TABLE OF CONTENT CHAPTER CHAPTER CHAPTER CHAPTER CHAPTER CHAPTER VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN CORPORATE GOVERNANCE

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2 TABLE OF CONTENT CHAPTER CHAPTER CHAPTER CHAPTER CHAPTER CHAPTER VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN Vision, mission, core values 2017 At a glance 2017 Achievements 2017 Titles and awards Message from the Chairman Financial and Operational Highlights ABOUT VINGROUP Vingroup Profile Corporate Milestones Businesses Corporate Structure Board of Directors Management Supervisory Board Development Strategy MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION 2017 Economy and 2018 Macroeconomic outlook Vingroup Operations and Financial Performance in 2017 Blueprint for CORPORATE GOVERNANCE Vingroup Governance 72 Structure Report of the Board of 74 Directors Report of the Supervisory 77 Board Governance Report 78 Internal Auditing Report 80 Risk Management 81 Share Information and 84 Investor Relations SUSTAINABLE DEVELOPMENT Vingroup s Vision for Sustainability Sustainability by the Numbers and 2017 Highlights 2017 Sustainability Report Managing Sustainability CONSOLIDATED FINANCIAL STATEMENTS General information Report of management Independent auditors report Consolidated balance sheet Consolidated income statement Consolidated cash flow statement Notes to the consolidated financial statements Appendix 1 The Group structure as at 31 December

3 VINGROUP ANNUAL REPORT 2017 GO GLOBAL VINHOMES METROPOLIS

4 CHAPTER 01 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN Vingroup is a premier corporate group but its influence is only within Vietnam. We strive to become a true international enterprise that is recognized globally. Our international standards of superiority should be reflected not only in our services and products, but also in our people. Every member of the Vingroup team must become a professional leader, serve with the highest integrity, and inspire co-workers to achieve the best levels of service. Vision, mission, core values 2017 At a glance 2017 Achievements 2017 Titles and awards Message from the Chairman Financial and Operational Highlights Pham Nhat Vuong Vingroup Chairman VINHOMES CENTRAL PARK

5 CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN VISION, MISSION, CORE VALUES VISION With the goal of market leadership and sustainable development, Vingroup aims to become one of the most respected companies not only in Vietnam but also in the region. We will achieve this goal by improving production quality and service levels in real estate development, retail operations, and hospitality, by improving the quality of life for the Vietnamese people, and by raising the reputation of the nation in the world. MISSION Customers Vingroup will provide products and services that meet international standards while reflecting the customs and cultural values of Vietnam. Products and services must anticipate changes and lead the trends. CORE VALUES Vingroup strives to uphold six core values: CREDIBILITY, INTEGRITY, CREATIVITY, SPEED, QUALITY, and HUMANITY. These values are described below. CREDIBILITY SPEED Vingroup vigorously protects its Credibility as The Company considers speed of execution and one would protect one s honor. The Group is fully efficiency in operations to be critical to our success. prepared to execute its plans and spares no effort in Among the practices that follow from our emphasis meeting its goals. on speed are, Fast To Decide, Fast To Invest, Fast To INTEGRITY As a foundation of our Company, Integrity demands that we remain in full compliance with all applicable laws and ethical standards. It follows that we must always put the interests of customers first. CREATIVITY Vingroup s management believes that creativity is what enables the Company to deliver on its philosophy, which is expressed as, Dare To Think, Dare To Do. This philosophy encourages all employees to learn new skills. Deploy, Fast To Sell, Fast To Change, and Fast To Adapt. QUALITY The place of quality in Vingroup s operations is expressed as Best in People, Best in Products and Services, Best in Quality of Life, Best in Commitment to Society. HUMANITY The Company respects the interests of all its stakeholders. Employees are Vingroup s most important resource. The Company will continue to promote harmony among the interests of all stakeholders by emphasizing fairness, integrity, unity, and strength. Shareholders and Business Partners The Company will uphold a spirit of cooperation, emphasizing mutual development and respect for partners by emphasizing the creation of long-term sustainable value. Employees Vingroup will maintain a dynamic, creative, and respectful work environment that enables employees to achieve their maximum potential. Vietnamese Society The Company will demonstrate its corporate social responsibility by harmonizing its corporate goals with the values of the communities in which it does business. VINPEARL HA TINH HOTEL SLOGAN PRESERVING THE STARTUP MINDSET As a relatively young company, Vingroup believes it is important to preserve the entrepreneurial traits that led to our success. The startup mindset includes listening to customers, cultivating creativity, supporting the courage to innovate, and collaborating to succeed. These traits will continue to guide the Company s growth and development. MESSAGE GO GLOBAL Our development goal this year is to Go Global! Vingroup s mantra for its future is to emphasize the Company s place in the world and to consider the role of the world in Vingroup s future. The Vingroup team must listen, research, innovate, dare to think and dare to do, and relentlessly improve ourselves in order to exceed customers wishes. This new perspective preserves our focus on growth and sustainability. LOGO The Vingroup Logo shows a bird in flight toward to the Sun. This image expresses our determination to strive for new levels of success. The V-shape of the bird s wings refers to Vietnamese national pride and to the Company s place in its competitive marketplace. The five stars beneath the image of the bird represent Vingroup s gold standards and principles. The two colors of the logo, from Vietnam s flag, express the Company s pride in our Vietnamese identity, spirit, and intelligence. 8 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

6 CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN 2017 AT A GLANCE 2017 ACHIEVEMENTS VND VND VND 89.4 TRILLION NET REVENUE 5.7 TRILLION PROFIT BEFORE TAX TRILLION MARKET CAPITALIZATION 43,000 EMPLOYEES 1.2 MILLION SQUARE METERS RETAIL GROSS FLOOR AREA 14,000 APARTMENTS, VILLAS, AND SHOPHOUSES DELIVERED DURING ,200 RETAIL STORES 46 RETAIL MALLS 82 MILLION RETAIL PURCHASES 1. VINFAST AUTOMOBILE AND MOTORBIKE BRAND LAUNCHED On September 2, 2017, Vingroup opened the VinFast Automobile Complex on Cat Hai Island in the City of Hai Phong. The name VinFast comes from the Vietnamese words for Vietnam, Style, Safety, Innovation, and Pioneer. The goal of VinFast is to become the leading auto maker in Southeast Asia with a range of products extending from internal combustion engines to electric vehicles. During 2017, VinFast signed agreements with such major suppliers as BMW, Bosch, Siemens, Pininfarina, Magna Steyr, and AVL. These agreements will enable VinFast to deliver electric motorcycles in September of 2018 and automobiles in September of VINHOMES LAUNCHES PROJECTS THROUGHOUT VIETNAM During 2017, Vinhomes launched 15 new projects including Vinhomes Riverside The Harmony, Vinhomes Skylake and Vinhomes Green Bay in Hanoi, and Vinhomes Imperia in Hai Phong. Across Vietnam, Vinhomes handed over nearly 14,000 new apartments, townhouses, villas and beach villas to homebuyers. 2.1 MILLION GUEST NIGHTS SOLD AT VINPEARL HOTELS 19,000 STUDENTS ENROLLED IN VINSCHOOLS 4.3 MILLION VISITS TO VINPEARL LAND 1,160 HECTARES FARMABLE LAND AT VINECO FARMS 475,000 PATIENTS SERVED AT VINMEC HOSPITALS AND CLINICS 4 MILLION VINID MEMBERS 2. LISTING OF VINCOM RETAIL JSC SHARES Vincom Retail JSC listed more than 1.9 billion shares on the Ho Chi Minh City Stock Exchange and quickly became one of the largest listed companies in Vietnam. During 2017, Vincom Retail opened 15 new retail malls, bringing its portfolio to 46 malls in 24 cities and provinces across the nation and its total retail GFA to 1.2 million square meters, making Vincom Retail Vietnam s largest retail mall developer, owner, and operator. 4. VINPEARL INCREASED ITS HOTEL ROOM COUNT TO MORE THAN 10,000 ROOMS 2017 was an expansion year for Vinpearl, with the launch of eight new resorts and hotels, raising its total to 17 hotels and resorts and its room count to over 10,000 rooms. As part of this development, Vinpearl launched properties in four new locations: Nghe An, Ha Tinh, and Cam Ranh. During 2017, Vinpearl opened a 36-hole golf course in Vu Yen near the large northern city of Hai Phong, creating a unique new destination for customers. 10 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

7 CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN 5. THE FASTEST GROWING RETAIL NETWORK IN VIETNAM VinCommerce has expanded its scale of operations to approximately 1,200 supermarkets and convenience stores nationwide, while at the same time investing in the retail experience of our customers by improving its service quality and the freshness of its foods. 8. VINGROUP CREDIT RATING UPGRADED BY S&P In December of 2017, S&P raised Vingroup s long-term credit rating to B+, the highest credit rating awarded in the history of the real estate industry in Vietnam. Vingroup is judged by S&P to have a stronger market position than some of its Southeast Asia business peers with the same credit rating. Vingroup also maintained its rating of B+ from Fitch. These ratings are important in giving Vingroup credibility in international capital markets. Forbes Magazine recognized Vingroup during 2017 as a multi-business corporation after having previously viewed Vingroup as only a real estate company. Recognition by Forbes demonstrates the extent to which Vingroup s ecosystem of businesses is now respected by international arbiters. 9. COOPERATION WITH A NETWORK OF 1,000 AGRICULTURAL COOPERATIVES AND FARMERS TO PROVIDE CLEAN, SAFE AGRICULTURAL PRODUCTS During 2017, Vingroup launched a program entitled, Accompanying, Supporting, and Promoting Domestic Production. This program introduced the strictest quality control procedures, providing clean production materials to 44 cities and provinces. To date, more than 1,800 participants have attended training programs in the standardization of farming technology, crop rotation, VietGap, pesticide, production optimization through adoption of advanced technology, and international branding. 6. VINSCHOOL MEETS HIGHEST INTERNATIONAL EDUCATIONAL STANDARDS After more than four years of operation, Vinschool has become home to nearly 19,000 students with 17 campuses spread across Vietnam. During 2017, Vinschool adopted a comprehensive mix of national and international standard curricula including the IPC Preschool Program, the Cambridge General School Program, and many other programs. All of these standards are based on progressive ideals, aiming for the full development of students. These programs are yet another step by Vinschool towards becoming the leading international educational network in Vietnam. 7. INTERNATIONAL AND PROFESSIONAL RECOGNITION FOR VINMEC On 9 June 2017, after only 15 months of operation, Vinmec Central Park International Hospital became the fourth hospital in Vietnam to win JCI international accreditation. This global standard is given to hospitals that meet the highest standards of patient care and safety. Vinmec Times City International Hospital completed its first live-donor liver transplant, becoming the first privately-owned hospital in Vietnam to master the challenge of complex organ transplants, bringing new options and hope to the people of Vietnam. In 2017, Vinmec also opened the sixth hospital Vinmec Da Nang International Hospital. With a team of qualified, experienced doctors and medical professionals in many important specialties, Vinmec Da Nang International Hospital was one of four medical facilities selected to support the APEC Summit that took place in November 2017 in Da Nang. 10. LARGE INVESTMENTS IN CULTURE AND SPORT Throughout the year, Vingroup made large investments to support the arts and culture. Examples include the opening of the VinTata Animation Studio and the Vincom Center for Contemporary Art (VCCA), strengthening the spiritual values of the community. The headquarters of the Fund for Investment and Development of Vietnamese Football (PVF) was transferred from Ho Chi Minh City to Hung Yen, Hanoi, with new facilities and enhanced training regime to raise PVF football to international standards. 12 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

8 CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN 2017 TITLES AND AWARDS 1. VINGROUP HONORED AS THE LARGEST PRIVATE COMPANY IN VIETNAM In December 2017, the Vietnam Report recognized Vingroup as The Largest Private Enterprise in Vietnam, not only for its size but also for its contributions to the nation s economy and community. The Vietnam Report also awarded Vingroup top-10 rankings in the categories of Most Respected Real Estate Developers and Most Respected Listed Companies in Vietnam during SELECTED FOR NIKKEI S ASIA 300 LIST Nikkei Magazine of Japan chose Vingroup as one of the top ten most dynamic companies in its Asia 300 list of companies during The list includes the largest and fastest growing enterprises throughout Asia. 3. ONE OF THE TOP TEN MOST SUSTAINABLE COMPANIES Vingroup was honored as one of the Ten Most Sustainable Businesses in the Service Sector by VCCI, as well as one of the Ten Enterprises with the Best Compensation and Social Welfare for Employees, an award given by the Vietnam General Confederation of Labor. 4. BEST PRIVATE EQUITY DEAL AND BEST FRONTIER MARKET TRANSACTION IN ASIA PACIFIC In December 2017, FinanceAsia and IFR Asia magazines gave the Vincom Retail listing and USD 741 million share sale the Best Private Equity Deal and the Best Frontier Market Transaction regional awards. The share sale attracted over USD 2 billion worth of investor orders the largest level of interest in Vietnam s capital market history, and was more than three times over-subscribed. 5. ONE OF THE TOP TEN ANNUAL REPORTS AND INTERNATIONAL ARC, LACP AWARDS FOR ANNUAL REPORTS Vingroup s annual report was amongst the ten best reports named by the Ho Chi Minh City Stock Exchange. The Company also received several prestigious international awards from ARC and LACP for its annual reports, namely a Gold award for Best Photography, a Silver award for Best Content in the Real Estate Mixeduse and Conglomerates categories by ARC, and a Gold award for the Global Conglomerate category by LACP. 6. RECOGNITION FOR VINGROUP BRANDS Four of the Company s brands were honored in 2017: Vinhomes, Vincom Retail, Vinpearl, and VinCommerce were recognized among the 50 most valuable brands in Vietnam by Brand Finance Magazine on December 4, Vinhomes was chosen as the fourth most valuable brand in Vietnam with a value of USD 604 million, an increase of 18% over the prior year and the only real estate brand among Vietnam s top ten brands in 2016 and VinCommerce ranked 19th, Vinpearl 26th, and Vincom Retail was in 32nd place. Vincom Retail also received third place recognition amongst the five most powerful brands in Vietnam, based on Vingroup s position in the modern retail real estate sector. In the same year, the Vietnam Report honored VinMart and VinMart+ amongst the Two Most Popular brands and the Fourth Most Respected Retailer in the country. 7. VINGROUP HONORED AT THE EUROMONEY INTERNATIONAL PROPERTY AWARDS Vingroup was honoured with the four most prestigious country real estate awards from Euromoney magazine. These awards were Best Real Estate Developer, Best Mixed-Use Developer, Best Retail Developer, and Best Hospitality Developer. These awards denote Vingroup s position and pretige as a leading real estate developer in Vietnam. 8. VINHOMES RECOGNIZED AS BEST DEVELOPER IN ASIA PACIFIC BY INTERNATIONAL PROPERTIES AWARDS In December of 2017, Vinhomes was honored by the International Property Awards for its Vinhomes Metropolis project, which was chosen in The Best High Rise Building category. The Company s Landmark 81 Tower at Vinhomes Central Park won first place in the category of The Best High Rise Architectural Buildings for its designers at Atkins design company. The IPA Awards are recognized as the world s most prestigious awards for property development. 9. BEST WORKPLACE AWARD BESTOWED BY ANPHABE CAREER COMMUNITY NETWORK Vingroup was proud to be named Best Workplace in the Real Estate / Architecture / Design / Retail / Wholesale / Commerce / Travel / Restaurant / Hotel categories surveyed by the Anphabe Career Community Network in collaboration with Nielsen Market Research Company 10. VINPEARL RESORTS HONORED AS A LEADING RESORT NETWORK IN VIETNAM Vinpearl was chosen by the World Travel Awards in June of 2017 as the Best Marine Resort in Vietnam. In August of 2018, Vinpearl was honored for the eighth consecutive time for its quality of service as well as for its contributions to tourism in Vietnam when it was chosen as The Best Resort in 2017 at the 2017 Guide Awards. 14 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

9 CHAPTER 1 CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN MESSAGE FROM THE CHAIRMAN Dear Valued Shareholders, On behalf of the Board of Directors, I send you my warmest wishes for health, happiness, and success! Ladies and Gentlemen, During 2017, the economy of Vietnam grew by 6.8% over 2016, thanks to improvements in both demand and productive capacity. Macroeconomic fundamentals are stable, with inflation at a four-year low for the fourth consecutive month. With that economic backdrop, Vingroup has enjoyed a successful year with many achievements. Vingroup Became the Largest Private Sector Enterprise in Vietnam in 2017 With strong growth in both size and service quality, Vingroup has become the largest private company in Vietnam and the enterprise with the largest market capitalization of USD 11 billion as of February 28, Vingroup s emergence as the largest private enterprise amongst Vietnam s Top 500 Companies reflects many years of hard work by tens of thousands of employees. Vingroup s combined business results for 2017 were as follows: revenue of VND 89.4 trillion, growing 55% over 2016, and after-tax profit of VND 5.7 trillion, growing 27% over The Company added nearly 7,000 new jobs, bringing our total number of employees to nearly 43,000. In operations, the Group not only expanded the scale of existing businesses but also added a seventh core business segment Industrials with VinFast motorcycles and cars was also a year marked by an emphasis on improving the quality of services in all areas of operations as Vingroup aims to attain international five-star standards across all businesses. In the area of corporate governance, Vingroup introduced the Five Transformational Principles that guide our strategy, business model, and governance: Elevate Standardize Simplify Automate Share. Vingroup s new operational model has helped win the trust of customers and has gained professional recognition in the form of domestic and international awards. The Company s core business areas have achieved outstanding results, as follows: In real estate development, Vingroup continued to hold the marketing-leading position, with the following highlights: Vinhomes deployed astute sales strategies and offer attractive product packages across all product segments. The Group also handed over a record nearly 14,000 apartments, villas, townhouses and beach villas throughout the country. Vincom Retail listed more than 1.9 billion shares on the Ho Chi Minh City Stock Exchange. The Company partnered with such well-known retail brands as Zara, H&M, and Pull & Bear to open their first stores in Vietnam. Vincom Retail s strategy of upgrading and diversifying shoppers retail experience drew more than 115 million visitors, an increase of 42% in retail traffic over the prior year. In our Hospitality and Entertainment segment, Vinpearl made improvements in service quality by implementing extensive reform campaigns that upgraded standards to the international five-star level, putting the Company on a path to leadership among the region s integrated resorts. In our Consumer Retail business, VinMart, VinMart+, and Adayroi achieved 41% growth during the year, serving more than 82 million customers with accompanying gains in service quality, customer perception and mind share. In the Healthcare segment, Vinmec implemented a new strategy focused on investing in key strengths, promoting international cooperation, and raising professional standards for doctors and other medical staff. Vinmec increased the scale of its operations to six hospitals with breakthroughs in treatments for cancer, cerebral palsy, autism, cardiovascular surgery, organ transplant, and robotic surgery. In Education, Vinschool has adopted a strategy of upgrading the quality of its offerings through innovative curricula and adding more teachers. The Vinschool network now enrolls close to 19,000 students on 17 campuses throughout Vietnam, making it the largest private educational institution in the nation. On March 5, 2018, Vingroup announced the establishment of VinUni International University to contribute talented graduates to the workforce in Vietnam. VinEco s agricultural operations successfully implemented advanced farming techniques using increased automation and growing new cultiva across its farms. VinEco also grew to 1,000 its network of cooperatives and farms producing clean agricultural products for Vietnamese consumers, helping to instill a change towards responsible farming practices in the country. During 2017, Vingroup added a new business in Industrials sector by launching VinFast to manufacture and sell motorcycles and cars. This launch represents the culmination of a long-held dream for Vietnam to produce its own cars. Ladies and Gentlemen, Beyond facts and figures, Vingroup has achieved a new level of dynamism that has drawn respect both in Vietnam and in international markets. Particularly, Vingroup is seen as an agent of change, a catalyst for entrepreneurism and an example of the Can Do mindset. The Group s standing in the domestic and international business communities has also been elevated in Our mission in 2018 is to Go Global Vingroup s accomplishments during the past year have prepared us to set new goals for The Company will continue to upgrade the breadth and quality of its operations to achieve international standards. Vingroup companies, especially Vincom Retail Malls, and VinMart and VinMart+ retail stores, will expand their presence throughout Vietnam. With solid investment backing, Vingroup will expand its comprehensive ecosystem of products, services, and delivery systems to meet the needs of Vietnamese customers. Vingroup will further upgrade all operations to fivestar standards, with accompanying improvements in infrastructure, staffing, and level of sophistication for Vinpearl, international doctors and techniques for Vinmec, and progressive educational philosophy for Vinschool and VinUni. As a new business segment for Vingroup, VinFast will set the standard for the Company s entrepreneurial approach to business. It will also introduce the first production motocycles and two prototype car models in Vingroup will continue to implement the governance revolution that was initiated in 2017, building on the Five Transformational Principles. The objectives of the Principles are to optimize internal resources to attain the highest level of effectiveness, so that Vingroup may make our mark as a leading global enterprise. With the mission of "To create a better life for the Vietnamese people, Vingroup still has a lot of work to do. On behalf of the Board, I express my sincere gratitude for your continued support, and I send my best wishes. Yours sincerely, Pham Nhat Vuong Vingroup Chairman 16 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

10 CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN CHAPTER 1 VINGROUP 2017 AND MESSAGE FROM THE CHAIRMAN FINANCIAL AND OPERATIONAL HIGHLIGHTS HAI PHONG VINCOM 1 VINPEARL 1 VINMART 1 VINMART+ 31 VINPRO 1 VINECO 1 VINFAST 1 NET REVENUE (Trillion VND) VINCOM SHOPPING MALL NETWORK 46 KEY LOCATIONS HANOI Revenue from sale of inventory properties Recurring income , , Retail gross floor area ( 000m 2 ) Number of shopping malls NETWORK Vingroup s extensive network of business operations cover prime locations throughout Vietnam. As of February 28, 2018, Vingroup and its subsidiary companies conduct operations in 38 of Vietnam s provinces and cities. Each of our business units VINHOMES VINCOM VINMART VINMART+ VINPRO VINMEC VINSCHOOL VINPEARL LAND TOTAL ASSETS (Trillion VND) VINCOMMERCE RETAIL NETWORK (Stores) 1, /02/ /02/2018 VinMart VinMart+ VinPro 36 1, headquartered in Hanoi, Ho Chi Minh City and Khanh Hoa contributed more than 10% of the Group s total revenue during HO CHI MINH CITY VINHOMES 2 VINCOM 11 VINMART 14 KHANH HOA VINCOM 3 VINPEARL 5 VINPEARL LAND 1 VINMART 3 VINMART+ 13 VINMEC 1 VINMART+ 396 VINPRO 7 OWNER S EQUITY (Trillion VND) VINPEARL HOTEL NETWORK (Guest nights 000s) 2,119 VINMEC VINECO VINSCHOOL ,620 Property KIEN GIANG VINCOM 1 VINPEARL 4 VINPEARL LAND 2 VINMART 1 VINPRO 1 VINMEC 1 VINECO 1 Hospitality and Entertainment Consumer Retail Healthcare Education Agriculture Industrials 18 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

11 VINGROUP ANNUAL REPORT 2017 GO GLOBAL VINHOMES THE HARMONY

12 Chapter 2 ABOUT VINGROUP CHAPTER II 2 ABOUT VINGROUP VINGROUP PROFILE CHAPTER 02 ABOUT VINGROUP Vingroup Profile Corporate Milestones Businesses Corporate Structure Board of Directors Management Supervisory Board Company Name: Vingroup JSC Ticker: VIC Charter Capital: VND 26,377,079,540,000 as of February 28, 2018 Headquarters: No. 7, Bang Lang 1 Vinhomes Riverside Ecological Area Viet Hung Ward Long Bien District Hanoi, Vietnam Telephone: (84-24) Fax: (84-24) Business registration number and tax code: Website: Vingroup Joint Stock Company ( Vingroup or The Group ) is one of the largest listed companies in Vietnam as measured by market capitalization. With its long-term vision of sustainability, Vingroup has initially focused on developing hospitality, commercial, and residential properties under the Vinpearl and Vincom brands. Today, Vingroup competes in five business segments: Property Hospitality and Entertainment Consumer Retail Social Infrastructure Services Industrials HOSPITALITY AND ENTERTAINMENT PROPERTY Vinpearl Five star & five star plus resorts and city hotels Vinpearl Golf World-class golf courses Vinpearl Land Amusement parks and conservation parks Vinhomes Premium integrated offerings of apartments, villas and shophouses VinCity Mid-range and affordable residential properties with comprehensive facilities Vincom Retail Quality retail malls and offices CONSUMER RETAIL VinMart & VinMart+ Supermarkets, mini-marts and convenience stores VinPro Electronics and appliance stores Adayroi Comprehensive e-commerce platform Development Strategy 43 In all of its established business segments, Vingroup is a proven market leader with a focus on the continuing modernization of consumer purchasing trends and lifestyles. 22 ANNUAL REPORT VINGROUP INDUSTRIALS VinFast Vietnamese international quality motorcycles and automobiles SOCIAL INFRASTRUCTURE SERVICES Vinmec International hospitals Vinschool High-quality K-12 school system VinEco VINGROUP Clean and - safe ANNUAL agricultural REPORT 2017 products 23

13 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP 2. CORPORATE MILESTONES Vinpearl JSC (formerly Hon Tre Tourism and Trading Limited Liability Company) was established on July 25, 2001 Five-star resort Vinpearl Nha Trang commenced operation Vinpearl Land opened, turning formerly arid Hon Tre Island into a luxury tourist destination, and symbolizing the rapid growth of tourism in Nha Trang Vingroup became the first real estate company in Vietnam to be selected by Russell Investments for the Russell Global Index Vincom Center Dong Khoi opened in Ho Chi Minh City The Group commenced pre-sales of apartments in the Royal City project in Hanoi Vincom JSC merged with Vinpearl JSC and increased total charter capital to VND 5.5 trillion. The Group began operating under the new name Vingroup Joint Stock Company Vingroup introduced the Vinmec brand and opened the Vinmec International Hospital in Times City Vinhomes Central Park, a modern, luxurious urban area, broke ground in Ho Chi Minh City. The Landmark 81 Tower, with 81 floors and a height of 461 meters, would become, upon completion, the tallest skyscraper in Vietnam and one of the ten tallest buildings in the world VinMart and VinMart+ began operations Vinpearl Phu Quoc Resort opened after ten months of construction, setting a new record for on-time completion The Group opened ten new retail malls to bring its total to 32 malls in 15 cities and provinces throughout Vietnam The retail store network was expanded to 1,000 outlets nationwide Vingroup introduced the Vingroup Loyalty Program Vingroup raised its hotel room count to more than 6,000 rooms and introduced a high-end city hotel brand, Vinpearl City Hotel, with the opening of a Vinpearl City Hotel in Can Tho Vingroup converted Vinmec and Vinschool into social enterprises and committed to reinvest 100% of profits generated from these two businesses to meet social targets Vingroup introduced the VinCity affordable real estate brand Vincom JSC (formerly Vietnam General Commercial JSC) founded on May 3 Vincom Center Ba Trieu launched. As the first modern retail mall in Hanoi, Vincom Center Ba Trieu introduced a new shopping experience to the customers Vinpearl cable car, with a total of 3,320 meters in length, connected Hon Tre Island with the main land. Vinpearl Nha Trang Resort opened an additional tower, raising the total number of five-star guest rooms to 485. Vincom listed its shares on the Ho Chi Minh City Stock Exchange with ticker symbol VIC Vincom became the first Vietnamese company to issue USD 100 million of convertible bonds on the Singapore Exchange (SGX) Vinpearl Luxury Nha Trang, a five-star resort, and Vinpearl Golf Nha Trang opened simultaneously Vinpearl Da Nang Resort & Villas were opened Vingroup became a Foundation Member of the World Economic Forum Vinschool was established and launched education offering ranging from kindergarten through high school A consortium led by Warburg Pincus invested USD 200 million in a strategic partnership with Vincom Retail. Warburg Pincus invested an additional USD 100 million in Vincom Retail in June 2015, raising the total investment to USD 300 million Vincom Mega Mall Royal City opened as Asia s largest underground retail complex Vingroup successfully issued USD 200 million of international senior unsecured bonds Vingroup achieved major progress in its property business segment by preselling 14,000 apartments, villas, and shophouses By year-end, the Group operated 15 additional retail malls and three more hotels During the year, Vingroup launched new businesses and brands, including: Vinpearl Resort & Villas a new concept combining resorts and beach villas VinEco safe and clean agricultural products VinPro electronics and appliance stores Vingroup also commenced operations at Vietnam s first and still only wildlife safari park with more than 3,000 animals representing 150 rare species Vincom Retail opened 15 new retail malls for a total of 46 in 24 cities and provinces throughout Vietnam. It was listed on Ho Chi Minh City Stock Exchange in November 2017 The retail store network was expanded to 1,200 outlets nationwide Vinpearl launched eight new hotels and resorts, bringing its total room count to over 10,000 rooms. VinFast automobile and motorbike brand was announced and construction began at its production site in September 2017 The Vincom Center for Contemporary Art (VCCA) and VinTata Animation Studio were introduced 24 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

14 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP BUSINESSES PROPERTY VINHOMES PREMIUM APARTMENTS, VILLAS AND SHOPHOUSES WHERE HAPPINESS LIVES VINCITY MID-RANGE AND AFFORDABLE REAL ESTATE IN FULLY-INTEGRATED COMMUNITIES Vingroup introduced the VinCity brand in 2017 to serve middle-income customers in non-cbd locations in Hanoi and Ho Chi Minh City, as well as the provinces of Hung Yen and Ha Tinh. VinCity projects are characterized by high-quality construction and a full complement of amenities. 14,000 Vinhomes is the leading real estate brand in Vietnam. Vinhomes develops, sells, and manages mixed-use Vinhomes properties include: Apartments, villas, shophouses and beach villas handed over during Projects managed in Hanoi, Ho Chi Minh City, Quang Ninh and Ha Tinh residential real estate projects that target the mid-range and high-end market segments. Vinhomes projects are in prime locations in Vietnam s most populous cities and provinces. Vinhomes now manages twelve projects with nearly 31,000 apartments, villas, and shophouses. Vinhomes benefits from all of the supporting infrastructure needed to create a successful community. These amenities include playgrounds, sports facilities, swimming pools, lounges, Vinschool educational institutions, Vinmec healthcare Hanoi Vincom Ba Trieu Vinhomes Riverside Vinhomes Riverside The Harmony Vinhomes Times City & Vinhomes Times City Park Hill Vinhomes Royal City Vinhomes Nguyen Chi Thanh Ho Chi Minh City Vincom Dong Khoi Vinhomes Central Park Quang Ninh Vinhomes Dragon Bay Ha Tinh Vinhomes Ha Tinh facilities, Vincom Retail malls and VinCommerce Vinhomes Gardenia supermarkets, mini-marts and convenience stores. Vinhomes delivers not only a property but also a modern Vinhomes Thang Long and high-living-standard environment in line with its slogan of where happiness lives. 26 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

15 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP VINCOM RETAIL QUALITY RETAIL MALLS HOSPITALITY AND ENTERTAINMENT VINPEARL VIETNAM S VACATION PARADISE 46 Retail malls include 4 Vincom Centers, 3 Vincom Mega Malls, 30 Vincom Plazas, and 9 Vincom+ malls 1.2 Million square meters of Retail Gross Floor Area As a leading operator of retail malls, Vincom Retail operates four distinct brands: Vincom Center, Vincom Mega Mall, Vincom Plaza, and Vincom+. In combination, these brands give Vincom Retail a presence throughout Vietnam with differentiated offerings for each customer group. Vincom Retail malls combine shopping, entertainment, and dining, as well as cultural and recreation experiences. This combination of services has set a new standard for Vietnamese retail and entertainment, establishing Vincom Retail as the market leader in modern retail real estate investment and management. Vincom Centers For the Shopping Elite: By bringing the leading international and domestic retail brands to Vietnam s major cities, Vincom Retail provides the elite shopping and entertainment experience in Hanoi and Ho Chi Minh City. Vincom Mega Malls For the Modern Lifestyle: These large-scale retail malls are mixed-use facilities located in densely-populated areas and offer a wide array of shopping, entertainment, and dining experiences. There are currently three Vincom Mega Malls located in Hanoi and Ho Chi Minh City. Vincom Plazas The Family Favorite: The Vincom Plaza brand provides a family-oriented modern shopping experience in newer cities and in suburban areas outside Hanoi and Ho Chi Minh City. There are currently 30 Vincom Plaza malls in 21 Vietnamese cities and provinces. Vincom+ Retail Malls Transforming Retail Behavior: These malls are located in districts and towns whose population exceeds 30,000 and where people are eager to take advantage of the newest shopping experience. There are nine Vincom+ malls in eight different provinces in Vietnam. VINCOM OFFICE VINCOM OFFICE PROVIDES PREMIUM WORKSPACES Vincom Office provides office properties for lease. These properties are located in the heart of major financial and business centers and offer maximum natural light, energy efficiency, and modern, professional workspaces. Vincom Offices include: Vincom Office Royal City Vincom Office Times City Vincom Office Dong Khoi 15 Hotels, resorts and villas 2 City hotels 3 Golf courses > 10,000 Rooms Vinpearl is the market-leading hospitality and tourism brand in Vietnam, operating 5-star and 5-star-plus resorts and beach villas throughout Vietnam. Starting with Vinpearl Resort Nha Trang, and after more than 15 years of development, Vinpearl now owns luxurious hotel and resort chains across Vietnam with four key resort lines: 5-star-plus resorts with the Vinpearl Luxury brand, 5-star resorts with the Vinpearl Resort, Vinpearl Resort & Villas and Vinpearl Resort & Golf brands, urban hotels and condotels with the Vinpearl City Hotel brand, and golf courses with the Vinpearl Golf brand. Vinpearl currently operates seventeen hotels and resorts with a total of more than 10,000 rooms in such popular tourist destinations as Ha Long Bay, Nghe An, Ha Tinh, Da Nang, Nha Trang, Cam Ranh, Can Tho, and Phu Quoc. Vinpearl Five-Star Plus Resorts include: Vinpearl Luxury Nha Trang Vinpearl Five-Star Resorts include: Vinpearl Ha Long Bay Resort Vinpearl Ha Tinh Ocean Villas Vinpearl Cua Hoi Resort & Villas Vinpearl Da Nang Resort & Villas Vinpearl Da Nang Ocean Resort & Villas Vinpearl Hoi An Resort & Villas Vinpearl Nha Trang Resort Vinpearl Nha Trang Bay Resort & Villas Vinpearl Golf Land Resort & Villas Vinpearl Nha Trang Long Beach Resort & Villas Vinpearl Phu Quoc Resort Vinpearl Phu Quoc Resort & Golf Vinpearl Phu Quoc Ocean Resort & Villas Vinpearl Phu Quoc Paradise Resort & Villas Vinpearl City Hotels include: Vinpearl Ha Tinh Hotel Vinpearl Can Tho Hotel Vinpearl Golfs include: Vinpearl Golf Hai Phong Vinpearl Golf Nha Trang Vinpearl Golf Phu Quoc 28 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

