing the prepaid lease payments under any circumstances;

• The prepaid lease payment is not less than 90% of the total estimated lease payment collected under contract over the lease period and lessee must pay all rental within 12 months from the commencement of the lease;

• Sigificant risks and rewards associated with the ownership of leased assets are transferred to the lessee; and

• The full cost of the lease must be reasonably estimated.

Revenue from leasing investment properties

Rental income arising from operating lease of properties is recognised in the consolidated statement of income on a straight line basis over the lease term. Lease incentives granted (if any) are recognised as a deduction of the total rental income.

Rendering of services

Revenue from services rendered is recognised in the consolidated statement of income when the services are rendered. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due.

Interest income

Interest income is recognised in the consolidated statement of income on a time proportion basis with reference to the principal outstanding and the applicable interest rate.

Leased assets

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset.

A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.






Where the Company and its subsidiaries are the lessee

Assets held under finance leases are capitalised in the consolidated balance sheet at the inception of the lease at the fair value of the leased assets or, if lower, at the net present value of the minimum lease payments. The principal amount included in future lease payments under finance leases are recorded as a liability. The interest amounts included in lease payments are charged to the consolidated statement of income over the lease term to achieve a constant rate on interest on the remaining balance of the finance lease liability.

Capitalised finance leased assets are depreciated using straight-line basis over the shorter of the estimated useful life of the asset and the lease term.

Assets subject to finance leases are included as the Company and its subsidiaries’s investment properties and long-term prepaid expenses in the consolidated balance sheet.

Rentals under operating leases are charged to the consolidated statement of income on a straight-line basis over the lease term.

Where the Company and its subsidiaries are the lessor

Assets subject to operating leases are included as the Company and its subsidiaries’s investment properties in the consolidated balance sheet.

Lease income is recognised in the consolidated statement of income on a straight-line basis over the lease term. Lease incentives granted (if any) are recognised as a deduction of the total rental income.

Borrowing costs

Borrowing costs are recognised as an expense in the year in which they are incurred, except where the borrowing costs relate to borrowings in respect of the construction of qualifying assets, in which case the borrowing costs incurred during the year of construction are capitalised as part of the cost of the assets concerned.

Earnings per share

The Company presents basic earnings per share (“EPS”) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to the ordinary shareholders (after deducting any amounts appropriated to bonus and welfare fund for the accounting period) of the Company by the weighted average number of ordinary shares outstanding during the year. As at 31 December 2020 and for the year then ended, the Company has no potential ordinary shares hence disclosure for diluted EPS is not applicable.

Segment reporting

A segment is a distinguishable component of the Company and its subsidiaries that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. The Company and its subsidiaries’s primary format for segment reporting is based on business segments.

Related parties

Parties are considered to be related to the Company and its subsidiaries if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions, or where the Company and its subsidiaries and the other party are subject to common control or significant influence. Related parties may be individuals or corporate entities and include close family members of any individual considered to be a related party.

(t)

(u)

(v)

(w)

(x) Comparative information

Comparative information in these consolidated financial statements is presented as corresponding figures. Under this method, comparative information for the prior year are included as an integral part of the current year financial statements and are intended to be read only in relation to the amounts and other disclosures relating to the current year. Accordingly, the comparative information included in these consolidated financial statements is not intended to present the Company’s consolidated financial position, consolidated results of operation or consolidated cash flows for the prior year.





4. Segment reporting(a) Business segments

The Company and its subsidiaries comprise the following main business segments:

• Sale of inventory properties;

• Leasing of investment properties and providing related services; and

• Others.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment revenue, expenses and results include transfer between business segments. Such trans-fers are eliminated on consolidation.

