YEARS YEARS OF DIFFERENTIATING THROUGH A NEW JOURNEY

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1 YEARS YEARS OF DIFFERENTIATING THROUGH A NEW JOURNEY ANNUAL REPORT 2016

2 CONTENT 04 GENERAL INTRODUCTION 06 Company information 08 Milestones 12 Message from Chairman and CEO 14 Financial Highlights 15 Business Vision and Mission 16 Organization structure 16 List of Board members 17 Board of Directors Introduction 18 Board of Management introduction 20 MANAGEMENT REPORT 22 Vietnam Economy and Stock Market Overview in Business performance in Financial Institutional Client 32 Corporate Client 34 Individual Client 36 RISK MANAGEMENT 39 Market risk 40 Operational risk 40 Payment risk 41 Liquidity risk 41 Legal risk

3 15 NĂM VCBS YEARS SUSTAINABILITY REPORT Vision Reputation and Experience 46 Human Resource Management 47 Modern trading technology foundation 48 Social responsibility 50 Operational network FINANCIAL STATEMENT General information 56 Report of the Board of Management 57 Independent auditors report 59 Statement of financial position 63 Statement of Comprehensive Income 65 Statement of Cash Flows 68 Statement of Changes In Owners Equity

4 15 YEARS VCBS YEARS Making difference Grounded on fundamental values General introduction

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6 COMPANY INFORMATION Company name in Vietnamese Company name in English Date of establishment Business Registration certificate Công ty TNHH Chứng khoán Ngân hàng Thương mại Cổ phần Ngoại Thương Việt Nam. VIETCOMBANK SECURITIES CO., LTD. (VCBS). January 07 th, 2002 under Decision No.27/QD-HDQT of the Board of Directors, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank). No , issued by Hanoi Department of Planning and Investment on April 24 th, 2002 (1 st time registration). 2 nd time registration on December 13 th, Company business Charter capital Head Office VCBS is licensed to provide all securities-related products and services in accordance with legal regulations. VND (Seven hundred billions Vietnam Dong). 12 th - 17 th Floor, Vietcombank Tower, 198 Tran Quang Khai, Hoan Kiem District, Hanoi. Tel: (84-24) Fax: (84-24)

7 6 7 ANNUAL REPORT 2016 COMPANY INFORMATION

8 Milestones Growing and proving competence Growing sustainably and sharing prosperity Solid foundation As one of the first securities companies in the market, Vietcombank Securities (VCBS) marks 15 years of development with multiple highlights during its journey to become a "LEADING INVESTMENT BANK IN VIETNAM".

9 Solid foundation The period highlights the Company s establishment, which was based on A solid foundation inherited from Vietcombank; First-mover advantage in applying online transaction technology; Leading position in Underwriting and Financial strengthening services 2002 First securities company provided an online price board ( and an on-line trading platform (Cyber Investor). Underwriter for VND1,000 billion of Government Bond. VCBS was the leading securities company in Vietnam bond market. Launch of VCBS Branch in HCMC (VCBS HCMC) Advisor and underwriter for Imexco share issuance, marking the first commitment underwriting in Vietnam stock market Advisor and underwriter for Eximbank shares issuance (VND200 billion), the largest value underwriting shares deal in the first 5 years of Vietnam stock market Certificate of Merit awarded by the Finance Minister of Vietnam for outstanding performance in the IPO of POSTEF (symbol: POT). It was also the first IPO conducted at Hanoi Securities Trading Center, known as Hanoi Stock Exchange (HNX) nowadays. Certificate of Merit awarded by the State Bank Governor for contributions in fulfilling 2004 mission. Certificate of Merit awarded by the Finance Minister for achievements in building & developing the stock market from 2000 to Charter capital increased from VND60 billion to VND200 billion. Certificate of Merit awarded by the Prime Minister for socio-economic achievements Certificate of Merit awarded by the Chairman of HCMC People Committee for municipal bond underwriting. Certificate of Merit awarded by Finance Minister of Vietnam for outstanding achievements in capital market development. COMPANY INFORMATION 8 9 ANNUAL REPORT 2016

10 Milestones (continued) Growing and proving competence The period sees VCBS growing and proving competence in a difficult market. The Company established several branches and representative offices throughout the country and successfully advised Vietcombank's IPO and other M&A transactions in the banking sector Advisor for Vietcombank IPO, one of the largest IPOs in Vietnam. Underwriter for Vietnam Steel Corporation bond issuance (VND400 billion) and Song Da Corporation bond issuance (VND300 billion). Launch of VCBS - Da Nang Branch (VCBS Da Nang) Organization restructuring after 5 years of operation. Launch of Transaction Office at Vietcombank Hai Duong Charter capital increased to VND700 billion. One of the first securities companies connecting to HSX online trading system. Prestigious Securities Brand Award for Outstanding Investment Bankers. Outstanding Securities Company awarded by Hanoi Stock Exchange Launch of VCBS - Can Tho Branch (VCBS Can Tho). One of the first securities companies connecting to HNX online trading system. Certificate of Merit awarded by the Chairman of HCMC People Committee for excellent performance Launch of VCBS - Vung Tau Branch. First securities company executed large M&A deals in Banking Industry. Details:» Merge between ShinhanVina Joint-Venture Bank and Shinhan Vietnam Bank.» Merge among 3 banks: First Joint Stock Commercial Bank, Vietnam Tin Nghia Joint Stock Commercial Bank and Saigon Joint Stock Commercial Bank Certificate of Merit awarded by the Chairman of State Securities Commission for Outstanding achievements in the secondary bond market operations in Advisor for M&A deals between:» Saigon Hanoi Joint Stock Commercial Bank and Hanoi Building Joint Stock Commercial Bank.» Vietnam Italy Steel JSC and Song Da Steel JSC. Underwriter for Vinaenco bond issuance (VND250 billion). Advisor and arranger for BIM Seafood bond issuance (VND250 billion).

11 Sustainable growth - Sharing prosperity In the period, the Company focused on growing its revenue-generating groups, training professional personnel, deploying a completely new technology system and developing innovative services and products to shape itself into a full-service investment bank The largest market share in the primary and secondary bond markets. In the Top 10 of stock and fund certificate brokerage house on HSX. Advisor and underwriter for CII bond issuance (VND1,000 billion). Successfully issued 5,000 billion on Vinacomin bond issuance. Advisor for M&A deals between Song Da 9 JSC and Song Da 91 JSC, and between Someco Song Da and Someco Hoa Binh. Launched a friendly-interface website to support investors in trading and searching information Top 4 Bond & Treasury Bill brokerage house with more than 10% market share. Certificate of Merit awarded by Mr. Vu Bang, Chairman of State Securities Commission, for achievements in developing Vietnam bond market from 2009 to Successfully issued VCBS corporates bonds (VND200 billion). Outstanding Member of the Stock Market, from 2009 to 2014, by HNX. Top 10 stock and fund certificate brokerage house on HSX. Advisor and underwriter for Masan Consumer Holdings (MCH) bond issuance - a wholly owned subsidiary of Masan Group (VND9,000 billion). Advisor and underwriter for Vinpearl Nha Trang bond issuance - a wholly owned subsidiary of Vingroup (VND2,300 billion). Officially launched a new trading platform operates via Home Trading, Web Trading, and Mobile Trading and App Trading subsystem. Top 5 advisor and auction member on HSX. Outstanding member of HNX for contributions to the market from 2005 to Successfully issued VND300 billion worth of VCBS corporates bonds. Established Giang Vo transaction office and a representative office in Hai Phong. COMPANY INFORMATION ANNUAL REPORT Advisor and underwriter in the issuance of 8,000 billion VND Vietcombank (VCB) bond. Awarded by Minister of Finance as Excellent Achievement and Significant Contribution to the Development of Vietnam Stock Market. Memorial award Top 5 Securities companies in Vietnam about advisory and auction in 2015, by HOSE. Outstanding Member of the stock market, from , by HNX. Opened VCBS Binh Duong office.