16 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP CONSUMER RETAIL VINPEARL LAND VINPEARL LAND VIETNAM S RECREATION PARADISE VINCOMMERCE A LEADING MODERN RETAIL NETWORK 1,200 Retail stores and convenience stores in Hanoi, Ho Chi Minh City, and many other provinces. 82 VinPro Electronics and Appliances stores VinPro is the Group s retail brand for electronics, Million retail purchases during 2017 smartphones, tablets, laptops and home appliances. Currently, there are 36 VinPro stores located in Vincom 4.3 Million visitors in 2017 Vinpearl Land is Vingroup s entertainment brand, offering high-quality amusement parks, conservation parks and family entertainment centers. Located in Vingroup s resorts and mixed-use developments throughout the country, these facilities are large-scale complexes comparable to the leading global theme parks. Vinpearl Land facilities include: Outdoor amusement parks: Vinpearl Land Nha Trang Vinpearl Land Phu Quoc Indoor entertainment center: Vinpearl Land Times City Vinpearl safari and conservation park includes: VinCommerce is the umbrella brand for the Group s consumer retail offerings VinMart, VinMart+, VinPro, and Adayroi. VinCommerce operates a comprehensive and market-leading network of retail stores in all major retail formats throughout Vietnam, where customers can experience the convenience of modern retail both in brick-and-mortar stores and online. VinMart supermarkets and VinMart+ mini-marts and convenience stores VinMart supermarkets and VinMart+ convenience stores and mini-marts win customers trust by providing high shopping malls across the country. Adayroi e-commerce Adayroi is Vietnam s leading e-commerce website. Its mission is to bring modern and convenient online shopping to Vietnamese families. Adayroi's distinct advantage is its access to Vingroup s entire ecosystem of products and services. adayroi.com provides diverse products including Food & FMCG, Mobile Phones & Tablets, Household Appliances, Electronics and Technology, Fashion, Health & Beauty, Mom & Baby, Sports & Outdoors, Books & Stationery, Vinpearl Safari Phu Quoc quality products from trusted suppliers and supported by exceptional service. Currently, the Group operates 67 Automobiles & Motorcycles, Services and Vingroup Products & Services. VinMart supermarkets and 1,055 VinMart+ mini-marts 30 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

17 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP SOCIAL INFRASTRUCTURE SERVICES VINMEC VINSCHOOL QUALITY HEALTHCARE SERVICES HIGH QUALITY K-12 EDUCATION 6 International hospitals 2 By employing the most highly skilled medical experts, and by using medical equipment imported from the United States, Canada, Europe, and Japan, Vinmec has grown rapidly in just five years in both quality and its range of services. 17 Kindergartens, elementary, secondary and high schools 19,000 Vinschool facilities include: In Ha Noi Five Vinschool Kindergartens at Vinhomes Times City Two Vinschool Kindergartens at Vinhomes Royal City International clinics Vinmec healthcare facilities include: Students enrolled Vinschool Kindergarten at Vinhomes Riverside 1,500 Beds 2,200 Healthcare professionals Vinmec is a leading Vietnamese healthcare system that adheres to international standards. It is an established pioneer in applying advanced technology to people s healthcare needs. Vinmec Times City International Hospital Vinmec Central Park International Hospital Vinmec Ha Long International Hospital Vinmec Da Nang International Hospital Vinmec Nha Trang International Hospital Vinmec Phu Quoc International Hospital Vinmec Royal City International Clinic Vinmec Saigon International Clinic Vinschool is a comprehensive educational system of kindergartens, secondary schools, and high schools with the goal of becoming Vietnam s leading international school system and an incubator of talent. All schools in the Vinschool system are equipped with advanced educational facilities. Vinschool has made substantial investments in highly qualified teachers and progressive curricula. This dynamic environment prepares students to take full advantage of both domestic and international opportunities while remaining grounded in Vietnamese culture and values. Vinschool Kindergarten at Vinhomes Nguyen Chi Thanh Vinschool Kindergarten at Vinhomes Gardenia Vinschool Kindergarten at Vinhomes Thang Long Vinschool Elementary School at Vinhomes Gardenia Vinschool Elementary, Secondary, and High School at Vinhomes Times City Vinschool Elementary, Secondary, and High School at Vinhomes The Harmony In Ho Chi Minh City Two Vinschool Kindergartens at Vinhomes Central Park Vinschool Elementary, Secondary, and High School at Vinhomes Central Park 32 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

18 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP INDUSTRIALS VINECO GREEN, CLEAN AND SAFE AGRICULTURE VINFAST VIETNAMESE MOTORCYCLES AND AUTOMOBILES BUILT TO INTERNATIONAL QUALITY STANDARDS 14 Farms 2,000 Hectares agricultural land VinEco was launched in 2015 to provide consumers with a trusted source of clean and safe agricultural products. VinEco has catalyzed the expansion of sustainable land. VinEco products include clean and safe vegetables, fruits, and flowers. VinEco collaborates with leading domestic producers and farming households to help them diversify their product offerings, enhance productivity, and improve the quality of the products available on the market. 335 Hectares of production complex 250,000 Cars in production capacity VinFast stands for Vietnam Style Safety Innovation Pioneer, which aims to produce Vietnamese cars to international standards. The goal of VinFast is to become the leading automobile manufacturer in Southeast Asia. Its main products will be automobile engines, internal combustion engines, electric engines and eco-friendly electric scooters. The first phase of the project has a design capacity of 250,000 cars and 250,000 scooters per annum. farming. By using the most advanced large-scale greenhouse technology from Japan and Israel, VinEco has achieved VietGAP standard. At the end of 2017, VinEco had 14 farms throughout Vietnam with 2,000 ha of agriculture 34 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

19 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP CORPORATE STRUCTURE GENERAL MEETING OF SHAREHOLDERS Vingroup operates five core businesses within seven groups of subsidiary companies, each structured into separate profit-and-loss (P&L) centers. Subsidiary companies in seven businesses retain self-governance BOARD OF DIRECTORS CHAIRMAN PHAM NHAT VUONG capacity, have their own balance sheets, and are accountable for their own business plans and financial performance. The corporate divisions in Vingroup JSC, the parent MANAGEMENT CHIEF EXECUTIVE OFFICER NGUYEN VIET QUANG SUPERVISORY BOARD company, provide support, supervision, and operational direction to the P&Ls. They also play a leading role in the committees and working groups that meet to assess, monitor, and make decisions regarding the Group and its business units. CORPORATE OFFICE PROPETY HOSPITALITY AND ENTERTAINMENT CONSUMER RETAIL HEALTHCARE EDUCATION AGRICULTURE INDUSTRY OTHER FINANCE DIVISION VINHOMES PROPERTY DEVELOPMENT COMPANIES VINPEARL JSC VINCOMMERCE GENERAL COMMERCIAL SERVICES JSC VINMEC INTERNATIONAL GENERAL HOSPITAL JSC VINSCHOOL LLC VINECO AGRICULTURAL INVESMENT DEVELOPMENT AND PRODUCTION LLC VINFAST MANUFACTURING AND TRADING LLC VINCOM CONSTRUCTION MANAGEMENT COMPANY COMMUNICATION DIVISION VINCOM RETAIL JSC VINPEARL PROJECT DEVELOPMENT COMPANIES VINMART SUPERMARKETS VINMART+ MINI-MARTS AND CONVENIENCE STORES VINMEC HOSPITALS VINACADEMY EDUCATION AND TRAINING LLC VINCOM SECURITY LLC LEGAL AND COMPLIANCE DIVISION VINCOM RETAIL NORTH VIETNAM LLC VINPEARL LAND VINPRO ELECTRONICS AND APPLIANCES STORES VINMEC CLINICS EXTERNAL FINANCE DIVISION VINCOM RETAIL SOUTH VIETNAM LLC ADAYROI E-COMMERCE RISK MANAGEMENT DIVISION INTERNAL AUDIT DIVISION INFOMATION TECHNOLOGY DIVISION SECURITY AND FIRE PREVENTION DIVISION HUMAN RESOURCES DIVISION 36 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

20 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP BOARD OF DIRECTORS The Board of Directors (the Board ) consists of nine members. The Board is headed by its Chairman and includes three independent members. NAME Mr. Pham Nhat Vuong Ms. Pham Thuy Hang POSITION Chairman Vice Chairwoman 3 4 MS. PHAM THU HUONG Vice Chairwoman Ms. Pham Thu Huong was elected to the Board in She is a graduate of the National University of Kiev (Ukraine) with a B.S. degree in International Law. MR. LE KHAC HIEP Vice Chairman and Independent Board Member Mr. Le Khac Hiep was elected to the Board in He was also Chairman of the Group from 2006 to He 7 MR. JOSEPH RAYMOND GAGNON Board Member Mr. Gagnon was elected to the Board in He is currently a Managing Director at Warburg Pincus Asia and leads its real estate investment business in North Asia. He is also a member of the Board of Directors of Vincom Retail, a subsidiary of Vingroup. He was a Director at Warburg Pincus Asia in Hong Kong from 2008 to 2011 and a Director of Business Development at GE Capital in Tokyo, Japan from 2003 to Mr. Gagnon graduated from Wake Forest University, USA. Ms. Pham Thu Huong Mr. Le Khac Hiep Ms. Nguyen Dieu Linh Mr. Nguyen Viet Quang Mr. Joseph Raymond Gagnon Vice Chairwoman Vice Chairman and Independent Board Member Vice Chairwoman and Authorized Spokeperson Board Member and Chief Executive Officer Board Member was appointed an Independent Member of the Board in From 1994 to 2004, he headed Prudential Real Estate s Vietnam Representative Office before becoming its Deputy General Director for External Relations. Previously, he was a researcher at the Institute of Physics in the Vietnam Academy of Science and Technology from 1984 to Mr. Le Khac Hiep graduated from the National University of Kharkiv (Ukraine) with a Distinguished B.S. degree in Physics. Mr. Le Khac Hiep is responsible for Vingroup s sustainability projects. 8 MR. MARC VILLIERS TOWNSEND Independent Board Member Mr. Townsend was elected as an Independent Board Member in He has worked in Asia in the real estate sector since He was the Managing Director at CBRE Vietnam from 2003 to 2017, the General Director of Regus in Southeast Asia from 1999 to 2002 and Vice Director of Sales & Marketing at Rockwell Land Corp. in Manila from 1997 to Mr. Townsend Mr. Marc Villlers Townsend Mr. Ling Chung Yee Roy Independent Board Member Independent Board Member 5 MS. NGUYEN DIEU LINH Vice Chairwoman and Authorized Spokesperson attended the University of Montpellier (France) and received a B.A degree in Accounting Studies from the University of Exeter (UK). He also completed the Program in Management Development at the Asian Institute of 1 The Board is the Group s policy-making body, with the authority to make decisions and to exercise all rights and responsibilities that do not fall under the jurisdiction of the General Meeting of Shareholders (the GMS ). The Board is also responsible for implementing the decisions of the GMS. BOARD MEMBERS MR. PHAM NHAT VUONG Chairman Mr. Pham Nhat Vuong was elected to the Board in 2002 and elected Chairman in He has a long track record as an entrepreneur both inside and outside Vietnam. He established the Group s core businesses, starting with its two initial brands, Vincom and Vinpearl. In 2012, Mr. Vuong was honored as the only billionaire in Vietnam by Forbes and retained the position as the billionaire with the highest net worth in Vietnam for four consecutive years from 2013 to MS. PHAM THUY HANG Vice Chairwoman Ms. Pham Thuy Hang was elected to the Board in 2005 and elected Vice Chairwoman in Ms. Pham Thuy Hang is a graduate of Hanoi University with a B.A. degree in Russian Linguistics and Literature. 6 Ms. Nguyen Dieu Linh has been a member of the Board since 2008 and Deputy CEO of the Group from 2005 to August Prior to joining Vingroup, she was a legal expert with Ngo Migueres & Partners in Hanoi from 1996 to She graduated from Hanoi University with a B.A. degree in English and French. She also received a B.A. in Law from the University of Social Sciences and Humanities MR. NGUYEN VIET QUANG Board Member and Chief Executive Officer Mr. Nguyen Viet Quang was elected to the Board since Prior to joining Vingroup in 2010, he was Board Member and Head of the Supervisory Board of Y Cao Company Limited during the period from 1996 to Mr. Nguyen Viet Quang graduated from the National Economics University with a B.A in Business Administration. 9 Management in Manila in Marc started his career in the Royal Marines. Marc is Chairman of CBRE Cambodia. MR. LING CHUNG YEE ROY Independent Board Member Professor Ling was elected to the Board in He is currently a Managing Director at RL Capital Management. Concurrently, he also serves as an Independent Board Director at several listed companies and non-profit organizations across Asia, as an Adjunct Professor in Finance at the EDHEC Business School, and as a Consultant for RHT Strategic Advisory and RHT Academy. Prior to RL Capital, Prof. Ling held senior investment banking positions with JPMorgan, Lehman Brothers, Goldman Sachs and Salomon Smith Barney. Prof. Ling was a former Board Director of the CFA Society of Japan. He was honored as the Real Estate Executive of the Year by Singapore Business Review in 2016, and as one of 20 Rising Stars in Real Estate by Institutional Investor in Prof. Ling graduated from INSEAD with a Global EMBA and from the National University of Singapore with a Bachelors degree in Business Administration. 38 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

21 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP MANAGEMENT The Board may elect a Board Member or appoint an outside executive to the position of CEO. The Board also decides on the compensation and employment terms for the CEO. The CEO need not be the Chairperson of the Board. The CEO s term of office is three years, unless otherwise decided by the Board. The CEO may be reappointed to successive terms. MEMBERS 3 MR. PHAM VAN KHUONG Deputy CEO Mr. Pham Van Khuong was appointed Deputy CEO in 4 MS. NGUYEN THI DIU Deputy CEO Ms. Nguyen Thi Diu was appointed Deputy CEO in He has nearly 30 years of experience in construction She served as a Director of Investment Banking Vietnam and industrial technology. From 1996 to 2003, he was the at UBS from 2013 to From 2008 to 2013, she was General Director of the Construction and Water Resources the Chairwoman and CEO of AFH Finance and Investment Technology Company in the Ministry of Construction. He Consultancy JSC. From 1996 to 2008, she was the started his career in 1982 as a design engineer at Vietnam Chief Representative and Head of Investment Banking Water, Sanitation, and Environment JSC. He received a B.S. at JPMorgan Vietnam. She received her MBA degree in degree in Engineering from Hanoi Architecture University. Finance from the University of Hawaii. 1 MR. NGUYEN VIET QUANG Board Member and Chief Executive Officer 2 MS. MAI HUONG NOI Deputy CEO Further details can be found in Chapter 2: About Vingroup Ms. Mai Huong Noi has been a Board Member since 2008 Board of Directors Page 39. and Deputy CEO since She was also CEO of the Group from 2006 to Prior to joining Vingroup, she was Deputy Director of the Customer Service Division at Hanoi Post Office from 2004 to Ms. Mai Huong Noi received a B.S degree in Economics and Banking from the National Economics University. 5 MS. DUONG THI HOAN Deputy CEO 6 MS. NGUYEN THI THU HIEN Chief Accountant Prior to being appointed Deputy CEO in August 2016, Ms. Nguyen Thi Thu Hien has been Vingroup s Chief Ms. Hoan held the position of the Head of Vingroup Accountant since She was the Chief Financial Communication Division from 2007 to She was the Officer of Ha Viet Investment JSC from 2005 to 2008 and General Director of Hung Viet Company from 2005 to its Chief Accountant from 2003 to She graduated Ms. Hoan received a B.S from Vietnam University from Hanoi University of Finance and Accounting with of Commerce and completed her Joint Master of Business B.A. degree in English from the University of Languages and Administration degree between Hanoi National and Foreign Studies. She is also a member of ACCA. University and Benedictine University of Illinois, USA. 40 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

22 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP THE SUPERVISORY BOARD CORPORATE STRATEGY The Supervisory Board is elected by the GMS. The serves for a five-year term. The responsibility of the Supervisory Board has three members including two Supervisory Board is to inspect the validity and legality of independent members. Each Supervisory Board member NAME the Group s business activities and financial reports. POSITION RESULTS OF PHASE I OF VINGROUP S CORPORATE STRATEGY FOR THE PERIOD FROM 2016 TO 2020 Mr. Nguyen The Anh Head Vingroup has successfully implemented its key strategies for Phase I. These strategies are as follows: Mr. Dinh Ngoc Lan Member Maintain its leading position in the property sector, maximize existing strength in project completion and Ms. Do Thi Hong Van Independent Member delivery, and product quality, providing the best living environment and integrated ecosystem, including hospitals, schools, retails, playgrounds, sport facilities SUPERVISORY BOARD MEMBERS and other amenities. Vingroup continues to invest in premium large-scale mixed-use projects in prime locations Expand and diversify products and businesses, maintain 1 MR. NGUYEN THE ANH Head of the Supervisory Board Mr. Nguyen The Anh was elected to the Supervisory Board in Prior to joining the Supervisory Board, he was a Deputy Head of the Corporate Office of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) from 2005 to 2007 and Assistant to the General Director from 2001 to From 1997 to 2000, he worked at Vietnam Financial Leasing Company and Vietcombank s Secretariat Office from 1995 to He received a B.S. degree in Economics and a Master of Political Economics from the National University of 3 MS. DO THI HONG VAN Independent Board Member Ms. Do Thi Hong Van was elected as an Independent Member of the Supervisory Board in She is currently the Chief Accountant at Nghe An Sugar Pte. Ltd. (previously known as Tate & Lyle Sugar Nghe An Co. Ltd.) and was a Financial Controller with Shell Vietnam Ltd. from 1998 to Ms. Do Thi Hong Van holds a B.S. degree in Economics and Accounting and is a senior member of ACCA. She is also a licensed auditor recognized by the Vietnam Association of Certified Public Accountants (VACPA). and improve sales, leasing and property management capacity and quality Improve Vingroup s footprint in cities and provinces throughout the country by expanding the Company s ecosystem across sectors, especially in property, retail, hospitality and entertainment Upgrade product and service quality to five-star standards Build strategic partnerships with leading international organizations and companies to raise Vingroup s international reputation and capabilities Promote governance and management improvements Vietnam. using the Five Transformational Principles of Elevate Standardize Simplify Automate Share 2 MR. DINH NGOC LAN Member In the property sector, Vinhomes delivered nearly 14,000 units during 2017 and placed in operation across the Mr. Dinh Ngoc Lan was elected to the Supervisory Board in Previously, he worked at the State Audit Office of Vietnam as a Regional Office Deputy Head of Business Auditing from 2007 to 2008 and an auditor from 1996 to Mr. Dinh Ngoc Lan received a B.S. degree in country 12 real estate projects with more than 31,000 apartments and villas. Today Vinhomes is ranked fourth among the fifty most valuable brands in Vietnam by Brand Finance Magazine and is the only real estate developer on this list. Economics from Vietnam University of Commerce. Vincom Retail was successfully listed on the Ho Chi Minh City Stock Exchange. After this listing, some investors were able to transfer shares with a value of USD 741 million, VINPEARL CAN THO HOTEL 42 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

23 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP setting a record for the largest equity transaction on the Exchange, and bringing the market value of Vincom Retail to USD 3.4 billion. During 2017, Vincom Retail continued to expand its scale and market share by opening 15 new shopping malls, bringing its total to 46 malls in 24 provinces nationwide. Vinpearl and Vinpearl Land continue to hold the marketleading position in the hospitality industry in Vietnam. These brands are now the first choice for domestic and foreign tourists. With the opening of seven hotels and one golf course on 29 April 2017, Vinpearl increased its capacity to more than 10,000 rooms. Vinpearl Land Entertainment welcomed over 4.3 million visitors during 2017 and recorded an increase in revenue of 42% over On January 15, 2018, Vinpearl announced plans to overhaul its hospitality system to match international fivestar standards. With this breakthrough in quality, Vinpearl will introduce a new set of high-end services to achieve its goal of Vietnam Hotels World Standards. Vingroup s retail brands VinMart, VinMart+, VinPro, and Adayroi have improved materially over 2016 both in terms of scale and quality, with more than 82 million purchases in These brands invested heavily improving brand awareness and image, displays, familiarity and the shopping experience. VinMart and VinMart+ were chosen by customers as their top two retail brands. The addition of VinEco agricultural products to these stores have helped to build customer trust and are among the most requested products at VinMart supermarkets and VinMart+ mini-marts and convenience stores. In social infrastructure services, Vingroup has always been determined to develop high-quality health care, education, and agricultural offerings to deliver on its mission To create a better life for the Vietnamese people. In September 2016, Vingroup transformed Vinmec and Vinschool into social enterprises to improve the quality of medical and social services. Vinmec is now the first and only hospital system in Vietnam to have received two recognized JCI certificates. The Vinschool education system continues to invest in facilities and curriculum to improve the quality of their educational programs. In March of 2018, Vingroup announced the formation of VinUni International University, marking the Company s official entry into the field of higher education to contribute high-quality human resources to the nation. In 2017, Vingroup announced its entry into the automobile and motorcycle manufacturing industry under the VinFast brand, signaling the Group s entrance into the Industry business sector. Vingroup thus fulfills a dream of a Vietnamese automotive brand. In the area of corporate governance, Vingroup continues to evolve its governance model from top-down, centralized management to a more decentralized model built around subsidiaries as business entities and independent P&Ls while the parent company, Vingroup JSC, plays a strategic role in evaluating and administering each subsidiary. This new model has grown out of transformational research from such leading consulting firms as McKinsey, Pricewaterhouse Coopers, and Ernst & Young, but including internal modifications and adjustments. This research has created numerous efforts to find the governance model best suited to diversified businesses like Vingroup. A robust governance model will be an important foundation The Company s goal is to implement the governance model best suited to support Vingroup s next phase of growth and development. VINHOMES GREEN BAY CORPORATE STRATEGY FOR THE 2016 TO 2020 PERIOD BUSINESS STRATEGY Over the coming five-year period, Vingroup will continue offices and service partments to capture the growing to expand the scale and scope of each vertical industry demand for an integrated live-work-play environment group in its ecosystem, turning each of Vingroup s from the rising middle-income populations in Vietnam. subsidiaries into a leader in product quality. The The investment in commercial properties also helps Company s business segments have been carefully Vinhomes secure a recurring stream of income to examined to create an integrated set of products and supplement existing residential cash flows. services that maintain Vingroup s competitive advantage and market leadership. This governance strategy requires the following developments in each business segment: Property In the Vingroup ecosystem, property continues to play a strategic role. During 2018, the VinCity product line will significantly expand the Vinhomes property portfolio. Four major VinCity projects will be launched simultaneously in Hanoi, Ho Chi Minh City, and two other provinces. This launch will bring Vingroup s powerful and unique integrated ecosystem to the middle- and affordable segments of the property market. Together with residential properties, Vinhomes will continue to invest in commercial projects, including 44 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

24 Chapter 2 ABOUT VINGROUP CHAPTER 2 ABOUT VINGROUP Retail Malls Continue to adopt best practices in developing quality shopping malls in order to leverage Vingroup s ecosystem and raise customer satisfaction Develop tailored models for increasing the Group s presence in provinces nationwide, leading the changes in consumer behavior, and capitalizing on the transition from traditional to modern retail channels. and high-quality daily neccesities for a large proportion in our society VinEco s safe and clean vegetables, semi-processed foods, and VinMart s ready-to-cook ingredients will be VinMart s key strategy. At the same me, VinMart will accelerate its partnership and assistance program o ered to high-quality Vietnamese brands in order to fast-track their access to customers. ADMINISTRATIVE AND HUMAN RESOURCE DEVELOPMENT Vingroup will continue to improve the profit & loss governance model in order to promote greater decentralization. P&Ls will operate with support and supervision from the Corporate Office. This support enables Vingroup s ecosystem to continue growing. The Group s internal audit and risk management functions will be active at both the Corporate Office and P&L levels in order to The Group s internal audit and risk management functions will be active at both the Corporate Office and P&L levels in order to ensure sufficient specialization and close monitoring of business activities. Vingroup will devote greater resources to cultivate a strong corporate culture, building on the Group s existing values. Management believes that the right strategy, combined with efforts by every member, will allow the Group to maintain its market-leading position while helping the entire Hospitality and Entertainment Vinpearl operates a chain of hotels, villas, and condotels at the most popular tourist destinations in Vietnam. Going forward, the Group will enhance service quality to protect existing revenues and to attract new customers Social Infrastructure Services Vingroup will develop new social infrastructure facilities at all of our residential projects. Our comprehensive investment will include equipment, facilities, expertise, and human resources. In addition, Vingroup will collaborate with well-known global organizations in the fields of healthcare, education, and agriculture in order to deliver ensure sufficient specialization and close monitoring of business activities. In this 5-year period, the group intends to evolve its governance and management structure through the Five Transformational Principles of Elevate Standardize Simplify Automate Share market to develop. Vinpearl will penetrate key urban markets with the new Vinpearl City Hotel brand. These internationalstandard hotels will be located in prime locations at socio-economic hubs throughout Vietnam, which are expected to benefit from the nation s rapid urbanization Vinpearl Land will continue to upgrade its recreation equipment and introduce unique entertainment offerings to deliver new experiences that have not previously been available domestically. Consumer Retail best-in-class services to the Vietnamese people. Industrials Vingroup will invest in a system of synchronous production processes, apply the most modern technologies in the world to production, thus helping consumers to own worldclass cars and eco-friendly scooter at reasonable prices. This will meet the increasing demand from consumers in the country, and enable export to foreign markets. Vingroup uses Elevate to emphasize the importance of human resources, particularly leaders and managers at the Group s businesses. We promote the best managers who will form the next generation of leaders. Technical and management training, in addition to challenging opportunities, will be offered equally to employees who show promise. Vingroup will regulate existing procedures and deliverable standards, in order to create a lean and more effective organizational structure that will improve productivity. After processes and deliverables are standardized, over the VinCommerce will continue to expand the scale and footprint of its consumer retail network: VinMart, VinMart+, VinPro. Again, product and service quality will continue to be the focus in order to provide safe time, the Group will be able to automate many procedures using advanced technology to deliver performance breakthroughs. Last, subsidiaries and P&Ls will cooperate with one another closely to share resources, opportunities and operations to the greatest possible extent to maximize our efficiency and capacity. 46 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

25 VINGROUP ANNUAL REPORT 2017 GO GLOBAL VINPEARL CUA HOI RESORT & VILLAS

26 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CHAPTER 03 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION 2017 Economy and 2018 Macroeconomic outlook Vingroup Operations and Financial Performance in 2017 Blueprint for ECONOMY AND 2018 MACROECONOMIC OUTLOOK 2017 ECONOMIC CONDITIONS VIETNAM ECONOMY MAINTAINS A HIGH GROWTH RATE During 2017 both the world and the Vietnamese economies maintained high growth rates. According to data from the National Supervisory Commission of Vietnam, The world economy grew at an annual rate of 3.6% in 2017, an improvement over 2016, thanks to a strong recovery for key global economies. The United States and the European Union both enjoyed low rates of unemployment. Consumption spending and investment activities both increased significantly in the U.S., while trade in Europe grew steadily during the year. Japan s economy also performed positively during the year in terms of manufacturing, consumption, and exports. The Bank of Japan continued to maintain a stimulus to fuel an economy with very low inflation. Vietnam also experienced an excellent year for economic development. The General Statistics Office of Vietnam (GSO) reported that economic growth in Vietnam was 6.8%, exceeding the target of 6.7% set by the Government. This strong performance was due to improvement across all sectors of the national economy. The GSO reported that the agriculture, fishery, and forestry sector of the economy have recovered significantly with a growth rate of 2.9%, an improvement over the 2016 growth rate of 1.4%. This sector contributed an additional 0.44 percentage points of growth to the overall economy. The industrial and construction sector of the economy grew at an annual rate of 8.0%, contributing 2.77 percentage points to overall economic growth. Lastly, the services sector growth rate was 7.4%, contributing 2.87 percentage points to overall growth. It is notable that the industrial and manufacturing sector has had the highest growth rate of all sectors during the past year, despite a significant slowdown in the mining category. This performance reflects a shift to clean, hightech industries producing high-value products and services. BASIC INDUSTRIES CONTINUED TO GROW DURING 2017 With most sectors growing steadily, creating more jobs and employment income, Vietnam s economic growth rate ranked highest in the region and very high in the world. Real estate, hospitality, and retail markets all benefited from the economy s growth trends. According to CBRE, there were 59,193 apartment transactions in Ho Chi Minh City and Hanoi during The average price of properties sold in the mid- and high-end segments of the market reached the highest level of the past three years. The tourism sector of Vietnam performed strongly during 2017, with nearly 13 million international arrivals, a growth rate of approximately 30% over the prior year. Domestic tourism also rose to a total of 73 million visitors. Total revenue from tourism was estimated at VND 510 trillion. A report by the UN World Tourism Organization listed Vietnam in sixth place among the ten fastest growth tourism destinations world-wide, and in first place within the Asia Pacific Region with a year-over-year growth rate of 31.2%. The consumer retail sector of the economy has long been viewed by analysts as an area with high growth potential. According to the GSO, Vietnam s total consumer retail revenue in 2017 was VND 2.9 trillion or USD 130 billion, an increase of 10.9% over Forbes Vietnam reported that consumer retail revenue has been growing steadily for more than 25 years. Vietnamese retail companies took advantage of this strong growth to expand store coverage across the nation. At the same time, many well-known international brands chose Vietnam as an important destination. Among these international brands, H&M, Zara, and Seven-Eleven entered the Vietnam market during the past two years. Their arrival served to make retail shopping even more attractive to Vietnamese consumers by increasing the range of product choices. WORLD ECONOMY GROW 3.6% 13 MILLION INTERNATIONAL VISITORS 73 MILLION DOMESTIC VISITORS VIETNAM TOTAL REVENUE IN THE CONSUMER RETAIL INDUSTRY WAS VND 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0, GDP VIETNAM WHICH GREW 2, % TRILLION 6.81% WHICH REPRESENTS A 30% GROWTH RATE TOTAL REVENUE FROM THE TOURISM INDUSTRY WAS APPROXIMATELY VND 510 TRILLION RETAIL SALES REVENUE AND RETAIL SALES GROWTH RATE FOR TOP 6/10 FASTEST-GROWING TOURIST DESTINATIONS ,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% Source: Forbes VINGROUP - ANNUAL REPORT

27 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION MACROECONOMIC OUTLOOK FOR 2018 THE NATIONAL FINANCIAL SUPERVISORY COMMISSION OF VIETNAM FORECASTED GDP GROWTH OF VIETNAM TO REACH 6.5% - 6.8% VIETNAM URBAN POPULATION IS FORECASTED TO GROW AT A RATE OF 3.5% / PER ANNUM EQUIVALENT DEMAND OF 800,000 APARTMENT UNITS A YEAR VIETNAM IS EXPECTED TO WELCOME AROUND MILLION INTERNATIONAL VISITORS MILLION DOMESTIC VISITORS THE PROPORTION OF THE POPULATION IN THE AGE OF ACCOUNTS FOR 48.7% Source: Vietnam s National Financial Supervisory Commission, CBRE, JLL, Vietnam National Administration of Tourism OF THE VIETNAM POPULATION A TOTAL REVENUE OF 620 TRILLION VND IN 2018 ECONOMIC STABILITY IMPROVES OPPORTUNITY FOR SUSTAINABLE DEVELOPMENT According to the World Bank s 2018 Report on Global Economic Prospects, the world economy is projected to grow at a 3.1% annual rate. Overall economic growth is projected to increase as a result of a strong recovery in investment s, manufacturing, and trade. Commodity exporters will benefit from increasing prices. The growth rates of developed economies will decline to 2.2% in 2018 as central banks reduce post-crisis stimulus levels and global investment levels slow. Developing economies and emerging markets, on the other hand, will grow at a faster rate of 4.5%, thanks to the growth of commodity exporters. The growth rate of the East Asian Asia Pacific Region is forecasted to decline to 6.2% in 2018 from 6.4% in Vietnam s National Financial Supervisory Commission has projected GDP growth in the range of 6.5% to 6.8%, with 6.5% considered the optimal growth rate for economic expansion without inflation pressure. Inflation in 2018 is forecasted at the same level as 2017, or less than 4%. GOLDEN DEMOGRAPHIC STRUCTURE AND INFRASTRUCTURE INVESTMENT CONSIDERED KEYS TO ECONOMIC DEVELOPMENT According to forecasts by JLL, Vietnam s middle class will account for 83.1% of all households by 2020, up from 79.9% in From 2018 to 2025, the urban population of Vietnam is projected to grow at an annual rate of 3.5%, the fastest growth expected in Southeast Asia. This urban shift is expected to result in demand for 800,000 new apartment units each year. With 48.7% of the population in the 25- to 44-year-old age cohort, Vietnam ranks highest in Southeast Asia in this golden age segment of the population. All of these factors suggest that Vietnam will be a leader in housing investment and growth prospects, according to the 2018 Asia Pacific Real Estate Outlook published by JLL. Although Vietnam s economy is the sixth largest among ASEAN member nations (after Singapore, Malaysia, Philippines, Indonesia, and Thailand), it is projected to experience the fastest GDP growth in ASEAN in Therefore, the real estate market is projected to maintain strong growth in 2018 on the basis of overall economic growth and the growth of the middle class. CBRE has forecasted a shift in the market to mid-end and affordable housing offerings, in addition to satellite cities near Hanoi and Ho Chi Minh City. These areas benefit from the expectation of significant investment in infrastructure and public transport facilities. In June of 2017, the National Assembly of Vietnam passed the Law on Tourism, effective January 1, This law supports the development of tourism with the expectation that Vietnam will receive 15 to 17 million international visitors and 78 million domestic visitors with total projected revenue of VND 620 trillion in The hospitality sector of the economy is forecasted to see continued growth and attractiveness to investors, not only in major tourist destinations such as Phu Quoc and Nha Trang, but also in other destinations such as Cua Lo in Nghe An Province and Hoi An in Quang Nam Province. As living standards improve, the retail industry will continue to benefit from rising per capita income. At a Hanoi seminar on the topic of modern retailing, held in December of 2017, experts noted two prominent trends in consumer behavior during 2017: non-cash and digital payments. During 2018, competition is expected to increase as many retailers implement customer-focused strategies. Although foreign-owned retailers are expected to compete vigorously for market share, Vietnamese retailers are also expected to invest aggressively to improve product and service quality. Domestic retailers are also expected to integrate their online and retail operations to strengthen their competitive advantage. 52 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

