Thiet ke Bao cao thuong nien - Vcbs 2007

VIETCOMBANK SECURITIES
Annual Report 2007

CONTENT
06 Message from Chairman
08 Message from Director
12 VCBS Core Values
14 VCBS Strategy
18 Financial Highlights
22 Finance-Securities Information Gateway
24 VCBS network
26 VCBS profile
28 VCBS’s lines in business
30 Organization chart
34 VCBS Business Performance in 2007
42 Development outlook for 2008-2010
44 Financial Section

4 Annual Report VCBS

“VCBS maintains its target to become
the leading investment bank in Vietnam, a crucial arm of
Vietcombank Financial Holdings in field
of investment banking”

Annual Report VCBS 5

Message
FROM CHAIRPERSON

“To realize the target of becoming the investment banking
arm of Vietcombank in 2008 requires VCBS to have significant
efforts in all fields of operations”


2007 - one year since officially entering WTO, Vietnam has VCBS, established in 2002, after 6 years of operations, VCBS
gained remarkable economic achievements. Vietnam’s Gross has succeeded in developing its own brand name in the
Domestic Product (GDP) of 2007 reached an estimated industry and has become a reliable place for both domestic
growth rate of 8.5% as compared to that of 2006. Vietnam’s and international investors. With the competitive edge in IT,
total invested capital was recorded at nearly VND 462 trillion, financial expertise and a comprehensive network, VCBS has
accounting for over 40% GDP. Vietnam’s FDI was record high won the heart of clients proven by the number of accounts
at USD 20.3 billion, an increase of nearly 70% during one year, opened at the company (approximately 40,000 at end of
with the new total registered capital reaching approximately 2007). Despite hard competition, VCBS kept its impressive
USD 1.8 billion, etc. Numerous opportunities were open in growth in terms of networking and trading volume, and
various economic sectors. maintained its top position in brokerage and underwriting.
After tax profit of 2007 was recorded high at 252 billion VND,
Year 2007 was remarked as a year of magnificent changes
a 126% increase as compared to 2006. The shareholder’s
to the Vietnamese securities market. The legal corridor
equity was raised to VND 444 billion.
was considerably widened with the issuance of Securities
Law besides a number of new enactions. This helped the To realize the target of becoming the investment banking arm
market operate with higher stability and efficiency. However, of Vietcombank in 2008 requires VCBS to have significant
participation of newly established securities companies also efforts in all fields of operations. The major tasks VCBS needs
made the market become more competitive than ever. By to fulfill in year 2008 are to strengthen financial capacity,
the end of 2007, such global events as the financial crisis that upgrade the technology, attract the high-profile staff via a
hit hard big names in the banking world, the depreciation friendly and favorable working environment, and develop a
of the United States Dollar and history-record prices of gold sophisticated risk management system. VCBS believes that
and gasoline caused the world economy to fluctuate wildly establishment of a long-term development strategy inclusive
and unpredictably, which in turn had a severe impact on of seeking an appropriate strategic partner is the key to
the Vietnamese market. Large-scale IPOs with total value VCBS fulfilling its mission of maintaining “safe and efficient
of USD hundred millions attracting great attention from business, sustainable development, competitive capacity
local and foreign investors pushed Vietnam’s stock market and international integration”.
capitalization value in 2007 to an impressive number of
On VCBS’s behalf, I hereby send my sincere thanks to all
approximately VND 500 trillion, equivalent to 44% GDP.
beloved investors, state regulators, and our reliable partners
However, big opportunities were always accompanied by
who have consistently supported VCBS. Above all, I reserve
challenges. The world economic recession, in the year-end
my heart-felt thanks for VCBS staff, without whom we find it
months, combined with the local credit tightening monetary
impossible to build one VCBS as today.
policy directly affected Vietnam’s young stock market. Vn-
Index experienced ups and downs in an unprecedented Yours sincerely,
way and this wobbling trend was predicted to continue in
2008. This reality required securities companies to have good Chairperson
stamina, an everywhere strategic vision, high motivation
and capacity to accommodate advanced technology.
Vietcombank Securities Ltd. Company (VCBS) was proud of
converging all those criteria.

Nguyen Thu Ha


Message
FROM CEO

“Being confident and enduring in all circumstances, and thanks
to the company’s sound financial capacity and professional
expertise of VCBS staff, together with the cohesion and
commitment of the management, in 2007, VCBS continued to
obtain a number of achievements and again, reconsolidated
its position among market leaders.”


Year 2007 witnessed various fluctuations that Vietnamese through its network of 01 head quarter, 02 branches, 02 sub-
securities market experienced. The market grew fantastically branch offices and 05 agent offices.
with Vn-Index even rocketing to reach the peak of VN Index of
Despite frequent labor relocation in the securities sector
1,170.67 on March 12th, 2007. However, that uptrend was soon
recently, we proudly established a team of employees that are
followed by a recession period then, a continuous downtrend
talented, enthusiastic, young and so committed to fulfilling
by the end of 2007. Enaction of new macroeconomic policies
themselves for the best and ultimate success of VCBS.
was partly the cause of this recession. Nevertheless, that series
of new securities companies entered the market made financial By the turn of 2008, it is estimated that the world economy
and labor markets become more competitive than ever. and global financial market will plunge into a time of recession
somehow. Inevitably, as part of the world economy, Vietnam
Being confident and enduring in all circumstances, and thanks
could hardly avoid this trend. Currency tightening policies
to the company’s sound financial capacity and professional
to be enacted to cope with high inflation are soon expected
expertise of VCBS staff, together with the cohesion and
and they will make a bad impact on the development
commitment of the management, in 2007, VCBS continued to
of securities market as well as operations of securities
obtain a number of achievements and again, reconsolidated
companies. In order to adjust to the market situation, in 2008
its position among market leaders.
VCBS commits focusing on enduring stability by suitable
Revenue in 2007 reached VND 439 billion, which is about 10% solutions of R&D, new products application, financial resource
higher than the planned target and 85% higher as compared supplement, enterprises model conversion and management
to that of 2006. The profit was recorded impressively at VND improvement.
252 billion, rising up 126% in comparison to that of 2006, and
On this opportunity, VCBS would like to express the sincere
was 11% over the company preset target.
thanks for the good faith and support of all our customers and
Accounts opened at VCBS has reached the number 40,000, we also acknowledge contribution and resilience of all VCBS
which doubled that of accounts in 2006. staffs that have been always united to build up VCBS brand
in the securities market of Vietnam and then accomplish the
Market share: Despite severe competition, VCBS still
slogan “VCBS-WITH YOU TOWARDS PROSPERITY”.
maintained its top position in the market as one of the
biggest securities companies with the largest market share Yours sincerely,
of brokerage services, at around 26% (inclusive of bond, CD,
Director
and stock brokerage). Especially, VCBS well maintained its
“monopoly” status in bond brokerage with the market share
of 52%.
In 2007, VCBS expanded its networks with the opening of
new branches, sub-branch offices and agent offices across
the nation. Currently, VCBS has established its presence in
big provinces and cities such as Ha Noi, Ho Chi Minh City, Da Nguyen Thi Bich Lien
Nang, An Giang, Can Tho, Dong Nai, Vung Tau, Binh Duong