12 Message from Chairman and CEO The support from our clients, business partners, and our talented & ethical teams has encouraged VCBS to invest in technology, people and to keep on growing sustainably and sharing prosperity.

13 Dear Valued Clients! Vietnam stock market remained stable and continued to grow positively in The key drivers include: (i) The slow recovery of major economies has motivated their central banks to launch easing policy and create cash flow in the economy, (ii) Recovery in pricing of commodities, especially crude oil, (iii) Active involvement of foreign investors, and (iv) High level of liquidity from banking system, stable interest rate, and exchange rate. As the result of proactive and flexible management of Vietnam Government, the economy has performed positively in 2016, VN Index and HNX Index grew 15.75% yoy and 0.84% yoy respectively. VCBS was one of the first securities companies in Vietnam Stock Market. During 15 years in business, VCBS has continuously improved products and services, invested in modern technology system, and contributed to the development of Vietnam Stock Market. In 2016, VCBS continued to be the leader in advisory by successfully advise the Vietcombank bond issuance of VND2,000 billion (one part of the total issuance of VND8,000 billion Vietcombank bond), and MIC and ALS bond issuance of VND400 billion to individual investors - a method of investment that was only for institutional clients. VCBS received awards from Minister of Finance as Excellent Achievements and positive contribution to the development of Vietnam Stock Market, from HOSE as Top 5 Company outstanding member in advisory and auction services in 2015, and from HNX as Outstanding member during As VCB aiming to become the number 1 Bank in Vietnam and Top 300 international financial corporation, VCBS is motivated to improve our investment banking services. In 2017 VCBS continues to implement the next 5 years plan to be the leading Investment Bank in Vietnam with a clear plan of action including: (i) Allocate resource to develop institutional clients, strengthening Corporate Advisories and Fixed Income investment activities; (ii) Continue to improve online trading technology system to provide customers with modern and secure transactional features, especially for the new phase of development; (iii) Manage risks and enhance internal supervisory to better support business operation. Besides, VCBS would also focus on training to improve labor quality and compensation for work efficiency. Over the last 15 years of operation, VCBS has shared many milestones with The State Securities and Commission, The Ho Chi Minh Stock Exchange, The Hanoi Stock Exchange, and our clients. We have faced many challenges and achieved many successes as well. The support from our clients, business partners, and our talented & ethical teams has encouraged VCBS to invest in technology, people and to keep on growing sustainably and sharing prosperity. Chairman Pham Thanh Ha Director Vu Quang Dong COMPANY INFORMATION ANNUAL REPORT 2016

14 Financial Highlights Net revenue 2016 (Billion VND) Billion VND Unit: VND million. Item Net revenue 336, ,582 Operating expense (124,819) (157,548) Financial income 7,004 2,279 Financial expense (46,820) (62,350) General and administrative Expenses (83,637) (70,786) Gross profit 87,762 80,177 Other income/expense (257) Profit before tax 87,505 80,177 Profit after tax 71,593 65,723 Charter capital 700, ,000 Liquidity Current ratio % % Capital structure Total liabilities/total assets 15.67% 29.06% Total liabilities/total Stock holder equity 30.60% 66.55% Operational capacity Total Asset Turnover 16.25% 14.22% Profitability Gross profit margin 21.11% 17.89% ROA 6.66% 5.80% ROE 3.41% 2.53% CAR 310% 265%

15 Business Vision and Mission In 2017, Vietnam is expected to continue to be the attractive destination for investment cash flow created by quantitative easing policies in major economies around the globe. Vietnam, relatively compared with other economies in Asia, has competitive advantages including stable political situation, and controlled inflation rate & exchange rate. On the other hand, a few significant changes in international market have created some barriers to the growth prospect of Vietnam Economy. Specifically: (1) The new policy of The President of United Stated does not entirely support the establishment of free trade partnership such as TPP; (2) Significant events such as Brexit and FED interest rate hike have caused instability in exchange rate; (3) The slowdown of China economy and difficulties such as bad debt, real estate bubble, and decline in commerce has caused CNY value to go down. The economy growth and stability would be challenged due to the impact from global volatility market. VCBS expects Vietnam GDP in 2017 will growth at 6.3% - 6.5%. In term of inflation stability, since the government has ample funds and inflation control tool, inflation rate is likely to be lower than 5% as targeted. Inflation rate in 2017 is expected to be around 4% - 4.5%. In term of exchange rate, abundant foreign currency supply enables State Bank of Vietnam to actively manage and stabilize the market for long-term important purposes. VND is likely decline 2% - 4% in value. Interest rate in 2017 is expected to remain stable, moving slightly around the interest rate in 2016 of 50 bps (0.5%). Therefore, we set the revenue target of % yoy Billion VND COMPANY INFORMATION ANNUAL REPORT 2016 Net profit after tax target 89Billion VND 35.4% yoy

16 Organization structure BOARD OF SUPERVISORS Board of Members Investment Council BOARD OF MANAGEMENT Equity group Fixed Income group CF group (serving institutional clients) Support group (end user support) List of Board members Full Name Mr. Pham Thanh Ha Ms. Hoang Diem Thuy Mr. Vu Quang Dong Mr. Tran Viet Anh Mr. Le Viet Ha Mr. Le Manh Hung Mr. Phan Anh Vu Ms. Nguyen Thuy Quynh Position Deputy general director of Vietcombank Chairman Member of VCBS BOD Member of VCBS BOD CEO Deputy CEO Deputy CEO Deputy CEO Deputy CEO Head of supervisory Board

17 Board of Directors Introduction Mr. PHAM THANH HA Chairman Mr. Pham Thanh Ha is currently Deputy General Director of Vietcombank, Chairman of Vietcombank Securities Co., Ltd (VCBS) and Chairman of Vietcombank Cardif Life Insurance Co., Ltd (VCLI). He received his Master Degree of Business Administration in Finance and Investment at Georgetown University, USA. Ms. HOANG DIEM THUY Member Of The Board of Directors Ms. Hoang Diem Thuy holds the following positions: Head of Asset Liability Management Department Vietcombank Head Office, Member of VCBS Board of Directors. Ms. Hoang Diem Thuy holds an MBA from the National Economics University and CFVG. COMPANY INFORMATION Mr. VU QUANG DONG Member Of The Board of Directors CEO ANNUAL REPORT 2016 Mr. Vu Quang Dong has joined Vietcombank since Before being appointed as CEO of VCBS, he was Manager of Off-shore Funding Department at Vietcombank. Mr. Vu Quang Dong holds a Ph.D in Finance and Economics from Georgetown University - USA.