28 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION VINGROUP OPERATIONS AND FINANCIAL PERFORMANCE IN 2017 BUSINESS PERFORMANCE 14,000 apartments, villas, and shophouses handed over during % 46 share of the residential property market in Hanoi and Ho Chi Minh City during the three-year period from 2015 to 2017 retail malls under operation Property Vinhomes strategy is to develop residential properties under the Vinhomes and VinCity brands. VINHOMES SKYLAKE Vinhomes projects focus on the high-end segment of the residential property markets in Hanoi, Ho Chi Minh City, and other properties, while VinCity projects focus on the mid-end and affordable segments in Hanoi, Ho Chi Minh City and their satellite cities. VinCity s expansion plan has an important role in maintaining our Group s leadership in real estate development. At the same time, VinCity benefits from the Group s sizeable land bank and holistic ecosystem of quality infrastructure services. In 2017, our project development teams and staff have improved the efficiency of their permitting procedures to speed up the launch of new projects. With a market share of 15% in Hanoi and Ho Chi Minh City, Vinhomes is strengthening its leadership by offering 15 new projects and delivering nearly 14,000 apartment, villas, beach villas, and shophouses to homebuyers. At the end of 2017, Vinhomes managed 12 real estate projects with more than 31,000 apartments, villas and shophouses, bringing the joy of new homes to tens of thousands of families. To accommodate this rapid growth, Vinhomes opened three large real estate trading floors with nearly 30,000 square meters in Hanoi and Ho Chi Minh City. Retail Malls Vincom Retail develops, owns, and operates Vietnam s largest and fastest-growing network of shopping malls. At the end of 2017, Vincom Retail managed 46 malls in 24 provinces throughout the country with total retail gross floor area of 1.2 million square meters. Vincom Retail malls have been successful in attracting the world s most popular brands: Nike, Adidas, The Gap, Old Navy, McDonalds, KFC, CGV, Lotte, California Fitness, and Playtime. Many leading retail brands are choosing Vincom as the site of their first stores in Vietnam. These retailers include Zara, H&M, Mango, Massimo Duti, and Pull & Bear. These brands appeal to Vietnam s fast-growing middle class, the group in which consumer spending is increasing at the most rapid rate. Vincom malls are also home to proprietary Vingroup brands such as VinMart and VinPro. These brands diverse offering of quality products meet the needs of a wide range of Vietnamese consumers. Recently the Group introduced the Vincom+ brand, which has been launched in eight provinces with nine malls. At the same time, malls across the three other formats are still being developed, extending Vincom Retail s expansion trajectory. On November 6, 2017, Vincom Retail share (under the ticker VRE) was listed on the Ho Chi Minh City Stock Exchange and closed the first trading day at VND 40,550 per share. This listing brought the market capitalization of Vincom Retail to VND 77 trillion. Vincom Retail joined the ranks of the largest listed companies after the first day of trading. VRE shares received significant attention from institutional investors, both domestic and foreign, with an average daily trading volume of VND hundreds of billions. Progress of Development Projects Vingroup s competitive advantage lies in its speed of development and project deliveries to customers. Projects undertaken by the Group in 2017 will continue to be handed over on time or ahead of schedule, in line with our past track record. Among the projects completed and delivered during 2017 were Vinhomes Times City Park Hill, Vinhomes Central Park, Vinhomes The Harmony, and several beach villa projects. Other projects are being developed by Vingroup and leading contractors with the highest level of quality and attention to deadlines. These projects include Vinhomes Golden River, Vinhomes Green Bay, and Vinhomes Metropolis. 54 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

29 CHAPTER 3 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CONSUMER RETAIL HOSPITALITY AND ENTERTAINMENT 2.1 >30% million hotel guest nights sold over the number of guest nights in 2016 ~1.200 >82 66% retail outlets million customer purchases increase in the number of purchases at VinPro over % foreign visitors Business Performance The Consumer Retail business is central to Vingroup s Business Performance Vinpearl is one of the Group s first two lines of business. Today it is the largest resort operator in Vietnam, with more than 10,000 rooms in 17 resorts across the nation. In September of 2017, the Group officially merged Vinpearl Land into Vinpearl Resorts, making Vinpearl Resorts the largest hospitality and entertainment operator in Vietnam. strategy to derive a greater proportion of the Group s revenue from businesses with stable recurring revenue and profit. In 2017, VinCommerce continued to execute on its long term goal and strategy, with an expansion of its store count to 67 VinMart supermarkets, 1,055 VinMart+ convenience stores, 36 VinPro electronics and appliances stores, and increased transactions through its e-commerce site, adayroi.com. On April 29, 2017, Vinpearl simultaneously opened eight new properties, bringing its room count from 6,000 to over 10,000 rooms in seven hotels and a golf course. This is a record on the number of properties opened on a single day in the Group so far. These newly launched properties are: Vinpearl Da Nang Ocean Resort and Villas, Vinpearl Phu Quoc Ocean Resort and Villas, Vinpearl Phu Quoc Island Resort and Villas, Vinpearl Nha Trang Long Beach Villas, Vinpearl Hoi An Resort and Villas, Vinpearl Cua Hoi Resort and Villas, Vinpearl Ha Tinh Ocean Villas, Vinpearl Ha Tinh Hotel Vinpearl s business performance set record results in Vietnamese visitors accounted for nearly 36% of all guest nights. Among the 64% of all guest night stays by foreign visitors, the three largest sources are China, Korea, and Russia. The total number of guest night stays was 2.1 million, an increase of 30% over Our Nha Trang properties recorded the most guest night stays, followed by Phu Quoc, and Da Nang resorts. Vinpearl Land also had a record year of operations, with revenue increasing by 42% over Our network of amusement parks and safari had more than 4.3 million customer visits. Vinpearl Land properties in Nha Trang hosted nearly 2.5 million customer visits, an increase of 31% over 2016, accounting for more than half of the total VINPEARL LAND NHA TRANG Vinpearl has adopted an Elevate strategy in human resources management and governance to improve efficiency and maintain its leadership position as amidst increasing competition from other operators of resort properties. The Elevate strategy focuses on human resources training to build the next generation of young, talented, and dynamic leaders. During 2017, Vinpearl implemented ten major information technology projects and 19 projects to overhaul the quality of customer service. These projects are aimed at reaching international five-star service standards in all Vinpearl properties. Progress of Development Projects During 2017, Vinpearl launched large integrated hospitality projects, beach villas, and city hotels in Nghe An, Ha Tinh, Da Nang, Hoi An, Nha Trang, and Phu Quoc. The goal of Vinpearl s expansion is to increase brand coverage in important tourist destinations, large cities and, eventually, throughout the nation. Vinpearl also aims to conduct advanced surveys, research and field studies in order to add facilities and services to its resorts that will improve customer satisfaction in Vinpearl resorts, Vinpearl Land, Safari Golf, and Spas. Vinpearl s suite of offerings include amusement parks, safaris, golf and fine dining, whose improvements will help to strengthen its position as Vietnam s vacation leader. VinMart Supermarkets and VinMart+ Mini- Marts and Convenience Stores With the goal of becoming a reliable source of quality products for consumers, since its introduction, VinMart and VinMart+ have grown rapidly and become one of the retail chains that contributed positively to the development of modern retail in Vietnam. As of February 2018, the system has 67 VinMart supermarkets and 1,055 VinMart+ mini-marts and convenience stores nationwide, which increased by 12 supermarkets and 212 stores respectively over the same period last year. The VinMart and VinMart+ are the only supermarket, mini-marts and convenience stores that has nationwide coverage. Not only in Hanoi, Ho Chi Minh City, and Da Nang, VinMart is also actively spreading to smaller cities through Vincom Plaza and Vincom+. During 2017, VinMart and VinMart+ served over 27 million and nearly 54 million orders respectively, which is up 25% and 66% respectively over The synergy from Vingroup ecosystem is the key selling point where VinEco-branded clean and fresh vegetalbes has become the highlight of VinMart and VinMart+ system. Products under VinMart Cook brand are gradually welcomed by housewives and office workers, enriching and enhancing the meal quality for Vietnamese families. In number of visits to Vinpearl Land properties. 56 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

30 CHAPTER 3 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION SOCIAL INFRASTRUCTURE SERVICES healthcare infrastructure and human resources in accordance with international standards. On December 18, 2017, Vinmec signed a five-year HEALTHCARE cooperation agreement (2017 to 2022) with the Hanoi University of Pharmacy to improve the technical skills 1,500 VND % Business Performance hospital beds trillion revenue increase in revenue over 2016 of Vinmec s staff and to strengthen the quality of young physicians. EDUCATION ~19,000 45% students increase in number of student over , VinCommerce built 5 new testing rooms, increasing the number of testing facilities to 25 units nationwide. The testing rooms tested and monitored 62,909 samples from VinMart and other subsidiaries of Vingroup. VinPro Electronics and Appliance Stores At the end of February 2018, Vinpro operated 36 supermarkets with a strategy of accompanying Vincom malls system. As a result, Vinpro benefited from favorable location with large population in the cities such as Hanoi, Ho Chi Minh City, Da Nang, Viet Tri, Bien Hoa and Can Tho. The number of orders in 2017 saw an impressive growth compared with 2016, reaching 400,000 orders, equivalent to a growth of 69%. Adayroi E-Commerce On September 27, 2017, Vinmec Da Nang International Hospital began operating as the sixth hospital in the Vinmec network. With a total investment of over VND 1,200 billion, including 222 hospital beds and advanced medical equipment, Vinmec is now Da Nang s largest private hospital. Upon its official opening, Vinmec Da Nang was honored as one of four health facilities supporting the APEC Summit in November The total number of patients in 2017 increased by 30% over 2016, which boosted revenue by 70% from VND 1.1 trillion in 2016 to VND 1.9 trillion in 2017, the fastest growth in the last four years. NUMBER OF PATIENTS AND HEALTHCARE REVENUE FOR 2016 AND 2017 Number of pa ents The Cardiology Department has the fastest revenue growth, 416% over 2016, followed by the Oncology Department with revenue growth of 105%. Outpatient and emergency care revenues increased by 115% and 111%, respectively, over The number of patient visits grew by 30% over last year, and per patient revenue for outpatients, inpatients, and health exams also grew substantially. Vinmec focused on the development across important Departments with special treatments for cancer, cerebral palsy, autism, cardiovascular surgery, organ transplants, and robotic surgery. As the monthly patient load increased, the utilization rates of operating and labor rooms also grew during the year. Strategic Alliances and Partnerships On November 16, 2017, Vinmec Times City International Hospital and Vietnam National Cancer Hospital signed a cooperation agreement on research and transfer of cancer 17 Business Performance campuses In 2017, Vinschool became the largest educational network in Vietnam after just four years of operations. Vinschool has begun a new phase of development based on the Group s strategy to attain international standards. Innovative new programs have been launched including the IPC International Pre-School Program (which is offered in Vietnam exclusively through the Vinschool network), the Cambridge Bilingual program, and the bilingual 21st Century Skills Program, currently taught at 4,655 International Baccalaureate schools in over 160 countries throughout the world. Vinschool s goal is to become a world-class educational Although a late comer, Adayroi became a familiar address to the new generation of consumers in Vietnam. One treatment technology for the period 2017 to On December 12, 2017, Vinmec and GE Healthcare, a year after launch, Adayroi reached 60.3 million visits in leading US healthcare company, signed a comprehensive According to the Vietnamese E-commerce map strategic partnership to promote the application of by iprice a large e-commerce portal across 7 ASEAN countries Adayroi is among 10 largest e-commerce 1Q 2Q 3Q 4Q science and technology and to develop Vinmec s platform in terms of number of visits. In 2017, Adayroi s products were diversified with more affordable prices and improved product quality. At the same time, Adayroi team also facilitated the promotion of attractive bundles and increased interactions with users. Revenue (VND billion) Progress of Development Project Vinmec Hai Phong International Hospital is in the final phase of construction to open during the second quarter of 2018; all equipment has been installed as scheduled Q 2Q 3Q 4Q Vinmec Can Tho International Hospital has completed ground preparation; construction commenced in March of ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

31 CHAPTER 3 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION institution in Vietnam and a leader in educational reform efforts. In September of 2017, Vinschool announced AGRICULTURE INDUSTRIALS its plans for a major change in the quality of education, including funding to attract the best teachers with training in the latest instructional methods, as well as investments in educational programs, school facilities and service standards. In October of 2017 Vingroup announced the conversion of Vinschool to a not-for-profit model. Standard tuition for new students for the academic year is based directly on expected program costs. All increases in tuition fee as a result of the upgrade in education quality for existing students in the next three years will be fully absorbed by Vingroup, with further sponsorship to reduce any increase in tuition fees from 2021 to Lastly, the Group will sponsor investments in extra-curricular facilities and equipment in certain campuses, such as a new swimming pool and indoor football field in Vinschool Times City, and a theatre in Vinschool The Harmony. Progress of Development Projects Vinschool continued to expand its school system based on its initial strategic of following Vinhomes urban areas. Although having recently operaad, Vinschool facilities at Vinhomes The Harmony, Vinhomes Central Park and Vinhomes Gardenia have attracted a large number of students due to the established prestige and quality has. Other facilities in urban areas such as Vinhomes Golden River, Vinhomes Green Bay are being completed to start operationg once the apartments were delivered ~1,200 >14,600 ~230 Business Performance farms central processing centers hectare of farmland tons of products in 2017 varieties of fruits and vegetables At the end of 2017, VinEco had built a network of 14 farms and 4 central processing facilities with about 1,200 hectares of farmland contributing about 230 varieties of fruits and vegetables to the market with an average monthly output of about 2,500 tons. Total sales of agricultural products in 2017 increased by 71% over The VinEco team is highly skilled and their enthusiasm and energy have contributed greatly to the development of this operation: 28.72% of VinEco s staff hold degrees in Agriculture at the bachelor s, master s and Ph.D. levels. VinEco has promoted the use of local labor, with a monthly average of 2,368 workers employed on VinEco farms during To promote the concept of producing clean agricultural products and their benefits for consumers, VinEco has partnered with 1,000 family farms to provide VND 300 billion in production support. Farmers would receive technical assistance and production funding to provide safe and high-quality products for the VinEco supply chain. During 2017, this partnership established strict controls to ensure the supply of clean ingredients at purchase points in 44 towns across the country. VinEco held more than 30 training sessions with 1,800 participants covering technical standards, crop rotation, VietGap standards, and the use of pesticides. Each month, VinEco purchases approximately 1,000 tons of safe vegetables from these farms, creating a reliable market for the farmers. All farmers selected for VinEco production are complying with VietGap standards in order to improve the environment through the standardization of Progress of Development Projects Among VinEco s 2017 business and operational accomplishments are the following: In the areas of production infrastructure and technology: VinEco has implemented advanced mushroom production techniques at Tam Dao farm. This farm produces five kinds of mushrooms with a maximum capacity of 1.5 tons per day, and is the largest facility of its kind in the country. VinEco has installed 45 hectares of NFT hydroponics to produce microgreens, leafy vegetables, tomatoes, sweet peppers, melons, and cucumbers at multiple locations: Long Thanh, Quang Ninh, Ha Nam, Hai Phong, Phu Quoc, and other VinEco farms throughout the country In the area of management: VinEco has established detailed production standards. The first phase of SAP management system adoption has been implemented with several functions tailored for VinEco to automate and expedite management reporting and analytics. A comprehensive 100- day transformation program was implemented between July 2017 and September 2017 to promote initiative and accountability, quality and efficiency of work, and quality of management and governance. and destroyed in accordance with local regulations. All of VinEco s agricultural products are subjected to rigorous quality control standards to ensure safety to consumers. VinEco s various actions and efforts aim to transform farming practices and spread the adoption of safe farming practices throughout Vietnam. On September 2, 2017, Vingroup announced its investment in industrials, specifically to produce automobiles and motorcycles under the VinFast brand. With VinFast, Vingroup is launching the automobile industry in Vietnam. Production facility construction began in the Dinh Vu Cat Hai Economic Zone of Hai Phong using European and American technology standards and with assistance from the world s leading manufacturing experts. The VinFast name stands for Vietnam Style Safety Innovation Pioneer. VinFast aspires to become the largest automobile manufacturer in Southeast Asia. In the first phase of development, VinFast will have a capacity of 250,000 electric scooters and 250,000 cars annually. The primary products will be automobiles using internal combustion engines, electric cars, and environmentallyfriendly electric motorcycles. The launch of VinFast demonstrates Vingroup s determination to build a Vietnamese brand that can master advanced manufacturing technology. Through automobile manufacturing, Vingroup intends to promote the development of industrials in Vietnam and to contribute to the industrialization and modernization of Vietnam. During 2017, VinFast s staff of experts have made plans to introduce motorcycle products by the end of 2018 and gasoline and electric cars by the end of The Company has partnered with the world s leading auto design companies to create exterior car designs. These designs have been previewed with a mass audience in a contest entitled, Choosing Your Car With VinFast. to solicit opinions on consumers preferences for future VinFast cars. From its survey, VinFast has selected two Sedan and SUV designs by Pininfarina of Italy for production, purchased technology from BMW and selected Magna Steyr as technical consultant to introduce the best, most stylish and safe car models from experts around the world. pesticides. Fertilizer and pecticide packages are collected 60 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

32 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION 2017 FINANCIAL PERFORMANCE townhouses in Vinhomes Gardenia, beach villas in Nha Trang and Phu Quoc, and other projects throughout Vietnam. billion from VND 17.4 trillion to VND 18.2 trillion at the end of 2017 as Vincom Retail expanded its network with the opening of 15 new shopping malls nationwide. KEY FINANCIAL INDICATORS Indicators 2017 (VND trillion) 2016 (VND trillion) % increase/decrease Current assets % Non-current assets % Total assets % Total liabilites % Of which, total debt (short-term and long-term) % Statutory obligations % Owner s equity % Net revenue % Cost of goods sold % Operating profit % Other profit (loss) % Profit before tax % Profit afer tax % Source: Vingroup JSC audited consolidated financial statements for 2016 and 2017 DISCUSSION AND ANALYSIS OF THE INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Value Percentage Value Percentage Item (VND trillion) (%) (VND trillion) (%) Sale of inventory property % % Leasing activities and rendering related services % % Rendering hotel, amusement park, and related services % % Rendering hospital and related services % % Sale of goods in supermarkets, convenience stores, and retail outlets % % Rendering education and related services % % Rendering other services % % Total % % Source: Vingroup JSC audited consolidated financial statements for 2016 and 2017 Net revenue increased by VND 31.7 trillion from 2016 to 2017, equivalent to an increase of 55%. Revenue increased in all business segments, particularly the sale of inventory property. Revenue from other business segments also grew, especially sale of goods in supermarkets, convenience stores, and retail outlets, due to the stronger presence of the entire Vingroup network Revenue from sale of inventory property grew by 68% from VND 37.3 trillion in 2016 to VND 62.5 trillion in Revenue growth from the sale of inventory property reflected the delivery of various projects to customers in Hanoi and Ho Chi Minh City, including Vinhomes Times City Park Hill, Vinhomes Central Park, apartments and Revenue from leasing activities and related services rose by 33% from VND 3.3 trillion in 2016 to VND 4.4 trillion in The increase reflects the Group s expanding shopping mall network across the country. Vingroup currently owns and operates 46 shopping malls and shopping centers in four different mall formats. Revenue from providing hotel services, amusement park services and related services rose to VND 5.5 trillion in 2017, an increase of 28%, reflecting a surge in visitors and expansion of capacity to over 10,000 hotel rooms managed across the nation. Revenue from sale of goods in supermarkets, convenience stores, and retail outlets increased by 41% from VND 9.2 trillion in 2016 to VND 13.1 trillion in 2017 due to an increase in the number of retail stores from 1,000 to about 1,200. Retail revenue per square meter also rose meaningfully as VinMart, VinMart+ and VinPro gained customers trust. The development of Vingroup s entire ecosystem has lifted profit after tax from VND 4.5 trillion in 2016 to VND 5.7 trillion in 2017, an increase of 27% over the previous year and 88% above the target set at the 2017 General Meeting of Shareholders. In 2017, the impact of foreign exchange fluctuations on the Group s financial conditions is small, because the USD- VND exchange rate was stable throughout the year, and our borrowing cost in USD was also at a low level. DISCUSSION AND ANALYSIS OF THE BALANCE SHEET AS AT DECEMBER 31, 2017 Current assets rose by VND7.3 trillion from VND 93.0 trillion to VND in The increase was largely due to movements in the value of short-term receivables attributed to do some outstanding receivables from a business partner. As of the date of the consolidated financial statements, these receivables have been fully collected. Non-current assets rose by 25% in 2017 over the level in 2016, reaching VND trillion as of December 31, Fixed assets, investment properties, and long-term assets in progress all rose due to an increase in the number of operating facilities and investment projects. Fixed assets rose to VND 35.6 trillion at the end of 2017 from VND 26.9 trillion at the end of 2016, due to the robust developments discussed above. During 2017, the value of investment properties increased by VND 836 Long-term assets in progress increased by VND 3.3 trillion to VND 37.5 trillion at the end of 2017, reflecting the large number of projects under construction by the Group during Projects with significant year-end balances included the Can Gio Urban Tourism Project (VND 12.3 trillion), Vinhomes Central Park (VND 2.6 trillion), Vinhomes Metropolis (VND 1.6 trillion) and VinCity Gia Lam (VND 1.6 trillion). Other long-term assets increased by 7.1 trillion VND compared with the end of 2016, mainly attributed to the Group s deposits to develop potential projects. Total liabilities reached VND trillion at the end of 2017 compared with VND trillion at the end of 2016, an increase of VND 26.1 trillion, mainly due to an increase in current liabilities. The Group launched and presold several residential projects, and received a large amount of prepayment proceeds. The proceeds is recognized in advances from customers, which will be recognized as revenue once projects have been completed and delivered during the coming years. Total debt of the Group increased by VND 9.6 trillion from VND 39.8 trillion at the end of 2016 to VND 49.4 trillion at the end of Short-term debt increased by VND 12.6 trillion, an increase of 224%. This increase reflected the classification of current portion of bonds and bank loans approaching maturity as well as new short-term loans acquired during the year. Non-current debt including loans and convertible bonds decreased by VND 2.9 trillion, a drop of 9% due to reclassification as mentioned. The Group s debt structure is comprised of corporate bonds (62%), bank loans (14%), and other syndicated loans (14%). At the end of 2017, the average debt maturity was 2.38 years. The ratio of VND-denominated debt to total debt was 85.3%, a slight increase from 81.4% in The ratio of total debt to total assets remained stable at 23% at the end of 2017 compared with 22% at the end of Both ratios are well within the range for real estate companies in the region. Statutory obligations declined to VND 4.9 trillion at the end of 2017 from VND 7.4 trillion at the end of 2016, due to payment of most of the land use fees and land leased fees during this period relating to the robust real estate projects developments by the Group. In 2017, the Group paid VND 13.5 billion in tax and statutory obligations. Owners equity increased by 9% from VND 48.3 trillion at the end of 2016 to VND 52.6 trillion at the end of 2017, mainly attributed to a significant increase in retained earnings resulting from positive performance results during the period. 62 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

33 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION KEY FINANCIAL INDICATORS Liquidity ratio (times) Current ratio: Current assets/current liabilities Quick ratio: (Current assets Inventories)/ Current liabilities Capital structure (times) Total liabilities 1 /Total assets Total liabilities 1 /Owners equity Leverage (times) Debt ratio: Total debt/total assets Operating capacity (times) Asset turnover: Net revenue/total assets Inventory turnover: Cost of goods sold/inventories Profitability (times) Profit after tax/net revenue 6.3% 7.7% Return on Equity: Profit after tax/equity 10.8% 9.2% Return on Assets: Profit after tax/total assets 2.6% 2.4% Operating income/net revenue 10.6% 11.6% Operating income/total assets 4.4% 3.6% 1 Total liabilities include amounts payable to suppliers, deposits from customers, and borrowings. Liabilities also include the proceeds from contracted sales paid by customers for properties under construction. These payments are recognized as revenues when the properties have been delivered to customers The Group s liquidity ratios for the year ended December 31, 2017 declined as short-term liabilities rose faster than short-term assets. The current ratio fell from 0.95 times to 0.81 times, and the quick ratio decreased from 0.39 times to 0.36 times. Short-term liabilities rose as it reflected the reclassification of current portion of bonds and bank loans approaching maturity and new short-term loans acquired during the period. As a result of the impact from short-term borrowings, capital structure ratios for the year increased compared with However, these ratios generally remained stable during the period. Profitability ratios for the year 2017 were improved compared with 2016 as profit after tax increased significantly, mainly attributed to the delivery of major projects in the year including Vinhomes Times City Park Hill and Vinhomes Central Park. VINPEARL GOLF HAI PHONG 64 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

34 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION BLUEPRINT FOR 2018 BUSINESS STRATEGY PROPERTY Vinhomes will develop and open large-scale residential projects in the high-end and mid-range segments of the property market, maintaining its leading position in the market based on product quality, delivery speed, and the overall ecosystem of property amenities. In the more affordable residential segment, VinCity will become the new standard by contributing to changes in the appearance of cities. In retail real estate, Vincom Retail will continue to open new shopping malls throughout the country. The Group expects to open about 25 shopping malls during At the same time, Vincom Retail will serve the mid-range to high-end consumer segments by enabling well-known international retailers to enter Vietnam through our extensive network of shopping malls. Vincom Retail will continue to diversify its dining and entertainment options to attract more customers from all age groups and to meet the shopping needs of all consumers. HOSPITALITY AND ENTERTAINMENT During 2018, Vinpearl will extend its network of hotels and resorts to more tourist and commercial destinations throughout Vietnam. In addition, the Group will promote a wide range of attractive hospitality packages to meet its growth targets for the domestic market and to expand its share among international travelers. Vinpearl will focus on new facilities and services such as Kids Clubs and Spas at our existing hotels and resorts and will improve service levels to meet international standards. Vinpearl is developing plans to overhaul its dining offerings. The number of international a la carte options will be increased, and dining services will become more personalized to appeal to customers from different countries. Within the entertainment business, Vinpearl Land plans to open projects developed during These include the Floating Bay, Royal Garden, Vinpearl Sky Wheel, Hill of Flowers, and other unique offerings originating in the VinTata Automation Studio. These innovations will enable Vinpearl Land to maintain its leading position in the entertainment business and will become a symbol of Vietnamese tourism in the cities where it operates. CONSUMER RETAIL During 2018, VinMart, VinMart+ and VinPro supermarket, convenience store and electronic store chains will expand by adding stores across several provinces in Vietnam with the best retail potential. VinMart and VinMart+ will focus on improving food hygiene, customer perception and mind share, and service quality. VinMart and VinMart+ will continue to add clean VinEco agricultural products and both fresh and prepared foods sold under the VinMart Cook brand to meet the growing demand from consumers and to strengthen consumer s awareness of interest in product quality and food safety. Adayroi e-commerce will become a strategic retail channel to promote the Vingroup ecosystem of products and services. In 2018, Adayroi will pay more attention to the tourism and travel segments, and will improve business profits. The Group will leverage VinID s customer base of nearly 4 million loyal members by offering them a great shopping experience with outstanding values. SOCIAL INFRASTRUCTURE SERVICES In healthcare, Vinmec plans to strengthen its cooperation with international partners and with leading hospitals in Vietnam in order to develop departments such as organ transplant, and cardiovascular and oncology surgery. At the same time, Vinmec will continue to strengthen existing departments in obstetrics and pediatrics. During 2018, Vinmec plans to open a new international hospital in Hai Phong. Vinschool plans to open 16 new kindergartens and schools in Hanoi, Ho Chi Minh City, and Hai Phong this year. After successful implementation of the IPC kindergarten program and the Cambridge curriculum in its primary, secondary and high schools, Vinschool will continue to focus on improving the quality of its teaching and will integrate international educational concepts with Vietnamese values. In March of 2018, Vingroup officially entered the higher education segment with its announcement of VinUni. VinUni will operate as a not-for-profit private institution. As part of its launch, VinUni signed strategic partnership agreements with two leading U.S. institutions: Cornell University and the University of Pennsylvania. Through these partnerships, VinUni will build a modern higher education program and coordinate with its partners to create its strategy and management systems. In the field of agriculture, VinEco continues to strengthen its production and purchasing activities with our affiliated producers to meet increasing demand from customers. Besides VinMart and VinMart+, VinEco will develop the Horeca channel and look for potential export markets. VINHOMES TIMES CITY 66 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

35 CHAPTER 3 MANAGEMENT REPORT ON 2017 BUSINESS PERFORMANCE AND 2018 PLAN OF ACTION INDUSTRIALS Following on VinFast s progress in 2017, this business unit aims to meet important development milestones during These include the construction of a modern, automated manufacturing plan with total area of 500,000 square meters at the Dinh Vu Cat Hai Economic Zone, to be completed during the third quarter of VinFast will work with respected auto industry partners in the areas of design, manufacturing, technology solutions, equipment, components, and auto parts needed for electric motorcycles in 2018 and automobiles in PLANS FOR BUSINESS DEVELOPMENT AND HUMAN RESOURCES MANAGEMENT IN 2018 The Group will continue to implement the decentralized P&L model at its subsidiaries, emphasizing the need for efficiency and accountability. Vingroup continues to implement the Five Transformational Principles of Elevate Standardize Simplify Automate Share in order to build a streamlined, versatile, and flexible management system. The role of the Company s business development system is to diversify the products and services of each business segment with the aim of delivering products of the highest quality to Vietnamese consumers. The ultimate goal is to diversify revenue sources and encourage consumers to use the products from the entire Vingroup ecosystem. Vingroup will simultaneously continue its strategy of raising standards toward the international fivestar standard. Vingroup will diversify its sources of investment capital both domestically and internationally and will match the availability of capital in the short-term, mid-term, and long-term with appropriate uses. The Group will promote the role of leaders while building its leadership pool from with its ranks. During 2018, Management plans to take steps to improve the material and spiritual life of employees, and to maintain an attractive, professional and friendly work environment. VINCOM CENTER LANDMARK 81 VINGROUP - ANNUAL REPORT