Customer is a Core Element
VCBS provides complex products and services; effective and creative financial solutions,
achieving added values that meet all of our customers’ requirements.


VCBS CORE VALUES


Competitive advantage

• Strong financial capacity
• Solid professional capacity
• Expert managerial capacity
• Leading technological capacity

The first priority - Ensure the rights of customers
With the business motto “Client Focus”, VCBS always commits
itself to the ultimate goal of satisfying all the needs of clients
both domestically and internationally.
In 2007, VCBS maintained the transparent separation between
the accounts of customers and company. That helped to
eliminate mistakes, faults or shortcomings. Moreover, all the
transactions have been checked and controlled carefully
and cautiously by our departments of internal audit and
compliance and risk management. Thanks to the devotion of
these two departments, all the mistakes in the trading progress
could be determined and processed quickly and timely. VCBS
also successfully launched the connection with Vietcombank
about the management of customers’ deposits. Since then,
client’s invested capital has been controlled more securely and
safely.


VCBS STRATEGY

Strategic vision
To become the leading investment bank in Vietnam by 2010, a crucial arm of Vietcombank Financial Holdings
in field of investment banking.
Mission of VCBS
• Making great contribution to the development of securities market of Vietnam for a stable and sustainable
growth of financial market.
• Offering diversified services, based on the capability of VCBS in terms of finance, technology, research and
network.
• Creating a professional, adequate and encouraging working environment for the growth and promotion
of each and every individual, especially for proactive, enthusiastic employees; simultaneously, building up
an unique company culture.


Strong Financial Competence forms our Basic Foundation
VCBS always maintains its financial competence on both the model and quality


FINANCIAL STATEMENTS

Unit: Thousand VND
Operating Results 2006 2007

Revenue 234,330,452 439,895,631
Expenses 87,550,554 137,999,722
Profit before tax 120,676,453 252,170,879
Net Income 108,850,736 203,002,989

Financial Position

Total Assets 2,545,369,800 2,393,101,139
Total Liabilities 2,277,851,434 1,949,065,849
Owner’s Equity 309,642,520 444,035,290

Profitability Ratios

Net profit margin 80.16 % 59%
ROE 38.97 % 46%


Total Assets Chart Owner’s Equity Chart
Unit: VND Billion Unit: VND Billion

3,000 500 444.03
2,545
2,500 2,393
400

2,000 309.64
300
1,500 1,389

1,052 1,119 200
1,000 146
114.35
84.24
100 65.44
500
242

0 0
2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007

Pre-tax Profit Chart ROE
Unit: VND Billion

252.17
250

200 50.00%
46%
38.97%
40.00%
150
31.50% 30.80%
120.68
30.00% 25.60%
100
20.00%
47.86
50 34.44 10.00%
23.67
4.3
0 0.00%
2003 2004 2005 2006 2007
2002 2003 2004 2005 2006 2007


The Latest Technology is a Plus
VCBS increases its competitive advantages through the combined use of modern
technology and business tips to make a difference.


Information Gateway
FINANCE-SECURITIES


In 2007, VCBS has launched a new website with user-friendly The website of VCBS is always an informative data room with
interface at http://info.vcbs.com.vn. full of reports, articles, research works from VCBS on the
securities market and related entities, efficiently supporting
clients with reliable information sources.


TRANSACTION SYSTEM


Via the transaction system, VCBS offers a wide range of telephone, internet; online and SMS checking, etc. to serve
services to the clients: direct ordering; transacting via the diversified requirements of clients.


VCBS PROFILE

Foundation: Vietcombank Securities Limited Company (VCBS) - a subsidiary 100% owned by Bank for
Foreign Trade of Vietnam (VCB) - was established in compliance with with Decision No.27/QĐ-HĐQT dated
7 January, 2002 of Vietcombank’s Chairman. The company was formally launched on 18 June, 2002 with the
initial charter capital of VND 60 billion.
Charter Capital : 200,000,000,000 VND
Employees : 200 people
Range of business : As per the License for Securities Business Operation No.09/GPHDKD granted
on 24 April 2002 by the State Securities Commission, VCBS is permitted to do business with all kinds of
securities-related products and services, including:
• Securities Custody
• Securities Brokerage and Trading
• Securities Investment
• Securities Undewriting and Distribution Agent
• Corporate Finance Consultancy
Registered Client Account: Nearly 40,000 accounts.


Achievements

• Be the first in Vietnam to provide Internet trading service Our Partner
named Cyber Investor.
We are the traditional service supplier of almost leading
• Rank top in Corporate Finance Advisory & Underwriting financial institutions in Vietnam capital market. Including:
Service in local market.
Citygroup Inc - Deutsche Bank - The Australia and New
• Be the leading underwriter for Government bonds, Municipal Zealand Banking Group Limited - Standard Chartered Bank -
bonds, corporate bonds. HSBC Holdings plc - Prudential plc,etc
• Be awarded from the Minister of Finance and Governor of
State Bank of Vietnam for VCBS’s great contributions to the
development of the securities market in the 2002 - 2005.