18 Board of Management introduction Mr. VU QUANG DONG CEO Mr. Vu Quang Dong joined Vietcombank since Before being appointed as CEO of VCBS, he was Manager of Off-shore Funding Department at Vietcombank. Mr. Vu Quang Dong holds a Ph.D in Finance and Economics from Georgetown University, USA. Mr. TRAN VIET ANH Deputy CEO Mr. Tran Viet Anh has been working for Vietcombank since 1994, with 8 years of experience in forex, money market, and derivatives in domestic and international market (at Vietcombank Treasury Department); 15 years of experience in the securities market including brokerage, corporate finance, M&A, project investment, securities trading (at VCBS), investment fund management, asset management (at VCBF); 10 years of corporates management experiences. Mr. Tran Viet Anh obtained his MBA at Solvay Business School, Brussels, Belgium. Mr. LE VIET HA Deputy CEO Mr. Le Viet Ha held various key positions in the management team of VCBS before being promoted to the position of Deputy CEO of VCBS. He graduated from Banking Academy in Banking and Finance and holds a Bachelor Degree of Law from Hanoi Law University.

19 Mr. LE MANH HUNG Deputy CEO Mr. Le Manh Hung has been working at VCBS since Having over 10 years of experience in the field of finance and banking, he was Head of Investment before serving as VCBS s Deputy CEO. He holds an MBA with a focus in Finance from California State University, East Bay (USA). Mr. PHAN ANH VU Deputy CEO Mr. Phan Anh Vu joined VCBS since 2002; he was Manager of Brokerage Department, Head Office before being promoted to the position of Deputy CEO of VCBS. Mr. Phan Anh Vu holds a Master Degree in Finance from the University of Queensland, Australia. COMPANY INFORMATION Ms. NGUYEN THUY QUYNH Head of Supervisory Board ANNUAL REPORT 2016 Ms. Nguyen Thuy Quynh has been working for VCBS for several years and held key positions in the management team of VCBS before being promoted as Head of Supervisory Board. Ms. Nguyen Thuy Quynh graduated from Finance Banking Department, University of Hanoi National Economics.

20 15 YEARS VCBS YEARS Making difference Strong foundation MANAGEMENT REPORT

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22 Vietnam Economy and Stock Market Overview in 2016 Vietnam economy remained stable. Inflation rate is under control (lower than 5% as planned). Given the amble supply of foreign currency, exchange rate and monetary market remain stable. Deposit rate slightly increased while borrowing rate remained stable to support economic growth. Economic indicators demonstrated a decrease in GDP growth rate in 2016 was at 6.21%, considerably lower than GDP in 2015 at 6.68%. In the context of no significant breakthough in domestic consumption and investment demand, the growth momentum heavily depended on FDI, natural resource exploitation, and public investment.

23 Even though GDP growth rate was lower than last year, Vietnam economy remained stable. Inflation rate is under control (lower than 5% as planned). Given the amble supply of foreign currency, exchange rate and monetary market remain stable. Deposit rate slightly increased while borrowing rate remained stable to support economic growth. In 2016, VN Index and HNX Index grew at 15.75% yoy and 0.84% yoy respectively. The key drivers of the increase in these markets were: (i) The slow recovery of major economies has motivated their central banks to launch easing policy and create cash flow in the economy; (ii) Recovery in pricing of commodities, especially crude oil; (iii) Active involvement of foreign investors; and (iv) High level of liquidity from banking system and the stable interest rate & exchange rate. MANAGEMENT REPORT ANNUAL REPORT 2016

24 Vietnam Economy and Stock Market Overview in 2016 (continued) VN Index: % SBV applied a new exchange rate policy Imposing antidumping duty on imports of steel Abundant liquidity from banking system Oil price hit its trough of 26 USD per barrel Released Circular 06 (replace the Circular No.36 before) / / / / / /2016 VN Index

25 HNX Index: +0.84% Brexit New trading regulation was enforced 78 MANAGEMENT REPORT Phenomenal net sold by the Foreign OPEC reached an output cut deal Donald Trump win US Presidential ANNUAL REPORT / / / / / /2016 HNX Index

26 Business performance in Billion VND profit after tax In 2016, VCBS marked an outstanding growth in brokerage performance of 30-40% yoy in both stock brokerage and bond brokerage. VCBS brokerage market share improved from 2.79% in 2015 to 3.15% in VCBS came back to Top 10 securities companies by market share in Ho Chi Minh Stock Exchange in In addition to favorable market conditions, the improvement is resulted from restructuring in VCBS s operation model, and developing trading software for new products to improve financial liquidity.

27 Corporate Finance services marked a significant milestone in 2016 by launching bond products to individual clients. This was a new investment channel which created stable revenue stream for bond underwriting service. VCBS completed issuing VND8,000 billion of Vietcombank bonds, and for the first time issuing bond to individual clients with maturity of 10 years with volume of VND2,000 billion. In 2016, the Company continued to launch software system CORE phase 2, develop and change many procedures and policies in order to adapt with new legal and business requirements. Operating structure between departments has been improved in term of specialization, promoting operational efficiency in Risk Management and Internal Audit departments. In 2016, the Company achieved VND billion in revenue and VND billion in profit after tax. MANAGEMENT REPORT ANNUAL REPORT 2016

28 Business operation Financial institutional client Highlights Continued to be one of the 21 official members of the Treasury bond auctions. Held the second largest market share in the Treasury bond brokerage market among securities firms. Strong growth in number of clients: the number of new accounts created in 2016 was double the number in Our new clients included foreign financial intuitional clients that recently entered the Vietnam market such as BNP Paribas Bank Hanoi branch, Siam Bank Ho Chi Minh bank, CIMB Bank Vietnam. Continued growth in revenue: as customer care and investment advisory activities are boosted, revenue from the Financial Institutional Clients department continued to see solid growth.

29 Solidified market position As one of the first members of the Treasury bond market, VCBS has maintained its leading position in both the primary and secondary markets. Since the Company was founded, VCBS has always been one of the 4 securities firms with the largest shares of transactions in the secondary market. Serving financial institutional clients has been one of VCBS core services since the Company was founded. In 2013, the Financial Institutional Clients department was officially separated from the Brokerage Services department to foster the growth in financial institutional client service activities. As one of the first members of the Treasury bond market, VCBS has maintained its leading position in both the primary and secondary markets. Since the Company was founded, VCBS has always been one of the 4 securities firms with the largest shares of transactions in the secondary market. With its reputation and deep understanding about the Vietnam financial market, VCBS is a trustworthy advisor for foreign investors who are interested in the Vietnam market. In 2016, VCBS hosted a number of large-size conferences and summits to connect financial institutional clients with domestic and foreign enterprises, attracting participation of various organizations and institutions. Through these events, VCBS was able to create a wide network of domestic and international clients, including international banks (such as Citibank, ANZ, Standard Chartered, HSBC, Deutsche Bank), domestic commercial banks (such as BIDV, TCB, VIB, NCB, Vietbank), insurance companies (such as Prudential, Manulife, Chubb Life, Generali Life, Fubon Life), and investment funds (such as Dragon Capital, Vinacapital, VCBF, Eastspring Investments). MANAGEMENT REPORT ANNUAL REPORT 2016

30 Business operation Financial institutional (continued) Continuing growth VCBS will continue to reach out to potential clients domestically and internationally as well as corporates that are en route to equitization or IPO, introducing special investment opportunities to offshore clients. VCBS aims to continue to provide its clients with valuable and timely investment recommendations thanks to the Company s comprehensive data base, in-depth research about the macro environment and various industries and businesses, state-of-the-art transaction system, and effective coordination between the Financial Institutional Clients department and the advisory team. Additionally, VCBS will continue to reach out to potential clients domestically and internationally as well as corporates that are en route to equitization or IPO, introducing special investment opportunities to offshore clients. In order to maintain sustainable growth, VCBS will prioritize improving human capital quality in its front-office teams and finalizing its core technologies so that it can provide financial institutions and offshore organizations with superior and high-security transaction services.