For the year ended 31 December 2020

Sale of inventory

propertiesVND million

Leasing activities

and rendering of related

servicesVND million

OthersVND million

Total segmentsVND million

EliminationVND million

ConsolidatedVND million

External revenue 2,149,022 6,008,061 171,835 8,328,918 - 8,328,918

Inter-segment revenue - 80,932 242,968 323,900 (323,900) -

Total segment revenue 2,149,022 6,088,993 414,803 8,652,818 (323,900) 8,328,918

Segment results 780,971 2,485,152 (191,161) 3,074,962 17,717 3,092,679

Financial income 275,859

Financial expenses 467,092

Net operating profit 2,901,446

Other income 123,527

Other expenses 32,253

Income tax expense 610,411

Net profit after tax 2,382,309


Sale of inventory

propertiesVND million

Leasing activities

and rendering of related

servicesVND million

OthersVND million

Total segmentsVND million

EliminationVND million

ConsolidatedVND million

External revenue 2,027,165 7,017,202 214,890 9,259,257 - 9,259,257

Inter-segment revenue - 66,219 356,096 422,315 (422,315) -

Total segment revenue 2,027,165 7,083,421 570,986 9,681,572 (422,315) 9,259,257

Segment results 567,507 3,108,518 (95,080) 3,580,945 2,057 3,583,002

Financial income 265,083

Financial expenses 302,500

Net operating profit 3,545,585

Other income 70,729

Other expenses 40,372

Income tax expense 724,009

Net profit after tax 2,851,933





(a)

(b)

Business segments (continued)

Geographical segments

Details of unallocated assets and liabilities are as following:

The Company and its subsidiaries operate in one single geographical segment which is Vietnam.

As at 31 December 2019

Sale of inventory propertiesVND million

Leasing activities and rendering of related services

VND millionOthers

VND millionConsolidated

VND million

Segment assets 1,238,846 31,969,164 344,473 33,552,483

Unallocated assets 2,286,207

Total assets 35,838,690

Segment liabilities 2,086,894 3,469,405 64,144 5,620,443

Unallocated liabilities 3,264,740

Total liabilities 8,885,183


Capital expenditure - 2,526,693 2,153 2,528,846

Depreciation of tangible fixed assets - 19,296 17,052 36,348

Amortisation of intangible fixed assets and goodwill - 79,750 - 79,750

Depreciation of investment property - 1,329,865 1,361 1,331,226


Sale of inventory propertiesVND million

Leasing activities and rendering of related services

VND millionOthers

VND millionConsolidated

VND million

Segment assets 692,577 33,684,146 383,652 34,760,375

Unallocated assets 5,056,057

Total assets 39,816,432

Segment liabilities 1,220,759 2,803,916 187,586 4,212,261

Unallocated liabilities 6,268,355

Total liabilities 10,480,616


Capital expenditure - 1,395,110 - 1,395,110

Depreciation of tangible fixed assets - 19,126 17,384 36,510

Amortisation of intangible fixed assets and goodwill - 82,037 - 82,037

Depreciation of investment property - 1,359,517 - 1,359,517

31/12/2020VND million

1/1/2020VND million

Cash and cash equivalents 3,050,907 1,388,344

Short-term financial investments 1,894,314 788,537

Interest income receivables from term deposits, other deposits and loan receivables 52,635 39,820

Receivables for payment on behalf 6,713 17,655

Prepaid provisional corporate income tax 3,771 4,622

Deductible value added tax 31,150 37,488

Taxes receivable from State Treasury 535 498

Deferred tax assets 16,032 9,243

Unallocated assets 5,056,057 2,286,207

Taxes and others payable to State Treasury 321,533 294,967

Accrued loans and bond interests 140,364 100,130

Dividends payable 2,233 2,233

Interest payables - 2,472

Short-term bonds and finance lease liabilities 19,887 19,415

Long-term bonds and finance lease liabilities 5,706,162 2,765,306

Deferred tax liabilities 78,176 80,217

Unallocated liabilities 6,268,355 3,264,740

4. Segment reporting (continued)





5. Cash and cash equivalents 7. Accounts receivable from customers

8. Prepayments to suppliers – short-term

6. 6. Held-to-maturity investments

Cash equivalents as at 31 December 2020 included term deposits in VND with original terms ranging from one to three months and earned interest at the rate ranging from 2.9% - 4.0% per annum (1/1/2020: term deposits in VND with original terms of three months and earned interest at the rate of 5.0% per annum).

In which:

Held-to-maturity investments – short-term represented term deposits with original term ranging from 5 to 12 months and earned interest at the rate ranging from 4.0% - 6.3% per annum (1/1/2020: term deposits with remaining term to maturity ranging from 6 to 12 months and earned interest at the rate ranging from 7.0% - 7.2% per annum).