OUR LINES IN BUSINESS

Securities Services
Brokerage Service
With the focus on fairness, faith and devotion, VCBS provide a package of brokerage service for all of
individual and institutional clients via diversified and convenient trading methods, including:
• Trading via Internet : Account opening, online trading, account checking,
and financial data downloading in www.vcbs.com.vn
• Trading via telephone :
In Hanoi : 84 – 04 – 9 365 094, 84 – 04 – 9 367 518, 84 – 04 – 9 367 519, 84-04-9 367 520
In Ho Chi Minh : 84 – 08 – 8 200 774, 8 200 775
In Danang : 84-0511- 3 888 991
• Trading directly on the counter : refer to VCBS network
Investment Advisory Service
VCBS takes into consideration a number of factors related to client’s capacity and needs (financial capacity,
goals age, income, tolerance for risk, social status, etc) in order to create the specific “risk profile” for each
client, which includes correlative advisory services below:
• Restructure and optimize current portfolio.
• Develop proper investment strategies.
• Select the suitable time and structure for investment.
• Look for effective investment opportunities.
• Assist in creating benchmark for assessing investment result.
• Provide technical analysis of listed and unlisted stock, and stock valuation according to the request of
investors.
Custody Service
VCBS is a registered member of Vietnam Securities Depository (VSD). In this system, physical security
holdings are converted into electronic holdings. When opening account in VCBS, our client can be provided
with all of security custody services, as follows:
• Transfer and settle securities
• Receive securities entitlements
• Freeze or lock account
Finance Assistance Service
To meet the capital needs of customers’ investment activities, VCBS has co-operated with Institutional
Lender in Vietnam to provide the following services:
• Payment of securities and dividend in advance
• Collateralized Loans


Corporate Finance Services
Due Diligence & Business Valuation • Determine the underwriting price;
• Corporate valuation is a required step in the process of • Assist in document of issuing permission for authorized
financial restructuring, M&A, equitization, securities issue entities;
or listing. • Launch campaign or road-show to introduce the issuance;
• Due diligence: This important step enables clients to have • Seeking for and negotiate with strategic partners;
an objective and comprehensive look at their business. • Operate online auction in the whole country
• Valuation: comparatives, DCF, Tangible assets, Book Value
M&A, Splitting, Spin-off, Divestment
• With VCBS’s services, you can rest assured that your business
M&A has been evolving into a mean businesses are embracing
value will be determined in the most optimal way
to diversify business activities, reduce risks, take advantages
Equitization and Conversion Consultancy of each other’s market, technology etc. With extensive custom
• Develop the roadmap of equitization or conversion. network and expertise, VCBS can serve as an intermediary in
• Determine corporate valuation. the M&A process to help eliminate unnecessary costs.
• Create equitization or conversion plan. Our M&A services include the following steps:
• Assist in seeking potential investors. • Formulation of strategy, search for and selection of target
• Organize public offering. companies
• Provide tailor-made post-equitization services, • Business survey and valuation in order to give a fair price
• Advice on the scheme of M&A
Listing Advisory Service
• Advice on related procedural work
• Advice on selecting the appropriate stock exchange and
listing requirements
• Survey, evaluation and valuation of your business
• Determination of listing price for the first trading session on
the securities trading center
• Preparation of the prospectus and the summary prospectus
• Follow-up the revision of the application; facilitation of the
progress of the SSC’s approval,
Financial Restructuring Advisory
• Advice on business strategy
• Financial restructuring
• Advice on financial risk management
IPO Underwriting
• Conduct survey, assessment, and definition of corporate
value;


Organization Chart


President

Board of Director

Front Office Middle Office Back Office Network
Division Division Division

Investment Internal Audit & Finance, Account HoChiMinh
Department Compliance Department Branch
Department

Brokerage Risk Management Custody Da Nang
Department Department Department Branch

Legal
Corporate Finance Research & Analysis Hanoi
and Compliance
Department Department Sub-branch
Department

Strategic Planning Marketing HoChiMinh
Department Department Sub-branch

IT Agents (05):
Department Can Tho,
Dong Nai…

HRM &
Administration
Department


People are an asset
VCBS’s Board of directors is committed to building an advanced human resource system
built on practical experience, camaraderie and enthusiasm that is proactive, youthful and
one that follows true business ethics.


VCBS BUSINESS PERFORMANCE IN 2007

Review of Vietnam Economy in 2007
According to the General Statistics Office, Vietnam’s Gross
Domestic Product (GDP) in 2007 achieved a growth rate of
8.48%. This impressive growth met the proposed target of
the Goverment (8.2-8.5%) for the year 2007. Vietnam is also
among countries whose economic growth rate ranks top in
the region.
Vietnam’s export value in 2007 is estimated to reach USD
48.4 billion, increasing 21.5% in comparison with that in 2006.
There are 10 types of products whose export values exceeded
USD 1 billion, including: crude oil ($8.5 billion), garment ($7.8
billion), footwear ($4 billion), seafood ($3.8 billion), wooden
product ($2.4 billion), electronics ($2.2 billion), coffee ($1.8
billion), rice ($1.4 billion), rubber ($1.4 billion), black coal ($1
billion).
Vietnam’s import value in 2007 is estimated to hit USD 60.8
billion, which is 35.5% higher than last year. Import value of
domestic enterprises reached USD 39.2 billion, while that
of foreign-invested enterprises was recorded at USD 21.6
billion.
Vietnam’s FDI attraction in 2007 reached the record number of
USD 20.3 billion, which shows an increase of 68.8% compared
to that in 2006. This was the aggregate value of registered
capital for more than 1,500 projects.
Inflation Rate In 2007, there was wild fluctations in price
movement, ending up with a rising inflation rate in the
ending months of the year. An inflation rate higher than GPD
growth rate has been a heavy burden on people and forced
the Government to release new monetary policies.