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32 Business operation Corporate Client VCBS advisors have thorough understanding about funding needs of corporate clients as well as investment demand of individual clients. In 2016, VCBS advised and underwritten VND2,000 billion in bonds from Vietcombank (out of the total VND8,000 billion in bonds underwritten) and VND400 billion in bonds from MIC and ALS.

33 With 15 years of experience operating in the Vietnam stock market since the market s establishment and the advantage of being a wholly owned subsidiary of Vietcombank, inheriting the Bank s strong financial foundation and widespread client network, VCBS gained trust and close relationship with corporations/ enterprises such as Vinacomin, VNPT, EVN, SCIC, Song Da Group, VNSTEEL, PJICO, Vinamilk, Sungroup, Vingroup and Masan Group. In 2016, VCBS s Investment Banking business line achieved noteworthy success and reaffirmed the Company leading position in Vietnam investment banking industry. VCBS advisors have thorough understanding about funding needs of corporate clients as well as investment demand of individual clients. In 2016, VCBS advised and underwritten VND2,000 billion in bonds from Vietcombank (out of the total VND8,000 billion in bonds underwritten) and VND400 billion in bonds from MIC and ALS. Moreover, VCBS was the market maker for all the bonds that the Company underwritten, lowering liquidity risk and enhancing the attractiveness of the secondary market for these bonds. These activities are the foundation for VCBS s plan to develop an appealing bond market for individual clients alongside its already successful bond-selling business with financial institutions. In a competitive market where many domestic banks wanted to issue bonds to increase their tier 2 capital, VCBS had successfully advised and underwritten VND8,000 billion in 10-year maturity bonds for Vietcombank. Merger and acquisition activities, especially those involved Mizuho Bank, have also been boosted. VCBS also sustained other advisory activities to diversify its revenue streams and maintain client relationships. In the near future, with support from Vietcombank, VCBS will continue to focus on growing its high value-added business lines such as M&A advisory, bond underwriting, and equity underwriting. MANAGEMENT REPORT ANNUAL REPORT 2016

34 Business operation Individual Client Highlights Officially provided quick margin service, meeting diversifying demand of clients. 11,400 new accounts were opened in Total number of individual accounts reached Served as a leading partner in distributing open-end fund certificates for prestigious financial institutions such as VCBF, Eastspring, and VFM. Opened representative office in Binh Duong, expanding VCBS s customer service network. Effective Investment consultancy services Considering its motto is focusing on customers, VCBS consistently upgrades its consulting services quality and investment recommendations to support customers decision. VCBS continuously follows closely to the market, diversification in macroeconomics areas, industries and the listed companies in the stock market. VCBS operates modern assessment and appraisal frameworks in order to ensure the efficiency of investment and mitigate risk. Besides providing investment recommendations on the stock market, in 2016, VCBS was a pioneer in providing individual clients with better access to the corporate bond market.

35 Modern, high-speed and secure online trading system By launching the second phase of its Online trading system, which operates via Web Trading, Mobile Trading, Home Trading and App Trading, VCBS continued to introduce new trading services to its clients. Besides providing basic transaction functions such as making transaction orders, margin trading, and auto-cash advance, VCBS also launched a series of new features and utilities such as automatic risk warning system, quick margin with no interest for the first 3 trading days, matched put-through transaction during continuous order matching session, group order and personalized stock watch list. Financial support As a financially strong institution, VCBS assists customers with efficient financial solutions that have lowest cost in the market. These financial solutions are integrated into VCBS s online trading system, proving to be effective tools to help investors maximize their profit. Product diversification Besides its traditional products, VCBS is an Open-ended fund-certificate distributor of reliable Vietnam Fund management firms such as VCBS- TBF, Eastpring and VFM. MANAGEMENT REPORT ANNUAL REPORT 2016 Nationwide network Together with VCBS current branches, transaction centers and representative offices, VCBS continuously expanded its customer care network by opening new Binh Duong representative office. The nationwide network growth marked a huge step in VCBS comprehensive development plan to deliver professional trading services to all key economic regions of the country.

36 15 YEARS VCBS YEARS Making difference Enthusiasm and dedication RISK MANAGEMENT

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38 RISK MANAGEMENT MARKET RISK Legal risk Operational risk Preventing risks that could threaten the Company and Customers interests Liquidity risk Payment risk VCBS has always maintained the goal of developing an international-standard risk management system that includes risk identification, risk assessment, risk limit determination, and risk supervision and handling.

39 VCBS Risk Management department was founded to consult the Company s executives in preventing risks that are harmful to the Company and its clients. The department s main tasks include identifying business risks that the Company is exposed to and developing solutions to effectively manage these risks, minimizing potential loss that these risks might cause. VCBS has always maintained the goal of developing an international-standard risk management system that includes risk identification, risk assessment, risk limit determination, and risk supervision and handling. Based on our risk management work in previous years, in 2016, VCBS continued to build new programs and apply new risk management policies, specifically: RISK MANAGEMENT Market risk ANNUAL REPORT 2016 In 2016, market plummeted in the beginning of the year as the CNY depreciated and oil prices plunged, then recovered as Brexit happened, and declined again in the end of the year as overseas traders were net selling. To manage market risk, the Company ensured tight coordination among all departments to continually monitor and evaluate the market and execute timely investment and risk management strategy for each market scenario.

40 RISK MANAGEMENT Operational risk Operational risk management was a priority of the Company. The Company has finalized a standard process for operational risk management, compiling a list of major operational risks the Company is exposed to and standardizing the code of conduct for its employees. Additionally, the Company has raised awareness among all employees about operational risk management though conferences and workshops. VCBS also standardized the responsibilities and practice of each employee position to enhance the effectiveness of the Company s internal control system. Other risk management measures include modernizing IT monitoring and warning systems, building backup plan in case of IT-related failure, and managing access rights of each department to the Company s data base. Payment risk The Company has developed several major measurements to manage payment risks, including (i) Periodically updating and evaluating its clients and partners creditworthiness; (ii) Establishing a crosscheck quota management system, ratio for safety threshold alert, ratio for forced sale to collect debt ; (iii) Developing a monitoring and warning system. In addition, the Company also intends to establish liability obligation regulations to improve the accountability of the staff and the efficiency of its debt collection activity.

41 Liquidity risk The Company manages to keep track of liquidity risk consistently to assure the sufficient operating funds and on-time payment of financial obligation. Cash-flows are forecasted periodically and liquidity conditions are reviewed on a daily basis, the fund contingency plans are provided. In its 15 years of operation, VCBS has always been proactive on ensuring sufficient capital for financial obligation payment, including investment planning. Legal risk VCBS always strictly follows the provisions of law. The amended and recently promulgated legislation were promptly updated and widely disseminated to employees. RISK MANAGEMENT Recognizing the rising complexity and diversification of the financial market, VCBS continued to enhance the rigor of its risk management system and increase the headcount of its risk management department. These initiatives are important to prepare the Company for entering the new derivatives market, which will begin to operate in 2017, as well as for any future developments in the financial market. ANNUAL REPORT 2016

42 15 YEARS VCBS YEARS Making difference Technology innovation SUSTAINABILITY REPORT

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44 Vision 2020 VCBS aims to be a leading investment bank in Vietnam Be a reliable partner of domestic and international businesses, organizations and financial institutions. Maintains sustainable growth and diversification in revenue. Provides clients with great service, diversified products and effective financial solutions. Provides employees with a professional working environment and excellent benefits.