1/1/2020VND million

Cash in transit 75 129

Cash in banks 1,030,832 1,368,215

Cash equivalents 2,020,000 20,000

3,050,907 1,388,344


1/1/2020VND million

Receivables from leasing activities and rendering of related services 660,921 268,761

Receivables from sale of inventory properties 111,001 128,647

Others 46,075 34,507

817,997 431,915


1/1/2020VND million

Related parties:

Vinhomes Joint Stock Company - 5,995

Other related parties 4,337 2,818

Third parties:

Other suppliers 92,799 112,268

97,136 121,081


1/1/2020VND million

Related parties:

Vinhomes Joint Stock Company 23,109 19,394

Vinfast Commercial and Services Trading Limited Liability Company 38,179 695

Vinpro Business and Trading Services Joint Stock Company - 17,972


Third parties:

Receivable from a customer 72,341 51,924

Other customers 668,816 311,167

817,997 431,915


1/1/2020VND million

Held-to-maturity investments – short-term

• Term deposits 1,894,314 788,537





9. Other receivables


1/1/2020VND million

Interest income receivables from term deposits and other deposits 52,635 39,820

Receivables for payment on behalf 6,713 17,655

Receivables for investment purposes (*) 457,909 -

Deposits for projects and contracts 12,728 41,764

Others 15,437 83,458

545,422 182,697


1/1/2020VND million

Deposits for leasing office and commercial centres 8,308 8,659

2020VND million

2019VND million

Opening balance 11,456 12,410

Increase in allowance during the year 10,624 5,673

Utilisation during the year (7,614) (6,627)

Closing balance 14,466 11,456

31/12/2020 1/1/2020

Cost VND million

AllowanceVND million

CostVND million

AllowanceVND million

Inventory properties under construction 422,004 - 828,622 (811)

Completed inventory properties 77,251 - 137,286 -

Other inventories 20,634 - 20,892 -

519,889 - 986,800 (811)


1/1/2020VND million

Parent company:

Vingroup Joint Stock Company 144,695 5,576

Other related parties:

Green City Development JSC - 3,075

Can Gio Tourist City Corporation - 9,557


Vietnam Investment and Consulting Investment JSC 69,857 19,459

Central Park Development LLC 41,287 -

Vinpearl Joint Stock Company 6,250 6,988


485,235 54,555

(a)

(b)

Other short-term receivables comprise:

Other long-term receivables

In which, other short-term receivables from related parties:

These receivables due from Vingroup Joint Stock Company, the parent company, and some companies within Vingroup Joint Stock Company (hereby referred to as “the counterparties”) are related to investment deposits in exess of estimated cost of the shopping mall components of a number of real estate projects. As at date of this report, most of these receivables have been settled.

Movements of the allowance for doubtful debts during the year were as follows:

(*)

10. Allowance for doubtful debts

11. Inventories






1/1/2020VND million

Other current assets•Deposits to related parties for investment purposes

- 1,065,000

Other long-term assets• Deposits to related parties for investment purposes

2,789,702 597,000

2,789,702 1,662,000


1/1/2020VND million

Parent company:Vingroup Joint Stock Company

958,000 958,000

Other related parties:

Thai Son Investment Construction Corporation 1,011,282 81,000

Gia Lam Urban Investment and Development Company Limited - 98,000

Can Gio Tourist City Corporation 163,000 163,000

Green City Development JSC 657,420 362,000

2,789,702 1,662,000

Buildings,structures

VND million

Machinery and

equipmentVND million

Motor vehicles

VND million

Officeequipment

VND million

Other assets

VND millionTotal

VND million

Cost

Opening balance 280,898 254,284 1,582 18,233 25,543 580,540

Additions - 6,834 - 1,336 - 8,170

Transfers from construction in progress

- 3,986 - 4,236 - 8,222

Reclassification - 1,582 (1,582) - - -

Transfers to short-term prepaid expenses

- (122) - - - (122)

Disposals - (1,138) - (39) - (1,177)

Closing balance 280.898 265.426 - 23.766 25.543 595.633

Accumulated depreciation

Opening balance 17,330 94,658 1,218 9,948 6,940 130,094

Charge for the year 5,131 25,822 - 2,317 3,240 36,510

Transfer to short-term prepaid expenses

- (69) - - - (69)

Reclassification - 1,218 (1,218) - - -

Disposals - (1,069) - (39) - (1,108)

Closing balance 22,461 120,560 - 12,226 10,180 165,427

Net book value

Opening balance 263,568 159,626 364 8,285 18,603 450,446

Closing balance 258,437 144,866 - 11,540 15,363 430,206

These are deposits to the counterparties for the co-investment and co-operation of the shopping mall components of a number of real estate projects. These deposits require no collaterals. In accordance with these contracts, the counterparties have com-mitted to transfer the shopping mall component of their properties to the Company and its subsidiaries, or to grant the Company and its subsidiaries the right to purchase the shopping malls.