36 VINGROUP ANNUAL REPORT 2017 GO GLOBAL VINPEARL LAND NHA TRANG

37 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 04 CORPORATE GOVERNANCE Vingroup Governance Structure Report of the Board of Directors Report of the Supervisory Board Governance Report Internal Auditing Report Risk Management Share Information and Investor Relations VINGROUP GOVERNANCE STRUCTURE Over the years, Vingroup launched a number of initiatives to strengthen its management and governance procedures. These initiatives were aimed at applying best practices in accordance with the Group s core values and aligning individual total compensation with business results. The Group has received the endorsement of the business community, investors, and management experts for outstanding corporate governance, as well as national and international awards for its 2016 and 2017 annual reports. ROLE OF THE MANAGEMENT SYSTEMS IN VINGROUP S DEVELOPMENT Vingroup has identified corporate governance as a critical success factor in achieving sustainable growth and profitability. The Group has issued an internal management code of conduct describing the requirements for professional and transparent management of operations. The code of conduct is designed to protect the interests of shareholders, customers, employees, and the community. PRINCIPLES OF THE MANAGEMENT CODE OF CONDUCT Maintain an effective management structure Provide transparent operations Vingroup s Management Code of Conduct Protect the legal rights and ensure equal treatment of all shareholders Prevent conflicts among concerned parties (Extract from Provision No 3, Vingroup Management Code of Conduct issued on August 16, 2013) CORE VALUES OF VINGROUP S MANAGEMENT MODELS Vingroup s governance structure has been developed based on the following core values: Fairness Efficiency Transparency Accountability Vingroup believes that effective management systems enable the organization to promote its core values, control business operations, and delegate responsibilities among its various business units. The Group constantly looks for ways to realize the synergies among the various business units and P&Ls to help meet its business goals. VINGROUP MANAGEMENT AND GOVERNANCE STRUCTURE 2017 The Vingroup management and governance system follows standard international practices for publicly listed companies and includes a General Meeting of Shareholders, a Board of Directors, a Supervisory Board, a Chief Executive Officer (CEO), along with functional units and representatives of the Parent Company in the Group s subsidiaries (the independent profit-and-loss centers, or P&Ls ). Vingroup s management and governance structure is used for both the Parent Company Vingroup JSC and the P&Ls. Components of the Vingroup management structure The General Meeting of Shareholders (GMS) has the highest level of authority within Vingroup and includes all shareholders with voting rights. The GMS determines key governance structures and has power to appoint members of the Board of Directors and Supervisory Board The Board of Directors (BOD) is the Group s management body, elected by the General Meeting of Shareholders and entrusted with the authority to make business decisions for the Group, and exercise rights and responsibilities that do not fall within the jurisdiction of the General Meeting of Shareholders. The Board consists of nine members, with three independent directors to ensure transparency and in accordance with prevailing laws and international standards. The Board of Directors does not have special committees because the functions of supervision and risk management are already assigned to dedicated Divisions in the Corporate Office. These Divisions supervise the operations of the business units and are empowered to assist take control of operational units as needed. The Board establishes standards for investment, divestiture, large corporate borrowings, and the issuance of stocks and bonds. Management is authorized to make decisions on those matters and transactions whose value fall below the Board approval thresholds as prescribed in the Charter of Vingroup JSC and can exercise rights and responsibilites that do not fall within the jurisdiction of the Board. The Supervisory Board is elected by the General Meeting of Shareholders and operates independently from the Board and Management. The Management includes the CEO and Deputy CEOs who are appointed by the Board of Directors. The CEO is the legal representative of the Group and has the highest authority in managing the daily operations of the Group. The Management is responsible for overseeing the Group s business operations by managing and supervising the heads of Divisions in the corporate office and the senior executives at each P & L. The Corporate Office is the body charged with supporting the Board of Directors, the CEO, and the Management of the Company in formulating the Group s business strategies and directions. The Corporate Office also carries out such functions as brand-building, corporate advertising, capital allocation, fund raising, mergers and acquisitions, investments all aimed at maximizing benefits for shareholders. Other corporate management functions assigned to the Corporate Office include internal audit, setting human resource policies, evaluating business results, and information technology management policies, and project management. During 2017, the responsibilities, roles, and objectives of Divisions within the Corporate Office have been recalibrated to reduce overlap with the P&Ls and duplication of effort, and to ensure effective supervision of business units The Corporate Office also carries out such functions as brand-building, corporate advertising, capital allocation, fund raising, mergers and acquisitions, investments all aimed at maximizing benefits for shareholders. Other corporate management functions assigned to the Corporate Office include internal auditing, setting information technology management policies, and project management. During 2017, the responsibilities, roles, and objectives of Divisions within the Corporate Office have been recalibrated to reduce overlap with the P&Ls and duplication of effort, and to ensure effective supervision of business units. The P&Ls are responsible for implementing Group decisions, resolving issues not reserved under the jurisdiction of the Management and Corporate Office, running the day-to-day operations of the business units, and reporting to the Group as required and requested. The P&Ls are also responsible for escalating issues to the Group on matters that affect shareholder interests. Relationship between the Corporate Office and P&Ls Relatonships between the Corporate Office and the business units are managed in accordance with the Enterprise Law, the Charter, Management Code of Conduct, other prevailing laws and Vingroup regulations. Vingroup effects decisions by exercising its rights as shareholders in the P&Ls. When projects require coordination between multiple business units, they are managed under the terms of Vingroup s responsibility matrix based on the RASCI framework (Recommender, Approver, Supporter, Consultant, and Informed). This framework is used to clarify responsibility, facilitate cooperation and promote transparency. Mechanism for coordination between the Corporate Office and the P&Ls Vingroup s business units are directed to cooperate with each other for mutual long-term benefit under arm s length principles. The Corporate Office also sets policies and guidelines to ensure that business units work with each other and with the Parent Company to utilize resources efficiently and leverage their individual strengths. VINGROUP - ANNUAL REPORT

38 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE REPORT OF THE BOARD OF DIRECTORS EVALUATION OF THE BOARD OF DIRECTORS ON MANAGEMENT AND BUSINESS PERFORMANCE IN 2017 APPROACH In compliance with provisions in the Group charter, internal regulations and prevailing law, the Board of Directors has completed the following governance and supervisory activities during 2017: Supervised capital-raising exercises to finance project development Successfully organized the GMS on April 24, 2017 Ensured the 2017 financial report, Annual report and the quarterly financial reports provided a timely and comprehensive update of the Group s business performance and financial state on the reporting datesupervised the implementation of GMS and BOD resolutions Maintained oversight on activities in order to improve operational performance and meet business targets Supervised the disclosure of information to stakeholders REPORT In 2017, the Board believes that the Group and Management have put in a significant amount of efforts in organizing and launching business operations, and maintaining good corporate governance practices. Business performance exceeded the planned levels. In particular, net revenue and profit after tax for 2017 were VND 89.4 trillion and VND 5.7 trillion, respectively, representing 112% and 188% in excess of the budget approved by the GMS. Vingroup also made investments in sports and culture, and started to implement campaigns to raise service quality throughout its operations. Multi-sector business operations in different locations and rapid expansion led to the increase in the total number of employees as well as the complexity and diversity of the work. Therefore, by complying with the Management Code of Conduct, streamlining business operation and opening new business units based on existing human capital and infrastructure, Vingroup has successfully maintained efficiency and stability in its business operations. This reflects significant contribution from Management, leaders and managers of the Group. During 2017, Vingroup has continued to build community awareness and has carried out a number of community service programs in the fields of agriculture, healthcare, and education. In agriculture, the Company supported programs to improve animal breeding and husbandry techniques for poor families. In education, Vingroup built new schools and soup kitchens for students in upland areas, and public road lighting for poor villages and remote areas. In healthcare, the Company provided free medical care, and infrastructure development. These programs have included schools in poor communities, health care and cancer screening programs, and DNA testing to identify the remains of martyrs, besides regular and adhoc programs. BOARD MEETINGS AND THE PROMULGATION OF THE GROUP S MAJOR DECISIONS During 2017, the Board held a total of 06 meetings with a member participation rate of 100%. The Board issued 23 resolutions, approving important policies that impacted the Group s operations and prospects. The resolutions can be summarized as follows: Content Reorganizing the corporate management and operational structure, establishing the P&Ls, making executive appointments at the Group and P&L levels Fund raising, issuance of corporate bonds, pledging of assets Total No Vinhomes, the residential real estate business of Vingroup continued to maintain a responsive and effective business strategy and a flexible sales policy in all product segments. Vinhomes delivered a record of 14,000 apartments, villas, townhouses all over the country. Retail mall leasing, consumer retail, hospitality and entertainment showed strong year-over-year growth geographic expansion. During 2017, the Group entered the manufacturing industry with the launch of VinFast automotive and motorcycle production. The goal of this unit is to deliver its first product by the end of Vingroup made further investments in the social infrastructure segments by turning its healthcare, education businesses into nonprofit enterprises. Besides outstanding business results, ACTIVITIES OF THE BOARD OF DIRECTORS DURING 2017 INTRODUCTION OF THE BOARD OF DIRECTORS The Board of Directors consists of nine members, including a Chairman and three independent directors. Further details can be found in Chapter 2: About Vingroup Board of Directors Page ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

39 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE REPORT OF THE SUPERVISORY BOARD ACTIVITIES OF THE SUPERVISORY BOARD DURING 2017 PARTICIPATION OF BOARD MEMBERS IN CORPORATE GOVERNANCE PROGRAMS During 2017, members of the Board (except for the three independent members who are located overseas) attended all seminars and training sessions on corporate management and governance. CORPORATE MANAGEMENT AND GOVERNANCE PLANS FOR 2018 During 2017, the Group announced the Five Transformational Principles of governance: Elevate Standardize Simplify Automate Share. During 2018, the Group plans to continue to implement this program in all of P&Ls and for all levels of employees. Elevate refers to the Group s emphasis on the importance of individual responsibility and accountability, as the individual is the nucleus of all activities. Human resource investments are aimed at developing all employees to be highly competent, professional, and efficient. Team leaders have to set the example, especially in the company value of Dare to Try, Dare to Do. That means management are tasked with clear mission and KPIs and have full accountability for their work. Besides, as part of succession planning, managers are assigned to train the next generation of leaders. Vingroup s top management has also formulate and implement talent pool training programs to prepare the next generation of highly qualified leaders. The principles of Standardize Simplify Automate Share are intended to formalize all operational standards, and subsequently to make them clear and simple. With simplification and automation, the Corporate office and P&Ls will be able to automate or increase the level of collaboration and sharing of resources especially in standardized procedures, such as those in our hotels, hospitals or supermarkets. The benefits of Standardize Simplify Automate are to ensure the management process is coherent and simplified to the greatest degree possible, so as to alleviate stress from our people. A clear operational framework also ensure that the growth in number of facilities and staff grows is not constrained because our staff can access a comprehensive informational database and rely on seamless processes. Lastly, Share helps our companies to increase staff productivity and the quality of work by maximizing the use of resources, thereby increasing workers income. During 2018, the Board of Directors has set the following four governance directions: first, Vingroup, the parent company, will continue to become a holding company and each P&L will be more independent; second, the Group will continue to pursue growth in both breadth and depth; third, the Five Transformational Principles will continue to be emphasized in management, and sales and marketing activities will be emphasized to generate higher business volumes; and fourth, Vingroup will prioritize internal training to ensure an adequate supply of well-trained staff members. Transformation is not a small challenge, since it places heavy responsibility on every individual to depart from old habits. However, if it is well executed, Transformation will ensure continued breakthroughs. During 2017, the Supervisory Board collaborated closely with the Board and Management. The Supervisory Board frequently monitored resolutions issued by the Board, decisions by Management and audits conducted by the Internal Audit Division. It helped to ensure that resolutions were issued and implemented in compliance with legal regulations and the internal policies of the Group. The Supervisory Board carried out these functions during 2017: Supervised and evaluated execution of business plans and progress of achieving revenue targets Supervised the execution of business plans and progress of achieving revenue targets Assessed financial investments and advised the Board and Management on ways to minimize risk and maximize returns No. 1 2 Date 07/03/ /09/2017 Number of attendees 3/3 3/3 Content Review the documents and reports prepared for the Annual General Meeting of Shareholders in 2017 Review the implementation of resolutions of the Board of Directors from the beginning of the year to the time of the meeting Evaluate and review the implementation of resolutions issued by the Board of Directors during the third quarter Review the implementation process and regulatory compliance related to the disclosure of information about the issuance of corporate bonds for a subsidiary Evaluate the results of the inspection of business activities and financial data that the Supervisory Board has prepared for Vinhomes and Vincommerce Ensured accuracy of quarterly and annual financial statements in accordance with Vietnamese Accounting Standards and current fiscal policies. Ensured compliance with laws and regulations on information disclosure Reviewed and evaluated key related-party transactions The Supervisory Board has not reported any unusual changes in business, investment, or finance during During 2017, the Supervisory Board held two quarterly meetings and several additional meetings as follows: Result The information received is accurate and consistent The resolutions were made in accordance with the regulations and the charter and they have been correctly executed The resolutions correctly executed without delay Hanoi Southern City Development JSC has strictly implemented the regulations in the issuance of corporate bonds, without delays and errors The business performance and financial status of these companies have improved; data are fully and accurately accounted for 76 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

40 CHAPTER 4 CHAPTER 4 CORPORATE GOVERNANCE CORPORATE GOVERNANCE In 2017, the Supervisory Board worked with the Legal and Compliance Division, the Finance Division and the Chief Financial Officers of certain P&Ls regarding specific legal and financial matters. In addition to these quarterly meetings, the Supervisory Board attended several meetings of the Board and Management to monitor and ensure compliance with relevant regulations and the Vingroup Code of management PLAN OF ACTION OF THE SUPERVISORY BOARD During 2017, the Supervisory Board will continue to carry out its mandated functions and responsibilities with a strong focus on increasing overall compliance and transparency. Monitor the suitability and legality of the Group s business activities. Examine the implementation of GMS and Board resolutions and decisions. Review quarterly and annual financial statements of the Group and those P&Ls that accounted for a high proportion of the Group s net revenue and expenses for accuracy and completeness. Advise the Board on ways to increase capital effciency and improve asset utlization. Coordinate activities among the Supervisory Board, the Board, Management, and the business segments to conduct regular and ad hoc inspections of specific businesses issues. GOVERNANCE REPORT 2017 GOVERNANCE REPORT During 2017, Vingroup remained in full compliance with regulations on corporate governance. The Group disclosed to investors and stakeholders all information on business operations within the required time period and in a transparent manner. After achieving a positive outcome from the 2016 restructuring, Vingroup continued to streamline its administrative processes and optimize resource allocation in order to maximize contributions, and enhance the supervisory functions of the Board, as well as ensure a system-wide implementation of the principles and fortify the relationships between the Group and related parties. Vingroup s Investor Relations function strives to provide transparent information to shareholders and investors. Further details can be found in Chapter 4: Corporate Governance Share Information and Investor Relations Page 84. Vingroup is one of the few enterprises to issue financial reports in line with Vietnamese Accounting Standards (VAS) and International Financial Reporting Standards (IFRS). The financial reports of the Group and its P&Ls are audited by Ernst & Young Vietnam Ltd. COMPENSATION FOR MEMBERS OF THE BOARD, SUPERVISORY BOARD, AND MANAGEMENT Remuneration policies Remuneration of the Board may not exceed 0.4% of 2017 afer-tax profit Remuneration of the Supervisory Board may not exceed 0.1% of 2017 afer-tax profit 2017 remunerations of the Board and the Supervisory Board were VND 12.5 billion and VND 2 billion, respectively. These amounts were equal to 0.22% and 0.04%, of 2017 afer-tax profit, respectively Members of Management received salaries and incentives based on their employment contracts, and did not receive any other form of remuneration. Other benefits for members of the Board, the Supervisory Board, and Management Regular health check-up: Full reimbursement is provided for the actual cost of annual health examinations at any Vinmec Internatonal Hospital or another medical facility selected by the Group. Health insurance: In addition to social and medical insurance required by law, members of the Board, the Supervisory Board and Management and their immediate families are provided with health insurance. Company telephone: Members of the Board, the Supervisory Board and Management are supplied with a mobile phone with services plus reimbursement for usage costs. Discounts when using Group services: Members of the Board, the Supervisory Board, and Management receive discounts for certain Group products and services. Such discounts are applicable for services at Vinmec International Hospitals, Vinpearl Hotels and Resorts, Vinpearl Land amusement parks, and Vinschool. VinID Cards are also given to members of the Board, the Supervisory Board, and Management so that they can earn loyalty points when using Group services. CHANGES IN MEMBERSHIP OF THE BOARD, THE SUPERVISORY BOARD, AND MANAGEMENT Reappointment of Ms. Duong Thi Mai Hoa as CEO, effective from 23 February 2017 Termination of Board Membership of Ms. Mai Huong Noi, effective from April 20, 2017 Appointment as Board Member of Mr. Nguyen Viet Quang, effective from April 20, 2017 Election of the Supervisory Board for the term of , effective from April 26, 2017, comprising of three members, namely: 1. Mr. Nguyen The Anh 2. Mr. Dinh Ngoc Lan 3. Ms. Do Thi Hong Van CHANGE IN THE LIST OF RELATED PARTIES OF A PUBLIC COMPANY An addition to the Member of the Board: Mr. Nguyen Viet Quang. The removal of the following person from the list of related persons of a public company: Ms. Nguyen Thi Van Trinh, as she is no longer a member of the Supervisory Board. Remuneration for members of the Board, the Supervisory Board, and Management complies with regulations on compensation, incentives, and operating expenses prescribed in the Group s Charter. Remuneration is further approved periodically by the GMS and complies with applicable laws. Remuneration for members of the Board, the Supervisory Board, and Management Business-related expenses: Actual expenses for business trips are reimbursed for members of the Board, the Supervisory Board, and Management as follows: Business class tickets for air, rail, water or road travel both domestically and internationally. Group hotels for business-related travel, or 4- or 5-star hotels if Group hotels are not available. Other business expenses are reimbursed based on actual costs. During 2017, there were nine members of the Board and three members of the Supervisory Board. The GMS in April 2017 set the amount of remuneration for members of the Board and the Supervisory Board as a percentage of the Group s afer-tax profit: 78 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

41 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE INTERNAL AUDIT REPORT RISK MANAGEMENT THE AIMS OF RISK MANAGEMENT Vingroup has built a risk management framework in accordance with international rules and standards (ISO 31000), while ensuring that it is suitable to the Group s corporate structure and the business environment in Vietnam. Risk management at Vingroup is based on these principles: A comprehensive risk management framework, coupled with effective risk management tools, should support the Group s business development strategies Risk management should identify risks in a timely manner and help maximize the outcome of favorable opportunities Vingroup will clearly allocate responsibilities and ownership in risk management and establish regular supervision and reporting mechanisms We will establish a common language in order to strengthen the risk management culture at Vingroup The first line of defense is responsible for risk ownership and management in its operations. The first line of defense includes the CEO, Divisions of the Corporate Office and the lines of business. The second line of defense is responsible for building policies, procedures and risk management tools, supporting the implementation of risk management activities at the Corporate Office and P&Ls. The second line of defense consists of the Board and the Risk Management Division. The third line of defense is responsible for assessing the effectiveness and efficiency of risk management activities in the Group. The third line of defense is the Internal Audit Division. Based on the three lines of defense, the risk management responsibilities are assigned to the Board, Management and the Divisions as follows: Responsible party Risk management responsibility During 2017, the Internal Audit Division reviewed and evaluated the business and compliance actvites of the Corporate Ofce and the P&Ls, as described below: Inspected and evaluated the quality of products sold to customers, focusing on strict control of food safety and hygiene. Also evaluated customer service to ensure full compliance with the law and terms of sale. Followed up on customer feedback and suggestions for improvements in service. Monitored relatonships between the P&Ls and their vendors to ensure that business partners were treated with fairness, transparency, timeliness and in the spirit of mutual benefit. Inspected work environments, employee compensation and benefits, training programs, and evaluated incentives and employee development opportunities. Coordinated with Vincom Security to control fire and explosion risks at all business locations. Together with the Legal and Compliance Division, evaluated adherence to all legal and administrative requirements. Collaborated with the Information Technology Department to oversee network security, data security, updates to the dataroom, and the maintenance of IT systems throughout the Group. Evaluated returns on the Group s assets by benchmarking financial metrics for the Group s business segments against those at other leading regional companies in the same industries. Coordinated with the Finance Division to evaluate the adequacy, reliability, timeliness, and transparency of financial and non-financial information in each P&L in order to provide maximum support for the Corporate Office. The Internal Audit Division stays current on relevant developments in audit practices, serving as an independent, specialized organization to monitor business operations and the financial condition of the P&Ls. During 2018, the Internal Audit Division will strengthen its advisory role to provide greater assistance to the P&Ls in achieving their targets. The Group recognizes that risk management is not only about threats but also about opportunities. Therefore, risk management is not risk minimization at all costs, but is about optimizing the correlation between risks and opportunities, and accepting risks within a pre-defined risk appetite. Vingroup is prepared to take risks in a prudent manner for justifiable business rationales. RISK MANAGEMENT STRUCTURE The model of risk management used at Vingroup is constructed with three lines of defense in order to ensure the independence and objectiveness of the Risk Management Division. 2 Board of Director Risk management division CEO Internal Audit Division Corporate Office P&Ls 1 3 Board of Issues regulations, strategies Directors and policies on risk management, and determines the organization structure, functions and responsibilities of the risk management system. CEO Supervises and ensures that risk management activities are carried out in line with strategies and policies on risk management. The Risk Management Coordinate with other Division, Internal Divisions to manage risks Audit Division, and with approved tools, limits, Risk Management procedures appropriate for the departments at the P&Ls Corporate Office and P&Ls. The model of risk management operates throughout the Group, from the Parent Company to P&Ls, to ensure coherent and continuous management of risk. 80 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

42 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE RISK MANAGEMENT PROCESS The Group uses a risk management process consisting of six components This process provides a logical and systematic approach to identify, analyze, assess the level of severity, formulate the risk mitigation measures, monitor and review, and communicate risks to provide information for Management to use for decision-making and timely response to both risks and opportunities. This risk management system is constructed based on the principles and guidelines of ISO standards as well as best risk management practices in the industry. The CEO and Head of the Risk Management Division submit risk management policies to the Board for approval at least annually, and the major risk factors of the Group are reviewed and assessed at least quarterly. 6 Comunicate Risks Identify Ricks Analyze Risks Prioritize Risks Fomulate Risk Mitigation Measures Monitor and Review Risks 1. Identify Risks: The first component of risk management is to identify all of the risks that may affect the Group s goals, including the sources and potential impacts of all risk factors. Each business area is studied in detail to identify risk factors and the Group s risk portolio is regularly updated. 2. Analyze Risks: The sources, impacts and likelihood of each risk factor are analyzed both quantitatively and qualitatively. 3. Prioritize Risks: All risk factors are ranked and weighed based on quantitative and qualitative predetermined criteria. 4. Formulate Risk Mitigation Measures: Risk mitigation strategies and plans are identified. Then, risk management measures are assessed and implemented to capture opportunities while offsetting the negative impacts of each identified risk factor. 5. Monitor and Review Risks: Risk mitigation measures are continuously monitored to ensure that they remain relevant and effective, in order to improve the Group s risk profile where possible, to adopt new and appropriate mitigation techniques, if needed, and to forecast and respond to risk events, if any Communicate Risks: Risks and risk management processes are widely communicated with employees to raise awareness and vigilance. Risk owners solicit and consider the opinions of the various parties involved to ensure that all stakeholders are fully aware of the role and responsibility of risk management. RISK MANAGEMENT ACTIVITIES IN 2017 Vingroup continued to strengthen its risk management systems throughout the year. During significant transactions, periods of market volatility, and changes in the legal environment, the Corporate Office and P&Ls consult the Risk Management, Legal and Compliance, Finance, External Finance Divisions in accordance with procedures set up for timely assessment and resolution. During 2017, the Group frequently arranged seminars to disseminate information about risks and legal developments for all members of Management and staff. MANAGING MATERIAL RISKS IN Macroeconomic risks In the property business, performance tends to fluctuate with macroeconomic conditions. Important macroeconomic factors include growth rates, inflation, credit growth, exchange rates, consumer indexes, savings rates, investments, and unemployment rates. All of these factors can influence Vingroup s operations and results. The Group frequently diversifies its real estate products. An example is its recent participation in the development of affordable housing. This category is less affected by economic fluctuations than the mid and high-end market segments. Specialized divisions monitor the macroeconomic environment and consult with Management and P&Ls to forecast future trends and their potental impact on business developments. This analysis helps Management to prepare appropriate strategies and policies. 2. Financial risks Financial risks for Vingroup include risks related to liquidity, interest rates and foreign currencies. Quarterly, the Finance and External Finance Divisions assess conditions in the capital and financial markets to proactively manage the debt portfolio and other commitments of the Group. The Finance and External Finance Divisions consult with local and External banking and finance experts to propose and implement risk management solutions, such as using derivatives, especially ahead of large transactions or transactions in foreign currencies. In order to manage liquidity risks, Vingroup actively manages our debt maturity profile and ensures that cashflows are carefully controlled. 3. Competition risks Vingroup s real estate, leasing, and consumer retail businesses are highly competitive. Competitors include multinational groups and domestic rivals offering products similar to Vingroup s. To respond, the Group innovates frequently to launch attractive new products of high quality. Vingroup s loyalty program, VinID Card, has succeeded in attracting 4 million cardholders by the end of The loyalty program joins together Vingroup s ecosystem of products and services, enhancing value for customers and positioning Vingroup ahead of the competition. 4. Investment risks Investments in new projects are implemented based on business strategies that are defined at the beginning of the year. Every investment has to be financially viable compared to the average cost of capital of the relevant P&Ls, or be important to the Group s strategy. Before an investment is made in a new project, risks such as market, legal, licensing, tax or operational risks have to be carefully assessed, and mitigating solutions proposed if necessary. The Group frequently consults with financial, legal and tax advisers and follows rigorous due diligence and mergers & acquisitions processes for potential acquisitions. 5. Project development risks Vingroup maintains a thorough project management system comprising several components for budgeting, cost management, quality control, regulatory compliance and speed of execution. There are stringent procedures to select well-qualified vendors for projects based on criteria such as experience and reputation. We also emphasize close supervision of our contractors. Senior executives in the Construction Supervisory Division are experienced practitioners from the design and engineering industries, well equipped to evaluate the quality of external contractors. 6. Personnel risks There is a shortage of experienced managers in the domestic labor market, particularly in senior roles. The Group s compensation framework is competitive and is based on results, rather than seniority, to attract and motivate talent. Vingroup has successfully created a strong cultural environment, turning the Group into a Common Home for all employees as a way to promote long-term commitments. These steps are aimed at building a leadership pipeline and strong management bench to support the Group s growth plans. On a regular basis, Vingroup organizes large-scale training programs for its employees. In addition, the Group emphasizes developing younger employees to prepare them for future roles as managers. 7. Environmental risk Construction projects may cause air, noise, or water pollution. Large-scale mixed-use projects may impact their ecological, economic, and social environments. The Group pays close attention to the potential environmental impact of each project. All projects undertaken by Vingroup undergo rigorous social and environmental analyses before development begins. The Group also follows the strictest standards in design and material selection in all projects. 82 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

43 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE SHARE INFORMATION AND INVESTOR RELATIONS SHAREHOLDER STRUCTURE (As at December 31, 2017) 9,80% VINGROUP SHARES PRICE DURING 2017 Ticker: VIC Outstanding shares (as at December 31, 2017): shares Price Market capitalization (as at December 31, 2017): VND Trading Significant shareholders Founding shareholders Other shareholders-domestic 29,00% 60,82% Share price Trading Date (VND/share) Date Volume ( 000 CP) Volume Other shareholders foreign 0,38% Closing Low ,300 Closing , ,000 Low No. Shareholder Number of shares held Ownership percentage (%) Number of shareholders High ,000 High ,737 1 Founding shareholders 10,025, Average volume-weighted price (**) 38,368 Average daily volume 945 Domestic Foreign 10,025, (*): Calculated based on adjusted stock price. In 2017, Vingroup does not pay dividends. (**): Calculated using the weighted average closing price, weighted by the daily trading volume in 2017 (250 days) SHARE PRICE PERFORMANCE price recovered quickly with the information of starting the automobile production complex, VinFast motorcycles In the first four months of 2017, Vingroup shares (VIC) fluctuated in the same direction with the VN Index, which was more volatile than the market (in late February to late March). The stock market still gained steadily despite the bad news from FED information raising the basic interest rate by 0.25% and the big fluctuation in the exchange rate caused VND devaluation. This is the time Vingroup entered the accumulation phase when the real estate market tends to increase again. During the next 6 months (March and September), while the VN-Index still retains its slow growth rate, VIC s stock +80% +60% +40% +20% Simultaneously launched 15 businesses and revenue from real estate projects such as Vinhomes Central Park (Ho Chi Minh City) and Vinhomes Times City Park Hill. The last two months of 2017, from October to December, witnessed a strong uptrend of both VN-Index and especially VIC shares following the listing and transfer of Vincom s historic shares. As of December 29, 2017, the price of VIC shares reached VND 77,300 per share, an increase of nearly 85% compared to the closing price of January 3, Launched VinFast Vincom Retail listed on HOSE 2 Significant shareholders (holding above 5%) Domestic 1,604,145,058 1,604,145, Foreign Other shareholders Domestic 1,023,537, ,083, ,053 11,275 Foreign 258,453, Total 2,637,707, ,055 Foreign 2,379,254, ,275 Foreign 258,453, Significant shareholders (holding above 5%) (As at December 31, 2017) Name Number of shares held Ownership percentage (%) Vietnam Investment Group JSC 880,175, Mr. Pham Nhat Vuong 723,969, January February March April May June July August September October November December Total 1,604,145, VN-Index VIC 84 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

44 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE History of charter capital increase ( ) Time of issuance Transaction Shareholder Capital before the issuance (VND) Capital mobilized from the issuance (VND) Capital after the issuance (VND) Insider holdings (As at December 31, 2017) 2013 Issuance of bonus shares (1) 7,004,620,550 Conversion of international bonds (2) 9,281,102,150 Shares swap (1) 9,288,068,790 2,276,481,600 9,281,102,150 6,966,640 9,288,068,790 7,968,000 9,296,036,790 Shareholder Board of Directors Name - Position Mr. Pham Nhat Vuong Chairman Ms. Pham Thuy Hang Vice Chairwoman Number of shares Ownership held (shares) percentage (%) 723,969, ,372, Conversion of international bonds (2) 9,296,036, ,201,960 10,018,38,750 Ms. Pham Thu Huong Vice Chairwoman 124,840, Stock dividend Conversion of international bonds (1) (2) 10,018,238,750 14,545,550,980 4,527,312,230 14,545,550, ,690,630 14,918,241,610 Ms. Nguyen Dieu Linh - Vice Chairwoman Mr. Le Khac Hiep - Vice Chairman Mr. Ling Chung Yee Roy Board Member 191, Stock dividend (1) 14,918,241,610 3,763,639,260 18,681,880,870 Mr. Nguyen Viet Quang Board Member Conversion of international bonds (2) 18,681,880, ,667,640 19,398,548,510 Mr. Marc Villlers Townsend Board Member 0 0 Stock dividend (1) 19,398,548,510 2,133,799,410 21,532,347,920 Mr. Joseph Raymond Gagnon Board Member 0 0 Issuance of bonus shares (1) 21,532,347,920 4,884,731,620 26,377,079,540 Management Ms. Duong Thi Mai Hoa CEO (1) Mr. Nguyen Viet Quang CEO (1) Note: In 2017, the Company did not increase chartered capital. (1): Existing shareholders Mr. Pham Van Khuong Deputy CEO Ms. Mai Huong Noi Deputy CEO 1,555, (2): International convertible bondholders Ms. Nguyen Thi Diu Deputy CEO 0 0 Dividend payment history ( ) Ms. Duong Thi Hoan Deputy CEO Ms. Nguyen Thi Thu Hien - Chief Accountant Dividend year % Form of payment Time of payment Supervisory Board Mr. Nguyen The Anh - Head of the Supervisory Board Mr. Dinh Ngoc Lan - Member of the Supervisory Board 10,179 1, Share 2012 Ms. Do Thi Hong Van - Member of the Supervisory Board Cash Share Note: (1) Mr. Nguyen Viet Quang was appointed CEO and Legal Representative of Vingroup, replacing Ms. Duong Thi Mai Hoa on Share 2015 February 25, 2018 by a resolution passed on the same day of the Board of Directors of Vingroup Joint Stock Company Share Share Share 2016 Note: In 2017, the Company does not pay dividends 86 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

45 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE Transactions by insiders in 2017 Name Relationship with insiders Ms. Mai Huong Noi Vinpearl Joint is the Chairwoman, Stock Company Mr. Nguyen The Anh is Head of the Supervisory Board, Mr. Dinh Ngoc Lan is a member of the Supervisory Board of Vinpearl JSC Vincommerce Ms. Mai Huong Noi General Trading is the Chairwoman of Service Joint Vincommerce Stock Company Bonds listed in foreign market Number of shares held prior to the transaction Share 0 0 Number of shares held after the transaction % Share % 90,039,008 78,976, Rationale Transfer of shares due to a merger of Vingroup subsidiaries Transfer of shares due to a merger of Vingroup subsidiaries SHAREHOLDERS AND INVESTOR RELATIONS ACTIVITIES IN 2017 Vingroup maintains an active investor relations program to handle inquiries, disclose information, and manage communications with shareholders, investors, analysts, and other interested parties. The Group is committed to fair treatment of all shareholders, whether domestic or foreign, institutional or individual. Through its official website, the Group provides timely and accurate information to shareholders and members of the general public. Information is released in Vietnamese and English simultaneously. Investor presentations as well as news and financial releases are regularly updated and may be viewed and downloaded from the website under the Shareholder Relations section. In addition to the GMS, quarterly conference calls and investor meetings following the release of financial results, Vingroup also hosts regular briefings, meetings, and site visits to keep investors and shareholders updated on the Group s projects, as well as financial and operational results. Many investor events provide access to members of the Group s senior management, who respond to questions about strategy and operations. During 2017, Vingroup held 135 meetings, presentations, and site visits for investors, and participated in nine domestic and foreign investor conferences in Singapore, Thailand, and Japan, meeting hundreds of interested investors. Vingroup s investor relations programs and annual reports have been recognized with several well-respected awards in 2016 and Further details can be found in Chapter 1: Vingroup in 2017 and Message from the Chairman Titles and Awards Page 14. During 2018, Vingroup s Investor Relations Department, a part of the External Finance Division, plans an even greater number of events for investors. We continue to strive to respond promptly to all investor and analyst inquiries. Investor Relations can be contacted via at ir@vingroup.net. None Bond Nội dung issuances in 2017 Loại trái phiếu Đồng tiền phát hành 2017 INVESTOR RELATIONS CALENDAR 5-year tranche bond 1 Domestic bond VND 3,000 QUARTER 1 Credit Suisse Ninth Annual Conference in ASEAN CIMB Southeast Asian Business Conference VCSC Vietnam Market Access Workshop Singapore Thailand HCMC 3-year tranche bond 1 Domestic bond VND 2,500 3-year tranche bond 1 Domestic bond VND 5,500 QUARTER 2 Annual General Meeting of Shareholders 2017 Deutsche Bank Asian Corporate Access conference UBS Laos Vietnam Myanmar Cambodia Investor Conference Hanoi Singapore Thailand 2.5-year tranche bond 1 Domestic bond VND 2,600 Investor conference to announce business results in the first quarter of 2017 Hanoi 2-year tranche bond 1 Domestic bond VND 1,000 2-year tranche bond 1 Domestic bond VND 1,100 2-year tranche bond 1 Domestic bond (*) VND 1,000 QUARTER 3 Daiwa Vietnam Business Day Conference SSI Vietnam Market Access Conference HSC Vietnam Market Conference Investor conference to announce business results in the second quarter of 2017 Japan - Singapore HCMC HCMC Hanoi, HCMC 2-year tranche bond 1 Domestic bond (**) VND 1,000 Note: (*) As of 31 December 2017, VND 500 billion has been disbursed from this loan QUARTER 4 Announcement of listing approval and the first trading date of Vincom Retail JSC, a subsidiary of Vingroup Meeting with investors to announce business results in the third quarter of 2017 HCMC Hanoi (*) As of 31 December 2017, VND 100 billion has been disbursed from this loan 88 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

