(TIỂU LUẬN) OPERATING AND ADMINISTRATIVE EXPENSES MANAGEMENT AT TOPS MARKET (CENTRAL RETAIL VIETNAM)

FOREIGN TRADE UNIVERSITYHO CHI MINH CITY CAMPUS MID-COURSE INTERNSHIP REPORT Major: International Finance OPERATING AND ADMINISTRATIVE EXPENSES MANAGEMENT AT TOPS MARKET CENTRAL RETAIL V

FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

MID-COURSE INTERNSHIP REPORT

Major: International Finance

OPERATING AND ADMINISTRATIVE EXPENSES MANAGEMENT AT TOPS MARKET (CENTRAL

RETAIL VIETNAM)

Student: Nguyễn Lý Minh Như Student ID: 1913316123

Class: K58CLC2 Supervisor: Lê Trung Thành

Ho Chi Minh City, August 2022

FOREIGN TRADE UNIVERSITY SOCIALIST REPUBLIC OF VIETNAM

HO CHI MINH CITY CAMPUS Independence - Freedom – Happiness

MIDTERM PROFESSIONAL REPORT REMARKSStudent’s full name: Nguyễn Lý Minh Như Student code: 1913316123 Name of the report: Operating and administrative expenses management at Tops

Market (Central Retail Vietnam)

method(s), and titles and main headings of the report (2 digits): 0.5-0.7 point(s)

3 The student has failed to carefully follow the supervisor’s instructions The

supervisor is not responsible for the report: 0.1-0.4 point(s)

4 The student has totally failed to follow the supervisor’s instructions The supervisor

rejects the submission of the report: 0 point

Assessment of compliance with regulations, progress and work ethics (Maximum

of 1.0 point, with one decimal number):

Ho Chi Minh City,… /… /

Supervisor

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STATUTORY DECLARATION

I absolutely certify that I wrote this Mid-Course Internship report on my own initiative.Except for the quoted literature, supervisor's instruction, and other reference sourcesindicated at the end of this paper, I did not rely on any other assistance I am wellaware that breaching this rule will result in the failure of this study

Ho Chi Minh City, / /2022

Student’s signature

Nguyen Ly Minh Nhu

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It is a fantastic chance to work as a Finance intern at Tops Market Vietnam.Despite the short time frame, it enhances my professional knowledge and requiredabilities As a result, I am grateful to everyone who has helped me, directly orindirectly, finish the internship report

First and foremost, I would want to express my gratitude and appreciation to TopsMarket Vietnam for allowing me to practice at the company I would like to thank Ms

Le Thi Bich Tuyen, Finance Manager, and other members of the Finance team inparticular for their focused assistance and for establishing favorable conditions for me

to do research, acquire facts, and exchange useful work experiences in order to enrich

my knowledge

Next, I'd want to express my heartfelt gratitude to my supervisor, Mr Le TrungThanh, who has diligently led and supported me throughout the process ofimplementing and fully finishing this report His remarks and support have greatlyenhanced and improved my work The report could not have been completedsatisfactorily without his inspiration and directions

Finally, my deepest gratitude goes to the professors at Foreign Trade University

-Ho Chi Minh City Campus for their excitement and attention to teaching, as well as forproviding me with a solid foundation of professional knowledge throughout the pastthree years

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS

LIST OF TABLES AND FIGURES

PREFACE

CHAPTER 1: OVERVIEW OF TOPS MARKET VIETNAM AND ITS BUSINESS OPERATION

1.1 History and development of Tops Market (Central Retail Vietnam)

1.1.1 General information of Tops Market

1.1.2 Business outcomes of Tops Market over years

1.2 Job description and summary

CHAPTER 2: OPERATING AND ADMINISTRATIVE EXPENSES MANAGEMENT AT TOPS MARKET

2.1 Overview of operating and administrative expenses management activities at Tops Market Vietnam

2.2 Main types of operating and administrative expenses of Tops Market Vietnam

2.3 Operating and administrative expenses management process at Tops Market Vietnam

2.3.1 Step 1: Nominal expenses calculation

2.3.2 Step 2: Actual expenses calculation

2.3.3 Step 3: Expenses variance analysis

2.3.4 Step 4: Expenses forecast

2.4 Critical discussion of operating and administrative expenses management process at Tops Market Vietnam

2.4.1 Accomplishments

2.4.2 Shortcomings

CHAPTER 3: THE OUTLOOK AND RECOMMENDATIONS FOR IMPROVEMENT IN OPERATING AND ADMINISTRATIVE EXPENSES MANAGEMENT AT TOPS MARKET