Included in tangible fixed assets were assets costing VND49,030 million which were fully depreciated as at 31 December 2020 (1/1/2020: VND29,279 million), but which are still in active use.

Details of tangible fixed assets used as collaterals for bonds issued by the Company and its subsidiaries are presented in Note 26(b)(ii).

Deposits to related parties for investments

12. Other assets 13. Tangible fixed assets





SoftwareVND million

Cost

Opening balance 49,787

Additions 6,497

Disposals (80)

Written off (1,813)

Closing balance 54,391

Accumulated amortisation


Charge for the year 9,453

Disposals (80)

Written off (1,410)


Net book value



Included in intangible fixed assets were assets costing VND3,677 million which were fully depreciated as at 31 December 2020 (1/1/2020: VND3,631 million), but which are still in active use.

Investment properties mainly include assets of the shopping malls of the Company and its subsidiaries which are used for provi-sion of leasing and other related services.

As at 31 December 2020, the Company and its subsidiaries are in the process of determining the fair values of these investment properties.

Details of investment properties used as collaterals for bonds issued by the Company and its subsidiaries are disclosed in Note 26(b)(ii).

As at 31 December 2020, land use rights and assets attached to land of one shopping mall owned by the Company and its subsid-iaries was used as collaterals for loans of a subsidiary of the Company’s parent company (1/1/2020: Nil).

Rental commitment under operating leases are disclosed in Note 31.

14. Intangible fixed assets 15. Investment property

Land use right and buildings,

structuresVND million

Machinery and equipmentVND million

TotalVND million

Cost

Opening balance 26,769,970 5,932,822 32,702,792

Additions 521,982 254,057 776,039

Transfers from construction in progress 37,256 12,481 49,737

Increase/(decrease) upon finalisation 249,027 (26,828) 222,199

Transfers to inventory properties (4,373) (1,267) (5,640)

Written-off (28,661) - (28,661)

Transfer to prepayment (2,514) (3,732) (6,246)

Closing balance 27,542,687 6,167,533 33,710,220


Opening balance 2,756,463 1,882,652 4,639,115

Charge for the year 777,634 581,883 1,359,517

Transfers to inventory properties (677) (369) (1,046)

Written-off (15,575) - (15,575)

Transfer to prepayment (232) (3,732) (3,964)

Closing balance 3,517,613 2,460,434 5,978,047

Net book value

Opening balance 24,013,507 4,050,170 28,063,677

Closing balance 24,025,074 3,707,099 27,732,173





16. Construction in progress 17. Prepaid expenses

2020VND million

2019VND million

Opening balance 654,380 1,343,478

Additions 382,205 2,105,617

Transfers to tangible fixed assets (8,222) (7,416)

Transfers to investment properties (49,737) (2,787,299)

Transfer to short-term prepayments (190) -

Transfer to long-term prepayments (19,205) -

Closing balance 959,231 654,380


1/1/2020VND million

Vincom Plaza My Tho project 284,107 103,448

Vincom+ Song Cong project 110,084 108,973

Vincom Plaza Bac Lieu project 215,724 92,312

Vincom Plaza Bien Hoa 2 project 135,650 135,650

Suoi Hoa Hotel 123,529 11,013

Other projects 90,137 202,984

959,231 654,380

Detailed by constructions in progress which account for more than 10% of total were as follows:

Borrowing costs capitalised into construction in progress in 2020 amounting to VND10,715 million (2019: Nil).Included in the carrying amount of long-term prepaid expenses was an amount of VND247,997 million prepaid to a related party, Ecology Development and Investment Joint Stock Company, as at 31 December 2020 (1/1/2020: VND258,051 million).