46 CHAPTER 4 CORPORATE GOVERNANCE CHAPTER 4 CORPORATE GOVERNANCE FINANCIAL CALENDAR Financial year ending December 31, 2017 April 26, Annual General Meeting April 28, 2017 Release of Quarter I, 2017 Financial Statements July 30, 2017 Release of Quarter II, 2017 Financial Statements October 30, 2017 Release of Quarter III, 2017 Financial Statements January 30, 2018 Release of Quarter IV, 2017 Financial Statements Financial year ending December 31, 2018 April, 2018 Proposed release of Quarter I, 2018 Financial Statements July, 2018 Proposed release of Quarter II, 2018 Financial Statements October, 2018 Proposed release of Quarter III, 2018 Financial Statements January, 2019 Proposed release of Quarter IV, 2018 Financial Statements VINPEARL HA TINH HOTEL 90 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

47 VINGROUP ANNUAL REPORT 2017 GO GLOBAL VINHOMES SKYLAKE

48 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 05 SUSTAINABLE DEVELOPMENT Vingroup s Vision for Sustainability Sustainability by the Numbers and 2017 Highlights 2017 Sustainability Report Managing Sustainability VINGROUP S VISION FOR SUSTAINABILITY Vingroup believes that a sustainable business is one that creates long-term value for its partners. We measure success not only in revenue and profit but also in the degree to which we serve as a catalyst for positive developments RESPONSIBILITIES TO SOCIETY Demonstrate love of country and promote national pride Comply fully with the law Contribute to the best of our ability in the work place in order to build the economy and enhance the image and standing of the nation Participate in social and charitable activities that help disadvantaged members of society Maintain an educated and active mind, in order to participate in the development of a civilized society, and Preserve natural resources and protect the natural environment RESPONSIBILITIES TO EMPLOYEES Treat employees as our most valuable asset Establish a work environment that is professional, dynamic, creative, and humane, and Adopt outstanding human resources policies, offering excellent remuneration and growth opportunities for employees at all levels. in our environment through practical, concrete actions. To achieve our goals, we have established principles that guide Vingroup s corporate actions and the actions of each member of the Vingroup team. RESPONSIBILITIES TO CUSTOMERS Put customers first and treat them with INTEGRITY Understand that the Group needs the support of its customers Maintain a friendly, respectful, and supportive attitude toward customers Demonstrate CREDIBILITY in all our interactions with customers Listen to customers in order to clearly understand their needs and balance customers needs with those of the Group Continuously improve the quality of our service to ensure customer satisfaction, and Anticipate market trends in order to innovate and offer superior products and services. RESPONSIBILITIES TO SHAREHOLDERS AND PARTNERS Maintain a spirit of cooperation for mutual benefit, and Uphold CREDIBILITY and commitment to sustainable partnerships and become The Number One Companion to our business partners and investors. SUSTAINABILITY BY THE NUMBERS AND 2017 HIGHLIGHTS km Of roads built with streetlights installed for poor villages across the country Top 10 Sustainable Businesses in Vietnam in 2017, as chosen by the Vietnam Business Council for Sustainable Development (VBCSD) Top 10 Ranked among the Top 10 Businesses honored for their contribution to workers, as awarded by the Vietnam General Confederation of Labor (VGCL) in collaboration with the Ministry of Labor, Invalids and Social Affairs, Vietnam Chamber of Commerce and Industry (VCCI) and Lao Dong Newspaper 38,000 people Took part in the series of inspirational workshops We are the Vingroup Family and the training program Vingroup Common Standards 80.4% Of the staff rated the working environment at Vingroup as making them satisfied or very satisfied 100,000 people After 6 months of operation, the Vincom Center for Contemporary Art (VCCA) had organized 5 major art exhibitions, welcoming more than 100,000 people to visit and enjoy the art, organizing 50 education and art events/activities 152 young footballers The Promotion Fund of Vietnamese Football Talent (PVF) is currently training and developing the talent of 152 young footballers aged 10 to students 216 students have received the Young Talent scholarship and the Students with 5 Good Attributes award, and the January Star Award at the national level ,000 20,000 orders Delivered by Adayroi used environmentallyfriendly degradable food packaging people With the program Screening and early detection of some forms of cancer, 20,000 people in 8 provinces/municipalities across the country were provided with screening and counselling services for breast cancer, cervical cancer, and colorectal cancer 3,000 poor households 2,797 Coordinated to support and provide technical training on animal breeding for 2,797 poor households in 9 provinces 14 schools hours doing community service More than 1,000 teachers and employees of the Vinschool education system spent over 3,000 hours doing community service, to bring gifts, warm clothes and affection to disadvantaged children, patients, elderly people living alone, and homeless people 534 charity houses The Kind Heart (Thien tam) Fund continued to build 534 charity houses in 32 provinces Built 14 schools and day-boarding accommodation for students of disadvantaged mountainous and border communes 1 million people Nearly 1 million people received library service through the program Financing mobile libraries the Light of Knowledge 123,000 Tet gifts Presented nearly 123,000 Tet gifts to the poor in 62 provinces VINGROUP - ANNUAL REPORT

49 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT 2017 HIGHLIGHTS 1. A Shift to the Non-Profit Model for Vinschool In October of 2017 Vingroup announced the conversion of Vinschool to a non-profit model. Standard tuition for new students for the academic year is based directly on expected program costs. All increases in tuition for existing students during the next three years will be fully absorbed by Vingroup, with further sponsorship to reduce any increase in tuition from 2021 to The Group will fund investments in extra-curricular facilities and equipment in certain campuses, such as a new swimming pool and indoor football field in Vinschool Times City, and a theatre in Vinschool The Harmony. 2. Establishment of the Solidarity Fund On January 11, 2017, Vingroup established the Solidarity Fund, under the Kind Heart Fund, to support staff members and their families during times of need. As a charity of the Vingroup Family Program, the Solidarity Fund promotes the Group s core values of mutual support, solidarity, sharing, and helping. This program helps to foster the development of a close-knit work environment within the Company. 4. VinEco Implements Cooperation with 1,000 Farm Families During its second year of operations, VinEco signed cooperation contracts with more than 1,000 households to produce clean and safe fruits and vegetables. To implement these contracts, VinEco conducted several trainings on safe production methods, advanced production techniques and provide newly improved seeds, quality control, product purchases and sales, assistance in VietGap certification and provided financial aid farm households that participate in the program. During the first year of operations, 500 farm families successfully produced vegetables, mushrooms, rice, and fruits for sale and consumption through our network of VinMart supermarkets and VinMart+ mini-marts and convenience stores. By maintaining strict control over products at all stages from cultivation to distribution, VinEco has been able to control and improve the quality of agricultural products delivered to consumers, by streamlining the redundant intermediaries. VinEco s goals are to provide safe and clean food to consumers, to support farmers, to upgrade the production techniques in order to enhance production yields for the agricultural sector. The results include 6. Vingroup Opens Leading Football Training Center in Southeast Asia On November 20, 2017, Vingroup s Promotion Fund for Vietnamese Football Talent (PVF) opened the Youth Football Training Center, one of the largest facilities in Southeast Asia, in Van Giang District of Hung Yen Province. Vingroup s investment in this large training center is comparable to England s leading youth football training academies. Mr. Mike Farnan, former director of international relations for Manchester United and a consultant to PVF. As a result of Vingroup s support, PVF will undergo a major upgrade in professional quality, including its coaching staff and training methods. Among the leading domestic and international coaches and trainers supporting PVF are Football Manager Ryan Giggs, Technical Advisor Paul Scholes, Technical Director Terry Robinson, Head Coach Hoang Anh Tuan, and Assistant Coaches Nguyen Manh Cuong, Nguyen Huu Dang, Nguyen Viet Thanh, and Le Phuoc Tu Vingroup s strategy is to develop youth football in a comprehensive, holistic and long-term approach, to help train generations of talented players for Vietnamese football, and to help Vietnamese football approach international standards in the near future. Mr. Le Khac Hiep, Vingroup Vice Chairman and Independent Member of the Board of Director, Chairman of the Management Board of PVF. 7. Vingroup Launches Vincom Center for Contemporary Art (VCCA) On June 6, 2017, Vingroup opened the Vincom Center for Contemporary Art in Hanoi with a mission of promoting art to the public. VCCA is a large-scale not-for-profit art center that has been developed and financed by Vingroup. After only 6 months of operation, VCCA organized five major art exhibitions and fifty art events and education sessions with more than 100,000 people attending. 3. Health Sector Funding building agricultural brands with international reach while protecting the health of both urban and rural During 2017, Vingroup increased its support to VND 1.5 communities, and upgrading the quality of production trillion for patients in poor households, individuals with and life for Vietnamese farmers. health challenges, and people who have contributed to the Revolution. This support provides treatment from leading doctors from the Vinmec International Hospital Ms. Nguyen Thi Phuong Thao - VinEco Vice General Director. network, allowing subsidies of 70% to 100% of total treatment costs and bringing hope to thousands of people throughout Vietnam. 5. Inauguration of 10 classrooms for poor children in Quang Tri province The Kind Heart Fund continued during 2017 to provide In September of 2017, Vinschool opened ten classrooms support for the health sector through programs that pay for poor children at three locations in the Ngay, Tram, and for medicines, medical exams, and treatment for poor Ro communes in the Dakrong district of Quang Tri Province. people. This program collaborates with 13 hospitals and All three of the communes receiving help from Vinschool 6 communities throughout the country to provide 19,930 are located in upland terrain where transportation and health exams. In the process, The Kind Heart Fund helps classroom construction are difficult, putting limits on to raise community awareness of the need for cancer the quality of instruction. This project was funded by prevention and early detection. donations from the 2016 Run for Education. The fund financed free DNA detection to identify war The Quang Tri education project illustrates Vinschool s martyrs at the Vinmec Research Institute of Stem Cell commitment to sharing its resources with the neediest and Gene Technology as a means of paying tribute for the members of the community. It further demonstrates the sacrifice of their lives for the Motherland and to support Caring and Sharing attribute within the five core traits that families searching for their martyred relatives. Vinschool strives to cultivate in its students: Inquisitive Proactive Honest Caring Respect. 96 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

50 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT 2017 SUSTAINABILITY REPORT 8. Vinpearl Land Nha Trang Develops Two Nature Preserves Vinpearl Land Nha Trang has opened Van Hoa Hill, a 35,000 square meter botanical garden with thousands of plants from five continents. In addition to common trees and flowers, Van Hoa Hill contains a collection of rare and endangered species listed in the Red Book of Endangered Species such as the Paphiopedilum Vietnamese and the Dendrobium Trantuanii. The preserve also includes such ancient trees as the African Baobab tree, the silk floss tree, the 500-year-old olive tree. These plants and trees have not only entertainment value but also serve an educational purpose as a living library for botanical research. Also part of the Preserve is the King s Garden, an open zoo with an area of 50,000 square meters and the home of hundreds of animal and plant species from around the world, many of which are listed in the Red Book: the yellow-cheeked gibbon, the stump-tailed macaque, the Indochinese lutung, the Bengal tiger, the leopard, and the green peafowl. 9. Adayroi Implemented Sales Campaigns to Develop Vietnamese Businesses During 2017, Adayroi launched sales campaigns to promote eco-friendly health products. Throughout the fourth quarter, Adayroi introduced more than sixty sales programs with this community-oriented message. As a distribution channel for Vietnamese businesses, Adayroi has partnered with over 160 Vietnamese suppliers to add their products to this fast-growing e-commerce network. ECONOMIC OPTIMIZATION FOR SUSTAINABLE GROWTH In 2017, the Group implemented concrete programs and action plans in pursuit of Vingroup s sustainability strategy for Further details can be found in Chapter 3: Report of Management on 2017 Business Performance and 2018 Plan of Action Vingroup Operations and Financial Performance in 2017 Page 54. ENSURING ECONOMIC EFFICIENCY BY MAXIMIZING STABLE SOURCES OF REVENUE AND PROFIT Increase Recurring and Stable Revenue and Profit During 2017, recurring revenue increased 32% over the prior year. This includes revenue from commercial property leasing, consumer retail, hospitality and entertainment, healthcare, education, and agriculture. The shift to a focus on recurring revenues is part of the strategy. Vingroup increased its focus on these business categories while improving product and service quality to retain current customers and attract new customers. Further details can be found in Chapter 3: Report of Management on 2017 Business Performance and 2018 Plan of Action Vingroup Operations and Financial Performance in 2017 Page 54. Optimize Capital Structure and Increase capital efficiency Vingroup continuously examines numerous financial products to ensure that free cash flows are used in accordance with capital costs. The Company s present situation with regard to capital enables it to select capital sources in a flexible manner. Ample cash flow from business operations has allowed the Group to optimize its capital structure. Standard & Poors, the international credit-rating agency, in 2017 raised Vingroup s long-term credit rating from B to B+ with a Stable outlook. Positive ratings by international credit-rating organizations has increased confidence in the Group on the part of international investors. VINGROUP LEADS THE REAL ESTATE MARKET AND MAINTAINS A TOP POSITION IN OVERALL BUSINESS PERFORMANCE CBRE data indicates that Vingroup continues to hold the largest market share in the real estate sector, a share of 15% of apartments sold in Hanoi and Ho Chi Minh City between 2015 and This leading share reflects Vingroup s strong value chain, which produces attractive, highly saleable products. In turn, this strong value chain is grounded in the Group s service and product ecosystem. Because this ecosystem would be difficult for another competitor to replicate, it has contributed to Vingroup s success, not only in real estate but also in other businesses. Further details can be found in Chapter 3: Report of Management on 2017 Business Performance and 2018 Plan of Action Vingroup Operations and Financial Performance in 2017, Page ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

51 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT SUSTAINABLE CONTRIBUTIONS TO THE VIETNAMESE ECONOMY chemicals and pesticide which are potentially harmful to the environment, Vinpearl Golf has used salt to prevent weeds from growing and spreading on golf courses. Unlike Vingroup s growth is reflected in its commitment to corporate social responsibility. During 2017, five of the Company s subsidiaries were among the top 100 taxpayers listed by the Vietnam General Department of Taxation. Vingroup was honored by the Vietnam Report as the largest private enterprise and ranked among the Fifty Outstanding Companies of VINGROUP ADHERES TO ENVIRONMENTAL AND SOCIAL PROCUREMENT STANDARDS, INCLUDING ITS SELECTION OF SUPPLIERS pesticide, when salt is sprayed, golf courses can operate as usual and no threat is posed to the surrounding area or to wild animals. Sustainable Products and Services Vingroup products are developed in accordance with the Group s strategy of sustainable development and are rigorously controlled for quality. Further details can be found in Chapter 2: About Vingroup Businesses Page 26. STRENGTHENING CORPORATE GOVERNANCE AND MANAGEMENT CAPABILITIES Integrating Sustainability in Supplier Selection In order to maintain its leadership position in all of its business segments, Vingroup is building a lean, flexible, Vingroup integrates sustainability into every company activity. Supply chain links from inputs to business operations are evaluated along three dimensions: Economy, Society, and the Environment. With its many existing business areas, and with an expanding network of new ventures, Vingroup enjoys the support of thousands of domestic and international suppliers. Managing this array of business partners is a key factor in the Group s sustainable development strategy. Each supplier chosen by Vingroup must meet a number of criteria, including quality, capacity, legal compliance, and environmental impact. Vingroup s procurement department also examines a potential business partner s record in the areas of labor relations, human rights, social impact, and environmental protection. VinCommerce examines the quality control procedures of each of the businesses that supply products to its VinMart Supermarkets and VinMart+ convenience stores and minmarts. During 2017, VinCommerce set up five new testing facilities for products entering its stores, bringing the total to 25 testing facilities nationwide. Each testing station contains modern equipment to take daily samples in order to monitor the safety of food products coming into its store networks. In addition to quality control, VinCommerce has set up policies to assist domestic suppliers to improving their performance on sustainability. In May of 2017, VinMart launched a new program to support family farms that raise pigs. This program enables not-for-profit pork marketing when pork production is in period of over-supply. Adayroi in 2017 became the first company in the e-commerce sector to begin using bio-degradable or eco-friendly food packaging. Adayroi provides a new distribution channel for many Vietnamese businesses, adding more than 160 suppliers during 2017 who met its standards and encouraging its customers to purchase environmentally-safe products with sales programs and community-oriented messages. VinEco continues to promote its program of collaboration with 1,000 farm families to produce safe and clean fruits and vegetables for the consumers. VinEco helps these farmers gain access to modern production techniques so that they can change traditional agricultural practices, improve their productivity, and ensure food safety and hygiene in accordance with VietGAP and GlobalGAP food standards. Sustainability in Project Selection and Development Vingroup weighs sustainability as part of its investment analysis for every new project. By researching and evaluating the risks of every new project, Vingroup can consider factors which may impact the environment and society. As part of its feasibility studies, the Group examines potential impacts on society and the environment. Sustainability is then considered throughout the process of planning and implementing projects. Starting from the initial design, green structures are prioritized using energy-saving designs, extensive landscaping, and a high density of trees. Vinhomes Green Bay, Vinhomes Skylake, and Vinhomes the Harmony projects were all designed as green urban areas within ecological zones. Parks and catchment basins with areas from 8ha to 32ha are among the features contributing to natural areas for residents, as well as helping to improve the micro climate and create public spaces. Broadleaf trees with spreading foliage are used to increase photosynthesis, increase environmental cleaning efficiency and provide shade. With projects in environmentally sensitive areas, such as healthcare and hospitality, the environment is always of paramount concern. Waste produced by medical activities is sorted, collected and kept by Vinmec hospital in accordance with regulations. Vinmec s large-scale waste water treatment systems use a biological treatment tank and the effluent quality is regularly controlled to meet or exceed regulated environmental standards. In addition, to ensure patient safety, the working environment is safe for all of the hospital s staff. The hospitals also maintain programs in fire prevention and firefighting, laboratory safety, radiation safety, and food safety which comply with the highest international standards. In order to contribute to environmental protection, Vingroup regularly organize sanitization projects around our development areas during construction, and along the beach where our resort and hotel projects operate. Vinpearl continuously explores environmental protection measures; for example, one of the measures is using salt to remove weed and exotic types of weed surrounding the golf courses across the whole system. Instead of using and efficient governance structure. Strengthening governance and perfecting its corporate structure is a key part of Vingroup s strategy for achieving its business goals. To meet those goals, the Group s Board of Directors has set directions as follows: Keep the pace of development in line with the organization s capabilities. To focus on depth and quality of development rather than breadth. Streamline the organization and the system of regulations and procedures to improve productivity and efficiency. Promote learning by developing training programs for leaders at all levels, so that training becomes a development strategy of the Group. Build the Vingroup Family with a focus on improving the material and spiritual well-being of its members, to turn Vingroup into the members Common home. Research and apply technology in business and governance to create new breakthroughs. Further details can be found in Chapter 4: Corporate Governance Report of the Board of Directors Page ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

52 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT ONGOING DEVELOPMENT OF HUMAN CAPITAL Total number of employees and average income Year Number of employees (people) Average income (VND million) Employee Benefits and the Work Environment In 2017, Vingroup again was listed among Top 10 Best Employers by the Vietnamese Trade Union, and honored as the Best Place to Work in Real Estate, Retail and Human capital is the critical resource for business development. Vingroup employees are experts in each of our core business segments, thereby creating an attractive, professional and friendly working environment based on the guidelines described below. PROTECT EMPLOYEE RIGHTS AND EQUALITY Vingroup respects the contributions made by all employees, regardless of nationality, age, gender, or educational background. The Group manages and promotes employees on the basis of their productivity and performance, providing equal opportunity for all employees so that all can develop their abilities to the full extent of their potential. Recruitment and Human Resources Strategy Vingroup recruits capable candidates who seek to work in a fast-paced, dynamic, creative, and professional environment. The recruitment process at Vingroup is fair and merit based. The Group has created a modern, efficient work environment that balances business needs with employee goals. Vingroup invests in human capital through the successful implementation of its training policies which underline new knowledge and skill upgrades. The Group also encourages promotions from within. Employees are given the opportunity to attend training programs, to gain experience in different jobs through rotation and job postings, in order to gain practical knowledge about the Group s business operations. Managers are required to serve as facilitators to provide technical training to less experienced employees. In additon, Vingroup frequently engages outside experts to provide training , , , , , employee distribution by education (People) Qualification Number of employees Ph.D. and Master 1,030 University 11,990 Below university-level Age 29, employee distribution by age (People) Number of employees , , , Above Total 42, employee distribution by gender (People) Total Male Female Tourism by Anphabe, an online network of management professionals coordinated by Nielsen, a market research firm. These awards recognize Vingroup s commitment to maintaining a modern, professional workplace with competitive benefit policies, balancing the interests of the employer and employees. Vingroup s work schedule Vingroup employees work eight hours per day. Noncustomer-facing or office employees work five and onehalf days per week, while customer-facing or service employees work six days per week. All employees receive paid public holidays, vacation and personal days in accordance with the Labor Law. Working conditions Vingroup is committed to maintaining a work environment where each employee can realize his or her full potential. We provide all employees with comfortable, modern offices and regular health checks. Customer-facing or service employees are further supplied with uniforms and work in environments that meet safety and sanitation standards. Labor regulations It is Group policy to maintain an Employee Code of Conduct that fully complies with all labor regulations. Employee allowances Mobile phone service, where required for specific jobs Meals Vehicle fuel Transportation to and from work Wages, insurance and welfare Vingroup salary levels are higher than other companies in the same sector. In the second half of the third quarter of 2016, the Group revised the minimum remuneration to VND 5 million (exclusive of meal allowances), as well as reformed the allowance and incentive payment scheme on the basis of employee performance and contribution. Social, Health, and unemployment insurance are provided in accordance with applicable laws. In addition, the Group also engaged Bao Viet Group to develop health insurance programs for employees. The Group s employee benefit programs include gifts for employees in conjunction with significant personal events, as well as recreational programs that bring employees together to promote teamwork and healthy lifestyles. In addition, support is provided for the children of employees in the form of recognition and awards, summer camps, and skills training programs. Multi-sport recreation complexes have been built at the Group s headquarters and several locations where there are large company operations. Other employee benefit programs include: an emergency fund, an employee loan fund that extends zero-interest loans for those facing personal hardship, and a bond issuance program with superior interest rates for employees only. Incentive scheme Vingroup has an incentive system for the Corporate Office and all Group companies. We also reward employees with outstanding achievements in the form of performance awards and bonuses. Participation of female employees is visible within management and operations, from the central to grassroots level of the Group. To attract and retain talent, the Group also applies a 42,878 21,517 (50.2%) 21,361 (49.8%) compensation policy that is particularly competitive for well-qualified and experienced employees in relevant fields. 102 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

53 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT FOSTER TEAM SPIRIT BY ORGANIZING COMMUNITY INVOLVEMENT AND EMPLOYEE CHARITABLE ACTIVITIES The Group is interested in promoting corporate activities that boost the welfare and morale of its employees. The Group established a Communist Party section and a Trade Union to strengthen solidarity amongst employees and party members. Employee activities supporting the Party have been judged to be outstanding, and the Group s Trade Union also won the title of Excellent Union in Long Bien District and Hanoi. Vingroup also gives special attention to further develop employee fitness and collaboration by organizing weekly activities including football, tennis, and badminton games. Festivals are planned for monthly and quarterly intervals, including team building activities in fields such as arts, singing, dancing, and the Vingroup running competition. Arts, sports, and culinary events have attracted the participation of hundreds of Vingroup employees, further strengthening their camaraderie, fitness and spirit. In addition to corporate programs, Vingroup encourages employees to participate in volunteer activities. Vingroup employees have a track record of taking part in community activities such as providing clothes and books for children living in orphanages and in remote districts throughout the country. With the desire not only to build good properties but also BUILD A STRONG CORPORATE CULTURE With the goal of making Vingroup into the Common Home of employees, Vingroup attaches great importance to building a professional and cohesive working environment. During July 2017 survey, 80.4% of employees rated their work environment very satisfactory or satisfactory. In 2017, Vingroup is rated Best Workplace in the categories of Real Estate, Architecture, Design, Retail, Wholesale, Trading, Food & Beverage, Education, and Training. Vingroup also holds the record of being the only company to win this award in these categories. Vingroup cohesion and pride are spread widely and deeply DELIVER HIGHEST QUALITY OF EMPLOYEE TRAINING Vingroup continues to implement extensive training programs with the aim of developing employee capabilities. In 2017, 800,000 staff members participated in training programs. Forms of training are also diverse, from focused training, online training to hands-on activities and coaching. In addition, the standardization of training materials has also been strengthened, especially the standardized guidelines for operating procedures. Skill tests were conducted by VinMart, VinPro, VinMart+ and Vinpearl in order to accurately assess the actual capacity of employees and to A series of 10 training topics on leadership enhancement for the all managers of Vingroup Professional Shopping Center Management (PSCM) in Singapore VinMart+ Service, a training program for employees of VinMart+, VinMart, and VinPro Nursing training in collaboration with Israel s MSR Kouhoukai Service Training Program from Japan Capacity Development Program for the Elite Teacher by the University of Waikato, New Zealand Training Program to Qualify Teachers to Launch 21st Century Skills into Primary and Secondary Education to raise the living standards of the Vietnamese people, Vinhomes has pioneered in community development, as demonstrated by community engagement in collective activities. In addition to annual Tet events, Vinhomes also offers initiatives such as Green Saturday, training standard house cleaners, Air Conditioning Maintenance, and free swimming lessons for children. through programs located in each part of the country. As create suitable training programs. In 2017, Vingroup continues to implement learning one of the activities in 2017, the Seminar series entitled We are the Vingroup Great Family and the Vingroup Common Standards training program attracted nearly 38,000 attendees, and Red Dye Vingroup attracted 14,500 participants. Vingroup has organized professional training programs for business production and career development for all job titles. Many effective training programs promote the culture of learning in Vingroup. These include: regulations with the aim of promoting learning and improving the quality and effectiveness of training. In order to encourage employees to continuously upgrade their skills, Vingroup encourages the P&Ls to win the P&L Academic Award with special benefits. 104 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

54 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT MANAGING CORPORATE SOCIAL RESPONSIBILITY DEVELOP PRODUCTS THAT MEET COMMUNITY STANDARDS Vingroup s goal is to provide clean, environmentallyfriendly products in every business segment. Vingroup products and services, including real estate developments, resorts, and the Safari are all community-oriented. Further details can be found in Chapter 5: Sustainable Development 2017 Highlights Page 96. Through its concrete actions, Vingroup has created a spillover effect to all businesses to promote the development of society. Vingroup s retail and agricultural products have a preferential pricing mechanism, which provides an opportunity for the majority of people to access clean food in their daily lives. In the process of developing the project, Vingroup is always ready to go along with the locality in investing in essential infrastructure such as roads, electricity, water and public works to meet the needs of residential development. teach, and sponsor young people in the fields of business, administration, science, sports, and the arts. During 2017, the Fund provided internships for 53 students in Vingroup. In September 2017, VinTalent sponsored the Student with Five Talents and the January Star scholastic awards, which were given to 163 recipients. The Promotion Fund for Vietnamese Football Talent (PVF), established and sponsored in 2009 by Vingroup, has trained 175 young football players through nine batches since inception. PVF teams have consistently achieved good results at the Youth Championships at both the national and regional levels. In 2017, PVF students obtained high achievements in domestic tournaments and joined the Vietnam national football team. Their the country. Solidarity Fund has organized programs to help flood victims with flood-proof houses, and has built roads and bridges as well as health clinics and classrooms in order to stabilize the daily life for people in flood-prone provinces. The Fund also sponsors the Naval Command to enhance its capacity to protect the sovereignty of the Spratly Islands. In addition, during the past year, the Fund has also participated in a number of other donor-supported activities, such as support for local foundations, and sponsored hundreds of patients with severe illness and those in particularly difficult circumstances who send letters to the Fund for help. partcipatiion contributed to the national team s achievements in the international tournaments, and in turn assisted the development the country s football foundation. Improving Community Welfare Through the Solidarity Fund, Vingroup has supported many social activities throughout the country. In 2017, The Kind Heart Fund has implemented programs to build 534 houses of compassion, support animal breeding techniques for the poor, to create more income and to help people escape poverty in a sustainable way, build Further details can be found in Chapter 3: Report of Management on 2017 Business Performance and 2018 Plan of Action Vingroup Operations and Financial Performance in 2017 Page 54 RAISE LEVEL OF SOCIAL WELL- BEING IN AREAS WHERE THE GROUP OPERATES In 2017, Vingroup continues to expand the presence of Vingroup brands to provinces and cities to improve the society. Large-scale, affordable public real estate projects will be located in the city s suburbs, creating more jobs and social development. Vincom+ models with moderate retail area can be deployed in many towns and cities across the country to support changing consumption habits. Vingroup s corporate social responsibility is also reflected in the decision to convert Vinmec and Vinschool into non-profit models, and to invest in VinEco s high-tech DEMONSTRATE A SENSE OF SOCIAL RESPONSIBILITY TOWARDS BUSINESS PARTNERS, CUSTOMERS, COLLEAGUES AND THE COMMUNITY Fairness and Transparency with Business Partners In partnerships, Vingroup emphasizes fairness, transparency, and mutual benefits for all involved parties, in accordance with applicable regulations and market practices. Each contract signed between the Group or its P&Ls and their counterparts contains an anti-bribery clause that clearly states the procedures for dealing with attempted bribery. Investing in Education and Youth Development to Prepare the Next Generations for Vietnam 14 schools with boarding houses for students in upland districts, support Vietnamese heroic mothers, sponsor free DNA testing to identify the martyrs at the Institute of Research at the Vinmec hospitals, cancer screening, construction and restoration of cultural works, and educational scholarships. The Phat Tich Charity and Career Center is located in Phat Tich Commune, Tien Du District, Bac Ninh Province. It is founded and sponsored by the Kind Heart Fund, which provides care and education for nearly 120 orphans and the elderly with no one to rely on. Also in 2017, the Fund continued to provide regular monthly stipend to nearly 200 individuals and their families in difficult circumstances, and regularly provided free meals to poor patients in public hospitals. The Kind Heart Fund also provided monthly support for 10 temples that are raising foster children in some provinces in the country, funded the cost of living and tuition fees for more than 3,000 good students that were in financial difficulty, and sponsored 312 Mother Vietnam Heroes and 290 former Military volunteers without support in provinces and cities nationwide. Everybody supported by the Fund agriculture with the goal of bringing safe food to the people of Vietnam. The Vietnam Talent Promotion and Development Fund (VINTALENT) runs the Talent Pool Project to select, received frequent attention and contact, and motivation and care. During 2017, many flash floods and typhoons caused great damage to the people in flood-prone provinces in VINPEARL GOLF NHA TRANG 106 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

55 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT ENVIRONMENTAL PROTECTION Vingroup places great emphasis on energy conservation as a means of achieving sustainable development throughout the Group. As a pioneer in real estate development and hospitality, the Group focuses on creating a green working environment, not only for its staff but also for customers. In our ongoing operations, the Group aims to raise staff awareness of environmental protection, addressing climate change, and managing waste treatment systems at Vingroup facilities. These steps ensure that Vingroup is meeting environmental standards, minimizing energy use, and reducing greenhouse gas emissions. MINIMIZE ENERGY AND WATER USE AND NOISE POLLUTION IN ALL OF THE GROUP S PROJEC At all facilities in the system, Vingroup controls the consumption of energy, electricity and water, and launches energy saving initiatives to reduce consumption. Public lighting is turned on by the hour, and by the area, to avoid waste, at the same time LED bulbs are used to save energy. In the fourth quarter of 2017, Vinpearl Phu Quoc has been able to control its energy costs by rearranging its operation plans, such as strict control of boiler operation, classification of non-thermal laundry items, thus saving an average of 15-20% of the oil cost per month. In addition, at all Vinpearl Resort hotels, the entire passenger transport and luggage on the project site operated by electric batteries instead of gasoline to reduce direct emissions into the environment. The re-use of water as well as wastewater treatment is studied and processed right from the design stage. Vinpearl projects use a system of purification, treatment of bio-waste water and posttreatment wastewater to irrigate plants. In Nha Trang, 75% of daily water is produced by the lake itself and handled carefully. In Phu Quoc, the system of lakes has a scientific design to store water in the dry season. Vinmec emphasizes the protection of both hospital and community environments. Solid waste collection facilities are equipped with modern technology. Staff members are trained to monitor waste streams to limit amounts discharged into the environment. Several hospital departments review and monitor compliance with the new standards: the Professional Council, the Quality Control Board, the Infection Control Council, and the Environmental Safety Board. In the field of agriculture, aware of the link between the product and the environment, VinEco advocates limiting the use of underground water, actively investing in water pumping stations from rivers and lakes, and building water treatment zones in accordance with the standard of irrigation water, such as Cu Chi, Tam Phuoc, Da Loan, Hai Phong, Quang Ninh and some other farms. All of VinEco s farms are using advanced drip irrigation to save water, saving 50% of irrigation water compared to regular irrigation. The total area used for advanced drip irrigation accounts for 80% of the cultivated area. Waste issues are also of particular concern. VinEco has built garbage disposal, treatment, and processing areas into organic waste for reuse on all farms throughout the country. VinEco has completed 10 composting workshops in 10 farms; three farms in Cu Chi, Taiwan, and Tam Dao are operating each month to provide 20 to 30 tons of compost for land improvement. VinEco also uses hydroponic greenhouses to circulate water for irrigation and for natural ventilation. This allows optimal control of indoor temperatures while minimizing power consumption. OBSERVE ENVIRONMENTAL PROTECTION PLANS IN EACH OF THE BUILDINGS THAT THE GROUP MANAGES In real estate projects, environmental protection is reflected in low-density designs and an emphasis on harmony between the projects and their surroundings. Optimization of visibility and natural light are found at Vinhomes Skylake, Vinhomes Golden River, and Vinhomes Metropolis. With central air-conditioning, low-e glass lenses to restrict UV light, and electricity consumption controls, these projects now comply with many advanced environmental standards. ADHERE TO THE HIGHEST STANDARDS IN CONSTRUCTION, AND DESIGN PRODUCTS WITH GREEN LIVING IN MIND Emphasis on environmental protection extends from the project design phase through construction and operation at all Vingroup properties: hotels, shopping malls, urban complexes, offices, and residential buildings. Planning and architectural design teams are dedicated to achieving environmental protection in every aspect of their work, from maximizing the efficient use of space, to the creation of modern living and resort complexes, to energy efficiency in building design and construction. Green areas are the hallmarks of Vingroup projects. With low-density housing, plentiful trees, and water features occupying a large proportion of the projects, there are many features to highlight in these modern living spaces. Projects such as Vinhomes Central Park, Vinhomes Golden River, Vinhomes Green Bay, Vinhomes The Harmony and Vinhomes Skylake have maintained green spaces, making full use of riverfront land to build eco-friendly, walkable complexes with large public parks. Vingroup construction creates green focal points in every city across Vietnam. 108 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