3.1 Opportunities and challenges

3.1.1 Opportunities 14

3.1.2 Challenges 143.2 Recommendation for improvement in operating and administrative expenses

management at Tops Market

CONCLUSION

LIST OF ABBREVIATIONS

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PREFACE

At the beginning of 2022, according to a report by TMX - an Asia-Pacificbusiness transformation consulting company, the total operating and administrativeexpenses of a business in Vietnam will range from 79,000 - 200,000 USD/month Byvirtue of being one of the three Asian markets with the lowest average operating andadministrative expenses, Vietnam is currently a country that draws significant inflows

of international capital Therefore, in recent years, there is a substantial increase inmergers and acquisitions deals carried out by the foreign retail groups, makingVietnam's retail industry increasingly complex

With the belief that local supermarkets as well as mini-malls will be a newtrending retail model with integrating diverse utilities, meeting essential dailyconsumption needs from offline to online, many retail groups in Vietnam soonlaunched this store model and competed fiercely

Most businesses who aim to set up and build retail stores will consider the totaloperating and administrative expenses as part of their assessment Companies havedifferent overall goals and will evaluate the cost basis in the context of the company'spractices to determine the operating model The characteristic of this chain businessmodel is to possess multiple stores at the same time in different areas, often reachinghundreds of points of sale on a multi scale; with many staffs working in shifts.Consequently, the problem that most retail organizations experience is a profits deficitbecause of a failure to effectively manage expenses and the quality of the team's work,while the organizational structure grows larger over time, creating a lot of blind holesand financial statement fraud Additionally, managers find it challenging to evaluatethe quality of store operation because it is unable to personally supervise the store,which results in a profit deficit when operating and administrative expenses increasessignificantly

2Tops Market Vietnam, as one of the largest supermarket chains, is aware of theoperation of every store across Vietnam and has done its best to minimize operatingand administrative expenses in order to enhance its performance.

With the goal of gaining specific understanding of the operating andadministrative expenditures process in a retail chain, I decided to complete myinternship in the Finance Team at Tops Market Vietnam and compose my report on thetopic of "Operating and Administrative Expenses Management at Tops MarketVietnam," which includes three major chapters:

Chapter 1: Overview of Tops Market Vietnam (Central Retail Vietnam) and its

business operation

Chapter 2: Operating and administrative expenses management at Tops Market

Vietnam

Chapter 3: The outlook and recommendations for improvement in operating and

administrative expenses management at Tops Market Vietnam

The study intends to serve the purpose of a thorough understanding of theoperating and administrative expenses management process step by step, as well as thefeatures of the supermarket chain's operation that cause the discrepancies in actualexpenses and nominal expenses After gaining a solid understanding of the earlierideas, I conducted further analysis regarding the company's accomplishments andshortcomings Considering the overall opportunities and challenges the company isfacing, I then suggested some helpful recommendations for prospective changes Ihave used this report as a fantastic opportunity to gain practical experience and apply

my academic knowledge in such a professional working environment while conducting

my research and producing this paper

CHAPTER 1: OVERVIEW OF TOPS MARKET VIETNAM AND ITS

BUSINESS OPERATION

1.1 History and development of Tops Market (Central Retail Vietnam)

Central Retail Vietnam ("CRV") is a part of Central Retail Corporation PublicCompany Limited ("CRC"), the main business of the Central Group and the top retailer

in Thailand One of their most attractive categories is Food which comprises TopsMarket as a business unit

Tiang Chirathivat founded a tiny family business in 1947 that eventually becameCRC Over times, the company expanded, and in 1956, the first Central DepartmentStore opened in Bangkok's Wang Burapha district Central Group has developed underthe Chirathivat family's leadership into one of Southeast Asia's most successful retailempires as well as one of Thailand's most well-known brands Through multipleformats, including department stores, convenience stores, specialty shops,supermarkets, hypermarkets, plazas, and online sales, CRC offers a diverse portfolio ofmarket leading businesses in different categories

In July 2011, CRV began operations with a focus solely on the fashion industry.Central Retail has continued to expand and improve Vietnam's modern commerce andretail sector throughout its operation in Vietnam Today, CRV proudly serves anaverage of 175,000 consumers every day at more than 280 malls and stores across 39provinces in Vietnam and employs nearly 15,000 people

In an agreement worth 1.05 billion dollars— in April 2016, Central Groupformally acquired Big C Vietnam from Casino Group (France) Recently, CentralRetail Vietnam undertook a rebranding initiative by converting 5 Hypermarkets to GO!and 8 Supermarkets to Tops Market In particular, the Tops Market concept will be

4built to provide all 3 elements: a large range of fresh organic foods, clear origin, andcustomer support.