Review of Vietnam Stock Market in 2007
Bond Market
Year 2007 marked significant improvements in the
Vietnamese bond market. That foreign financial institutions
more actively participated (banks, insurance companies
and foreign investment funds) in trading government bond
and corporate bond is the major motivation for market


development. This was also a vital opportunity for the In the time from May 2007 to August 2007, the market
securities companies to provide a variety of relevant services experienced a long-term recession period, in which Vn-Index
including consultancy, issue underwriting and agency. stumbled to 887 point in August 23, 2007.
However, in Quarter 3, proceeds from bond issuance were The market rebounded at the end of September and in
much less than that of the early 6 months in 2007. Similarly, October with aggressive increases in trading value in both
fewer transactions were dealt in the secondary market bourses. In fact, the average trading value per session was
than early months in 2007, reflected by a sharp decrease in 1,600 billion. This was also the time many big corporations
trading volumes and values. got their shares listed on both bourses such as SSI, PVS, DPM,
etc. The Vn-Index quickly surpassed the resistance levels of
Listed Stock Market
900, 1,000 and 1,100 points and reached the peak of 1,107
In comparison with 2006, in 2007 the centralized stock points on 4/10/2007. However, after that, the market began
market obtained a significant improvements. The market to stay flat and then decresed. At the time of IPO Vietcombank
capitalization value of two bourses reached 490 trillion VND, in December 2007, Vn-Index fell down to under 950 points.
which was 145% higher than that in 2006 and accounted for
Unexpected ups and downs that the market experienced
44% of GDP. In the same year, the Ho Chi Minh Stock Exchange
also put an end to the overheated period of uptrend. Almost
welcome 32 newly-listed companies of which there were
all the new investors who joined the market in 2007 booked
those with big charter capital such as SSI (800 billion VND),
losses for their investments.
DPM (3.8 trillion VND), HPG (1.32 trillion VND), etc. This hiked
up the market capitalization value of listed companies at Ho In year 2007, that some new policies were enacted such as
Chi Minh Stock Exchange, which has reached 363 trillion VND the Individual Income Tax Law, which imposes tax on capital
in terms of market capitalization, 151% higher than that in gains and dividend and Decree 03, which limits lending quota
2006. of banks, partly caused the market to go down and fall into a
long recession
In Hanoi Securities Trading Center, the total number of listed
companies was 111, which reflected a 15% growth. Moreover, VCBS Revenue in the period from 2005 to 2007
the market capitalization value was recored to be 126 trillion
VND billion
VND, a 72% increase as compared to that of 2006. Among
400
newly-listed companies in 2007, PVS was an outstanding
symbol ticker with the charter capital of 1 trillion VND. 350

Market Movement in 2007 300

250
2007 was the year the listed market experienced many ups
and downs. In the period from December 2006 to March 2007, 200
the market expanded aggressively with Vn-Index reaching
150
the peak of 1,170 point on Mar 19, 2007. Later, after repeated
warnings about an unsafe “overheated” market, panic selling 100

by individual investors occurred, pushing the market to fall 50
into the first recession period which lasted until April 2007.
0
During this time, the market got bluechip stocks to rebound
2005 2006 2007
a number of times thanks to foreign investors’ buying trend.
Brokerage Self-trading Financial Advisory & Underwriting Others
This recovery took place during Bao Viet Group’s IPO.


VCBS Business Performance in 2007
VCBS’S MILESTONE 2007
2007: A year of strong growth in human resource. As at 31
December 2007, the number of VCBS staff was nearly 200,
an increase of 121% over 2006; the average age was of 28.27
with nearly 18% of masters.
2007: Total number of VCBS’s accounts went up nearly 2007: As at 31 December 2007, total revenue gained VND 437
40.000 (including both individual and institutional accounts), billion, an increase of 87% over 2006. Pre-tax profit gained
making VCBS the leading securities company of transaction 252 billion, an increase of 108% over 2006. Profit/chartered
accounts. capital ratio gained over 100%;


SECURITIES SERVICES
Performance in 2007
In terms of trading value in the market, VCBS maintained a
stabilized position and continues to prosper. The average
trading values reached 670 billions per day, hitting the cap
in the market. In 2007, VCBS expanded and upgraded 2 sub-
May 2007: VCBS® was officially granted SSL certificate with EV branch offices in Hanoi and Ho Chi Minh City. Besides, at the
from the number one supplier in electronic authentication- end of the year, the event of launching its activities at Da
VeriSign™ for VCBS’s online trading system Cyber Investor™, Nang Branch marked a milestone in VCBS plan of expanding
which provides protection and encryptation for preventing its transaction network nationwide. VCBS has been present
phishing web; and active at almost big cities in Vietnam: Hanoi, Ho Chi
Minh, Da Nang, Can Tho, Vung Tau, Binh Duong, Dong Nai
June 2007: VCBS launched Cau Giay sub-branch office; and An Giang.
July 2007: VCBS extended transaction floor at its branch in In addition, VCBS prides itself over its technology with the
Hochiminh City; leading online trading system named Cyber Investor® . With
September 2007: VCBS launched a new version of website nearly 60% transaction orders from Internet, Cyber Investor
integrating functions as“finance – securities information has brought Customers the utmost benefits.
gateway”. Launching 2 specific websites: http://www.vcbs. In terms of marketshare, despite rough competition in
com.vn and http://info.vcbs.com.vn marked a strong focus the market, VCBS maintains to be one of the top securities
on technology. Right 1 month after launching, total visitors companies with the biggest market share: brokerage
in the 2 websites increased quickly with nearly 300.000 page accounts for 26% of the total market (including 8% of shares,
views; fund certificates and 52% of bonds).
September 2007: VCBS was officially selected by HOSE as The “presiding” position in bond brokerage (52%) not only
one of the 8 securities companies which satisfied standards helps VCBS gain the leading stand in brokerage market
of remote order receiving; share but also promotes its reputation to big institutional
September 2007: VCBS succeeded in consulting Techno- clients such as HSBC, Deustche Bank, Citiglobal, ANZ,
Agricultural Supplying Joint Stock Company with the Standard Chartered Bank, BNP Paribas, Chinfon Bank, Mizuho
securities code of TSC. Right after listed in HOSE, TSC has been Corporate Bank, Prudential Fund, ManuLife Fund, and other
traded strongly in the bourse with 15 continuous session of big local financial institutions of Techcombank, VIBank,
hitting the ceiling; PGBank, GPBank, Pjico,etc.
Bond Trading Value
Octerber 2007: VCBS continued expanding trading floor at
Head office with many big LCDs and self-trading area where Unit: VND billion
supports customers place online orders.
140,000 131,772
December 2007: VCBS opened Danang branch. This is
VCBS’s first branch in the Central of Vietnam. Launching 120,000
Danang expressed the comprehensive development of VCBS’
100,000
transaction network in all 3 area of North-Central-South of
Vietnam; 80,000
December 2007: VCBS was selected to be Consultant
Company for Vietcombank’s Initial Public Offering (IPO); 60,000
44,950
40,000