56 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT MANAGING SUSTAINABILITY ENGAGING STAKEHOLDERS Vingroup aims to balance the interests of its stakeholders, in order to develop long-term sustainable partnerships based on mutual trust, transparency, and corporate ethical standards. These are the Group s most important stakeholder groups: SHAREHOLDERS VALUES BROUGHT BY VINGROUP SUSTAINABILITY STRATEGY FOR 2020 ACCOMPLISHING BUSINESS GOALS IN ORDER TO GROW EFFECTIVELY AND SUSTAINABLY Shareholders and investors Business performance Dividend payment Transparent and fair corporate governance to protect shareholder interests Vingroup s senior management believes that long-lasting sustainable value and social contributions can only be accomplished by achieving sustainable economic growth. Leveraging our commercial success, the Group now has the resources to execute our strategies in human capital development, environmental protection, and corporate social responsibility. The Group s sustainability strategy for 2020 requires Vingroup to strike a balance among the interests of stakeholders, following the four principles Maximize growth in ways that are sustainable Maintain a leadership position in the real estate market, as well as in all the other business segments Make sustainable contributions to the economy Observe applicable procurement, environmental, and social standards, and Strengthen corporate governance and management capability ONGOING DEVELOPMENT OF HUMAN CAPITAL Protect employee rights and equality Build a strong and cohesive corporate culture Focus on sustainable development of the human resources, and Foster team spirit by organizing community involvement and employee charitable activities. Customers Adequate and timely disclosure of information, promptly seeking shareholders consent for important matters through extraordinary shareholder meetings when required Frequent meetings, Vingroup website, mailboxes ir@vingroup.net, ir@vincom.com.vn, ir@vinhomes.vn, and Investor Relations Quarterly Newsletters enable investors to meet and understand the Group s strategy from senior management. Commitment to quality of products and services Highly-qualified consultants to provide adequate and accurate information Model units for prospective buyers of residential properties; relentless improvements in design, landscaping and amenities Additional benefits for customers using VinID Card (Vingroup Loyalty Program) Shopping mall tenants benefit from regular large-scale events to attract shoppers Vinhomes residents enjoy frequent community programs to connect with one another in a harmonious environment 24/7 hotline to provide information and assistance on the Group s products and services. MANAGING CORPORATE SOCIAL RESPONSIBILITIES Develop products that meet community standards Local community Environmental and community impact assessment studies prior to implementation of real estate developments Raise the level of social well-being in areas where the Group operates, and Demonstrate a sense of social responsibility towards business partners, customers, colleagues and the community. Frequent dialogues with local authorities regarding measures to improve the local environment Assist regulatory authorities in developing local infrastructure ENVIRONMENTAL PROTECTION Mobilize local work force, create new jobs and raise level of social well-being in areas where the Group operates. Minimize energy and water use and noise pollution in all of the Group s projects Observe environmental protection plans in each of the buildings that the Group manages, and Adhere to the highest standards in construction, and design our products Regulators Participate in conferences and seminars with regulators Member of many trade associations including the World Economic Forum ( WEF ) and Vietnamese Association of Enterprises with Foreign Investments. Contribute comments on draft policies and legal documents with Green Living in mind. Employees Further details can be found in Chapter 5: Sustainable Development 2017 Sustainability Report Ongoing development of human capital Page 102. Business partners Maintain relationships with suppliers and business partners based on fairness, transparency and mutual benefit Select suppliers based on criteria including compliance with the law and commitment to environmental protection and sustainability. 110 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

57 CHAPTER 5 SUSTAINABLE DEVELOPMENT CHAPTER 5 SUSTAINABLE DEVELOPMENT IDENTIFICATION, CLASSIFICATION AND HANDLING OF CRITICAL ISSUES Vingroup constantly reviews its operations and maintains communications with stakeholders in order to identify critical issues facing the Group. These issues are ranked based on their level of concern to stakeholders and their impact on corporate operations in order for us to prioritize action plans and resources. Using this approach, critical issues identified by Vingroup that need to be addressed are discussed in the following paragraphs. For shareholders and investors: economic efficiency, presence in the market For customers: safety and health, product responsibility For local communities: wastewater and waste, energy For management agencies: compliance, anticorruption. public policy For employees: equal opportunity, fair Remuneration, Employment, Education and Training, Human Rights For partners and suppliers: equal opportunity, supplier review Vingroup understands the significance of sustainability and is therefore determined to integrate sustainability into our operations and governance at all levels, from executives to employees. Senior management commitment Sustainability criteria are defined in detail and are used as benchmarks to measure the performance of each member of Management and senior executives in Vingroup and the P&Ls. Integration of sustainability measures into management and operational practices Management is responsible for developing specific policies, targets, and mechanisms to monitor the achievement of sustainability targets set by the Board. One example is the policy to require an environmental and community impact assessment to be conducted prior to the commencement of a real estate project. Another example is the way that recruitment and training procedures are designed to ensure equal opportunity for all employees. Training To ensure that sustainability objectives are achieved, the Group frequently provides training to all employees to introduce relevant knowledge and skills. VINPEARL SKY WHEEL VINPEARL LAND NHA TRANG Vingroup has already received recognition from the Business Council for Sustainable Development as one of the Top Ten Sustainable Companies in Vietnam in We view our current progress in sustainability as an early step on a long journey to achieve our mission to create a better life for the Vietnamese people. 112 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

58 VINGROUP ANNUAL REPORT 2017 GO GLOBAL VINPEARL HA LONG BAY RESORT

59 CHAPTER 6 GENERAL INFORMATION CHAPTER 06 CONSOLIDATED FINANCIAL STATEMENTS General information Report of management Independent auditors report Consolidated balance sheet Consolidated income statement Consolidated cash flow statement Notes to the consolidated financial statements THE COMPANY Vingroup Joint Stock Company ( the Company ) is a joint stock company established in Vietnam pursuant to the Business Registration Certificate No issued by the Hanoi Department of Planning and Investment on 3 May 2002 and the Business Registration Certificate No re-issued on 12 May The Company subsequently received amended Enterprise Registration Certificates, with the latest amendment being the 64th amended Enterprise Registration Certificate dated 28 February The Company s shares are officially listed on the Ho Chi Minh City Stock Exchange ( HOSE ) from 19 September 2007 pursuant to Decision No.106/QD-TTGDHCM issued by the Director of HOSE on 7 September The current principal activities of the Company are to invest in, construct and trade real estate properties; to carry out capital mobilization and investment activities; and to provide general administrative services. Current principal activities of the Company s subsidiaries are presented in Appendix 1. The Company s head office is registered at No. 7, Bang Lang 1 street, Vinhomes Riverside Eco-urban Area, Viet Hung ward, Long Bien district, Hanoi, Vietnam. Its branch is located at No. 72, Le Thanh Ton and No. 45A, Ly Tu Trong street, Ben Nghe ward, district 1, Ho Chi Minh city, Vietnam. BOARD OF DIRECTORS Members of the Board of Directors during the year and at the date of this report are: Mr. Pham Nhat Vuong Chairman Mr. Le Khac Hiep Vice Chairman Ms. Pham Thuy Hang Vice Chairwoman Ms. Pham Thu Huong Vice Chairwoman Ms. Nguyen Dieu Linh Vice Chairwoman Mr. Ling Chung Yee Roy Member Ms. Mai Huong Noi Member resigned on 20 April 2017 Mr. Nguyen Viet Quang Member appointed on 20 April 2017 SUPERVISORY BOARD Members of the Supervisory Board during the year and at the date of this report are: Mr. Nguyen The Anh Head of the Supervisory Board Mr. Dinh Ngoc Lan Member Ms. Do Thi Hong Van Member Ms. Nguyen Thi Van Trinh Member resigned on 26 April 2017 MANAGEMENT Members of management during the year and at the date of this report are: Mr. Nguyen Viet Quang Chief Executive Officer appointed on 25 February 2018 Ms. Duong Thi Mai Hoa Chief Executive Officer resigned on 25 February 2018 Ms. Mai Huong Noi Deputy Chief Executive Officer Mr. Pham Van Khuong Deputy Chief Executive Officer Ms. Nguyen Thi Diu Deputy Chief Executive Officer Ms. Duong Thi Hoan Deputy Chief Executive Officer LEGAL REPRESENTATIVE Appendix 1 The Group structure as at 31 December Mr. Marc Villiers Townsend Mr. Joseph Raymond Gagnon Member Member The legal representative of the Company from 1 January 2017 to 25 February 2018 is Ms. Duong Thi Mai Hoa and from 25 February 2018 to the date of this report is Mr. Nguyen Viet Quang. AUDITOR The auditor of the Company is Ernst & Young Vietnam Limited. VINGROUP - ANNUAL REPORT

60 CHAPTER 6 CHAPTER 6 REPORT OF MANAGEMENT INDEPENDENT AUDITORS REPORT Management of Vingroup Joint Stock Company ( the Company ) is pleased to present this report and the consolidated financial statements of the Company and its subsidiaries (collectively referred to as the Group ) for the year ended 31 December MANAGEMENT S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the consolidated financial position of the Group and of the consolidated results of its operations and its consolidated cash flows for the year. In preparing those consolidated financial statements, management is required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and For and on behalf of management: prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue its business. Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure that the accounting records comply with the applied accounting system. It is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Management confirmed that it has complied with the above requirements in preparing the accompanying consolidated financial statements. STATEMENT BY MANAGEMENT Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2017 and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to the preparation and presentation of the consolidated financial statements. To: The Shareholders of Vingroup Joint Stock Company We have audited the accompanying consolidated financial statements of Vingroup Joint Stock Company ( the Company ) and its subsidiaries (collectively referred to as the Group ) as prepared on 10 April 2018 and set out on pages 6 to 99, which comprise the consolidated balance sheet as at 31 December 2017, the consolidated income statement and the consolidated cash flow statement for the year then ended and the notes thereto. Responsibility of the Company s management The Company s management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to the preparation and presentation of the consolidated financial statements, and for such internal control as the Company s management determines is necessary to enable the preparation and presentation of the consolidated 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 consolidated financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the Group's preparation and fair presentation of the consolidated 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 Group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Company s management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated financial position of the Group as at 31 December 2017, and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of the consolidated financial statements. Ernst & Young Vietnam Limited Tran Phu Son Trinh Xuan Hoa Nguyen Viet Quang Chief Executive Officer Deputy General Director Audit Practising Registration Certificate No Auditor Audit Practising Registration Certificate No Hanoi, Vietnam 10 April 2018 Hanoi, Vietnam 10 April ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

61 CHAPTER 6 CHAPTER 6 CONSOLIDATED BALANCE SHEET As at 31 December 2017 Code ASSETS Notes Ending balance Beginning balance (Restated) Code ASSETS Notes Ending balance Beginning balance (Restated) 200 B. NON-CURRENT ASSETS 113,545,441,345,980 90,499,384,229, I. Long-term receivables 563,644,449, ,506,617, Long-term loan receivables 8 269,026,341,080 58,989,915, A.CURRENT ASSETS 100,246,615,638,617 92,976,241,715, I. Cash and cash equivalents 5 8,141,750,027,686 9,833,332,219, Cash 6,182,781,185,541 6,243,230,621, Cash equivalents 1,958,968,842,145 3,590,101,597, II. Short-term investments 6 672,569,770, ,156,904, Held-for-trading securities ,369,112,000 32,369,112, Provision for held-for-trading securities 6.1 (19,505,232,000) (18,996,660,000) Held-to-maturity investments ,705,890, ,784,452, III. Current accounts receivable 27,335,112,175,074 18,254,656,305, Short-term trade receivables 7.1 5,744,460,450,918 3,170,762,775, Short-term advances to suppliers 7.2 8,675,566,825,227 5,229,186,165, Short-term loan receivables 8 7,684,239,828,536 3,224,258,638, Other short-term receivables 9 5,748,899,913,388 6,809,970,413, Provision for doubtful short-term receivables 10 (518,054,842,995) (179,521,687,152) 140 IV. Inventories 11 56,058,815,191,085 55,175,220,368, Inventories 56,403,215,413,508 55,272,215,830, Provision for obsolete inventories (344,400,222,423) (96,995,461,541) 150 V. Other current assets 8,038,368,474,701 9,218,875,916, Short-term prepaid expenses 12 4,758,744,122,155 3,123,024,713, Value-added tax deductible 1,099,347,699, ,722,775, Tax and other receivables from the State ,678,380, ,457,535, Other current assets 13 1,966,598,271,806 5,011,670,892, Other long-term receivables 9 294,618,108, ,516,702, II. Fixed assets 35,649,944,002,033 26,880,911,532, Tangible fixed assets 14 34,973,533,341,870 26,066,821,876, Cost 40,845,582,676,116 30,165,242,182, Accumulated depreciation (5,872,049,334,246) (4,098,420,305,890) Intangible fixed assets ,410,660, ,089,655, Cost 1,222,264,361,922 1,173,632,007, Accumulated amortisation (545,853,701,759) (359,542,351,914) 230 III. Investment properties 16 18,198,420,908,900 17,362,127,296, Cost 20,842,351,193,783 19,186,357,270, Accumulated depreciation (2,643,930,284,883) (1,824,229,973,612) 240 IV. Long-term assets in progress 37,492,138,281,596 34,229,427,585, Construction in progress 18 37,492,138,281,596 34,229,427,585, V. Long-term investments 6,485,785,915,017 3,360,331,864, Investments in associates, jointly controlled entities ,439,624,600,795 1,730,283,476, Investments in other entities ,176,543,861,811 1,616,241,288, Provision for long-term investments 19.1 (50,382,547,589) (56,192,900,196) Held-to-maturity investments ,920,000,000,000 70,000,000, VI. Other long-term assets 15,155,507,789,052 8,201,079,333, Long-term prepaid expenses 12 3,061,950,076,912 2,252,711,733, Deferred tax assets ,979,519, ,604,798, Other long-term assets 13 7,115,047,177, Goodwill 20 4,640,531,015,193 5,619,762,801, TOTAL ASSETS 213,792,056,984, ,475,625,944, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

62 CHAPTER 6 CHAPTER 6 CONSOLIDATED BALANCE SHEET CONSOLIDATED BALANCE SHEET As at 31 December 2017 As at 31 December 2017 Code RESOURCES Notes Ending balance Beginning balance Code RESOURCES Notes Ending balance Beginning balance (Restated) 300 C. LIABILITIES 161,235,046,806, ,184,454,789, I. Current liabilities 123,624,630,823,022 97,627,931,086, Short-term trade payables ,245,460,364,882 6,458,154,238, Short-term advances from customers ,822,434,640,779 47,537,280,868, Statutory obligations 22 4,933,105,236,661 7,366,546,933, Payables to employees 674,309,918, ,583,692, Short-term accrued expenses 23 10,416,596,543,393 8,454,261,883, Short-term unearned revenues 24 1,755,431,476,536 1,138,838,659, Short-term other payables ,460,922,418,130 20,468,556,855, Short-term loans and debts ,140,968,057,370 5,590,652,159, Short-term provisions ,402,166, ,055,795, II. Non-current liabilities 37,610,415,983,920 37,556,523,702, D. OWNERS' EQUITY 52,557,010,177,655 48,291,171,155, I. Capital ,557,010,177,655 48,291,171,155, Issued share capital ,377,079,540,000 26,377,079,540, a Shares with voting rights 26,377,079,540,000 26,377,079,540, Share premium ,651,165,167,904 2,504,959,737, Treasury shares 28.1 (2,974,924,074,484) (2,974,924,074,484) Other funds belonging to owners equity ,845,114,930 32,845,114, Undistributed earnings ,583,084,564,118 1,887,422,518, a Undistributed earnings by the end of prior year 1,882,422,518, ,299,862, b Undistributed earnings of current year 3,700,662,046,049 1,485,122,655, Non-controlling interests ,882,759,865,187 20,463,788,319, TOTAL LIABILITIES AND OWNERS EQUITY 213,792,056,984, ,475,625,944, Long-term unearned revenues 24 5,535,359,362,778 2,389,764,581, Other long-term liabilities ,750,848, ,119,050, Long-term loans and debts ,219,525,897,044 34,168,826,603, Deferred tax liabilities ,779,876, ,813,466,293 Van Thi Hai Ha Preparer Nguyen Thi Thu Hien Chief Accountant Nguyen Viet Quang Chief Executive Officer 10 April ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

63 CHAPTER 6 CONSOLIDATED INCOME STATEMENT CHAPTER 6 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2017 For the year ended 31 December 2017 Code ITEMS Notes Current year Previous year (Restated) Code ITEMS Notes Current year Previous year (Restated) Revenue from sale of goods and rendering of services ,392,047,933,230 57,670,387,202, Deductions 29.1 (41,999,335,317) (56,043,536,545) Net revenue from sale of goods and rendering of services ,350,048,597,913 57,614,343,665, Cost of goods sold and services rendered 30 (62,796,326,957,038) (40,184,632,606,036) Gross profit from sale of goods and rendering of services 26,553,721,640,875 17,429,711,059, Finance income ,636,951,439,612 6,762,384,524, Finance expenses 31 (3,786,983,558,714) (5,389,034,072,187) 23 In which: Interest expenses (3,401,633,686,717) (4,308,066,793,490) Shares of profit of associates, joint-ventures ,400,927,597 19,823,588, Selling expenses 32 (8,150,455,992,627) (6,672,815,695,018) General and administrative expenses 32 (6,852,447,761,955) (5,481,841,090,812) Operating profit 9,445,186,694,788 6,668,228,314, Other income ,964,045, ,479,678, Other expenses 33 (765,869,262,018) (618,871,762,087) Other (loss)/profit 33 (330,905,216,212) 69,607,916, Accounting profit before tax 9,114,281,478,576 6,737,836,230, Current corporate income tax expense 35.1 (3,731,381,559,479) (2,534,168,929,813) Deferred tax income ,041,872, ,477,855, Net profit after tax 5,654,941,791,226 4,458,145,157, Net profit after tax attributable to shareholders of the parent ,462,411,670,513 3,384,588,126, Net profit after tax attributable to noncontrolling interests ,192,530,120,713 1,073,557,030, Basic earnings per share 37 1,816 1, Diluted earnings per share 37 1,816 1,378 Van Thi Hai Ha Preparer 10 April 2018 Nguyen Thi Thu Hien Chief Accountant Nguyen Viet Quang Chief Executive Officer I. CASH FLOWS FROM OPERATING ACTIVITIES 01 Profit before tax 9,114,281,478,576 6,737,836,230,994 Adjustments for: 02 Depreciation of fixed assets and investment properties and amortisation of intangible assets 40 3,985,433,267,539 3,311,557,843,562 (including amortisation of goodwill) 03 Provisions 689,528,177, ,826,931, Foreign exchange losses/(gains) 50,260,047,814 (64,931,257,744) 05 Profits from investing activities 40 (1,015,255,359,806) (5,967,033,063,420) 06 Interest expenses 31 3,401,633,686,717 4,308,066,793, Operating profit before changes in working capital 16,225,881,298,087 8,467,323,478, Increase in receivables (6,730,252,290,761) ( ) 10 Increase in inventories (1,227,813,074,755) (13,486,963,673,195) 11 Increase in payables (other than interest, corporate income tax) 18,034,651,110,034 18,604,163,811, Increase in prepaid expenses (2,563,290,205,702) (2,720,086,885,910) 14 Interest paid (3,062,709,959,110) (3,736,500,947,012) 15 Corporate income tax paid 22 (3,890,618,182,474) (2,294,234,119,932) 20 Net cash flows from operating activities 16,785,848,695,319 4,498,546,635,973 II. CASH FLOWS FROM INVESTING ACTIVITIES 21 Purchase and construction of fixed assets and other long-term assets (19,509,233,343,507) (14,301,529,343,969) 22 Proceeds from disposals of fixed assets and other long-term assets 230,738,747,196 66,786,752, Loans to other entities and payments for purchase of debt instruments of other entities 40 (13,120,643,139,535) (3,432,087,468,527) 24 Collections from borrowers and proceeds from sale of debt instruments of other entities 40 5,871,047,533,029 22,880,893,204, Payments for investments in other entities (net of cash held by entity being acquired) 40 (15,153,204,450,348) (22,459,345,068,846) 26 Proceeds from sale of investments in other entities (net of cash held by entity being 40 13,991,102,708,588 15,306,966,443,347 disposed) 27 Interest and dividends received 1,173,726,980,704 1,107,787,615, Net cash flows used in investing activities (26,516,464,963,873) (830,527,865,324) 124 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

64 CHAPTER 6 CHAPTER 6 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at 31 December 2017 and for the year then ended Code ITEMS Notes Current year Previous year III. CASH FLOWS FROM FINANCING ACTIVITIES 31 Capital contribution and issuance of shares 40 13,000,000,000 1,310,346,390, Capital redemption (30,000,000,000) - 33 Drawdown of borrowings 31,918,446,307,125 20,814,923,248, Repayment of borrowings (22,256,448,989,518) (21,563,433,421,832) 36 Dividends paid to equity holders 40 (1,604,550,206,376) (1,339,903,941,515) 40 Net cash flows from/(used in) financing activities 8,040,447,111,231 (778,067,725,026) 50 Net (decrease)/increase in cash and cash equivalents for the year (1,690,169,157,323) 2,889,951,045, Cash and cash equivalents at the beginning of the year 9,833,332,219,401 6,938,465,104, Impact of exchange rate fluctuation (1,413,034,392) 4,916,069, Cash and cash equivalents at the end of the year 5 8,141,750,027,686 9,833,332,219,401 Van Thi Hai Ha Nguyen Thi Thu Hien Nguyen Viet Quang Preparer Chief Accountant Chief Executive Officer 10 April CORPORATE INFORMATION Vingroup Joint Stock Company ( the Company ) is a joint stock company established in Vietnam pursuant to the Business Registration Certificate No issued by the Hanoi Department of Planning and Investment on 3 May 2002 and the Business Registration Certificate No re-issued on 12 May The Company subsequently received amended Enterprise Registration Certificates, with the latest amendment being the 64th amended Enterprise Registration Certificate dated 28 February The Company s shares are officially listed on the Ho Chi Minh City Stock Exchange ( HOSE ) from 19 September 2007 pursuant to Decision No.106/QD-TTGDHCM issued by the Director of HOSE on 7 September The current principal activities of the Company are to invest in, construct and trade real estate properties; to carry out capital mobilization and investment activities; and to provide general administrative services. Current principal activities of the Company s subsidiaries are presented in Appendix 1. The normal course of business cycle of real estate business starts of the Company and its subsidiaries ( the Group ) at the time of application for investment certificate, commencement of site clearance, construction and ends at the time of completion. Thus, the Group s normal couse of business cycle of real estate trading is from 12 to 36 months. The Group s normal course of business cycle of other business activities is 12 months. The Company s head office is registered at No. 7, Bang Lang 1 street, Vinhomes Riverside Eco-urban Area, Viet Hung ward, Long Bien district, Hanoi, Vietnam. Its branch is located at No. 72, Le Thanh Ton and No. 45A, Ly Tu Trong street, Ben Nghe ward, district 1, Ho Chi Minh city, Vietnam. The number of the Company s employees as at 31 December 2017 is: 347 (31 December 2016: 333). As at 31 December 2017, the Company has 48 subsidiaries. The information on these subsidiaries, along with the Company s voting rights and equity interest in each subsidiary are detailed in the Appendix BASIS OF PREPARATION 2.1 Accounting standards and system The consolidated financial statements of the Company and its subsidiaries expressed in Vietnam dong ( VND ) are prepared in accordance with Vietnamese Enterprise Accounting System and Vietnamese Accounting Standard issued by the Ministry of Finance as per: Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 1); Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 2); Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 3); Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 4); and Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 5). Accordingly, the accompanying consolidated financial statements, including their utilisation are not designed for those who are not informed about Vietnam s accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam. 2.2 Applied accounting documentation system The Company s applied accounting documentation system is the General Journal. 2.3 Fiscal year The Group s fiscal year applicable for the preparation of its consolidated financial statements starts on 1 January and ends on 31 December. As at 31 December 2017, the Group also holds investments in a number of associates as disclosed in Note ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

65 CHAPTER 6 CHAPTER Accounting currency The consolidated financial statements are prepared in VND which is also the Company s accounting currency. 2.5 Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries for the year ended 31 December Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continued to be consolidated until the date that such control ceases, except for temporary controls when a subsidiary is acquired and held exclusively with a view to resale within 12 months. The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All intra-company balances, income and expenses and unrealised gains or losses resulting from intra-company transactions are eliminated in full. Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet, separately from parent shareholders equity. Impact of change in the ownership interest of a subsidiary, without a loss of control, is recorded in undistributed earnings. In case the Group disposes a partial interest in a subsidiary and loses control but retains an interest as an associate, the Group s investment is accounted for using the equity method of accounting. Profit/loss from this transaction is recognised in the consolidated income statement. In case the Group disposes a partial interest in a subsidiary and loses control but retains an interest as an investment in other entities, the Group s investment is accounted for using the cost method. Profit/loss from this transaction is recognised in the consolidated income statement. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1 Changes in accounting policies and disclosures The accounting policies adopted by the Group in preparation of the consolidated financial statements are consistent with those followed in the preparation of the Group s consolidated financial statements for the year ended 31 December Cash and cash equivalents Cash and cash equivalents comprise cash on hand, cash at banks and short-term, highly liquid investments with an original maturity of no longer than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value. 3.3 Inventories Inventory property Property acquired or being constructed for sale in the ordinary course of business or for long-term lease qualified for recognition of outright sales, rather than to be held for rental or capital appreciation, is held as inventory and is measured at the lower of cost incurred in bringing the inventories to their present location and condition, and net realisable value. Freehold and leasehold rights for land; Amounts paid to contractors for construction; and Borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, construction overheads and other related costs. Net realisable value is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date and less estimated costs to completion and the estimated costs of sale. The cost of inventory recognised in profit or loss on disposal is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the appropriate basis. Other inventories Inventories are carried at the lower of cost incurred in bringing each product to its present location and condition and net realisable value. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs to complete and the estimated costs necessary to make the sale. The periodic method is used to record the costs of inventories for hotel and related services. The perpetual method is used to record the costs of other inventories. The costs of inventories for hospital and related services are valued on specific identification basis. The costs of other inventories are valued on weighted average basis. Provision for obsolete inventories An inventory provision is created for the estimated loss arising due to the impairment of value (through diminution, damage, obsolescence, etc.) of raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the consolidated balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement. 3.4 Receivables Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other debtors, after provision for doubtful debts. The provision for doubtful debts represents amounts of outstanding receivables at the balance sheet date which are doubtful of being recovered. Increases and decreases to the provision balance are recorded as general and administrative expense in the consolidated income statement. 3.5 Tangible fixed assets Tangible fixed assets are stated at cost less accumulated depreciation. The cost of a tangible fixed asset comprises its purchase price and any directly attributable costs of bringing the tangible fixed asset to working condition for its intended use. Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and expenditures for maintenance and repairs are charged to the consolidated income statement as incurred. When tangible fixed assets are sold or retired, any gain or loss resulting from their disposal (the difference between the net disposal proceeds and the carrying amount) is included in the consolidated income statement. 3.6 Leased assets The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset. A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases. Where the Group is the lessee Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over the lease term. Where the Group is the lessor Assets subject to operating leases are included as the Group s investment properties in the consolidated balance sheet. Initial direct costs incurred in negotiating an operating lease are recognised in the consolidated income statement as incurred. Lease income is recognised in the consolidated income statement on a straight-line basis over the lease term. 3.7 Intangible fixed assets Intangible fixed assets are stated at cost less accumulated amortisation. The cost of an intangible fixed asset comprises of its purchase price and any directly attributable costs of preparing the intangible asset for its intended use. Expenditures for additions, improvements are added to the carrying amount of the assets and other expenditures are charged to the consolidated income statement as incurred. When intangible fixed assets are sold or retired, any gain or loss resulting from their disposal (the difference between the net disposal proceeds and the carrying amount) is included in the consolidated income statement. Land use rights Definite and indefinite land use rights are recorded as intangible fixed assets based on land use right certificates issued by governing bodies. The prepayment for land rental, of which the land lease contracts have effectiveness prior to 2003 and Land use right certificate being issued, are recorded as intangible fixed asset according to Circular No. 45/2013/TT-BTC issued by the Ministry of Finance on 25 April 2013 guiding the management, use and depreciation of fixed assets ( Circular 45 ). Research and development costs Research costs and development costs that do not meet the capitalisation criteria are recognised as expensed in the consolidated income statement as incurred. Development expenditure on an individual project is recognised as an intangible fixed asset only if the Group can demonstrate all of the following conditions: The technical feasibility study of completing the intangible fixed asset so that it will be available for use or sale; The intention to complete and use or sell the intangible fixed asset; The ability to use or sell the intangible fixed asset; The asset will generate probable future economic benefits; The availability of resources to complete the development and to use or sell the intangible fixed asset; The ability to measure reliably the expenditure during the development; and They are estimated to meet all criteria for use duration and value prescribed for intangible fixed asset. 128 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

66 CHAPTER 6 CHAPTER 6 Development costs capitalised as asset are stated at cost less accumulated amortisation. Amortisation of the asset begins when development is completed and the asset is available for use. 3.8 Depreciation and amortisation Depreciation and amortisation of tangible fixed assets and intangible fixed assets are calculated on a straight-line basis over the estimated useful life of each asset as follows: Buildings and structures Machinery and equipment Means of transportation Office equipment E-commerce website Computer software Land use rights with definite term Distribution rights and others 5-50 years 3-15 years 3-12 years 3-8 years 2-20 years 3-10 years years 3-15 years No amortisation is charged on the land use rights with indefinite terms. 3.9 Investment properties Investment properties are stated at cost, including transaction costs, less accumulated depreciation and amortisation. Subsequent expenditure relating to an investment property that has already been recognised is added to the net book value of the investment property when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing investment property, will flow to the Group. Depreciation of investment properties is calculated on a straight-line basis over the estimated useful life of each asset as follows: Land use rights (definite) Buildings Machinery and equipment years 5-50 years 3-15 years No amortisation is charged on the land use rights presented as investment properties with indefinite terms. Investment properties are derecognised when either they have been disposed of or when the investment properties are permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the assets is recognised in the consolidated income statement in the year of retirement or disposal. Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner-occupation or readiness for sale, commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment properties when, and only when, there is change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale. The transfer from investment property to owner-occupied property or inventories does not change the cost or the carrying value of the property for subsequent accounting at the date of change in use Borrowing costs Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds. Borrowing costs are recorded as expense during the year in which they are incurred, except to the extent that they are capitalised as explained in the following paragraph. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily take a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset Prepaid expenses Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated balance sheet and amortised over the period for which the amounts are paid or the period in which economic benefits are generated in relation to these expenses. Long-term prepaid expenses include long-term prepaid land rental, pre-operation expenditure, tools and supplies, and other prepaid expenses that bring future economic benefits for more than one year. Prepaid land rental represents the unamortised balance of advance payment made in accordance with Land Rental Contract signed with authorities. Such prepaid land rental is recognised as a long-term prepaid expense for allocation to the consolidated income statement over the remaining lease period according to Circular Business combinations and goodwill Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of business combination. In case prior to the date that control is obtained, the investment is an investment in associate or a long-term investment and the acquisition of that subsidiary is a business combination, when preparing the consolidated financial statements, the Group shall remeasure its previously held equity interests at its acquisition-date fair value and recognise the resulting gain or loss, if any, in the consolidated income statement. Goodwill acquired in a business combination is initially measured at cost being the excess of the cost the business combination over the Group s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities. If the cost of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortisation. Goodwill is amortised over 10-year period on a straightline basis. The Group conducts the periodical review for impairment of goodwill of investment in subsidiaries. If there are indicators of impairment loss incurred is higher than the yearly allocated amount of goodwill on the straight-line basis, the higher amount will be recorded in the consolidated income statement. Assets acquisitions and business combinations The Group acquires subsidiaries that own real estate projects. At the time of acquisition, the Group considers whether the acquisition represents the acquisition of a business. The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. When the acquisition of subsidiaries does not represent a business combination, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised. In case prior to the date that control is obtained, the investment is an investment in associate or a long-term investment and the acquisition of the subsidiary is not a business combination, when preparing the consolidated financial statements, the Group shall not remeasure the previously held equity interests. Instead previously held equity interests and the consideration were allocated to the assets and liabilities acquired based on their relative fair values on acquisition date. Business combinations involving entities under common control Business combinations involving entities under common control are accounted for as follows: The assets and liabilities of the two combined entities are reflected at their carrying amounts on the date of business combination; No goodwill is recognised from the business combination; The consolidated income statement reflects the results of the combined entities from the date of the business combination; and Any difference between the consideration paid and the net assets of the acquiree is recorded in equity Investments Investment in associates The Group s investment in its associate is accounted for using the equity method of accounting. An associate is an entity in which the Group has significant influence that are neither subsidiaries nor joint ventures. The Group generally deems they have significant influence if they have over 20% of the voting rights in the investee. Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post-acquisition changes in the Group s share of net assets of the associates. Goodwill arising on acquisition of the associate is included in the carrying amount of the investment. The Group does not charge any amortisation on the goodwill, but annually carries out test of impairment of goodwill. The consolidated income statement reflects the Group s share of the post-acquisition results of operation of the associate. The share of post-acquisition profit/(loss) of the associates is presented on face of the consolidated income statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividend/profit sharing receivable from associates reduces the carrying amount of the investment. The financial statements of the associates are prepared for the same reporting year as the Group and using the consistent accounting policies with the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. The Group ceases the use of the equity method of accounting since the date it no longer has significant influence over the associate. If the retained equity interest is a long-term investment, the entity measures the retained equity interest at fair value regarded as the cost on initial recognition. Profit/(loss) from the disposal of associate is recognised in the consolidated income statement. Investments in joint ventures The Group s investment in joint ventures is accounted for using the equity method of accounting. Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post joint ventures changes in the Group s share of net assets of the joint ventures. The consolidated income statement reflects the share of the post-acquisition results of operation of the joint ventures. The share of profit/(loss) of the joint ventures is presented 130 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