45 Reputation and Experience Inheriting a legacy of more than 50 years of operational experience in the field of finance and banking as well as the financial resources from Vietcombank and having 15 years of experience navigating the stock market, VCBS is a partner of almost every financial group, banking institution, securities firm, insurance company, and international financial institution, investment fund in Vietnam. Being a trustworthy intermediary financial organization that receives active support from Vietcombank, VCBS has a solid foundation to play its role in connecting organizations, market-making and providing diverse financial products. SUSTAINABILITY REPORT ANNUAL REPORT 2016 With a profound understanding of potential issues regarding the investment environment, policies and legislation and clients needs, VCBS always bring to its clients the "effective financial solutions."

46 Human Resource Management In 2017, VCBS will continue to improve its operation structure, following the model of international investment banks. The Company will establish new front-office departments to continue to diversify its revenue streams and provide clients with a larger product portfolio. VCBS has built up a well-trained workforce, specializing in various fields such as economics, finance, banking, law. Many of them are holders of licenses/designations such as CPA, ACCA, CFA, and professional certificate issued by the SSC. The Company boasts a team of experts who have extensive experience working in domestic and international investment banks, asset management funds and consulting firms. In 2017, VCBS will continue to improve its operation structure, following the model of international investment banks. The Company will establish new front-office departments to continue to diversify its revenue streams and provide clients with a larger product portfolio. Along with maintaining highquality workforce, VCBS also aims to find and develop new talents to ensure the Company s future success. In the past 5 years, VCBS has co-organized and sponsored I-INVEST, which is held by Foreign Trade University and is one of the largest contests for business students in North Vietnam. Through the contest, VCBS is able to identify and offer talented students an internship and potentially full-time employment later on at the Company. The experience that the students gained through the contest as well as the internship will allow them to shape their career paths. In the future, these well-trained students will play an integral role in developing the Vietnam stock market.

47 Modern trading technology foundation Since the first day of its establishment, VCBS has understood the importance of having modern and secure trading technology platform in ensuring the Company s success. As a result, VCBS has always been one of the leading securities firms to utilize state-of-the-art technology in its operation. In 2016, VCBS continued to introduce new features on its trading platform, which is the most modern platform in the Vietnam market. VCBS s clients gained access to transaction modules such as VCBS - Web Trading, VCBS - Home Trading, VCBS - Mobile Web Trading, and VCBS - Mobile Trading App. VCBS Trading has friendly user interface and provides a wide range of functions, serving client s various transaction needs. The system boasts the shortest transaction interval in the market and is supported by a professional risk warning system. VCBS has always been one of the leading securities firms to utilize state-ofthe-art technology in its operation. SUSTAINABILITY REPORT ANNUAL REPORT 2016

48 Social responsibility Since its establishment, VCBS has associated the business operation with social events into practical programs such as charity, gratitude and humanitarian activities. Since its establishment, VCBS has associated the business operation with social events into practical programs such as charity, gratitude and humanitarian activities. Those events are not only responsibility and morality but also our Company culture. In 2016, all VCBS staffs were enthusiastic in participating and responding to these programs: "Giot hong yeu thuong" and Giot mau tinh nghia on Blood Donation Day hosted by Vietcombank and related agencies; visiting and giving gift to poor families in Ly Son island district; showing gratitude to families of war veterans on Martyrs Day July 27; and other community programs held by VCBS Union and Youth Union. Additionally, VCBS regularly organizes programs that are combined with admission of new Party members, and team building events to create a stronger community among VCBS staff.

49 48 49 ANNUAL REPORT 2016 SUSTAINABILITY REPORT

50 OPERATIONAL NETWORK Ha Noi Hai Phong Con Co Island HOANG SA ISLAND Da Nang Ly Son Island EAST SEA Binh Duong Ho Chi Minh City An Giang Dong Nai Phu Quy Island Can Tho Ba Ria - Vung Tau Phu Quoc Island TRUONG SA ISLAND Hon Khoai Island Con Son Island

51 Head Office 12 th & 17 th Floor, Vietcombank Tower, 198 Tran Quang Khai, Hoan Kiem, Hanoi City. Tel: (84-24) / Fax: (84-24) Giang Vo Transaction Office 1 st Floor, C4 Giang Vo Building, Giang Vo Ward, Ba Dinh District, Ha Noi City. Tel: (84-24) / Fax: (84-24) HCMC Branch 1 st & 7 th Floor, Green Star Building, 70 Pham Ngoc Thach, Ward 6, District 3, HCMC. Tel: (84-28) / Fax: (84-28) South Sai Gon Transaction Office 3 rd Floor, V6 Building, Plot V, Him Lam New urban area, No.23 Nguyen Huu Tho, Tan Hung Ward, District 7, HCM City. Tel: (84-28) / Fax: (84-28) Da Nang Branch 12 th Floor, No.135 Nguyen Van Linh, Vinh Trung, Thanh Khe District, Da Nang City. Tel: (84-236) / Fax: (84-236) Can Tho Representative Office 1 st Floor, Vietcombank Can Tho building, No.7 Hoa Binh, Ninh Kieu District, Can Tho City. Tel: (84-292) / Fax: (84-292) Vung Tau Representative Office 1 st Floor, No. 27 Le Loi Street, Vung Tau City, Ba Ria Vung Tau Province. Tel: (84-254) / Fax: (84-254) Dong Nai Representative Office F240-F241 Vo Thi Sau Street, Group 7, Thong Nhat Ward, Bien Hoa City, Dong Nai Province. Tel: (84-251) / Fax: (84-251) An Giang Representative Office 7 th Floor, Vietcombank An Giang Building, Hai Ba Trung Street, My Long Ward, Long Xuyen City, An Giang Province. Tel: (84-296) / Fax: (84-296) SUSTAINABILITY REPORT ANNUAL REPORT 2016 Hai Phong Representative Office 2 nd Floor, 11 Hoang Dieu Street, Minh Khai Ward, Hong Bang District, Hai Phong City. Tel: (84-225) / Fax: (84-225) Binh Duong Representative Office 3 rd Floor, 516 Cah Mang Thang Tam Street, Phu Cuong Ward, Thu Dau Mot City, Binh Duong Province. Tel: (84-274) / Fax: (84-274)

52 15 YEARS VCBS YEARS Making difference Sustain growth momentum financial statement