15,771
20,000
6,566
100 1,627
0
2002 2003 2004 2005 2006 2007


Bond market share of VCBS CORPORATE FINANCE
Listing Advisory Services
100%
90% The year 2007 was remarked as a severe competitive year
80% in field of listing advisory service due to the decrease in the
80% number of listing companies and the increase of newly-
70% established securities companies in compared to 2006. In
these circumstances, VCBS had concentrated on improving
60%
51.87% the quality of services as a competitive advantage. VCBS
48%
50% was willing to offer to listing companies the whole package
40% 34.70% 35.40% services with variety of added value benefits of customer care,
thus reinforce the trust of investors to the listing companies.
30%
19% With quality improvement and services diversitification, VCBS
20%
commits to bring the success, efficiency and development to
10% listing companies.
0%
Issuing Underwriting Service:
2002 2003 2004 2005 2006 2007
In 2007, thanks to the strong development of Vietnam
securities market and the significant increase in the amount
of stock issued, VCBS maintained the leading position in
issuing underwriting services market, especially in bond
issuing underwriting.
Underwriter of Goverment and Municipal Bond
Unit:VND billion
By the end of 2007, VCBS had conducted governmental,
municipal bonds issuing with total value of VND 8,849 billion,
accounting for 20% of the market.
40,000
40,000 Equitization and conversion Consultancy:

32,000
Equitization contracts are often complicated and risky,
therefore VCBS has always paid ultimate attention with the
30,000
strictest requirements to preparation and implementation
stages as well as to building up a professional and experienced
staff in field of equitization.
20,000
Being a consultancy with excellent services and expertise,
12,000
10,500 in 2007, VCBS implemented contracts of whole package
10,000 8,046 7,962 8,356 including advisory service, business valuation and listing
3,098 3,517 advisory through HASTC and HOSTC.
2,244
0 The most remarkable achievement of VCBS in 2007 was the
2003 2004 2005 2006 2007 equitization advisory contract signed with Vietcombank with
the factual value of VND 10,146 billion. As a Local Partner, VCBS
Total Issued Amount Amount underwritten by VCBS
had contributed signficantly to the success of equitizating
one of the four biggest state-owned banks of Vietnam.


Top 4 biggest IPO in 2007 Forward trading of securities & Commercial papers
Unit: USD million
In term of proprietary trading, timed trading and valuable
papers trading are always among the top priorities of VCBS.
They have been always the efficient operation activities and
700 had the great contribution to the business achievement
600 of VCBS thanks to its own professional and experienced
expertise staff. Besides, flexible investment policies and strict
500
internal supervision to assure the transperancy and accuracy
400 of stock exchanges also play roles in these successes.
656 In 2007, despite of the difficulties appeared due to recent
300
investment policies and decisions, the section of proprietary
200 357 trading, timed trading and valuable papers trading of VCBS
100 237.4 233.7 still proved its competitive advantages of expertise and
professionlism in order to gain the planned targets. Total
0
revenue of 2007 in this field was VND 292 billion, equal to
VCB DPM BVI PVFC 105% of planned figure.


Sustainable Business Effects
VCBS strives to achieve stable business results with complex and sustainable business
effects in all operational fields.


Development
OUTLOOK FOR 2008 - 2010

Targets for 2008-2010
• Total Assets: Increase 15%/year
• Owner’s Equity: Increase 15%/year
• Profit before tax: Increase 20 – 25%/year
• ROA, ROE: 30 – 35% annually

To achieve this, the following approaches are implemented:
Services and products
Brokerage services will be upgraded to meet stricter criteria in terms of quality, reliability, and convenience,
based on an extensive network, advanced technology and well-stored data room. On one hand, VCBS
incorporates these factors to bring a user-friendly, and convenient one-stop service to clients. On the other
hand, VCBS promotes investment advisory service to assist clients in making optimal decisions.
Custody service will be more value-added to clients thanks to a fast secure and convenient hi-tech service
with which clients can withdraw, deposit or pledge the securities in a most comfortable way. A sophisticated
procedure is implemented to update clients with information on exercise of rights of shares under their
ownership.
Finance Advisory will maitain the role of VCBS’s core business. Besides traditional services such as government
bond underwriting, corporate bond issue advisory, VCBS also markets its new services such as M&A to domestic
and foreign clients. Along with the efforts in expanding the network, VCBS extends its reach of PR activities to
FDI companies in Vietnam who have demand for restructuring and listing in the Vietnam Stock Market.
Investment activities will be diversified in an attempt to search for new sources of revenue, based on the
expertise and experience of investment officers in different sectors. New product development together with
supporting services such as margin trading, derivative trading will be deployed
Information Technology
With the tradition of being the leader in terms of technology since the early stage of securities market, VCBS
will reconsolidate this competitive edge through its efforts to deploy new development stages. In 2008, VCBS


plans to carry out an entirely advanced system with a flexible, only focuses on upgrading and updating staffs’ knowledge
fast, efficient and secure software solution for both the front and expertise through official and on the job training courses
and back office while ensuring an electronic connection with in and outside of Vietnam, but also pays close attention to
the systems of HOSE and HASTC continual improvement of the working environment, financial
reward regime and others benefits to motivate its united,
Risk Management
professional and loyal staffs.
VCBS always understands that identification, evaluation and
Corporate Culture
monitoring of risk factors are the utmost important in assuring
the stability of the development and growth of the company. Thanks to its young staffs, VCBS would conduct a corporate
Thus, in 2008, VCBS would minimize risks by diversifying its culture of proactiveness, innovativeness and client focus.
portfolio, improving service quality, developing new products Besides, VCBS would promote timeout activities, and encourage
to meet the diversified needs of clients, and cooperating their participation.
more efficiently with foreign financial and technological
organizations. Moreover, VCBS will develop a complete risk
management procedure, and ensure its staff strictly abide
by the procedure to minimize operational risks at the best
possible. Human resources development
To cope with increasingly severe competitions as well as the
stricter requirements of the market, in 2008, VCBS would
concentrate on developing the human resources, one of the
most decisive factors to the success of any company. VCBS not


FINANCIAL SECTION

Business Registration:
0104000069 24 April 2002
0104000069/DC1 13 December 2006
The Business Registration Certificate and its update were issued by the Hanoi Department of Planning and
Investment.
Securities Operating:
09/GPHDKD 24 April 2002
12/GPHDLK 23 May 2002
Licence No. 12/GPHDLK 23 May 2002
The Securities Operating Licence and updates were issued by the State Securities Commission.

