Contents MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS VISION, MISSIONS AND CORE VALUES RESPONSIBILITIES TOWARDS SOCIETY, ENVIRONMENT AND EMPLOYEES THE COMPANY S HISTORY REPORT OF THE BOD/ THE MEMBERS COUNCIL/ CHAIRMAN OF THE BOD REPORT OF THE BOARD OF MANAGEMENT FINANCIAL REPORTS INTERPRETATION OF FINANCIAL REPORTS AND AUDIT REPORTS RELATED COMPANIES ORGANIZATION AND HUMAN RESOURCES INFORMATION ABOUT SHAREHOLDERS/LIMITED LIABILITY PARTNERS AND THE BOD 4 6 7 8 14 21 27 35 36 40 51 3
Message from The Chairman of The Board of Directors Dear shareholders, On behalf of the Board of Directors (BoD) and the Board of Management (BoM) of Vincom JSC, I would like to extend our warmest greetings and wishes of good health, happiness and success to you and your family! Mr. Le Khac Hiep Chairman of the BOD The year 2009 has concluded after experiencing many difficulties caused by the global financial crisis. Nonetheless, Vietnam, with its great endeavors and proper policies, was one of the first countries to emerge from the decline, maintaining positive GDP growth throughout the year and the highest growth rate in the region. The Vietnamese real estate market has also rebounded from the crisis with a strong development pipeline, which is expected to result in a strong recovery in 2010. With Vincom JSC, 2009 is also a year of great turning points. Based on analysis and assessments on domestic and global economic development, Vincom Management devised a development strategy at the beginning of the year, which focused on the high-end property segment, in order to capitalize upon the market recovery in 2010, and temporarily ceased or closed businesses that are unattractive in the short-term. In 2009, all investment and business activities, project implementation and development of the Company met targets set by the BoD. For completed financial results of 2009 please refer to the audited financials by Ernst & Young Vietnam. With its determination and solid grasp of investment and business opportunities from the crisis, Vincom has accelerated the completion and opening of key projects. In Hanoi, Vincom Center 2 (connected to Vincom City Towers - VCT) was opened in early August 2009 with occupancy rate in excess of 85%. The high-end Vincom Park Place apartments were handed over to customers from October 2009. In Ho Chi Minh City, construction progress on Vincom Center Ho Chi Minh City, a high-end mixed-use complex comprising of retail, services, hotel, office and underground parking located at 68-70 Le Thanh Ton Street and Eden Quadrangle, District 1, has been accelerated to open on 30 April 2010 - the 35th Anniversary of Vietnam Liberation Day. The project will be the most luxurious and largest office and retail space in Vietnam. 4
As a part of its strategy to be the leading brand name in the high-end real estate sector in Vietnam, operating under a group model, Vincom has engaged in a series of new and exciting projects in Hanoi and Ho Chi Minh City. The Company made capital contributions to a number of large real estate companies in Hanoi and acquired controlling stake in projects such as Royal City Real Estate Investment and Development Joint-stock Company; Hanoi Southern Urban Development Joint-stock Company; Sai Dong Investment and Urban Development Joint-stock Company; Viettronics Real Estate Limited Liability Company. In November 2009, in an incredible achievement, Vincom became the first Vietnamese company that successfully issued USD100 million of international convertible bonds listed on the Singapore Stock Exchange. The transaction has helped Vincom achieve international acclaim. This event is not only a turning point for Vincom JSC, but also for Vietnamese enterprises in general. It opened a new direction for Vietnamese enterprises to diversify financing and participate in international the capital markets. Vincom was given a number of big awards for its successes in 2009, including the Top 100 Brands - Vietnam s Golden Star 2009 Award, Top 20 Prestigious Securities Brand Award Top 10 Trade and Services Award, and so on. Ladies and Gentlemen, Inspired by the achievements made in the recent years, especially in the challenging year of 2009, the BoD of Vincom JSC has set a strategic breakthrough target for the Company in 2010 and subsequent years. Upon thoroughly analyzing and studying the investment environment of the property market in general with particular emphasis on the high-end segment, the BoD forecasts that the market will recover and grow strongly in 2010, especially in the high-end segment. This serves as an open opportunity for those wishing to grow sustainably and professionally. The Board, therefore, has decided to continue focusing on the high-end and mid to high-end segments as part of its strategic development in 2010 and the years after. However, Vincom s real estate investment activities will reach a new high level with larger scale, more breakthrough and creativity in order to capture potential business opportunities. In 2010, apart from the task of exploiting completed projects and boosting