53

54 GENERAL INFORMATION THE COMPANY Vietcombank Securities Company Limited ( the Company ) is a limited liability company established under Licence No. 09/GPHDKD issued by the State Securities Commission of Vietnam on 24 April The Company operates under the Charter of securities company issued on 2 June The Company s principal activities are to provide brokerage service, securities trading, investment advisory service, custodian service, financial consulting service and underwriting for securities issuance. The Company s Head Office is located at the 17th floor VCB Tower 198 Tran Quang Khai Street, Hoan Kiem District, Ha Noi. The Company has two (02) branches located in Ho Chi Minh City and Da Nang City. BOARD OF MEMBERS Members of the Board of Members during the year and at the date of this report are as follows: Name Position Date of appointment Mr. Pham Thanh Ha Chairman Appointed on 15 June 2015 Ms. Hoang Diem Thuy Member Appointed on 05 June 2014 Mr. Vu Quang Dong Member Appointed on 09 November 2012 BOARD OF SUPERVISORS Members of the Board of Superviors during the year and at the date of this report are as follows: Name Position Date of appointment Ms. Nguyen Thuy Quynh Head of the Board of Supervisors Appointed on 01 January 2014 Ms. La Thi Hong Minh Member Appointed on 01 January 2014 Ms. Tran Kim Van Member Appointed on 01 November 2015 BOARD OF MANAGEMENT Members of the Board of Management during the year and at the date of this report are as follows: Name Position Date of appointment Mr. Vu Quang Dong Director Appointed on 31 May 2013 Mr. Tran Viet Anh Deputy Director Appointed on 01 August 2014 Mr. Le Viet Ha Deputy Director Appointed on 12 July 2012 Mr. Phan Anh Vu Deputy Director Appointed on 31 May 2013 Mr. Le Manh Hung Deputy Director Appointed on 06 June 2016

55 LEGAL REPRESENTATIVE The legal representative of the Company during the year and at the date of this report is Mr. Vu Quang Dong - Deputy Director. Mr. Le Viet Ha Deputy Director is authorised by Mr. Vu Quang Dong to sign the accompanying financial statements for the year ended 31 December 2016 in accordance with Letter of Authorization No. 40A/2016/ KSNB dated 17 June AUDITORS The auditors of the Company are Ernst & Young Vietnam Limited ANNUAL REPORT 2016 FINANCIAL STATEMENT

56 REPORT OF THE BOARD OF MANAGEMENT Management of Vietcombank Securities Company Limited ( the Company ) is pleased to present its report and the Company s financial statements as at and for year ended 31 December MANAGEMENT S RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS Management of the Company is responsible for ensuring that the financial statements give a true and fair view of the financial position and the results of its operation, its cash flows and its changes in equity during the year. In preparing these financial statements, the Board of Management is required to:»» select suitable accounting policies and apply them consistently;»» make judgments and estimates that are reasonable and prudent;»» state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and»» prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. Management is responsible for ensuring that proper accounting records are kept to disclose, with reasonable accuracy at any time, the financial position of the Company and to ensure that the accounting records comply with the registered accounting system. It is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. Management confirmed that the Company has complied with the above requirements in preparing the accompanying financial statements for the year ended 31 December STATEMENT BY MANAGEMENT Management of the Company does hereby state that, in its opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2016 and of the results of its operations, its cash flows and its changes in owners equity for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System, accounting regulations and guidance applicable to securities companies and statutory requirements relevant to the preparation and presentation of financial statements. For and on behalf of the Board of Management: Mr. Le Viet Ha Deputy Director Hanoi, Vietnam 20 March 2017

57 INDEPENDENT AUDITORS REPORT Reference No: / To: The Owner of Vietcombank Securities Company Limited We have audited the accompanying financial statements of Vietcombank Securities Company Limited (the Company ) as prepared on 20 March 2017 and set out on pages 59 to pages 69 which comprise the financial position as at 31 December 2016, the results of its operations, the cash flow statement, the statement of changes in owners equity for the year then ended and the notes thereto. Management's responsibility Management is responsible for the preparation and fair presentation of these financial statements in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System, accounting regulations and guidance applicable to securities company and the statutory requirements relevant to the preparation and presentation of financial statements of securities company, and for such internal control as management determines is necessary to enable the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 auditors judgment, 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 entity'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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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. FINANCIAL STATEMENT ANNUAL REPORT 2016

58 INDEPENDENT AUDITORS REPORT Reference No: / (continued) Conclusion In our opinion, the financial statements give a true and fair view, in all material respects, of the financial position of the Company as at 31 December 2016, and of the results of its operations, its cash flows, and statement of changes in owners equity for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System, accounting regulations and guidance applicable to securities company and the statutory requirements relevant to the preparation and presentation of financial statements. Ernst & Young Vietnam Limited Dang Phuong Ha Deputy General Director Audit Practising Registration Certificate No Tran Thi Thu Hien Auditor Audit Practising Registration Certificate No Hanoi, Vietnam 20 March 2017

59 STATEMENT OF FINANCIAL POSITION as at 31 December 2016 B01-CTCK Code ITEMS Notes Ending balance VND Beginning balance VND 100 A. CURRENT ASSETS 2,423,857,553,116 1,931,675,541, I. Financial assets 2,420,716,924,818 1,927,156,357, Cash and cash equivalents 4 46,285,626,484 69,478,685, Cash 46,285,626,484 39,478,685, Cash equivalents - 30,000,000, Fair value through profit and loss (FVTPL) financial assets 6.1 1,452,502,678,180 1,186,022,756, Held-to-maturity (HTM) investments ,223, Loans ,588,264, ,232,262, Available-for-sale (AFS) financial assets 6.4 8,190,000, Provision for impairment of financial assets and 116 mortgage assets 6.5 (37,832,779,185) (16,342,406,809) Receivables 7 35,673,742,123 46,349,302, Receivables from disposal of financial assets - 15,620,161, Receivables from and accruals for dividend and interest income 35,673,742,123 30,729,141, Accuals for dividend and interest income 35,673,742,123 30,729,141, Prepaid/Advances to suppliers 105,315, ,123, Receivables from services provided by the Company 7 9,697,469,069 4,935,303, Other receivables 7 215,443,397,368 66,356,451, Provision for impairment of receivables 7 (936,788,719) (1,067,344,882) 130 II. Other current assets 8 3,140,628,298 4,519,183, Advances 165,000,000 63,000, Office supplies, materials and tools 1,244,161, ,053, Short-term prepaid expenses 1,731,166,538 3,455,545, Short-term deposits, collaterals and pledges 300,000 11,500, Deductible value-added tax ,085, B. NON-CURRENT ASSETS 171,046,810, ,064,667, I. Long-term financial assets 120,600,000, ,000,000, Investments 120,600,000, ,000,000, Held-to-maturity investments ,600,000, ,000,000, II. Fixed assets 21,310,513,443 34,046,804, Tangible fixed assets 9 11,939,620,471 18,748,498, Cost 48,024,074,511 47,791,809, a 1.2 Accumulated depreciation (36,084,454,040) (29,043,310,529) Intangible fixed assets 10 9,370,892,972 15,298,305, Cost 20,029,141,755 20,029,141, a 2.2 Accumulated amortization (10,658,248,783) (4,730,835,777) 240 III. Construction in progress 215,686, IV. Other non-current assets 28,920,610,657 33,017,862, Long-term deposits, collaterals and pledges 3,178,129,375 2,970,681, Long-term prepaid expenses 11 3,799,572,781 6,344,404, Deferred tax assets ,942,908,501 1,942,605, Deposits to Settlement Assistance Fund 20,000,000,000 20,000,000, Other long-term assets - 1,760,170, Total Assets 2,594,904,363,462 2,098,740,208,890 FINANCIAL STATEMENT ANNUAL REPORT 2016