67 CHAPTER 6 CHAPTER 6 on face of the consolidated income statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividend/profit sharing received or receivable from jointly controlled entities reduces the carrying amount of the investment. The financial statements of the joint ventures are prepared for the same reporting period and use the same accounting policies as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Held-for-trading securities and investments in other entities Held-for-trading securities and in securities and investments in other entities are stated at their acquisition costs. Provision for held-for-trading securities and investments in entities Provision is made for any diminution in value of the heldfor-trading securities and investments in capital of other entities at the balance sheet date in accordance with the guidance under Circular No. 228/2009/TT-BTC dated 7 December 2009 and Circular No. 89/2013/TT-BTC dated 28 June 2013 issued by the Ministry of Finance. Increases or decreases to the provision balance are recorded as finance expense in the consolidated income statement. This accrued severance pay is used to settle the termination allowance to be paid to employees upon termination of their labour contract following Article 48 of the Labour Code Provisions General provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed by a third party, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance expense. Provision for warranty expenses Monetary liabilities are translated at selling exchange rate of the commercial bank where the Group conducts transactions regularly. All foreign exchange differences incurred during the year and arised from the translation at the end of the year are taken to the consolidated income statement Treasury shares Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised upon purchase, sale, issue or cancellation of the Group s own equity instruments Appropriation of net profits Net profit after tax (excluding negative goodwill arising from a bargain purchase) is available for appropriation to investors/shareholders after approval by the appropriate level of authority/in the annual general meeting, and after making appropriation to reserve funds in accordance with the Company s Charter and Vietnam s regulatory requirements. The Group maintains the reserve funds which are appropriated from the Group s net profit as proposed by the Board of Directors and subject to approval by shareholders at the Annual General Meeting Advances from customers for reimbursing the prepaid lease payments under any circumstances; The prepaid lease payment is not less than 90% of the total estimated lease payment collected under contract over the lease period and lessee must pay all rental within 12 months from the commencement of the lease; Almost all risks and rewards associated with the ownership of leased assets are transferred to the lessee; and Lessor must estimate the full cost of leasing activity. Revenue from leasing of properties Rental income arising from leased properties is recognised in the consolidated income statement on a straight line basis over the lease terms of ongoing leases. Sale of goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually upon the delivery of the goods. Rendering of services Revenue from hotel, amusement park, education, beauty, hospital, real estate management and other related services is recorded when the services are rendered. When the outcome of the contract is certainly determined, revenue will be recognised based on percentage of completion. Held-to-maturity investments Held-to-maturity investments are stated at their acquisition costs. After initial recognition, these investments are measured at recoverable amount. Any impairment loss incurred is recognised as expense in the consolidated income statement and deducted against the value of such investments Payables and accruals Payables and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group Accrual for severance pay The severance pay to employee is accrued at the end of each reporting year for all employees who have been in service for more than 12 months up to the balance sheet date at the rate of one-half of the average monthly salary for each year of service up to 31 December 2008 in accordance with the Labour Code and related implementing guidance. The average monthly salary used in this calculation is revised at the end of each reporting year following the average monthly salary of the 6-month period up to the reporting date. Increases or decreases to the accrued amount other than actual payment to employee will be taken to the consolidated income statement. The Group estimates provision for warranty expenses based on revenue and available information about the repair of real estate properties sold in the past Foreign currency transactions Transactions in currencies other than the Group s reporting currency of VND are recorded at the actual transaction exchange rates at transaction dates which are determined as follows: Transaction resulting in receivables are recorded at the buying exchange rates of the commercial banks designated for collection; Transactions resulting in liabilities are recorded at the selling exchange rates of the transaction of commercial banks designated for payment; and Payments for assets or expenses without liabilities initially being recognised is recorded at the buying exchange rates of the commercial banks that process these payments. At the end of the year, monetary balances denominated in foreign currencies are translated at the actual transaction exchange rates at the consolidated balance sheet dates which are determined as follows: Monetary assets are translated at buying exchange rate of the commercial bank where the Group conducts transactions regularly; and Payments received from customers as deposits for the purchase of houses, villas and apartments in the future that do not meet the conditions for revenue recognition, are recognised and presented as Advances from customers in the liability section in the consolidated balance sheet Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding trade discount, rebate and sales return. The following specific recognition criteria must also be met before revenue is recognised. Revenue from sale of inventory property Revenue from sale of inventory property is recognised when the significant risks and rewards incident to ownership of the properties have passed to the buyer. Revenue from sale of inventory property also includes longterm lease of inventory property qualified for recognition of outright sales. If the lease-term is greater than 90% of the asset s useful life, the Group will recognise the revenue for the entire prepaid lease payment if all of the following conditions are met: Lessee is not allowed to cancel the lease contract during the lease term, and the lessor is not reponsible Gains from securities trading/capital transfer Gains from securities trading and capital transfer are determined as the excess of selling prices against the cost of securities sold. Such gains are recognised on the transaction date when the relevant contracts are executed. Interest Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectability is in doubt. Dividends Income is recognised when the Group s entitlement as an investor to receive the dividend is established Construction contract Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the consolidated balance sheet date based on the construction works as certified by customers. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that is probably recoverable. Contract costs are recognised as expenses in the year in which they are incurred. 132 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

68 CHAPTER 6 CHAPTER 6 Difference between the cumulative revenue of a construction contract recognised to date and the cumulative amount of progress billings of that contract is presented as construction contract receivable/payable based on agreed progress billings in the consolidated balance sheet Taxation Current income tax Current income tax assets and liabilities for the current and prior year are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted as at the consolidated balance sheet date. Current income tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to equity, in which case the current income tax is also dealt with in equity. Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to offset current tax assets against current tax liabilities and when the Group intends to settle its current tax assets and liabilities on a net basis. Deferred income tax Deferred tax is provided on temporary differences at the consolidated balance sheet date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except: where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss; in respect of taxable temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, carried forward unused tax credit and unused tax losses, to the extent that it is probable that taxable profit will be available against which deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilised, except: where the deferred tax asset arises from the initial recognition of an asset or liability which at the time of the related transaction, affects neither the accounting profit nor taxable profit or loss at the time transaction incurred; in respect of deductible temporarily differences associated with investments in subsidiaries and associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Previously unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date. Deferred tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to equity, in which case the deferred tax is also dealt with in the equity account. Deferred tax assets and liabilities are offset when there is a legally enforceable right for the Group to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on: Either the same taxable entity; or when the Group intends either settle current tax liabilities and assets on a net basis or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered Earnings per share Basic earnings per share amounts are calculated by dividing net profit/(loss) after tax for the year attributable to ordinary shareholders of the Group (after adjusting for welfare fund and reward) by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit/(loss) after tax attributable to ordinary shareholders of the Group (after adjusting for dividend on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares 3.25 Segment information A segment is a component determined separately by the Group which is engaged in providing products or related services (business segment), that is subject to risks and returns that are different from those of other segments. Management defines the Group s segment report to be based on type of products and services provided Related parties The parties are considered as related parties of the Group if one party has the ability, directly or indirectly, to control over the other party or otherwise significantly influence on the other party in making financial and operating decisions, or when the Group and the other party are under common control or significant influence. Stakeholders may be companies or individuals, including intimate family members of individuals considered to be related parties. 4. SIGNIFICANT ACQUISITIONS AND DISPOSALS DURING THE YEAR 4.1 Acquisition of group of assets Acquisition of Prime Land Real Estate Investment JSC ( Prime Land JSC ), a new subsidiary On 24 May 2017, the Group acquired 100% voting shares of Prime Land JSC from individuals and a corporate counterparty with total consideration of VND640 billion and thereby, Prime Land JSC became a subsidiary of the Group. At the date of acquisition, Prime Land JSC is the owner of a potential real-estate project located at Me Linh district, Hanoi, Vietnam. Management has reviewed and assessed that the acquisition of shares of this company is an acquisition of Fair value recognised at acquisition date Assets Cash and cash equivalents 35,286,299,868 Tangible fixed assets 191,777,550,911 Investment properties 14,641,646,769 Investment in other entities (Note ) 13,989,202,387 Other assets 20,632,471,738 Liabilities 276,327,171,673 Short-term trade payables 2,164,962,660 Deferred tax liabilities (Note 35.3) 4,082,402,914 Other payables 4,499,316,420 Total identifiable net assets 265,580,489,679 Non-controlling interests (45,804,586,581) Goodwill from business combination (Note 20) 11,056,322,262 Total purchase consideration (i) 230,832,225,360 Analysis of cash flows on acquisition group of assets, rather than a business combination. The consideration of this acquisition is allocated to the assets and liabilities acquired based on their relative fair values at acquisition date. Accordingly, a part of consideration was recognised in construction in progress (Note 18). The non-controlling interests were also recognised at their relative proportion of the interests in the assets and liabilities acquired. These acquired assets and liabilities are presented in the same categories as other similar assets and liabilities held by the Group. 4.2 Business combination Acquisition of Nha Trang Port Joint Stock Company ( Nha Trang Port JSC ), a new subsidiary On 5 September 2017, the Group acquired 55.01% voting shares of Nha Trang Port JSC via the stock exchange market with total consideration of VND148.5 billion. Thereby, the voting right of the Group in Nha Trang Port JSC increased to 85.55%, Nha Trang Port JSC became a subsidiary of the Group. The principal activities of Nha Trang Port JSC are to render port services, warehouse leasing and other related services. As at 31 December 2017, the Group recognises the fair value of identifiable assets, liabilities or contingent liabilities of Nha Trang Port JSC at the date of acquisition as follows: Cash of the acquired subsidiary 35,286,299,868 Cash paid for acquiring the subsidiary up to 31 December 2017 (148,500,000,000) Net cash flow used in acquisition (113,213,700,132) 134 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

69 CHAPTER 6 CHAPTER 6 (i) Total consideration of VND230.8 billion in which VND148.5 billion was paid in cash and VND82.3 billion was the fair value of 30.53% equity interest previously held by the Group in Nha Trang Port JSC. The Group remeasured the fair value of this previously held investment and recognised a gain of VND1 billion in the consolidated income statement (Note 29.3). Loss before tax of Nha Trang Port JSC for the period from the acquisition date to 31 December 2017 is VND7.1 billion. Acquisition of Co.Co International Co., Ltd ( Co.Co are to invest in, trade and lease out villas, apartments and International Ltd ), a new subsidiary offices. On 8 November 2017, the Group acquired 70% voting As at 31 December 2017, the Group was in the process shares of Co.Co International Ltd from a corporate of determining the fair value of identifiable assets, counterparty with total consideration of VND417 billion. liabilities or contingent liabilities of Co.Co International Thereby, Co.Co International Ltd became a subsidiary of Ltd at the date of acquisition. The provisional fair values of the Group. identifiable assets and liabilities of Co.Co International Ltd The current principal activities of Co.Co International Ltd at the acquisition date are presented below: Provisional fair value recognised at acquisition date Assets Cash and cash equivalents 80,227,671,439 Other current assets 241,716,000 Investment properties 275,901,300,000 Tangible fixed assets 4,740,079,706 Other non-current assets 4,364,714, ,475,481,217 Liabilities Other current liabilities 10,968,117, Significant disposals with loss of control Disposal of Tay Ho View Hotel and Tourism LLC ("Tay Ho View LLC") On 20 April 2017, the Group disposed 70% shares of Tay Ho View LLC to a corporate counterparty with total consideration of VND802 billion. Loss from this disposal of VND17.8 billion was recognised in the consolidated income statement (Note 31). Disposal of Vinhomes 1 Real Estate Trading LLC ("Vinhomes 1 LLC") and merger of Vinhomes 1 LLC into Vinhomes Real Estate Management JSC ("Vinhomes Management JSC") On 3 April 2017, the Group disposed 45% shares of Vinhomes 1 LLC to Vinhomes Management JSC with total consideration of VND135 billion. Thereby, the voting right of the Group in Vinhomes 1 LLC decreased from 100% to 55%. On 8 May 2017, Vinhomes 1 LLC was merged into Vinhomes Management JSC and the voting right of the Group in Vinhomes Management JSC increased from 12.5% to 16.4%. Loss from these two transactions of VND35 billion was recognised in the consolidated income statement (Note 31). Disposal of Hoa Mai Trading Commercial Services LLC ("Hoa Mai LLC") On 5 July 2017, the Group disposed 74% shares of Hoa Mai LLC to a corporate counterparty with total consideration of VND336.8 billion. Gain from this transactions of VND156.4 billion was recognised in the consolidated income statement (Note 29.3). Merger of Vinhomes 2 Real Estate Trading LLC ("Vinhomes 2 LLC") into Vinhomes Management JSC On 1 August 2017, Vinhomes 2 LLC was merged into Vinhomes Management JSC. Thereby, the voting right of the Group in Vinhomes Management JSC increased from 16.4% to 18.6%. Gain from this transaction of VND47.3 billion was recognised in the consolidated income statement (Note 29.3). 4.4 Completion of the provisional accounting for business combination Acquisition of Savina JSC in 2016 On 27 April 2016, the Group acquired 65.33% shares of Savina JSC through equitisation of the Savina One Member Limited Liability Company with total consideration of VND475 billion and thereby, Savina JSC became a subsidiary of the Group. As at 31 December 2016, the Group was in the process of determining the fair value of identifiable assets, liabilities or contingent liabilities of Savina JSC at the date of acquisition, and applied provisional accounting to consolidate Savina JSC. In 2017, the Group has completed the determination of the fair value of net assets acquired with changes compared to provisional fair value determined previously, and made the retrospective adjustments as follows: Other non-current liabilities 2,791,090,000 Deferred tax liabilities (Note 35.3) 34,816,675,461 48,575,883,005 Total identifiable net assets 316,899,598,212 Non-controlling interests (90,218,348,764) Goodwill from business combination (Note 20) 190,318,750,552 Total purchase consideration 417,000,000,000 Analysis of cash flows on acquisition Cash of the acquired subsidiary 80,227,671,439 Cash paid for acquiring the subsidiary up to 31 December 2017 (417,000,000,000) Net cash flow used in acquisition (336,772,328,561) Provisional fair value Adjustment Fair value after adjustment Assets Cash and cash equivalents 699,919,715, ,919,715,320 Tangible fixed assets 25,300,885,704-25,300,885,704 Intangible fixed assets - 2,180,454,112 2,180,454,112 Investment in associates (Note ,239,919,511 1,474,225,028 4,714,144,539 Other assets 29,942,765,511 11,312,886,668 41,255,652, ,403,286,046 14,967,565, ,370,851,854 Liabilities Short-term accruals 43,960,667,647-43,960,667,647 Other liabilities 19,065,137,296-19,065,137,296 Net assets 695,377,481,103 14,967,565, ,345,046,911 Non-controlling interests (241,087,372,698) (5,189,255,066) (246,276,627,764) Goodwill arising from business combination (Note 20) 20,875,503,395 (9,778,310,742) 11,097,192, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

70 CHAPTER 6 CHAPTER 6 Acquisition of Vicentra JSC in 2016 On 28 October 2016, the Group increased its voting right in Vicentra JSC to 63.15% with total consideration of VND2,780 billion and thereby, Vicentra JSC became a subsidiary the Group. As at 31 December 2016, the Group was in the process of determining the fair value of identifiable assets, liabilities or contingent liabilities of Vicentra JSC at the date of acquisition. Therefore, the Group applied provisional accounting method to consolidate this company. In 2017, the Group has completed the determination of the fair value of net assets acquired with changes compared to provisional fair value determined previously, and made the retrospective adjustments as follows: Acquisition of Ecology JSC in 2016 In addition, in 2017, the Group has completed the provisional accounting method to consolidate Ecology JSC. The Group assessed that the finalised result of this transaction was unchanged in comparison with the provisional result determined in CASH AND CASH EQUIVALENTS Ending balance Beginning balance Provisional fair value Adjustment Fair value after adjustment Cash on hand 150,606,565,743 55,845,974,848 Assets Cash and cash equivalents 1,206,813,935,768-1,206,813,935,768 Short-term trade receivables 351,537,095, ,537,095,788 Short-term advances to suppliers 353,693,817, ,693,817,646 Short-term loan receivables 9,035,689,095,154-9,035,689,095,154 Cash at banks 6,005,448,449,742 6,168,352,990,692 Cash in transit 26,726,170,056 19,031,656,359 Cash equivalents 1,958,968,842,145 3,590,101,597,502 TOTAL 8,141,750,027,686 9,833,332,219,401 Inventories (Note 11) 6,647,606,468,464 5,392,439,576,588 12,040,046,045,052 Other short-term receivables 367,459,130, ,459,130,437 Short-term prepaid expenses 451,958,808, ,958,808,456 Deferred tax assets 16,226,938,919-16,226,938,919 Other long-term receivables 3,877,365,333,333-3,877,365,333,333 Construction in progress (Note 18) 296,036,399, ,860,319, ,896,719,755 Other long-term assets 68,680,027,976-68,680,027,976 22,673,067,051,780 5,630,299,896,504 28,303,366,948,284 Liabilities Cash equivalents as at 31 December 2017 comprise bank deposits in VND with terms ranging from 1 month to 3 months, earning interests ranging from 4.2% to 5.5% per annum (as at 31 December 2016: 4.3% to 5.2% per annum). Cash at banks and cash equivalents as at 31 December 2017 include VND887 billion in escrow accounts and VND322 billion in restricted-for-use accounts for business and other activities of the Group (as at 31 December 2016: VND391 billion). Cash at banks and cash equivalents as at 31 December 2017 include maintenance funds of handed-over apartments at real estate projects of the Group. Subsequently, these maintenance funds will be transferred to Building Management Boards. Details of foreign currencies: Short-term trade payables 205,229,551, ,229,551,429 Short-term advances from customers 5,618,486,690,150-5,618,486,690,150 Ending balance Beginning balance Statutory obligations 76,930,249,745-76,930,249,745 Short-term accrued expenses 599,409,802, ,409,802,823 Unearned revenue 61,496,125,387-61,496,125,387 Other short-term payables 2,453,417,592,577-2,453,417,592,577 Other long-term payables 122,676,287, ,676,287,778 Long-term loans 10,777,654,960,903-10,777,654,960,903 Other liabilities 77,848,901,682-77,848,901,682 Total identifiable net assets 2,679,916,889,306 5,630,299,896,504 8,310,216,785,810 Non-controlling interests (987,427,626,946) (2,074,509,731,248) (3,061,937,358,194) Foreign currencies: United State dollar 7,590,475 3,751,403 Australian dollar 2,425 - Singapore dollar 56 - Hong Kong dollar 50 - Euro 23,175 36,362 Korean Won 230,000 - Goodwill arising from business combination (Note 20) 2,837,107,358,440 (2,610,712,900,640) 226,394,457,800 Japanese Yen 57,000 - Thai Baht 7, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

71 CHAPTER 6 CHAPTER 6 6. SHORT-TERM INVESTMENTS 6.1 Held-for-trading securities Ending balance Beginning balance Cost Fair value Provision Cost Fair value Provision 32,369,112,000 12,863,880,000 (19,505,232,000) 32,369,112,000 13,372,452,000 (18,996,660,000) Shares of Pertro Vietnam Fertiliser and Chemicals Corporation TOTAL 32,369,112,000 12,863,880,000 (19,505,232,000) 32,369,112,000 13,372,452,000 (18,996,660,000) 6.2 Held-to-maturity investments Ending balance Beginning balance Cost Carrying value Cost Carrying value Short-term bank deposits (i) 659,705,890, ,705,890, ,784,452, ,784,452,807 TOTAL 659,705,890, ,705,890, ,784,452, ,784,452,807 than 3 months to 1 year and earning interest rates ranging from 5.0% to 6.5% per annum). Held-to-maturity investments as at 31 December 2017 include maintenance funds for handed-over apartments at real estate projects of the Group. Subsequently, these maintenance funds will be transferred to Building Management Boards. (i) Short-term bank deposits in VND as at 31 December 2017 have terms ranging from more than 3 months to 1 year and earning interest rates ranging from 4.5% to 7.1% per annum (As at 31 December 2016: short-term bank deposits have terms ranging from more 7. TRADE RECEIVABLES AND ADVANCES TO SUPPLIERS 7.1 Short-term trade receivables Ending balance Beginning balance Sale of inventory properties 3,614,086,042,849 1,973,699,838,278 Disposal of investments 1,118,410,842, ,694,692,439 Leasing activities and rendering related services 344,946,214, ,226,402,832 Rendering hospital services and related services 208,024,680,022 55,576,231,521 Rendering hotel services, amusement park services and related services 158,360,787,526 95,357,152,770 Construction and related services 157,958,584, ,559,823,132 Rendering of management services, real estate brokerage and related services 73,288,649,997 97,426,132,924 Other short-term receivables 69,384,648,921 57,222,501,919 TOTAL 5,744,460,450,918 3,170,762,775,815 In which: Short-term trade receivables from related parties (Note 36) 135,043,603,890 11,319,259,495 Provision for doubtful debts (67,008,044,384) (61,176,629,527) Details of receivables which are more than 10% of total balance: Sale of inventory properties to a corporate counterparty - 616,434,941,286 Disposal of an investment to a corporate counterparty 100,000,000, ,000,000,000 Disposal of other investments to another corporate counterparty 981,716,150, Short-term advances to suppliers Short-term advances to suppliers as at 31 December 2017 VND92 billion (31 December 2016: VND19 billion) (Note mainly include advances to suppliers and construction 36). contractors for developing real estate projects of the As at 31 December 2017, the Group has made a provision Group and purchasing other goods and services. In which, for uncollectible advances of VND12 billion (31 December short-term advances to related parties are approximately 2016: VND20 billion). 140 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

72 CHAPTER 6 CHAPTER 6 8. LOAN RECEIVABLES 9. OTHER RECEIVABLES Ending balance Beginning balance Ending balance Beginning balance Short-term Short-term: Current portion of long-term loans to customers and individuals 76,999,942,000 24,697,885,462 Customers advance collected by third party on behalf of the Group (i) 2,185,345,550, ,005,348,149 Loans to corporate counterparties (i) 7,607,239,886,536 1,831,835,225,564 Loans to related parties (Note 36) - 1,367,725,527,787 TOTAL 7,684,239,828,536 3,224,258,638,813 Provision for doubtful loan receivables (127,240,478,176) (34,849,342,992) Long-term Loans to customers 25,257,439,663 28,687,800,577 Loans to a corporate counterparty (ii) 320,768,843,417 55,000,000,000 In which: current portion of long-term loans to customers and individuals (76,999,942,000) (24,697,885,462) TOTAL 269,026,341,080 58,989,915,115 (i) Balance as at 31 December 2017 comprises: Loan receivables of VND5,041 billion from a corporate counterparty with terms from 6 months to 12 months earning interest rates from 6% to 7% per annum. In which, a loan of VND4,491 billion is secured by shares of this corporate counterparty which are owned by individual shareholders; and asset ownership right derived from certain real-estate properties. Up to the date of this consolidated financial statements, the Group has collected all these loan receivables; Loan receivable of VND2,122 billion to a corporate counterparty which is unsecured, matured on 30 June 2018 and earning interest rate of 9% per annum. Up to the date of this consolidated financial statements, the Group has collected this loan receivable; Interest on bank deposits, deposits and loans to others 974,465,191,355 1,042,244,561,460 Deposit for investment co-operation contracts (ii) 935,000,000,000 4,035,000,000,000 Guarantee deposits for project development, selling apartments and completing contracts 440,875,574, ,745,055,602 Receivables from former owners of subsidiaries 285,651,049,202 - Guarantee deposit for interest obligation 110,646,740, ,353,130,605 Others 816,915,807, ,622,317,459 TOTAL 5,748,899,913,388 6,809,970,413,275 Provision for doubtful other short-term receivables (312,027,720,377) (62,885,538,299) Long-term: Long-term deposits for outlet rentals 82,362,006, ,115,824,752 Guarantee deposit for bond obligation 120,190,140, ,190,140,000 Deposit for business co-operation contracts 73,366,827,000 73,366,827,000 Other receivables 18,699,134,999 18,843,910,330 TOTAL 294,618,108, ,516,702,082 In which: Most of other loan receivables are unsecured. (ii) Loan to a corporate counterparty which is unsecured and earning interest rate of 6.5% per annum. Other short-term receivables from related parties (Note 36) - 9,351,347,691 (i) Balance as at 31 December 2017 represents the downpayment from customers under real estate sales and purchase agreements of the Group which are collected on behalf by a corporate counterparty in accordance with agreements among companies within the Group and this corporate counterparty. (ii) Balance as at 31 December 2017 represents deposit receivable from a corporate counterparty which was guaranteed by shares of a financial institution which are owned by this corporate counterparty and other shareholders. This amount has been previously deposited for developing a potential real-estate project. 142 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

73 CHAPTER 6 CHAPTER BAD DEBTS 11. INVENTORIES Bad debts of the Group mainly include overdue trade receivables, loan principal receivables and interest receivables: Ending balance Beginning balance Debtor Recoverable Recoverable Cost Cost amount amount Overdue receivables 706,325,250, ,510,885, ,097,494, ,425,150,317 Completed inventory properties Ending balance Beginning balance Cost Provision Cost Provision 3,863,489,205,510 (130,480,925,010) 2,150,104,528,562 (13,837,803,985) Overdue loans receivables 161,077,828,534 33,837,350,358 99,537,848,254 64,688,505,262 TOTAL 867,403,079, ,348,236, ,635,342, ,113,655,579 Details of overdue receivables which account for more than 10% of total overdue receivables: Ending balance Beginning balance Debtor Recoverable Recoverable Cost Cost amount amount A corporate counterparty 384,737,291, ,710,931, Another corporate counterparty 87,231,780,861 26,169,534,256 87,231,780,861 61,062,246,603 Inventory properties under construction 49,912,878,755,235 (105,024,042,158) 50,778,882,339,667 - Raw materials 137,527,038, ,928,525,806 - Inventories for hospital, supermarkets, hotel and 2,326,880,062,920 (85,505,947,911) 2,097,927,277,737 (62,681,136,250) retail outlets Tools and equipment 49,091,010,055-58,283,018,424 - Others 113,349,341,168 (23,389,307,344) 68,090,140,229 (20,476,521,306) TOTAL 56,403,215,413,508 (344,400,222,423) 55,272,215,830,425 (96,995,461,541) Details of inventories and associated rights used as collaterals for borrowings of the Group are disclosed in Note 26. Detail movements of provision for obsolete inventories: Details of overdue receivables which have been written off as Management assesses that these receivables are irrecoverable: Ending balance Beginning balance Debtor Recoverable Recoverable Cost Cost amount amount Ocean Thang Long JSC 41,098,537,541 41,098,537,541 41,098,537,541 - Trang Tien Nha Trang Trading and Tourist Company Limited 14,452,509,589 14,452,509,589 14,452,509,589 - Topcare Investment and Trading Company Limited 10,468,046,036 10,468,046,036 10,468,046,036 - Ending balance Beginning balance Beginning balance 96,995,461,541 58,478,146,455 Add: Provision made during the year 344,400,222,423 96,995,461,541 Less: Utilisation and reversal of provision during the year (96,995,461,541) (58,478,146,455) Ending balance 344,400,222,423 96,995,461,541 Others 3,468,007,172 3,468,007,172 1,435,408, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

74 CHAPTER 6 CHAPTER PREPAID EXPENSES 13. OTHER ASSETS Ending balance Beginning balance Ending balance Beginning balance Short-term: Selling expenses related to apartments not yet handed over Prepaid committed profit for villas under business co-operation contract and management program 2,752,756,498,957 1,718,749,696,667 1,103,598,553, ,882,103,856 Short-term: Deposits for investment purpose (i) 1,658,670,826,179 4,789,340,371,022 Others 307,927,445, ,330,521,597 TOTAL 1,966,598,271,806 5,011,670,892,619 Provisional corporate income tax 558,615,647, ,649,303,769 Tools and supplies 182,978,501, ,963,377,103 Others 160,794,920, ,780,231,761 Long-term: Deposits for investment purpose (ii) 7,115,047,177,440 - TOTAL 7,115,047,177,440 - TOTAL 4,758,744,122,155 3,123,024,713,156 Long-term: Prepaid land rental 1,252,345,408, ,344,458,259 Tools and supplies 1,185,836,974,586 1,137,285,673,676 Pre-operating expenditures 391,898,594,170 38,374,812,090 Others 231,869,099, ,706,789,135 TOTAL 3,061,950,076,912 2,252,711,733,160 (i) As at 31 December 2017, this comprises: An unsecured and non-interest deposit of VND819 billion to an individual for acquiring additional shares of an existing subsidiary of the Group. Up to the date of this consolidated financial statements, the deposit was fully collected by the Group; and A deposit of VND694 billion to a corporate counterparty under a principle agreement for the purpose of acquiring a potential real estate project. (ii) As at 31 December 2017, this comprises: Deposits of VND1,115 billion to a corporate counterparty earning interest rate which is determined by 12-month interest paid in arrears VND saving rate of Joint Stock Commercial Bank for Foreign Trade of Vietnam, adjusted each 3-month. The deposit and interest will be used as settlement for 10% of contract value under detailed contracts between the Group and this corporate counterparty; An unsecured deposit of VND4,500 billion earning interest rate of 8.4% per annum during the deposit term to a corporate counterparty for the purpose of developing a potential real estate project; and An unsecured and non-interest deposit of VND1,500 billion to a corporate counterparty for the purpose of developing a potential real estate project. 146 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

75 CHAPTER 6 CHAPTER TANGIBLE FIXED ASSETS Buildings and structures Machinery and equipment Means of transportation Office equipment Others Total Cost: Beginning balance 20,163,585,099,528 7,994,079,372, ,092,001, ,617,905, ,867,803,811 30,165,242,182,483 Additions 9,114,117,330,346 3,523,938,611, ,960,252, ,668,723, ,042,310,709 13,455,727,228,473 In which: Newly purchased - 1,307,406,536, ,741,492, ,710,741, ,974,725,015 2,106,833,495,818 Newly constructed 8,293,255,416,444 1,905,232,483, ,198,487,899,914 Acquisition of subsidiaries (Note 4) 174,268,070,088 4,005,232,856 17,218,759, ,982,011 67,585, ,517,630,617 Reclassified from investment properties (Note 16) 645,006,954, ,832,605, ,839,560,090 Reclassified (145,739,092,299) 145,739,092, Other additions 147,325,981,161 10,722,660, ,048,642,034 Decreases (2,173,695,229,472) (383,770,213,836) (59,054,370,104) (138,778,249,971) (20,088,671,457) (2,775,386,734,840) In which: Sold, disposal (61,450,522,046) (72,708,406,797) (38,874,173,014) (21,240,994,808) (1,048,138,784) (195,322,235,449) Reclassified to investment properties (Note 16) (1,503,695,468,796) (300,904,544,806) (1,804,600,013,602) Disposal of subsidiaries - (82,174,000) (20,180,197,090) (314,538,183) (1,317,315,407) (21,894,224,680) Other decreases (608,549,238,630) (10,075,088,233) - (117,222,716,980) (17,723,217,266) (753,570,261,109) Ending balance 27,104,007,200,402 11,134,247,769,686 1,151,997,884, ,508,378, ,821,443,063 40,845,582,676,116 In which: Fully depreciated 26,074,365, ,202,804,364 23,459,276,964 58,394,034,146 30,479,443, ,609,924,577 Accumulated depreciation: Beginning balance 1,616,911,680,860 1,835,868,696, ,762,811, ,610,672, ,266,444,681 4,098,420,305,890 Additions 819,207,230,627 1,032,567,586,885 95,748,632, ,366,778, ,834,059,612 2,151,724,288,550 In which: Depreciation for the year 773,640,860, ,609,143,772 95,748,632, ,366,778, ,834,059,612 2,071,199,474,971 Reclassified from investment properties (Note 16) 47,972,653,903 32,552,159, ,524,813,579 Reclassified (2,406,283,437) 2,406,283, Decreases (169,303,701,274) (128,171,978,637) (31,615,063,400) (46,744,388,215) (2,260,128,668) (378,095,260,194) In which: Sold, disposal (10,383,268,757) (34,773,012,865) (23,055,533,376) (9,475,776,132) (170,190,994) (77,857,782,124) Reclassified to investment properties (Note 16) (103,563,333,009) (91,721,500,425) (195,284,833,434) Disposal of subsidiaries - (82,174,000) (8,559,530,024) (300,525,904) (337,340,212) (9,279,570,140) Other decreases (55,357,099,508) (1,595,291,347) - (36,968,086,179) (1,752,597,462) (95,673,074,496) Ending balance 2,266,815,210,213 2,740,264,304, ,896,381, ,233,062, ,840,375,625 5,872,049,334,246 Net carrying amount: Beginning balance 18,546,673,418,668 6,158,210,675, ,329,190, ,007,232, ,601,359,130 26,066,821,876,593 Ending balance 24,837,191,990,189 8,393,983,465, ,101,503, ,275,315, ,981,067,438 34,973,533,341,870 Details of tangible fixed assets used as collaterals for borrowings and corporate bonds of the Group and third parties are disclosed in Note ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