marketing and sales for to-be-completed projects, Vincom JSC is launching a series of large projects in Hanoi and Ho Chi Minh City. These projects are on both a larger scale in relation to its existing projects and other developments throughout Vietnam. In addition, the BoD shall, along with the BoM, build and expand new business directions; and at the same time, strictly and professionally implement corporate management practices, brand development, human resources and corporate culture strategies, etc. Distinguished shareholders, On behalf of the BoD, I would like to express our gratitude to you for your trust, support and sharing, and I look forward to your continuous support. I strongly believe that with our prudent plans and strategies as well as methodical investment and business approach aiming at sustainable development, Vincom JSC will continue to harvest greater success and further strengthen its leading position in the Vietnamese property industry. Sincerely yours, CHAIRMAN OF THE BOD Le Khac Hiep 5
Vision, Missions and Core values Vision With its spirit and a thirst for pioneering, Vincom Joint Stock Company ( Vincom or the Company ) strives to be a leading business group in Vietnam, with a strategic focus on real estate investment and a desire to establish the Company as a brand name of international stature. Missions Towards Market: To supply high-end, international standard, unique and creative real estate products and services to fulfill the demand from customers. Towards Employees: To build a professional, dynamic, and creative working environment; to provide opportunities for income growth and career development. Towards Shareholders: To promote attractive and sustainable investment values for shareholders. Towards Society: To harmonize the benefits of the Company and society; to contribute actively to community activities and to demonstrate a sense of responsibility to the community. Core values Sustainable and customer centric investment Providing distinctive products that are of the highest quality Prioritizing speed and effectiveness Appreciating creativity and differentiation Understanding the Company s mission and pursuing realistic objectives A united, respectful organization that values loyalty Strictly observing laws and regulations Building a corporate culture that values desire for pioneering and pride in Vietnamese intelligence and spirit 6
Responsibilities towards society, environment and employees Annual Report 2009 The stature of a modern enterprise is visible through its implementation of social responsibilities, which include being considerate towards staff s living conditions, contributing to the protection of the environment, and particularly charity and social activities for community development. Although it is quite a new concept, Vincom JSC, with its foundation and pride as a Vietnamese enterprise, has always fulfilled these responsibilities since its establishment. Since its establishment approximately seven years ago and more particularly in 2009, Vincom has regularly organized activities that help improve the life of the employees, and has actively participated in domestic and international social, humanitarian and charity activities. In order to ensure benefits for staff and provide exchange opportunities that further strengthen the solidarity and commitment to the Company, Vincom organizes summer holidays, cultural and musical events, and parties during the New Year, Lunar New Year, Establishment Day, Independence Day, and summer. At these events, excellent departments and individuals are recognized and given awards that are materially and spiritually valuable. Children the generation of the future, also receive a lot of attention and affection from the Management of the Company. The Company engages children for musical performances, gives presents on International Children s Day and the Mid-Autumn Festival. In addition, Vincom has a reward policy for staff s children who perform well at school. Besides having material value, the presents encourage them to continue studying and serve as a matter of pride for parents. Vincom also has a Company Sports Day, which involves competitions and exchanges amongst departments that employees eagerly anticipate. Besides, Vincom pays attention to and actively contributes to the social, humanitarian and charity activities in the amount of tens of billions of Vietnamese Dong. These efforts are acknowledged and recorded in Certificates of Merit granted by the Ministries, Departments, Sectors and authorities nationwide. In 2009, Vincom was awarded the Vietnamese Compassion Award, which commends exemplary enterprises that launch multiple humane activities for the community. During recent floods and calamities, Vincom has always been one of the archetypal enterprises leading relief efforts for the taking children in flood zones back to school campaign or the warm blankets for the highlands program. The company also supports the building of science, technology and service stations for navy soldiers who are protecting the country s territorial