1/1/2020VND million

Prepaid selling expenses related to sale of inventory properties not yet handed over 46,583 26,458

Prepaid land costs - 14,995

Prepaid provisional corporate income tax 3,771 4,622

Project investment costs - 1,014

Others 19,159 33,227

69,513 80,316


1/1/2020VND million

Prepaid rentals 247,997 258,051

Overhaul expenditures 164,339 111,029

Tools and supplies 22,048 36,132

Prepaid land costs 14,073 4,685

Commission fees 11,648 19,827

Committed profits 51,823 114,798

Others 2,234 10,190

514,162 554,712

(a)

(b)

Short-term prepaid expenses

Long-term prepaid expenses





18. Deferred tax assets and deferred tax liabilities

19. Goodwill

Tax rate31/12/2020VND million

1/1/2020VND million

Deferred tax assets:

Unearned revenue 6,951 - -

Revaluation of subsidiaries’ net assets at merger date and others

9,081 9,081 9.081

Difference of allowance for inventories between separate financial statements and consolidated financial statements

- 162 162

Total deferred tax assets 16,032 9,243

Deferred tax liabilities:

Fair value adjustment on acquisition of a subsidiary 20% 38,130 39,010

Difference from recognition of outright sales transactions – unearned revenue 20% 24,281 25,290

Revaluation of subsidiaries' net assets at merger date 20% 10,404 10,462

Depreciation 20% 5,361 5,455

Total deferred tax liabilities 78,176 80,217

VND million

Cost

Opening and closing balances 725,837



Charge for the year 72,584


Net book value



20. Accounts payable to suppliers

21. Advance from customers – short-term

22. Taxes other payables to State Treasury


1/1/2020VND million

Related parties 357,888 1,834,334

Vietnam Investment and Consulting Investment JSC 3,834 725,226



Vingroup Joint Stock Company 92,725 348,467

Gia Lam Urban Investment and Development Company Limited 123,173 -


Third parties 430,474 221,131

Other suppliers 430,474 221,131

788,362 2,055,465

1/1/2020VND million

IncurredVND million

PaidVND million

Net-offVND million


Corporate income tax 255,478 619,241 (592,703) (851) 281,165

Value added tax 33,568 843,255 (386,789) (456,771) 33,263

Land rental and usage - 62,613 (60,700) - 1,913

Personal income tax 5,921 60,692 (61,529) - 5,084

Other taxes - 1,829 (1,721) - 108

294,967 1,587,630 (1,103,442) (457,622) 321,533

Cost & amount within payment capacity

The advance from customers – short-term represented the instalments from customers for the purchase of inventory properties. All advance from customers will be recognised as revenue upon completion and handover of the inventory properties.Cost





23. Accrued expenses

24. Unearned revenue


1/1/2020VND million

Accrued construction costs 467,777 590,595

Accrued loan interests 140,364 100,130

Accrued commission and brokerage fee 59,531 59,909

Accrued committed profit relating to business cooperation contracts and apartment management service program

50,247 30,381

Others 291,413 183,887

1,009,332 964,902


1/1/2020VND million



1/1/2020VND million

Portion of long-term unearned revenue to be realised within 12 months 164.209 116.291

within 12 months 164,209 116,291


1/1/2020VND million

Revenue received in advance from leasing activities and rendering of related services

250,390 245,815

rendering of related services (164,209) (116,291)

Amount to be realised within 12 months 86,181 129,524


1/1/2020VND million

Vinhomes Joint Stock Company 25,071 -


35,363 10,999

Accrued expenses payable to related parties

Unearned revenue – short-term

Unearned revenue – long-term

Unearned revenue from related parties

(a)

(b)

(c )

25. Other payables


1/1/2020VND million

Deposits under deposit contracts and loan agreements received from customers

269,067 375,812

Deposits from tenants for leasing offices, counters and shophouses to be refunded within the next 12 months

364,032 244,933

Deposits received for maintenance of handed-over properties 82,208 88,977

Deposits for site construction 46,357 48,474

Dividends payable 2,233 2,233

Other deposits - 35,404

Others 22,622 34,977

786,519 830,810


1/1/2020VND million

Deposits from tenants for leasing offices and counters – shopping center

1,220,857 1,194,804

Deposits from tenants for leasing offices and counters to be refunded within the next 12 months – shopping center

(364,032) (244,933)

Deposit under business cooperation contracts 180,000 180,000

Other deposits 35,404 -

Amount due after 12 months 1,072,229 1,129,871


1/1/2020VND million

Other payables – short-term



20,825 23,398

Other payables – long-term


Vinfast Commercial and Services Trading Limited Liability Company 16,018 -

Vinschool One Member LLC 6,375 4,247


206,759 196,763

Other payables - short-term

Other payables - long-term

Other payables to related parties

(a)

(b)

(c )





26. Bonds and finance lease liabilities

Carrying amount & amount within

repayment capacity

Movements during the year

Carrying amount & amount within

repayment capacity

1/1/2020VND million

IncreaseVND million

DecreaseVND million


Finance lease principals due within 12 months from related parties (Note 26(b))