Chairman: Ms. Nguyen Thu Ha
Board of Management: Ms. Nguyen Thi Bich Lien Director
Mr. Mai Trung Dzung Deputy Director (from 15 July 2007)
Mr. Nguyen Truong Xuan Deputy Director (from 15 July 2007)
Mr. Le Viet Ha Deputy Director (from 15 July 2007)

Registered Offices
17th floor, Vietcombank Tower 198 Tran Quang Khai Street Hanoi, Vietnam
Ho Chi Minh City Branch
70 Pham Ngoc Thach Street District 3, Ho Chi Minh City Vietnam
Da Nang City Branch
2nd Floor, 10 Hai Phong, Hai Chau District, Da Nang City, Vietnam
Auditors
KPMG Limited Vietnam


KPMG Limited
16th Floor, Vietcombank Tower Telephone + 84 (4)936 0380
198 Tran Quang Khai Street, Hoan Kiem District, Hanoi Fax + 84 (4)936 0381
The Socialist Republic of Vietnam Internet www.kpmg.com

Auditor’s Report
To the Investor
Vietcombank Secur it ies Company Limited
Scope
We have audited the accompanying balance sheet of Vietcombank Securit ies Company Limited as of 31 December 2007 and
the related statements of income, changes in equity and cash flows for the year then ended, as set out on pages 3 to 33. These
financi al statements are the responsibi lity of the Company’s management. Our responsibility is to express an opinion on these
fi nancial statements based on our audit.
We conducted our audit in accordance with Vietnamese Standards on Auditing and International Standards on Auditing
accepted in Vietnam. Those standards require that we plan and perform the aud it to obtain reasonable assurance that the
financial statements are free of materi al misstatement. An audit includes examining, on a test basis, evidence supporting th
e amounts and disclosures in the fin anci al statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation . We believe that
our audit prov ides a reasonable basis for our opinion.
Audit opinion
In our opinion the financial statements present fairly, in all material respects, the fi nanc ial position of Vietcombank Securities
Company Limited as of 3 1 Decem ber 2007 and the resu lts of its operations and its cash flows for the year then ended
in accordance with Dec ision No. 99/2000/QD-BTC issued by the Ministry of Finance on the accounting system of securities
companies, the Vietnamese Accounting Standards, the Vietnamese Accounting System and accounting principles generally
accepted in Vietnam.

KPMG Limited
Vietnam
Investment licence No: 863/GP
Audit Report No: 07-02-159

Mark E.Jerome Ho Viet Ha
CPA No. 0628/KTV CPA No. 0676/KTV
Deputy General Director
Hanoi

KPMG Limited, a company licensed under the law on
Foreign Investment in Vietnam, is a member of
KPMG International, a Swiss cooperative.


Audited Financial Statements

Unit: Thousand VND

Code Note 2007 2006

ASSETS
CURRENT ASSETS AND SHORT-TERM
100 2,376,018,480 2,535,506,518
INVESTMENTS
Cash and cash equivalents 110 3 715,690,793 761,166,847
Cash on hand 111 540,667 883,62
Cash in bank 112 14,366,383 6,496,290
Cash in bank from investors relating to
114 640,322,139 743,024,881
securities transactions
Cash in bank for settlement relating to
116 55,461,604 10,762,056
securities transactions
Cash equivalents 5,000,000 -
Securities investments and other short-
120 4 1,457,492,756 1,722,585,977
term investments
Trading securities 121 1,470,237,732 1,486,560,809
Short-term securities investments of
122 - 156,566,683
entrusted investors
Short-term investments of the Company 123 - 80,000,000
Provision for diminution in the value of
126 (12,744,976) -541,515
securities
Accounts receivable 130 196,913,987 47,322,077
Accounts receivable from investors 132 44,734 13,602,890
Advances to suppliers 134 5 28,957,252 523,345
Receivables from customers 772,292 380
Other receivables 137 6 167,139,709 32,815,842
Other current assets 150 5,920,944 4,431,617
Advances 151 388,164 -
Short-term prepayments 152 1,961,126 675,213
Short-term deposits and collaterals 156 3,571,654 3,756,404
FIXED ASSETS AND LONG-TERM
200 17,082,659 9,863,282
INVESTMENTS
Fixed assets 210 12,670,239 7,644,289
Tangible fixed assets 211 7 12,657,006 7,644,289
Cost 212 21,090,177 12,870,115
Accumulated depreciation 213 (8,433,171) (5,225,826)
Intangible fixed assets 217 8 13,233 -
Cost 218 284,144 270,911
Accumulated depreciation 219 (270,91) (270,91)
Other long-term assets 240 4,112,420 1,918,993
Long-term deposits and collaterals 241 121,691 421,691
Deposits at Payment Support Fund 242 9 3,990,729 1,497,302
TOTAL ASSETS 250 2,393,101,139 2,545,369,800


Unit: Thousand VND

Code Note 2007 2006

RESOURCES
LIABILITIES 300 1,949,065,849 2,235,727,280
Current liabilities 310 1,949,065,849 2,064,566,678
Short-term borrowings 312 - 1,334,700,000
Payables to suppliers 318 7,343,282 5,306,883
Advances from customers 319 10 356,386,781 5,732,611
Dividends, bonds and yields payables 320 5,907,302 17,211,923
Taxes payable to State Treasury 323 13,653,549 9,190,870
Payables to employees 324 6,535,069 1,329,630
Accrued expenses 325 11 19,570,333 5,789,963 200
Payables to securities issuers 327 200 200
Other payables 328 12 904,075,396 6,632,324
Settlements of securities transactions
329 635,593,937 678,672,274
by investors
Long-term liabilities 340 - 171,160,602
Payables to entrusted investors 345 - 171,160,602
EQUITY 400 444,035,290 309,642,520
Contributed capital 410 13 200,000,000 200,000,000
Supplementary capital 17,061,355 732,405
Reserves and retained profits 430 226,973,935 108,910,115
Financial reserves 432 10,034,350 6,843,433
Statutory reserves 433 14 10,034,350 6,843,433
Retained profits 438 203,006,123 108,853,868
Rewards and welfare funds 439 (13,048,165) (6,787,186)
TOTAL RESOURCES 450 2,393,101,139 2,545,369,800