60 STATEMENT OF FINANCIAL POSITION as at 31 December 2016 (continued) B01-CTCK Code ITEMS Notes Ending balance VND Beginning balance VND 300 C. LIABILITIES 1,461,672,024,916 1,023,718,215, I. Current liabilities 1,461,672,024, ,718,215, Short-term borrowings and financial leases ,015,193,732 45,462,000, Short-term borrowings 754,015,193,732 45,462,000, Short-term bonds issued ,000,000, ,000,000, Payables for securities transaction activities 13 2,297,076,924 1,534,930, Short-term trade payables 14 4,705,166, ,101,353, Short-term advances from customers 15 7,519,100, ,850, Statutory obligations 16 5,702,435,326 7,332,231, Payables to employees 26,241,846,283 5,930,197, Employee benefits 55, Short-term accrued expenses 17 13,919,490,222 12,541,231, Other current liabilities 18 1,186,259, ,865, Bonus and welfare funds 18 6,940,540,423 13,419,630, Government bond repurchase ,144,860, ,398,924, II. Long term liabilities - 284,000,000, Long-term bonds issued ,000,000, D. OWNERS EQUITY 1,133,232,338,546 1,075,021,992, I. Owners equity 21 1,133,232,338,546 1,075,021,992, Owners capital 700,914,795, ,914,795, Owners capital 700,000,000, ,000,000, Other capital 914,795, ,795, Foreign exchange difference Charter capital supplementary reserve 21,884,133,763 18,597,962, Operational risk and financial reserve 41,953,025,960 38,666,855, Other reserves 30,762,096,449 30,762,096, Undistributed profit 337,718,286, ,080,283, Realized profit 337,718,286, ,080,283, TOTAL LIABILITIES AND OWNERS EQUITY 2,594,904,363,462 2,098,740,208,890

61 OFF-BALANCE SHEET ITEMS Code ITEMS Notes Ending balance VND Beginning balance VND A. ASSETS OF THE COMPANY AND ASSETS MANAGED UNDER AGREEMENTS Financial assets of the Company deposited/ registered at Vietnam Securities Depository ( VSD ) The Company s non-traded financial assets deposited at VSD ,320,830, ,133,310, ,500,010, ,010, The Company s financial assets in transfer ,320,900,000 2,647,500, The Company s financial assets which have not been deposited at VSD B. ASSETS AND PAYABLES UNDER MANAGEMENT AGREEMENTS FOR INVESTORS ,801,140,000 44,471,140, Investors financial assets deposited/registered at VSD ,418,786,910,000 18,076,911,970, Unrestricted financial assets 18,222,861,310,000 13,591,516,420, Restricted financial assets 154,827,430, ,091,130, Mortgaged financial assets 3,949,321,430,000 3,991,601,340, Blocked financial assets 190,000, ,000, Financial assets in transfer 91,586,740, ,548,080, Investors non-traded financial assets deposited at VSD ,932,030,000 86,900,340, Unrestricted and non-traded financial assets deposited at VSD Restricted and non-traded financial assets deposited at VSD 80,875,170,000 70,356,470,000 23,056,860,000 16,543,870, Investors financial assets in transfer ,625,360, ,819,270, Investors deposits ,120,449, ,824,628, Investors deposits for securities trading activities managed by the Company Investors synthesizing deposits for securities trading activities ,422,466, ,934,931, ,784,172,652 - FINANCIAL STATEMENT ANNUAL REPORT 2016

62 STATEMENT OF FINANCIAL POSITION as at 31 December 2016 (continued) B01-CTCK OFF-BALANCE SHEET ITEMS (continued) Code ITEMS Notes Ending balance VND Beginning balance VND B. ASSETS AND PAYABLES UNDER MANAGEMENT AGREEMENTS FOR INVESTORS (continued) 029 Investors deposits for clearing and settlement securities transactions Domestic investors deposits for clearing and settlement securities transactions Foreign investors deposits for clearing and settlement securities transactions ,913,810,792 3,889,696,282 52,300,079,144 2,287,250,744 1,613,731,648 1,602,445, Deposits of securities issuers ,075,651,306 42,214,580, Payables to investors - investors deposits for securities trading activities managed by the Company Payables to investors - domestic investors deposits for securities trading activities managed by the Company Payables to investors - foreign investors deposits for securities trading activities managed by the Company ,379,906, ,562,677, ,716,906, ,320,987,641 40,662,999,242 35,241,690, Payables to securities issuers ,349,165, Dividend, bond principal and interest payables ,816,194,731 40,127,365,646 Prepared by: Approved by: Approved by: Ms. Le Thu Hien General Accountant Ms. Le Thi Ngoc Tram Chief Accountant Mr. Le Viet Ha Deputy Director Hanoi, Vietnam 20 March 2017

63 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2016 B02-CTCK Code ITEMS Notes I. OPERATING INCOME Gain from financial assets at fair value through profit and loss (FVTPL) Gain from disposal of financial assets at FVTPL Dividend, interest income from financial assets at FVTPL Current year VND Previous year VND 155,718,780,381 83,813,150, ,960,085,223 43,953,203, ,758,695,158 39,859,946, Gain from held-to-marturity (HTM) ,125,122,558 5,170,476,276 investments Gain from loans and receivables ,265,080,380 68,193,554, Revenue from brokerage services 24 93,698,306,014 64,711,507, Revenue from underwriting and issuance agent 24 18,650,011,398 90,248,695,979 services Revenue from securities custodian services 24 5,078,911,330 4,674,076, Revenue from financial advisory services 24 10,315,698,863 12,796,823, Revenue from other operating activities 25 10,730,223,098 10,795,482, Total operating revenue 368,582,134, ,403,766,829 II. OPERATING EXPENSES Loss from financial assets at fair value through profit and loss (FVTPL) 26,592,380,619 71,119,767, Loss from disposal of financial assets at ,271,052,493 71,119,767,261 FVTPL Transaction costs of acquisition and ,328,126 - disposal of financial assets at FVTPL Provision expenses for impairment on value of financial assets, doubtful debts and borrowing cost ,490,372,376 (22,612,183,150) Expenses for proprietary trading activities 27 19,359,371,906 8,270,446, Expenses for brokerage services 27 64,787,816,366 39,738,015, Expenses for underwriting and issuance agent 27 4,409,510,717 - services Expenses for securities custodian services 27 10,957,813,044 6,555,134, Expenses for financial advisory services 27 9,950,327,996 21,748,354, Total operating expenses 157,547,593, ,819,535,596 FINANCIAL STATEMENT ANNUAL REPORT 2016