19,415 21,383 (20,911) 19,887


1/1/2020VND million

Finance lease liabilities from a related party (i) 191,281 190,093

Corporate bonds (ii) 5,534,768 2,594,628

5,726,049 2,784,721

Repayable within twelve months (19,887) (19,415)

Repayable after twelve months 5,706,162 2,765,306

Total finance lease payments

VND million

InterestsVND million

PrincipalsVND million

Within 1 year 21,397 1,510 19,887

Within 2 to 5 years 87,192 26,366 60,826

More than 5 years 506,114 395,546 110,568

614,703 423,422 191,281

Total finance lease payments

VND million

InterestsVND million

PrincipalsVND million

Within 1 year 20,911 1,496 19,415

Within 2 to 5 years 85,587 25,684 59,903

More than 5 years 528,797 418,022 110,775

635,295 445,202 190,093

Short-term bonds and finance lease liabilities

Long-term bonds and finance lease liabilities

Finance lease liabilities related to long-term lease contracts with commercial centres of Vincom Plaza Quang Trung and Vincom Plaza Le Van Viet. The minimum lease payments for these non-cancelleable finance lease contracts are as following:

31/12/2020

1/1/2020

Finance lease liabilities

(a)

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16 29. Share capital

30. Dividends

31. Off balance sheet items

31/12/2020 & 1/1/2020

Number of shares VND million

Authorised and issued share capital

Ordinary shares 2,328,818,410 23,288,184

Treasury shares

Ordinary shares 56,500,000 1,954,258

Shares in circulation

Ordinary shares 2,272,318,410 22,723,184

Share premium - 46,983

2020 2019

Number of shares VND million Number of shares VND million

Balance at the beginning of the year 2,272,318,410 22,723,184 2,328,818,410 23,288,184

Repurchase of treasury shares - - (56,500,000) (565,000)

Balance at the end of the year 2,272,318,410 22,723,184 2,272,318,410 22,723,184

The Company’s authorised and issued share capital are as follows:

All ordinary shares have a par value of VND10,000. Each share is entitled to one vote at meetings of the Company.

On 26 May 2020, the shareholders of the Company resolved not to distribute dividends (2019: dividends by cash to existing shareholders at the rate of 10.5% (1 share received VND1,050)).

Commitment under operating leases where the Company and its subsidiaries are the lessor

The Company and its subsidiaries, as lessor, leased retail outlets under operating lease agreements. The minimum lease payments under these agreements as at the balance sheet dates are as follows:

Movements in share capital during the year were as follows:

Lease commitments(a)


1/1/2020VND million

Within one year 4,151,260 3,867,465

Within two to five years 7,729,630 7,524,354

More than five years 5,637,899 5,169,275

17,518,789 16,561,094





Commitment under operating leases where the Company and its subsidiaries are the lessor

The Company and its subsidiaries, as lessor, leased retail outlets under operating lease agreements. The minimum lease pay-ments under these agreements as at the balance sheet dates are as follows:

The Company and its subsidiaries have enterred into construction contracts on the development of real estate projects. The estimated commitments amount of these contracts amount to VND992,797 million (1/1/2020: VND1,620,787 million).

Commitment for co-developing shopping malls

Under business cooperation contracts between the Company and its subsidiaries and Vingroup Joint Stock Company and some companies within Vingroup Joint Stock Company (hereby referred to as “the counterparties”), the Company and its subsidiaries are committed to acquire equity interests in target companies, which will be established to own and operate a number of shopping malls in the provinces and cities after certain conditions under the contracts are satisfied. The Company and its subsidiaries provide funds to the counterparties to construct the malls. In case the counterparties do not complete the necessary procedures to transfer the shopping centers to the target companies, the parties to the contract will cooperate to manage the operations of these shopping malls. The Company and its subsidiaries commit to take over the management and operations of these shopping malls and share a portion of profit to the counterparties.

Commitments under business cooperation contracts relating to shopping mall projects

As disclosed in Note 12, the Company and its subsidiaries signed agreements and business cooperation contracts with Vingroup Joint Stock Company and some companies within Vingroup Joint Stock Company (hereby named as “the counterparties”) for cooperation in the development and operation of the shopping mall components of a number of real estate projects. Under these contracts, the counterparties commit to transfer the shopping mall components of these projects to the Company and its subsidiaries; or to grant the Company and its subsidiaries with the right to purchase the shopping malls. Under these contracts, the Company and its subsidiaries are expected to make additional payments estimated at VND418,742 million (1/1/2020: VND3,940,200 million) to these counterparties.