waters. Its charity activities also include supporting the poor, families of war invalids and martyrs, disadvantaged people, and orphans, which help contribute towards building a humane and developed society. As a big enterprise operating in the high-end real estate sector, Vincom is highly aware of the importance of environmental protection at each of its properties. The Company has always set priorities for energy-saving and green space, starting with its first building Vincom City Towers, which won the Energy-saving Building Award and continuing with ongoing projects. Bearing in mind that business development must be in parallel with humanitarian, social and charity activities, and fulfilling duties towards the community and society, Vincom continues to be active in this regard and views this as a noble practice. 7
2. Development process a. Business areas In 2009, Vincom JSC continued its focus on projects in accordance with business areas licensed in its Business Registration Certificate, which include: - Real estate trading; - Leasing of offices, apartments, machinery and engineering equipment; - Hotel business; - Entertainment and recreation: billiards, electronic games, terrestrial games, water games, swimming; - Beauty salon (excluding eye tattooing and services that cause bleeding); - Hospitality; - Industrial and civil engineering; - Trading in industrial, agricultural goods, construction materials, transportation vehicles, electronic goods, informatics goods, home appliances, automation equipment, automatic anti-theft equipment, forestry and aquatic products; - Agent for goods on consignment; - Investment consulting; - Leasing out facilities with specially-designed and high-tech equipment (concert hall, theatre, meeting hall, wedding hall, studio and cinema); - Advertising and related services; - Organizing trade fairs, trade exhibitions; - Designing banners and posters; - Sanitation services, insect killing and anti-termite services; - Car, motorbike and bicycle keeping service; - Constructing doing golf course and doing related businesses; - Constructing eco-tourism areas and doing related businesses; - Business relating to green parks, water park and recreational farms and gardens. - Services relating to real estate brokerage, real estate evaluation, real estate transaction floor, real estate consulting, real estate auctions, real estate advertising, real estate management. 9
b. Business situation Although the global and domestic economies have not yet recovered from the financial storm that began in 2008, the Company was able to obtain encouraging business results in 2009. Following the development of Vincom City Twin Towers, the modern Vincom Park Place tower was launched and commenced its operation in 2009, with a connection to VCT building. Besides superior advantages in terms of business lines, size, location, facilities, equipment and services, the VCT building management is also advised by experts from CB Richard Ellis Vietnam (CBRE), a global leader in providing property consultancy, brokerage and management services worldwide. The building has become an ideal place, drawing the attention of big enterprises and individuals who have high living standards, and helping bring the Vincom brand to a new height. In 2009, the building s occupancy rate remained high. The occupancy rate for the office space was more than 90% on average throughout the year while reaching 98% level at end of the year. In addition, the occupancy rate for the shopping mall was 99.2% on average the same year. With these rates, net revenue from property leasing services was VND280billion, representing a 20% increase over 2008. Revenue from financial activities with medium and short-term investments in 2009 brought stable income with an increase of 4.8 % compared to 2008. Also in 2009, the construction of projects commenced in 2008 was on schedule. Particularly, with 57,000 m2 retail space and almost 80,000 m2 office space, Vincom Center Ho Chi Minh City phase 1 is expected to be opened on April 30, 2010. This is a component of the Vincom Complex of Commerce and Services Center, Hotel, Office, Luxury Apartments and Underground Parking Place in District 1, Ho Chi Minh City. The shopping mall within this complex will be the largest shopping center in Vietnam. The project will offer luxurious design and excellent service to meet high-end shopping, entertainment and office needs. Besides the mission of serving and taking care of customers and building and retaining its strong brand name through business development, the Company has always had a social mission, which constitutes launches of and involvement in community activities. This mission has always been Vincom s top priority and helps bring its image closer to the community, showing not only a strong business brand name, but also a quintessential symbol of compassion and community developer. The Kind Heart Fund, which Vincom participated in the establishment, has gained the attention of individuals and organizations who wish to share and help poverty-stricken people nationwide. 10