76 CHAPTER 6 CHAPTER INTANGIBLE FIXED ASSETS Indefinite land use rights Distribution right Definite land use rights E-commerce website Computer software Others (Restated) Total Cost: Beginning balance 37,127,969, ,320,981, ,715,386, ,496,910, ,784,641,316 65,186,117,874 1,173,632,007,764 Additions ,665,763, ,665,763,431 In which: Newly purchased ,665,763, ,665,763,431 Decreases - (59,666,691,717) - (21,432,000,000) (67,078,473,220) (25,856,244,336) (174,033,409,273) In which: Sold, disposal - (9,202,304,251) (9,202,304,251) Other decreases - (50,464,387,466) - (21,432,000,000) (67,078,473,220) (25,856,244,336) (164,831,105,022) Ending balance 37,127,969,964 52,654,290, ,715,386, ,064,910, ,371,931,527 39,329,873,538 1,222,264,361,922 In which: Fully amortised ,027,034, ,249,509,343 2,156,057, ,432,601,723 Accumulated amortisation: Beginning balance - 84,426,792,339 36,131,276,508 99,278,468, ,758,784,154 10,947,030, ,542,351,914 Additions - 15,426,647,605 6,481,753, ,968,058,704 83,056,482,501 6,475,375, ,408,318,062 In which: Amortisation for the year - 15,426,647,605 6,481,753, ,968,058,704 83,056,482,501 6,475,375, ,408,318,062 Decreases - (47,199,149,938) - - (15,723,073,854) (7,174,744,425) (70,096,968,217) In which: Sold, disposal - (4,327,295,092) (4,327,295,092) Other decreases - (42,871,854,846) - - (15,723,073,854) (7,174,744,425) (65,769,673,125) Ending balance - 52,654,290,006 42,613,030, ,246,527, ,092,192,801 10,247,661, ,853,701,759 Net carrying amount: Beginning balance 37,127,969,964 27,894,189, ,584,109, ,218,442, ,025,857,162 54,239,087, ,089,655,850 Ending balance 37,127,969, ,102,355,897 32,818,383, ,279,738,726 29,082,212, ,410,660,163 Details of intangible fixed assets used as collaterals for borrowings and corporate bonds of the Group are disclosed in Note ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

77 CHAPTER 6 CHAPTER INVESTMENT PROPERTIES Land use rights Buildings and structures Machinery and equipment Total Cost: Beginning balance 7,335,758,400,081 9,445,306,328,473 2,405,292,541,549 19,186,357,270,103 Additions 577,308,232,372 2,874,414,615, ,280,989,833 4,284,003,837,652 In which: Newly purchased 91,322,144, ,661,913, ,984,057,686 Newly constructed 59,249,642,671 1,373,250,731, ,376,445,027 1,963,876,819,595 Acquisition of subsidiaries (Note 4) 794,855, ,748,091, ,542,946,769 Reclassified from tangible fixed assets (Note 14) 425,941,589,613 1,077,753,879, ,904,544,806 1,804,600,013,602 Decreases (1,310,730,605,202) (1,091,084,870,730) (226,194,438,040) (2,628,009,913,972) In which: Sold, disposal (35,460,960,000) (51,725,090,562) (9,562,734,180) (96,748,784,742) Disposal of subsidiaries (1,042,508,373,783) (243,494,542,238) - (1,286,002,916,021) Reclassified to inventories (181,804,505,077) (128,452,246,662) (16,155,209,777) (326,411,961,516) Reclassified to tangible fixed assets (Note 14) (50,956,766,342) (594,050,188,610) (150,832,605,138) (795,839,560,090) Other decreases - (73,362,802,658) (49,643,888,945) (123,006,691,603) Ending balance 6,602,336,027,251 11,228,636,073,190 3,011,379,093,342 20,842,351,193,783 Accumulated depreciation: Beginning balance 314,606,592, ,328,195, ,295,185,948 1,824,229,973,612 Additions 100,690,916, ,985,480, ,723,308, ,399,705,977 In which: Depreciation/amortisation for the year 82,816,779, ,296,284, ,001,808, ,114,872,543 Investment properties of the Group mainly include shopping malls owned and operated by the Group for providing leasing and related services. As at 31 December 2017, the Group was in the process of determining the fair value of these investment properties. Details of investment properties used as collaterals for borrowings and corporate bonds of the Group are presented in Note 26. Revenue and expenses relating to investment properties are presented in Note CAPITALISED BORROWING COSTS During the year, the Group capitalised borrowing costs with an amount of VND1,036 billion (for the year ended 31 December 2016: VND1,087 billion). These costs related to specific and general borrowings obtained to finance the real estate projects of the Group. The capitalised borrowing costs in relation to the general borrowings are determined by applying a capitalisation rate of 9.43% per annum (for the year ended 31 December 2016: 9.74% per annum) on the accumulated weighted average expenditures of the real estate projects. The capitalisation rate used is the weighted average of the borrowing rates applicable to the borrowings of the Group that are outstanding during the year. Reclassified from tangible fixed assets (Note 14) 17,874,136,842 85,689,196,167 91,721,500, ,284,833,434 Decreases (11,092,295,567) (68,801,634,283) (39,805,464,856) (119,699,394,706) In which: Sold, disposal - (466,043,009) (255,961,836) (722,004,845) Disposal of subsidiaries - (7,658,853,492) - (7,658,853,492) Reclassified to inventories - (23,796,379,446) (6,997,343,344) (30,793,722,790) Reclassified to tangible fixed assets (Note 14) (11,092,295,567) (36,880,358,336) (32,552,159,676) (80,524,813,579) Ending balance 404,205,213,325 1,199,512,041,864 1,040,213,029,694 2,643,930,284,883 Net carrying amount: Beginning balance 7,021,151,807,935 8,619,978,132,955 1,720,997,355,601 17,362,127,296,491 Ending balance 6,198,130,813,926 10,029,124,031,326 1,971,166,063,648 18,198,420,908, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

78 CHAPTER 6 CHAPTER CONSTRUCTION IN PROGRESS Projects Ending balance Beginning balance (Restated) Projects Ending balance Beginning balance (Restated) Can Gio urban area project 12,273,714,689,320 12,243,684,937,843 Vinhomes Central Park project 2,642,045,375,209 3,929,866,564,685 Vinhomes Metropolis project 1,581,236,366,722 3,518,540,132,293 Gia Lam urban area project 1,566,673,525, ,044,747,462 Vinhomes Golden River project 1,321,716,493, ,896,719,755 Agricultural projects 1,180,726,564,843 1,276,545,915,977 Vinhomes Smart City project 1,118,860,549, ,138,707,862 Vinhomes Melodia project 869,446,057, ,768,956,046 Co Loa project 706,146,938,493 44,292,427,562 Vinhomes Cau Rao 2 project 700,172,268,056 - Vinfast project 685,023,176,672 - Vinpearl Hoi An Southern project 710,392,064,844 - Vinmec Hospital project 646,470,735, ,261,077,964 Tien Phong Flower Village project 636,545,018,848 - Con Au golf course project, Can Tho 601,844,855, ,273,969,231 Vincom Thanh Hoa project 586,292,767, ,648,455,745 Vinpearlland amusement park projects 1,918,864,883, ,686,691,498 Vincom Hung Vuong project, Hue 477,338,918, ,547,295,582 Vinpearl Cua Sot project - 80,314,018,516 Vinhomes Skylake project 428,837,554,802 - Vinhomes Star project 426,501,750, ,119,239,394 Vinpearl Quy Nhon project 414,924,862, ,960,206,942 Vinhomes Imperia Hai Phong project 378,159,192,398 1,130,454,940,277 International passenger port project 364,512,528, ,586,113,776 Golf and Spa areas Vinpearl Nha Trang projects 304,514,286, ,856,749,478 Vincom Quang Binh project 295,232,966,763 79,922,045,343 Vu Yen island eco-urban area project 296,738,973, ,924,230,619 Vincom Tay Ninh project 255,261,897,829 34,526,928,419 Vinpearl Hoi An project - 192,334,811,149 Vinpearl Beach Front Condotel project 239,801,405,819 - Vinhomes Riverside - The Harmony project 247,632,049,160 - Hon Mot project 235,543,778, ,209,993,419 Vincom Plaza Suoi Hoa, Bac Ninh project 234,926,380, ,944,453,570 Vincom Ha Nam project 217,685,076,583 81,799,536,519 Maximark supermarket chains project 128,746,631, ,679,009,391 Southern Star project 189,461,963, ,272,511,069 Vincom Son La project 172,796,852,936 13,985,448,991 Vinpearl Phu Quoc project 171,682,130, ,381,668,929 Vinpearl Empire Condotel project 144,584,162, ,354,536,405 Vincom Lang Son project 171,152,826,356 46,830,447,487 Times Garden Ha Long project 143,865,288,978 42,171,335,715 VinMart and VinMart+ supermarket chains project 100,471,040, ,263,354,228 Vinpearl Cua Hoi project 90,792,873, ,876,937,416 Giang Vo project 70,871,783,274 49,735,587,160 Vinhomes Gardenia project 38,909,817, ,114,974,026 Vincom Ha Tinh project - 330,725,763,495 Vincom Vinh Long project - 262,530,998,697 Times City Park Hill project - 203,234,960,766 Tay Ho View project - 169,954,400,993 Vincom Plaza Tra Vinh project - 139,556,964,057 Vincom Plaza Hau Giang project - 115,769,011,486 Nam Long project - 104,000,000,000 Other projects 967,672,413,700 1,001,391,488,571 TOTAL 37,492,138,281,596 34,229,427,585,378 Lang Van project 271,117,951, ,546,570,195 Vinhomes Green Bay project 266,228,592,019 87,901,749,375 Construction in progress used as collaterals for borrowings and corporate bonds of the Group and third parties are disclosed in Note ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

79 CHAPTER 6 CHAPTER LONG-TERM INVESTMENTS 19.1 Investment in associates and other entities Note Ending balance Beginning balance (Restated) Investment in associates ,439,624,600,795 1,730,283,476,020 Investments in other entities ,176,543,861,811 1,616,241,288,531 Provision for diminution of long-term investments (50,382,547,589) (56,192,900,196) TOTAL 4,565,785,915,017 3,290,331,864, Investment in associates Beginning balance (Restated) Additional investment during the year Share of profit/(loss) from associates Diminution of investment Dividend received Ending balance Truong Thanh Furniture Corporation (i) 232,999,777, (232,999,777,446) - - Vinaconex Water Supply JSC ( Viwasupco JSC ) (ii) 872,488,610,366-52,960,983,605 (892,749,593,971) (32,700,000,000) - Phu Quoc Tourism JSC (iii) 492,139,241,524 1,905,000,000,000 (10,063,517,095) - - 2,387,075,724,429 Nha Trang Port JSC (iv) 80,262,801,920-1,026,329,485 (81,289,131,405) - - Hanoi Breeds JSC 47,654,104, ,159, ,788,263,901 Vietnam Book Printing JSC 4,738,940, ,972,426 - (321,300,000) 4,760,612,465 TOTAL 1,730,283,476,020 1,905,000,000,000 44,400,927,597 (1,207,038,502,822) (33,021,300,000) 2,439,624,600,795 (i) In March and April 2017, the Group disposed 29.9% shares of Truong Thanh Furniture Corporation. Thereby, Truong Thanh Furniture Corporation is no longer an associate of the Group. Gain from the disposal with an amount of VND80 billion was recognised in the consolidated income statement; (ii) On 1 September 2017, the Group disposed all shares of Viwasupco JSC. Thereby, Viwasupco JSC is no longer an associate of the Group; (iii) In 2017, the Group acquired 190,500,000 shares issued by Phu Quoc Tourism JSC to increase charter capital with total consideration of VND1,905 billion. Thereby, the voting right of the Group in Phu Quoc Tourism JSC remained unchanged; and (iv) On 5 September 2017, the Group acquired 13,500,000 shares of Nha Trang Port JSC and the voting right of the Group in Nha Trang Port JSC increased to 85.55%. Thereby, Nha Trang Port JSC became a subsidiary of the Group (Note 4). 156 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

80 CHAPTER 6 CHAPTER Investment in associates Details of these associates and the voting rights held by the Group as at 31 December 2017 are as follows: No Name Voting rights Equity interest Registered office s address Principal activities (%) (%) 1 Hanoi Breeds JSC No.77 Le Hong Phong, Nguyen Trai street, Ha Dong district, Hanoi Cattle breeding 2 No.22B, Hai Ba Trung street, Vietnam Book Printing Trading books and related Trang Tien ward, Hoan Kiem JSC items and lease offices district, Hanoi 3 Phu Quoc Tourism JSC Bai Dai area, Ganh Dau commune, Phu Quoc district, Kien Giang province Providing short stay services Number of shares Name Ending balance Beginning balance Hanoi Breeds JSC 677, ,306 Vietnam Book Printing JSC 297, ,500 Phu Quoc Tourism JSC 225,000,000 34,500,000 Viwasupco JSC - 21,800,000 Nha Trang Port JSC - 7,492,240 Truong Thanh Furniture Corporation - 43,233, Investment in other entities Details of other long-term investments of the Group as at 31 December 2017 are disclosed as follows: Ending balance Beginning balance (Restated) Voting Cost (VND) Provision (VND) right (%) Number of shares Voting Cost (VND) Provision (VND) right (%) Number of shares Thanh Nien Media JSC 400, ,400,000, , ,400,000,000 - Thuan Phong Energy , ,000,000,000 - Development JSC Vinatextmart JSC (iii) 50,000, ,395,000,000-50,000, ,395,000,000 - Kim Ngoc Joint Venture LLC (i) ,467,729,348 (9,125,891,479) (i) ,467,729,348 - Vien Dong Pearl LLC (i) ,071,699,183 - (i) ,071,699,183 - M.Y.M JSC 6,080, ,469,660,000 (41,256,656,110) 5,700, ,669,660,000 - Viwaco JSC ,201, ,487,200, ,013,750,570, (i) ,750,000,000 (56,192,900,196) Vinhomes Management JSC (ii) Van Phong Port LLC (i) ,989,202, TOTAL 2,176,543,861,811 (50,382,547,589) 1,616,241,288,531 (56,192,900,196) 158 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

81 CHAPTER 6 CHAPTER 6 (i) These are limited liabilities companies; (ii) In May and August 2017, Vinhomes 1 LLC and Vinhomes 2 LLC were merged into Vinhomes Management JSC. Thereby, the Group's equity interest in Vinhomes Management JSC increased to 18.6% as disclosed in Note 4; (iii) As at 31 December 2017, the fair value of this investment is VND556.5 billion. The fair value of other investments were not determined in the absence of necessary information Held-to-maturity investment Ending balance Beginning balance Long-term deposits (i) 1,830,000,000,000 - Long-term bonds (ii) 90,000,000,000 70,000,000,000 TOTAL 1,920,000,000,000 70,000,000,000 (i) This comprises bank deposits in VND with terms of 3 years earning interest rate of 7.1% per annum. (ii) Balance as at 31 December 2017 includes long-term bonds issued by commercial banks with term of 10 years earning interest rates ranging from 7.57% to 8% per annum. VINPEARL DA NANG OCEAN RESORT & VILLAS 160 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

82 CHAPTER 6 CHAPTER Goodwill Goodwill on acquisition of subsidiaries Beginning balance (Restated) Cost Accumulated amortisation Net carrying amount Additions Disposed Ending balance Beginning balance Amortisation Disposed Ending balance Beginning balance Ending balance Hanoi Southern JSC 2,246,022,053, ,246,022,053,759 1,127,149,041, ,114,947,680-1,351,263,989,064 1,118,873,012, ,758,064,695 PFV JSC 567,441,137, ,441,137, ,927,829,405 53,834,961, ,762,790, ,513,307, ,678,346,673 Sai Dong JSC 2,251,823,291, ,251,823,291, ,375,302, ,175,554,161-1,031,550,856,474 1,444,447,988,998 1,220,272,434,837 Royal City JSC 1,262,707,762,179 - (30,656,010,788) 1,232,051,751, ,112,374, ,206,861,830 (17,700,622,206) 773,618,614, ,595,387, ,433,137,187 Vinpearl Danang LLC (ii) 208,586,514, ,586,514, ,631,690,993 24,991,434, ,623,125,154 79,954,823,201 54,963,389,040 Tan Lien Phat JSC 494,880,330,007 - (2,963,622,923) 491,916,707, ,253,504,041 49,516,013,916 (712,198,104) 152,057,319, ,626,825, ,859,387,231 Vincom Construction 1 LLC 20,000,000, ,000,000,000 6,003,649,635 1,998,175,182-8,001,824,817 13,996,350,365 11,998,175,183 Vincommerce JSC 328,706,927,483 - (8,449,479,382) 320,257,448,101 81,191,580,522 32,354,505,511 (2,379,092,342) 111,166,993, ,515,346, ,090,454,410 Khanh Gia Investment Trading Services LLC 214,714,616,533 - (92,182,661,002) 122,531,955,531 44,000,900,948 21,514,150,609 (21,212,670,848) 44,302,380, ,713,715,585 78,229,574,822 Vinatextmart LLC 17,075,684,954 - (438,934,004) 16,636,750,950 3,489,491,811 1,689,292,265 (106,924,587) 5,071,859,489 13,586,193,143 11,564,891,461 An Phong JSC (i) 480,340,849,596 - (206,223,024,863) 274,117,824,733 55,168,411,886 49,681,045,651 (28,884,612,200) 75,964,845, ,172,437, ,152,979,396 Hoang Lan LLC 18,942,936,598 - (797,729,232) 18,145,207,366 1,726,326,734 1,892,219,994 (97,211,616) 3,521,335,112 17,216,609,864 14,623,872,254 Hoa Hong Vang LLC 12,602,352,813 - (530,713,133) 12,071,639,680 1,155,388,121 1,258,855,713 (65,061,349) 2,349,182,485 11,446,964,692 9,722,457,195 Savina JSC 11,097,192, ,097,192,653 1,422,940,144 2,085,835,954-3,508,776,098 9,674,252,509 7,588,416,555 Ecology JSC 322,419,360, ,419,360,569 1,579,110,933 32,215,457,599-33,794,568, ,840,249, ,624,792,037 Phu Gia JSC 34,561,278, ,561,278, ,397,030 3,453,289,506-3,851,686,536 34,162,881,234 30,709,591,728 Vietnam Investment JSC 246,843,055, ,843,055,863 1,212,135,061 24,664,033,778-25,876,168, ,630,920, ,966,887,024 Vicentra JSC 182,145,086, ,145,086,601 3,062,824,755 18,214,508,660-21,277,333, ,082,261, ,867,753,186 Nha Trang Port JSC (iii) - 11,056,322,262-11,056,322, ,347, ,347,426-10,542,974,836 Co.Co International Ltd (iii) - 190,318,750, ,318,750,552-2,813,362,313-2,813,362, ,505,388,239 Other subsidiaries 42,336,588,503 - (13,923,505,242) 28,413,083,261 17,623,317,187 3,874,856,504 (5,463,137,634) 16,035,036,057 24,713,271,316 12,378,047,204 TOTAL 8,963,247,019, ,375,072,814 (356,165,680,569) 8,808,456,411,302 3,343,484,217, ,062,709,512 (76,621,530,886) 4,167,925,396,109 5,619,762,801,574 4,640,531,015,193 (i) In 2017, An Phong JSC was merged into South Vincom Retail LLC, which is another subsidiary of the Group; (ii) In 2017, Vinpearl Danang LLC was merged into Vinpearl JSC, which is another subsidiary of the Group; and (iii) The goodwill has arisen from business combinations during the year as presented in Note ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

83 CHAPTER 6 CHAPTER TRADE PAYABLES AND ADVANCES FROM CUSTOMERS 22. STATUTORY OBLIGATIONS 21.1 Short-term trade payables Balance (Amount payable) Ending balance Beginning balance Beginning balance Payables for the year Payment made Ending balance Trade payables to suppliers 8,240,916,817,514 6,452,935,402,714 Payables to a corporate counterparty 203,302,654, ,403,553,352 Trade payables to others 8,037,614,163,060 5,777,531,849,362 Payables to related parties (Note 36) 4,543,547,368 5,218,835,859 Payables Value added tax 519,145,453,004 4,265,194,639,762 (4,479,011,339,134) 305,328,753,632 Corporate income tax 1,279,432,234,001 3,926,298,110,828 (3,890,618,182,474) 1,315,112,162,355 Personal income tax 65,955,384, ,703,664,516 (942,609,479,683) 91,049,569,323 TOTAL 8,245,460,364,882 6,458,154,238,573 Land use fee and land rental fee 5,474,528,647,601 1,681,309,782,456 (4,014,056,728,064) 3,141,781,701,993 Other taxes 27,485,214, ,495,946,647 (208,148,111,934) 79,833,049,358 TOTAL 7,366,546,933,741 11,101,002,144,209 (13,534,443,841,289) 4,933,105,236, Advances from customers Ending balance Beginning balance Beginning balance Payables for the year Payment made Ending balance Downpayment from customers under real estate sale and purchase agreements 54,119,899,720,605 46,746,483,533,640 Advance from customers under general construction contracts 413,809,440, ,215,154,107 Advance from customers for restaurant and hospitality services 189,563,627, ,314,538,506 Advance from customers for healthcare services 31,810,932,023 51,211,161,868 Receivables Overpayment of corporate income tax 45,050,552, ,106,490,796 (9,302,188,877) 201,854,854,143 Other taxes 66,406,983,184 8,330,654,303 (62,914,110,831) 11,823,526,656 TOTAL 111,457,535, ,437,145,099 (72,216,299,708) 213,678,380,799 Advance from customers for retail trading 17,639,165,277 22,912,607,823 Advance from customers for educational services and others 49,711,755,388 26,143,872,704 TOTAL 54,822,434,640,779 47,537,280,868, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

84 CHAPTER 6 CHAPTER SHORT-TERM ACCRUED EXPENSES 25. OTHER PAYABLES Ending balance Beginning balance Interests expense 2,122,242,028,100 1,205,242,481,968 Construction costs 6,256,615,957,532 5,825,575,368,830 Commission fee 722,467,081, ,588,008,516 Committed profit under business co-operation contracts and villas management program 622,556,069, ,083,263,076 Other accrued expenses 692,715,406, ,772,761,485 TOTAL 10,416,596,543,393 8,454,261,883,875 In which: Short-term accrued expenses due to related parties (Note 36) 13,868,302, ,047,955, Other short-term payables Ending balance Beginning balance Payables under deposits, loans and other agreements related to real estate projects 17,634,848,595,573 16,724,175,440,632 Deposits for investment purpose (i) 3,273,198,353,531 2,270,266,929,290 Collection on behalf 1,512,939,781,432 67,703,284,120 Apartment maintenance fund held on behalf of customers 1,140,662,807, ,190,298,633 Deposits by tenants to be refunded within the next 12 months (Note 25.2) 184,697,274, ,961,783,374 Payable under business co-operation contract 116,720,664,690 - Payable to customers due to cancellation of contracts 44,714,739,981 78,482,282, UNEARNED REVENUE Dividend payable - 385,018,955,101 Others 553,140,200, ,757,882,527 TOTAL 24,460,922,418,130 20,468,556,855,796 Ending balance Beginning balance In which: Short-term: Other short-term payables to related parties (Note 36) 299,916,673, ,412,887,222 Villas leasing management services 609,257,787, ,220,641,246 Education services 682,776,358, ,544,782,280 Customer loyalty program - Vingroup Card 262,847,850, ,751,293,234 Hospitality and entertainment services 92,362,235, ,235,383,964 Office leasing 16,576,272,128 24,775,727,931 Other unearned revenue 91,610,971,663 51,310,830,403 TOTAL 1,755,431,476,536 1,138,838,659,058 Long-term: Villas leasing management services 5,459,695,246,103 2,286,854,496,566 Office leasing 25,698,532,007 57,194,087,287 (i) Ending balance as at 31 December 2017 comprises of: Deposits of VND1,487 billion from corporate counterparties and individuals to acquire shares in a number of investments owned by the Group. Up to the date of these consolidated financial statements, the Group has settled some of these deposits with an amount of VND961 billion; Deposits of VND989 billion from a corporate counterparty to guarantee obligation under a business cooperation contract with existing subsidiaries of the Group ; 25.2 Other long-term liabilities A deposit of VND450 billion from a corporate counterparty under a business cooperation contract with the Company in order to develop a real-estate project; and A deposit of VND275 billion from a corporate counterparty to acquire shares of an entity which is a long-term investment of the Group. Other unearned revenue 49,965,584,668 45,715,997,629 Ending balance Beginning balance TOTAL 5,535,359,362,778 2,389,764,581,482 Deposits from tenants 878,583,397, ,240,797,624 In which: Unearned revenue from related parties (Note 36) 70,705,898,141 81,871,768,284 In which: Deposits from tenants to be refunded within the next 12 months (Note 25.1) (184,697,274,921) (142,961,783,374) Others 18,864,725,041 35,840,036,692 TOTAL 712,750,848, ,119,050, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

85 CHAPTER 6 CHAPTER LOANS AND DEBTS 26.1 Short-term loans Notes Beginning balance Movement during the year Ending balance Carrying value Payable amount Increase Decrease Carrying value Payable amount Current portion of long-term loans from banks ,470,632, ,470,632,184 3,356,492,983,280 (873,470,632,185) 3,356,492,983,279 3,356,492,983,279 Current portion of corporate bonds ,973,682,722,225 3,973,682,722,225 7,336,142,817,320 (4,000,000,000,000) 7,309,825,539,545 7,309,825,539,545 Short-term loans from banks ,498,805, ,498,805,225 5,053,455,438,163 (3,411,304,708,842) 2,385,649,534,546 2,385,649,534,546 Others ,447,000,000,000 (4,358,000,000,000) 5,089,000,000,000 5,089,000,000,000 TOTAL 5,590,652,159,634 5,590,652,159,634 25,193,091,238,763 (12,642,775,341,027) 18,140,968,057,370 18,140,968,057, Short-term loans from banks Details of short-term loans from banks are presented as below: Lender Original currency Ending balance VND Maturity date Interest rate Collateral Joint Stock Commercial Bank for Foreign Trade of Vietnam 13,687,679 EUR 373,172,656,472 From April 2018 to December % per annum 299,904,466,590 From January 2018 to February % per annum (i) 6,914,661 EUR 191,121,220,642 From January 2018 to October % per annum Vietnam Technological and Commercial Joint Stock Bank 465,738 USD 10,593,211,265 From Jan 2018 to May % per annum (i) 2,095,166 USD 47,717,420,909 From March 2018 to October % per annum Joint Stock Commercial Bank for Investment and Development of Vietnam 496,554,691,624 From January 2018 to April 2018 From 6.1% to 6.5% per annum (i) Tien Phong Commercial Joint Stock Bank 274,991,187,839 From February 2018 to March % per annum (i) Vietnam Prosperity Joint Stock Commercial Bank 621,798,542,444 From January 2018 to April 2018 From 6% to 6.3% per annum (ii) Maybank Vietnam 69,796,136,761 February % per annum (i) TOTAL 2,385,649,534,546 (i) These loans are unsecured; and (ii) This loan is secured by a number of shares of a subsidiary owned by the Company. 168 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

86 CHAPTER 6 CHAPTER Other short-term loans Ending balance as at 31 December 2017 comprises of: Unsecured loans from a corporate counterparty with an amount of VND5,041 billion bearing interest rate at 7% per annum. These loans will mature from April 2018 to December 2018; and An unsecured loan with an mount of VND48 billion from an individual bearing interest rate at 6% per annum will mature in May Long-term loans Notes Beginning balance Movement during the year Ending balance Carrying value Payable amount Increase Decrease Carrying value Payable amount Long-term loans from banks ,383,219,417,884 10,383,219,417, ,279,162,042 (2,865,655,030,761) 7,914,843,549,165 7,914,843,549,165 Convertible loans 449,616,637, ,616,637,420 2,490,190,350 (452,106,827,770) - - Corporate bonds ,335,990,548,299 23,335,990,548,299 16,455,589,711,999 (16,486,897,912,419) 23,304,682,347,879 23,304,682,347,879 TOTAL 34,168,826,603,603 34,168,826,603,603 16,855,359,064,391 (19,804,659,770,950) 31,219,525,897,044 31,219,525,897, Long-term loans from banks Details of long-term loans are presented as below: Lender Ending balance USD VND Maturity date Interest rate Collateral Joint Stock Commercial Bank for Foreign Trade of Vietnam 2,359,540,302,158 From January 2018 to October 2025 In which: current portion (1,477,617,983,279) 12-month interest paid in arrears VND saving rate for individual (+) 3% to 3.5% per annum; 7.8% per annum (i) Vietnam Joint Stock Commercial Bank for Industry and Trade 855,800,000,000 In which: current portion (855,800,000,000) November month interest paid in arrears VND saving rate for individual (+) 3.5% per annum (ii) Joint Stock Commercial Bank for Investment and Development of Vietnam 197,232,109,983 December month interest paid in arrears VND saving rate for individual (+) 2% per annum (iii) Vietnam Technological and Commercial Joint Stock Bank 1,213,565,229,651 January % per annum for the first period, for subsequent periods, 12-month interest paid in arrears VND saving rate for individual (+) 3.33% per annum (iv) Syndicated loan 300,000,000 6,645,198,890,652 In which: current portion (1,023,075,000,000) From January 2018 to July month LIBOR (+) 5% per annum (v) TOTAL 7,914,843,549,165 In which: Long-term loans 11,271,336,532,444 Current portion (3,356,492,983,279) 170 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

87 CHAPTER 6 CHAPTER 6 (i) Loans from Joint Stock Commercial Bank for Foreign (iii) Loans from Joint Stock Commercial Bank for Investment Trade of Vietnam and Development of Vietnam These loans are secured by the land use rights and assets This loan is secured by Vinmec International General attached to the land of Vinhomes Central Park project; a Hospital in Nha Trang. part of assets and rights to receive the insurance benefit (iv) Vietnam Technological and Commercial Joint Stock according to insurance contracts related to Vinpearl Ha Bank Long Luxury Resort; the greenhouses, irrigation systems, machineries and equipments of VinEco Hai Phong farm This loan is secured by a number of shares of a subsidiary project, VinEco Long Thanh farm project and a number of owned by other subsidiary and a portion of capital shares of the Company owned by individuals. contribution of a subsidiary in another subsidiary. (ii) Loans from Vietnam Joint Stock Commercial Bank for (v) Syndicated loan Industry and Trade This loan is from Credit Suisse AG Singapore Branch, These loans are secured by land use rights and assets Industrial and Commercial Bank of China, Maybank attached on land of Landmark 81 Tower (except apartment International Labuan Branch and Taipei Fubon component) formed in the future, receivable rights of some Commercial Bank Foreign Branch with total principal apartment buildings in Vinhomes Central Park project. of USD300 million, disbursed on 11 July 2016 and 8 September This loan is secured by a number of ordinary shares of certain subsidiaries in the Group Corporate bonds Ending balance Beginning balance Domestic corporate bonds 30,614,507,887,424 27,309,673,270,524 In which: current portion of domestic corporate bonds (7,309,825,539,545) (3,973,682,722,225) TOTAL 23,304,682,347,879 23,335,990,548,299 Domestic corporate bonds Underwriter Ending balance Maturity date Interest rate Collaterals 12-month interest paid-in-arrears VND saving rates (+) 3% (i) per annum; 8.1% per annum Vietnam Bank for Industry and Trade Securities Joint Stock Company 5,787,277,777,830 From June 2018 to March 2022 In which: current portion (2,797,608,333,330) 12-month interest paid-in-arrears VND saving rates (+) 3.5% - 5% per annum; and from 7.75% per annum to (ii) 10.5% per annum Techcom Securities Company Limited 21,932,706,014,490 From November 2018 to In which: current portion (1,991,531,166,667) February month interest paid-in-arrears VND saving rates (+) 3% (iii) per annum Vietcombank Securities Company Limited 2,295,686,039,548 October 2018 In which: current portion (2,295,686,039,548) FPT Securities Joint Stock Company 598,838,055,556 From July 2018 to July 10% per annum (iv) In which: current portion (225,000,000,000) 2019 TOTAL 23,304,682,347,879 In which: Long-term bonds 30,614,507,887,424 Current portion of long-term bonds (7,309,825,539,545) 172 ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT

88 CHAPTER 6 CHAPTER 6 (i) These bonds are secured by a portion of the shopping malls of Vincom Ba Trieu and Vincom Center Long Bien; the land use rights and assets attached to the land of Vincom Mega Mall Thao Dien, Vincom Plaza Ngo Quyen Da Nang and assets attached to the land of Vincom Center Pham Ngoc Thach, Vincom Plaza Thu Duc, Vincom Plaza Ha Long. These shopping malls are owned by North Vincom Retail LLC and South Vincom Retail LLC, subsidiaries. (ii) These bonds are secured by the entire project "Vinpearlland Amusement Park" except for the Vietnamese pagoda model area of Vinpearl Amusement Park project, Vinpearl Nha Trang Resort 5-star hotel, a number of shares of a subsidiary owned by another subsidiary, a portion of Vincom Dong Khoi Building, which is owned by subsidiaries; the capital contribution capital of the Company in a subsidiary; the payment is guaranteed by a trust fund of the Asian Development Bank through an agreement secured by shares of certain subsidiaries. (iii) This bond is secured by a portion of land use rights, machineries, equipment of Vinpearl Nha Trang Bay Resort & Villas project and Vinpearl Premium Golf Land project. (iv) This bond is secured by a number of shares of a subsidiary owned by Company. 27. SHORT-TERM PROVISION Ending balance Beginning balance Warranty provision 169,598,159, ,414,378,407 Others 5,804,006,578 67,641,416,970 TOTAL 175,402,166, ,055,795, ANNUAL REPORT VINGROUP VINGROUP - ANNUAL REPORT