Commitments to transfer a part of Towers A&B of Vincom Centre Ba Trieu

On 31 July 2006, Vingroup Joint Stock Company signed an agreement to transfer a portion of Vincom City Towers to a corporate counterparty. According to this agreement and its subsequent obligation transferring agreements, North Vincom Retail LLC, a subsidiary of the Company, is committed to transfer the following investment properties to this corporate counterparty on 20 July 2052:

• A half of commercial area (from 1st floor to 6th floor of Towers A&B Vincom City except for the reception and elevator waiting area of 160m2 on the 1st floor); and

• A half of the basements of the towers.


1/1/2020VND million

Within one year 166,405 134,399

Within two to five years 660,228 483,612

More than five years 3,325,487 3,057,240

4,152,120 3,675,251

Capital commitments

Other commitments

(b)

(c )

32. Revenue from sale of goods and provision of services

33. Cost of sales

34. Financial income

2020VND million

2019VND million

Total revenue

• Revenue from sale of inventory properties 2,149,022 2,027,165

• Revenue from leasing activities and rendering of related services 6,008,061 7,017,202

• Other revenue 171,835 214,890

Net revenue 8,328,918 9,259,257

2020VND million

2019VND million

Total cost of sales

• Cost from sale of inventory properties 1,115,177 1,291,837

• Cost from leasing activities and rendering of related services 3,056,868 3,264,936

• Cost from other services 335,586 298,864

4,507,631 4,855,637

2020VND million

2019VND million

Interest income from bank deposits, loans and other deposits 275,859 265,075

Other financial income - 8

275,859 265,083

Total revenue represents the gross value of goods sold and services rendered exclusive of value added tax.

Net revenue comprised:

31.Off balance sheet itemsLease commitments(a)

Commitments related to program of management services and apartment rental

South Vincom Retail LLC, a subsidiary of the Company, has signed contracts to provide management and leasing services to customers who bought apartments at Vinpearl Riverfront Condotel Da Nang. Accordingly, for the five years from the date of apartments being handed over, customers are guaranteed by the investors to receive a higher amount between specific percentage on the selling price and 85% on the annual net leasing income from the sublease of the apartment to third parties.





35. Financial expenses2020

VND million2019

VND million

Interests on bonds and finance lease 443,319 296,528

Amortisation of bond issuing costs 20,267 2,479

Other financial expenses 3,506 3,493

467,092 302,500

36. Selling expenses

37. General and administration expenses

38. Other income

2020VND million

2019VND million

Staff costs 60,328 70,877

Marketing expenses 126,050 197,795

Depreciation and amortisation 7,782 8,819

Consultancy, commission and brokerage fee 131,651 82,461

Outside service expenses 1,353 3,873

Others 2,876 8,135

330,040 371,960

2020VND million

2019VND million

Staff costs 140,122 160,082

Management fee 118,442 150,470

Depreciation and amortisation 81,936 78,657

Provisions 10,624 5,674

Outside service expenses 39,744 24,299

Others 7,700 29,476

398,568 448,658

2020VND million

2019VND million

Penalties received 72,089 47,629

Others 51,438 23,100

123,527 70,729

39. Other expenses

40. Production and business costs by elements

41. Income tax

2020VND million

2019VND million

Contract compensation paid 3,886 9,373

Loss from disposals of fixed assets - 8,724

Loss on written-off of fixed assets 13,489 14,849

Others 14,878 7,426

32,253 40,372

2020VND million

2019VND million

Cost of construction and development of real estate properties 647,976 1,365,194

Staff costs 560,945 660,327

Depreciation and amortisation 1,482,557 1,447,324

Outside services expenses 1,859,948 1,982,495

Other expenses 218,160 293,818

2020VND million

2019VND million

Current tax expense

Current year 618,663 723,525

Under provision of corporate income taxes in prior years 578 1,078

619,241 724,603

Deferred tax benefit

Origination and reversal of temporary differences (8,830) (594)

Income tax expenses 610,411 724,009

Recognised in the consolidated statement of income(a)





42. Earnings per share

2020VND million

2019VND million

Net profit attributable to ordinary shareholders after bonus and welfare fund accruals