Off balance sheet items

2007 2006
Code VND’000 VND’000

Custody securities of local members 006 19,997,803,020 13,914,825,250
Trading securities of local members 007 19,865,073,530 13,747,243,200
Trading securities of local member companies 008 158,966,090 907,858,730
Trading securities of local members’ investors 009 19,706,107,440 12,764,145,180
Trading securities of local members’ trust investors 010 0 75,239,290
Mortgaged securities of local members 015 132,729,490 167,582,050
Mortgaged securities of local members’ investors 017 132,729,490 167,582,050
Custody securities of foreign members 023 2,036,892,310 43,035,830
Trading securities of foreign member companies 025 2,036,892,310 43,035,830

2007 2006
PROFIT AND LOSSES Code Note VND’000 VND’000

REVENUE FROM SECURITIES TRADING ACTIVITIES 01 341,825,417 152,371,173
Less sales deductions 11 (518,538) (1,820,062)
NET SALES 12 341,306,879 150,551,111
Revenue from investment activities 13 98,588,752 83,779,341
REVENUE FROM SECURITIES TRADING 14 439,895,631 234,330,452
Expenses for securities trading 15 10 (137,999,722) (87,550,554)
GROSS OPERATING PROFIT 20 301,895,909 146,779,898
General and administration expenses 30 11 (49,726,302) (26,103,445)
NET OPERATING PROFIT 40 252,169,607 120,676,453
PROFIT BEFORE TAX 60 252,170,879 120,676,453
Corporate income tax 70 13 (49,167,890) (11,825,717)
NET PROFIT AFTER TAX 80 203,002,989 108,850,736


Note to the Financial Statements
Principal activities
The principal activities of Vietcombank Securities Company an insignificant risk of changes in value, and are held for the
Limited (“the Company”), which is a wholly-owned subsidiary purpose of meeting short- term cash commitments rather
of the Bank for Foreign Trade of Vietnam (“Vietcombank”), are than for investment or other purposes.
to conduct securities brokerage activities and securities trading Trading securities, short-term and long-term
activities; and to provide securities issuance underwriting, investments
securities investment advisory and securities custodian services
under Business Registration Certificate No.0104000069 dated Trading securities, short-term and long-term investments
24 April 2002 issued by Hanoi Department of Planning and include investments in securities and other short-term and
Investment and amended on 13 December 2006 (together long-term investments. Trading securities, short-term and
referred to as “the Business Registration Certificate”), and long-term investments are stated at cost less allowance for
Securities Operating Licences No. 09/GPHDKD dated 24 diminution in value of securities, short-term and long-term
April 2002 and No 12/GPHDLK dated 23 May 2002 (together investments.
referred to as “Securities Operating Licences”), issued by the The allowance for diminution in value of trading securities,
State Securities Commission of Vietnam. short-term and long-term investments is made as at 31
Summary of significant accounting policies December and in accordance with the current regulation as
issued by the Ministry of Finance. The allowance is reversed
The following significant accounting policies have been if the subsequent increase in recoverable amount can be
adopted by the Company in the preparation of these financial related objectively to an event occurring after the allowance
statements. was recognised. An allowance is reversed only to the extent
Basis of financial statement preparation that the investment’s carrying amount does not exceed the
carrying amount that has been determined if no allowance
The financial statements, expressed in expressed in Vietnam had been recognised.
Dong (“VND”), rounded to the nearest thousands, have been
prepared in accordance with Decision No. 99/2000/QD- Cost of trading listed shares is determined on a weighted
BTC issued by the Ministry of Finance on 13 June 2000 on average basis. Cost of trading unlisted shares is determined
the accounting system of securities companies, Vietnamese on a first in, first out basis. Cost of trading bonds is determined
Accounting Standards, the Vietnamese Accounting System on a specific identification basis.
and accounting principles generally accepted in Vietnam. Securities sold subject to a simultaneous agreement to
The financial statements are prepared on the historical cost repurchase these securities at a certain later date at a fixed
basis price (‘securities repurchase agreements’) are measured
in accordance with their original measurement principles.
Fiscal year The proceeds of the sales are reported as liabilities in ‘other
The fiscal year of the Company is from 1 January to 31 payables account’ and are carried at amortised cost (refer
December to Note 2(i)). Interest incurred on securities repurchase
agreements are recognised as interest expense over the life
Foreign currency transactions of each agreement on an accruals basis.
Monetary assets and liabilities denominated in currencies Accounts receivable
other than VND are translated into VND at rates of exchange
ruling at the balance sheet date. Transactions in currencies Trade and other receivables are stated at cost less provision
other than VND during the year have been translated into VND for doubtful debts.
at rates approximating those ruling at the transaction dates. Securities purchased under agreements to resell (‘reverse
All realised and unrealised foreign exchange differences are securities repurchase agreements’) are reported not as
recorded in the statement of income. purchases of the securities, but as receivables in the ‘other
receivables’ account and are carried in the balance sheet at
Cash and cash equivalents amortised cost. Interest earned on these reverse securities
repurchase agreements is recognised as interest income in
Cash comprises cash balances and call deposits. Cash
the ‘revenue from operating capital account’ over the life of
equivalents are short-term highly liquid investments that are
each agreement on an accruals basis.
readily convertible to known amounts of cash, are subject to


Tangible fixed assets
Cost
Tangible fixed assets are stated at cost less accumulated Proceeds from sales of securities subject to a simultaneous
depreciation. The initial cost of a tangible fixed asset agreement to repurchase these securities at a certain later date
comprises its purchase price, including import duties, non- at a fixed price (securities repurchase agreements) are reported
refundable purchase taxes and any directly attributable costs as liabilities in the ‘other payables’ account (refer to Note 2(e)).
of bringing the asset to its working condition and location
Taxation
for its intended use. Expenditures incurred after tangible
fixed assets have been put into operation, such as repairs and Income tax on the profit or loss for the year comprises current
maintenance and overhaul costs, are normally charged to and deferred tax. Income tax is recognised in the statement of
income in the year in which the costs are incurred. In situations income except to the extent that it relates to items recognised
where it can be clearly demonstrated that the expenditures directly to equity, in which case it is recognised in equity.
have resulted in an increase in the future economic benefits
expected to be obtained from the use of tangible fixed assets Current tax is the expected tax payable on the taxable income
beyond their originally assessed standard of performance, for the year, using tax rates enacted or substantially enacted
the expenditures are capitalised as an additional cost of at the balance sheet date, and any adjustment to tax payable
tangible fixed assets. in respect of previous year.