General information:

Legal Vietnamese name: Công ty Cổ phần Central Retail Việt Nam

Legal English name: Central Retail Corporation (Vietnam) Joint Stock Company Head office: 163 Phan Dang Luu, Ward 1, Phu Nhuan

District, Ho Chi Minh City

Tel: +84 28 3995 8368

Email: Info@vn.centralretail.com

Website: centralretail.com.vn

Awards and recognition: Vietnam Report has proudly ranked Central Retail in

Vietnam as the top company among the Top 10 illustrious retailers for the year 2021.Using a logical and subjective process, the top 10 businesses were chosen based onthree principal reasons: (1) financial capability as evidenced by the latest financialreport; (2) media recognition; and (3) August and September 2021 consumer andstakeholder survey

1.1.1 General information of Tops Market

Eight urban Big C supermarkets have changed their brand names to Tops Markettill June 2022 Tops Market constantly aims at providing

consumers the greatest service and the most convenient shopping

experience as part of its vision to become the go-to place for all

food purchasing Tops Market is always improving and thinks that,

as a result of Big C's basic beliefs and achievements, Tops Market

will be a reliable choice, providing all of the shopping needs of

every Vietnamese household

List of 8 Tops Market in Vietnam: Tops Market The Garden, Tops Market

Nguyen Xien (GO! MARKET Nguyen Xien), Tops Market Le Trong Tan, Tops

5Market Ha Dong, Tops Market Thao Dien, Tops Market An Phu, Tops Market Au Coand the most recently established in June 2022 is Tops Market Moonlight.

1.1.2 Business outcomes of Tops Market over years

Between 2019 and 2020, TMV had a 14.1% increase which is equivalent to 48.9billion VND in its total income From this point, the totals income decreased to 395.3billion VND (decreased 0.08%) in 2021 and this income figure reach 200.3 billionVND for the first 6 months of 2022 Besides, TMV’s operating and administrativeexpenses increased from 241.1 billion VND to 282.1 billion VND between 2029 and

2020 Then, these expenses went down to 250.6 billion VND in 2021 Overall, TMVgained 3.7 billion VND for profit before tax in 2019 and lost 7.8 billion VND for profitbefore tax in 2020, which equals to 310.8% decrease compared to the previous year In

2021, TMV improved its performance and gained 19.1 billion VND for profit beforetax

Table 1 1 Total profit of Tops Market Vietnam from 2019 to 2021

Total income

Operating and administrative expenses

Net operating income EBITDAR EBITDA EBIT

Net interest receipt (payment) Profit before tax

(Source: Profit & Loss Statement in 2019,2020 and 2021 of Tops Market Vietnam)

1.2 Job description and summary

Title: Finance Intern

Location: Central Retail Vietnam, 163 Phan Dang Luu, Ward 1, Phu Nhuan

District, Ho Chi Minh City

Specialism: Finance team

Level: Entry-level

Position type: Fulltime

Duties and responsibilities: I am responsible for assisting with the management

of operating and administrative expenses To do this, I must view all the contracts thatare relevant to the operations, such as the maintenance service contracts, and determinewhether there are any inconsistencies between the contract values and the actualexpenses Furthermore, it is also my duty to forecast such expenses for the followingyear and analyze the data to identify strategy to minimize those operating andadministrative costs

Internship summary: The internship at Tops Market was set forth on July 4th

2022, up to August 5th 2022 It was an honor to be given the opportunity to work as aFinance intern at Tops Market Vietnam I got enthusiastic advice and assistance fromthe Finance staff during my five-week training there The team members provide mewith several opportunities to study, observe, and apply what I've learned The financedepartment prioritized preparatory training sessions in the initial weeks of practice togain a fundamental grasp of the company's finance and accounting handbook The

7majority of the activities assigned by the line manager were organizing files andreviewing spending data.

Aside from the concentrated training sessions, I was also given the opportunity toself-discover missing information from the team members' actual working experience

in following weeks Along with these jobs, I gained experience by assisting the linemanager with ad hoc chores I am also conscious of the difference between the learningenvironment in the lecture hall and the actual working environment at the firm,therefore I will strive to use the gathered information and my strong resolve to meetthe goals set