2,381,855 2,851,480

2020VND million

2019VND million

Issued ordinary shares at the beginning of the year – currently in circulation

2,272,318,410 2,328,818,410

Effect of treasury shares held - (2,941,096)

Weighted average number of ordinary shares during the year – currently in circulation

2,272,318,410 2,325,877,314

2020VND million

2019VND million

Earnings per share 1,048 1,226

2020VND million

2019VND million

Accounting profit before tax 2,992,720 3,575,942

Tax at the Company’s tax rate 598,544 715,188

Non-deductible expenses 924 2,015

Amortisation of goodwill 14,517 14,517

Unrecognised deferred tax (1,854) (3,539)

Other adjustments (1,055) (5,250)

Tax incentives (1,243) -

Under provision of corporate income taxes in prior years 578 1,078

610,411 724,009

Reconciliation of effective tax rate

Applicable tax rates

Net profit attributable to ordinary shareholders

Weighted average number of ordinary shares

Earnings per share

Basic earnings per share

(b)

(c )

(i)

(ii)

(iii)

The Company and its subsidiaries have an obligation to pay corporate income tax to the government at corporate income tax rate of 20%.

The calculation of basic earnings per share for the year ended 31 December 2020 was based on the profit attributable to ordinary shareholders after deducting amount appropriated to bonus and welfare fund for the annual accounting period, of VND2,381,855 million (2019: VND2,851,480 million) and a weighted average number of ordinary shares outstanding of 2,272,318,410 (2019: 2,325,877,314 shares), calculated as follows:

43. Significant transactions with related parties

Transaction value

2020VND million

2019VND million

Shareholders

Ha Noi Southern City Development and Trading Limited Liability Company

Dividends paid - 201,798

Sai Dong Urban Development and Investment Joint Stock Company


Parent company

Vingroup Joint Stock Company

Purchase of goods and services 151,597 209,501

Interest income from loans and other deposits 9,905 7,200

Collection of deposits for investments - 796,000

Deposits for investment 579,587 273,485


Other related companies

Vinhomes Joint Stock Company

Sales of goods and services 284,778 281,258


Deposits for investment 649,806 -

Vinpearl Joint Stock Company



Deposit received under business cooperation contracts - 180,000

Vinfast Trading and Production LLC

Sales of goods and services 38 25,742

Vinfast Commercial and Services Trading LLC

Sales of goods and services 118,725 -

Ecology Development and Investment Joint Stock Company

Terms and conditions of transactions with related parties:

During the year, the Company and its subsidiaries sold goods and services to and purchased goods and services from related par-ties based on contractual agreement.

Accounts receivable from or payable to related parties are under normal course of business and are receivable or payable based on contractual agreements.

In addition to related party balances disclosed in other notes to the consolidated financial statements, the Company and its subsid-iaries had the following significant transactions with related parties during the year:

41. Income tax (continued)





Transaction value

2020VND million

2019VND million

Rental expense 39,867 33,714

Vinschool One Member LLC


Vietnam Investment and Consulting Investment JSC

Deposits for investment 711,641 -

Thai Son Investment Construction Corporation



Interest income from deposits 44,587 7,812

Gia Lam Urban Investment and Development Company Limited




Central Park Development LLC

Acquisition of assets - 239,581


Green City Development JSC

Deposits for investment 295,420 1,020,000

Collection of deposits for investments - 800,000


Vinsmart Research and Manufacture JSC

Interest income 25,698 -

Lending 1,050,000 -

Collection of loans 1,050,000 -

Members of the Board of Directors and Board of Management

Salary and bonus 28,438 28,064

44. Comparative informationThe comparative information as at 1 January 2020 was derived from the balances and amounts reported in the Company’s consoli-dated financial statements as at and for the year ended 31 December 2019.




Approved by

THE LEGAL REPRESENTATIVE OF THE COMPANY((Signature, Full name and the Company seal)

To:• States Securities Commission of Vietnam • Ho Chi Minh Stock Exchange • The Company archives



Vincom Retail Joint Stock Company

No.7 Bang Lang Street, Vinhomes Riverside Ecological Area, Viet Hung Ward, Long Bien District, Hanoi, Vietnam.

Tel: (+84) 24 3974 9999 Fax: (+84) 24 3974 8888 Website: vincom.com.vn

SHAPING SUSTAINABLE FUTURE - Vincom Retail

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Transcript of SHAPING SUSTAINABLE FUTURE - Vincom Retail