Depreciation Deferred tax is provided using the balance sheet liability
method, providing for temporary differences between the
Depreciation is computed on a straight-line basis over the carrying amounts of assets and liabilities for financial reporting
estimated useful lives of tangible fixed assets. The estimated purposes and the amounts used for taxation purposes. The
useful lives are as follows: amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of
Transportation equipment 6 years
assets and liabilities using tax rates enacted or substantively
Electronic equipment 3 - 6 years enacted at the balance sheet date.
Office equipment 4 years A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
Intangible fixed assets
which the asset can be utilised. Deferred tax assets are
Cost of acquisition of new software, which is not an integral reduced to the extent that it is no longer probable that the
part of the related hardware, is capitalised and treated as an related tax benefit will be realised.
intangible asset. Software is amortised on a straight-line
basis at a yearly rate of 33%.
Trade and other payables
Trade and other payables are stated at their cost.


Revenue
Securities brokerage Dividend income is recognised when the right to receive
payment is established.
Revenue from securities brokerage activities is recognised in
the statement of income when services are provided. Interest income from bonds is recognised in the statement of
income on a straight-line basis over the life of the bonds.
Securities trading
Borrowing costs
Revenue from securities trading activities is recognised in the
statement of income upon receipt of the Notice for settlements Borrowing costs are recognised as an expense in the year in
of securities trading transactions from the Securities Trading which they are incurred.
Centers (for listed securities) and completion of the agreement
Related companies
on transfer of the assets (for unlisted securities).
Related companies include the investor, its subsidiaries and
Investment portfolio management
associates
Revenue from investment portfolio management activities is
Provision for severance allowance
recognised in the statement of income on a straight-line basis
over the life of each contract. Under the Vietnamese Labour Code, when an employee
who has worked for his/her employer for 12 months or more
Securities investment advisory
voluntarily terminates his/her labour contract, the employer
Revenue from securities investment advisory service is is required to pay the employee a severance allowance based
recognised in the statement of income in proportion to the on the number of years of service. Provision for severance
stage of completion of the transaction at the balance sheet allowance is calculated based on employees’ current salary
date. The stage of completion is assessed by reference to level and their service time.
work performed.
Off balance sheet items
Securities custody
Amounts which are defined as off balance sheet items under
Revenue from securities custodian activities is recognised in Decision No. 99/2000/QD-BTC dated 13 June 2000 issued by
the statement of income when services are provided. the Ministry of Finance on the promulgation of accounting
systems of securities companies are disclosed in relevant
Operating capital
sections in these financial statements.
Revenue from operating capital mainly represents interest
Nil balances
income on deposits at banks and interest earned on reverse
securities repurchase agreements (refer to Note 2(f )). Revenue Items or balances required by Decision No. 99/2000/QD-BTC
from operating capital is recognised in the statement of dated 13 June 2000 issued by the Ministry of Finance on the
income on an accruals basis. promulgation of accounting systems of securities companies
that are not shown in these financial statements indicate nil
Investment activities
balances.


VCBS CONTACTS


Head-quarter Sub-branch offices
Vietcombank Securities Cau Giay Transaction Unit: Floor 1st
Floor 12th and 17th, Vietcombank Tower, 198 Tran CTM Building - 299 Cau Giay, Cau Giay District, HN
Quang Khai Street, Hoan Kiem District, Hanoi Tel: 84-4-2201599 Fax: 84-4-2201419
Tel: 84-4-9366426/84-4-9366990 Fax: 84-4-9360262
Email: headquarter@vcbs.com.vn Nguyen Hue Transaction Unit: Floor 4th,
Website: http://www.vcbs.com.vn 8 Nguyen Hue, Dist. 1, HCM City
http://info.vcbs.com.vn Tel: 84-8-8292866 Fax: 84-8-8293062

Branches Agent Offices
HCM Branch Agent Office in Can Tho:
Floor 1st, Green Star Building, 70 Pham Ngoc Thach, 7 Hoa Binh Avenue, Can Tho
Ward 6, District 3, Hochiminh City Tel: 84-710-814376 Fax: 84-710-811906
Tel: 84-8-8208116 Fax: 84-8-8208117
Floor 6th, Khanh Nguyen Building, 63 Pham Ngoc Agent Office in Dong Nai:
Thach, Ward 6, District 3, Hochiminh City 77C Hung Dao Vuong, Bien Hoa City, Dong Nai
Tel: 84-8-8200799 Fax: 84-8-8200770 Tel: 84-61-948313 Fax: 84-613-940312

Da Nang Branch Agent Office in Binh Duong:
Floor 2nd, 10 Hai Phong Street, Hai Chau District, 72 Phuong Phu Hoa, Thu Dau Mot, Binh Duong
Da Nang City Tel: 84-650-831227 Fax: 84-650-838674
Tel: 84-511-3888991 Fax: 84-511-3888881
Agent Office in An Giang:
1 Hung Vuong Street, Long Xuyen City, An Giang
Tel: 84-76-841803 Fax: 84-76-841591

Agent Office in Vung Tau:
27 Tran Hung Dao, Ba Ria, Vung Tau
Tel: 84-64-858697 Fax: 84-64-512649


“VCBS - with you towards prosperity”


Vietcombank Securities
Floor 12th and 17th, Vietcombank Tower, 198 Tran Quang Khai Street, Hoan Kiem District, Hanoi
Tel: 84-4-9366426/84-4-9366990 Fax: 84-4-9360262 Email: headquarter@vcbs.com.vn

www.vcbs.com.vn . info.vcbs.com.vn . trading.vcbs.com.vn

Thiet ke Bao cao thuong nien - Vcbs 2007

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