64 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2016 (continued) B02-CTCK Code ITEMS Notes III. FINANCE INCOME Current year VND Previous year VND Realized and unrealized gain from changes in foreign 2,322,145 - exchange rates Dividend and interest income from non-fixed deposits 2,276,498,339 2,554,543, Other finance income - 11,419, Total finance income 28 2,278,820,484 2,565,962,559 IV. FINANCE EXPENSES Realized and unrealized loss from changes in foreign 4,059,399 - exchange rates Borrowing costs 62,345,961,780 46,820,243, Total finance expenses 29 62,350,021,179 46,820,243, VI. GENERAL AND ADMINISTRATIVE EXPENSES 30 70,786,184,574 83,567,946, VII. OPERATING PROFIT 80,177,155,729 87,762,003,284 VIII. OTHER INCOME AND EXPENSES 71 Other income ,303, Other expenses - 344,100, Total other operating profit 909 (256,797,245) 90 IX. PROFIT BEFORE TAX 80,177,156,638 87,505,206, Realized profit 80,177,156,638 87,505,206, X. CORPORATE INCOME TAX (CIT) EXPENSE 31 14,453,737,835 15,912,035, Current CIT expense ,454,040,560 15,621,765, Deferred CIT expense 31.2 (302,725) 290,270, XI. PROFIT AFTER TAX 65,723,418,803 71,593,170, Total comprehensive income 65,723,418,803 71,593,170,258 Prepared by: Approved by: Approved by: Ms. Le Thu Hien General Accountant Ms. Le Thi Ngoc Tram Chief Accountant Mr. Le Viet Ha Deputy Director Hanoi, Vietnam 20 March 2017

65 STATEMENT OF CASH FLOWS for the year ended 31 December 2016 B03a-CTCK Code ITEMS Notes I. CASH FLOWS FROM OPERATING ACTIVITIES Current year VND Previous year VND Expenditures on purchase of financial assets (3,449,226,247,823) (1,917,120,690,039) Proceeds from disposal of financial assets 3,234,214,240,598 1,358,950,400, Proceeds from dividends 7,908,467,464 16,370,292, Proceeds from interests 43,028,622,110 17,908,612, Expenditures on borrowing interests for operation of the Company Expenditures on services provided for the Company (53,219,717,888) (32,021,733,642) (24,499,360,953) (19,142,594,532) Expenditures on employees (38,637,350,947) (38,639,299,932) Tax expenditures for the Company s operating activities Expenditures on purchase, disposal of financial assets (41,274,168,245) (27,334,749,820) (763,043,549) Other proceeds on operating activities 31,065,187,523,501 25,941,529,053, Other expenditures on operating activities (31,475,539,783,375) (25,234,393,814,686) 20 Net cash flows (used in)/from operating activities (732,820,819,107) 66,105,476,022 II. CASH FLOWS FROM INVESTING ACTIVITIES Expenditures on purchase of fixed assets, investment properties and other assets Net cash flows from investing activities - - FINANCIAL STATEMENT ANNUAL REPORT 2016

66 STATEMENT OF CASH FLOWS for the year ended 31 December 2016 (continued) B03a-CTCK Code ITEMS Notes III. CASH FLOWS FROM FINANCIAL ACTIVITIES Current year VND Previous year VND Drawdown of borrowings 4,139,464,614, ,000,000, Other borrowings 4,139,464,614, ,000,000, Repayment of borrowings (3,429,836,854,031) (760,000,000,000) 34.3 Repayment of other borrowings (3,429,836,854,031) (760,000,000,000) 40 Net cash flows from/used in financial activities 709,627,760,000 (55,000,000,000) 50 Net increase/(decrease) in cash during the year (23,193,059,107) 11,105,476, Cash and cash equivalents at the beginning of the year 69,478,685,591 58,373,209, Cash 39,478,685,591 58,373,209, Cash equivalents 30,000,000, Cash and cash equivalents at the end of the year 4 46,285,626,484 69,478,685, Cash 46,285,626,484 39,478,685, Cash equivalents - 30,000,000,000

67 CASH FLOWS FROM BROKERAGE AND TRUST ACTIVITIES OF THE INVESTORS Current year VND Previous year VND Code ITEMS Notes I. CASH FLOWS FROM BROKERAGE AND TRUST ACTIVITIES OF THE INVESTORS 01 Cash receipt from disposal of securities on 298,141,490,579,683 96,184,916,898,666 behalf of customers 02 Cash payment for acquisition of securities on (334,350,347,480,568) (104,406,605,666,627) behalf of customers 07 Cash receipt from settlement of securities 36,326,628,596,758 8,260,717,994,230 transactions of customers 09 Cash payment for custodian fees of (3,475,874,465) (2,941,439,515) customers 12 Cash receipt from securities issuers 12,592,807,220,811 8,031,700,163, Cash payment to securities issuers (12,606,946,149,976) (8,062,904,484,934) 20 Net increase/(decrease) in cash during the year 100,156,892,243 4,883,464, II. CASH AND CASH EQUIVALENTS OF 736,039,208, ,155,743,850 THE CUSTOMERS AT THE BEGINNING OF THE YEAR 31 Cash at banks at the beginning of the year: 32 The investors deposits managed by the 689,934,931, ,612,786,185 Company 33 The investors collective deposits for securities 3,889,696,282 4,124,174,769 trading activities 34 The investors deposits for securities - - transaction clearing and settlement 35 Deposits of the securities issuers 42,214,580,471 73,418,782, III. CASH AND CASH EQUIVALENTS OF ,196,100, ,039,208,713 THE CUSTOMERS AT THE END OF THE YEAR 41 Cash at banks at the end of the year: 42 The investors deposits managed by the 626,422,474, ,934,931,960 Company for securities trading activities 43 The investors collective deposits for securities 127,784,164,795 - trading activities 44 The investors deposits for securities 53,913,810,792 3,889,696,282 transaction clearing and settlement 45 Deposits of the securities issuers 28,075,651,306 42,214,580,471 Prepared by: Approved by: Approved by: FINANCIAL STATEMENT ANNUAL REPORT 2016 Ms. Le Thu Hien General Accountant Hanoi, Vietnam 20 March 2017 Ms. Le Thi Ngoc Tram Chief Accountant Mr. Le Viet Ha Deputy Director

68 STATEMENT OF CHANGES IN OWNERS EQUITY for the year ended 31 December 2016 B04-CTCK Beginning balance 1 January January 2016 ITEMS Notes VND VND A B 1 2 I. CHANGES IN OWNERS EQUITY 1. Owners capital 700,914,795, ,914,795, Owners capital 700,000,000, ,000,000, Other capital 914,795, ,795, Charter capital supplementary reserve 15,045,260,910 18,597,962, Operational risk and financial reserve 35,114,153,107 38,666,855, Other reserves 30,762,096,449 30,762,096, Undistributed profiti 237,155,927, ,080,283, Realized profit 237,155,927, ,080,283, Unrealized profit - - TOTAL 1,018,992,233,756 1,075,021,992,989

69 Increase/(decrease) Ending balance Previous year Current year Increase Decrease Increase Decrease 31 December December 2016 VND VND VND VND VND VND ,914,795, ,914,795, ,000,000, ,000,000, ,795, ,795,416 3,579,658,513 (26,956,600) 3,286,170,940-18,597,962,823 21,884,133,763 3,579,658,513 (26,956,600) 3,286,170,940-38,666,855,020 41,953,025, ,762,096,449 30,762,096,449 72,741,452,916 (23,817,097,509) 65,723,418,803 (14,085,415,126) 286,080,283, ,718,286,958 72,741,452,916 (23,817,097,509) 65,723,418,803 (14,085,415,126) 286,080,283, ,718,286, ,900,769,942 (23,871,010,709) 72,295,760,683 (14,085,415,126) 1,075,021,992,989 1,133,232,338,546 Prepared by: Approved by: Approved by: FINANCIAL STATEMENT ANNUAL REPORT 2016 Ms. Le Thu Hien General Accountant Hanoi, Vietnam 20 March 2017 Ms. Le Thi Ngoc Tram Chief Accountant Mr. Le Viet Ha Deputy Director

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