Annual Report 2018
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Contents
Chairman’s statement
Investment Managers’ Report
Top Five Portfolio Companies
Directors’ Report
Sustainability Report
Corporate Governance Report
Independent Auditors’ Report
Statement of Financial Position
Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
1-2
3-4
5-9
10
11-12
13-16
17-18
19
20
21
22
Notes to Financial Statements
23-40
Key Parties
Directors’ Profiles
41
42
VietNam Holding LimitedAnnual Report 2018
Chairman’s Statement
The last 12 months have been a period of significant
Corporate Governance Improvements
change for VNH. At the AGM on 21 September 2017,
One particularly unsatisfactory feature of VNH was
the previous Board stepped down and, subsequently,
the previous Board’s entitlement to a share of the then
five new directors were appointed in their place. The
investment manager’s incentive fee, and, in the case of
new Board initiated a broad review of all aspects of the
the former Chairman, substantial discretionary bonuses.
Fund, particularly the areas of Corporate Governance,
In the Board’s view, such entitlement and payments
investment management and share buybacks/discount
created a conflict of interest, as one of a Board’s key duties
level. We discuss the changes that have been implemented
is assessing the performance of its Investment Manager.
as a result of this review, as well as providing an overview
The new Board has removed any such contractual
of the proposals we are tabling for approval at the AGM
entitlement and will not be receiving incentive fee
to be held in London on 31 October, 2018.
payments or bonuses.
Investment Management Changes
Furthermore, as was reported in the interim results
On 16 July 2018, the Fund appointed Dynam Capital as
published in March 2018, VNH’s published annual report
the new investment manager, on substantially reduced
for the year to 30 June 2017 failed to fully disclose the
fee terms compared with those of the previous manager,
previous Board’s full remuneration, in particular the award
VNH Asset Management (‘VNHAM’). Dynam Capital is
of a bonus of $150,000 paid to the former Chairman in
a newly established firm set up and owned by Vu Quang
2016/17. The previous Board also awarded and paid the
Thinh and Craig Martin. Vu Quang Thinh has been the
former Chairman a bonus of $100,000 the day before she
lead portfolio manager of VNH since July 2011 and was the
stepped down from the board in September 2017.
Chief Investment Officer of VNHAM until June this year. He
is the Chief Investment Officer and Managing Director of
We were pleased to announce on 7 September, 2018 that
Dynam. Craig Martin is the executive Chairman of Dynam
VNH successfully negotiated the repayment of $125,000
Capital, and also sits on the Investment Committee.
of such bonus payments from the previous Board.
Craig was head of Private Equity at Prudential Vietnam,
and most recently co-CEO of CapAsia, an Asia focused
private equity manager. We are pleased to say that
the key members of Vu Quang Thinh’s previous Vietnam
based team have joined Dynam Capital.
As part of the formal transition to Dynam, the Board
agreed a termination settlement with the previous
manager, VNHAM, that had no net impact on VNH’s
NAV. The Board would like to thank VNHAM for their
support and co-operation in the handover process.
An unusual feature of VNH prior to the appointment
of the current Board was the Directors’ involvement in
portfolio decisions. The new Board believes this is best
left to the investment management team, and has
therefore reduced the Board’s involvement in investment
management matters to the extent permitted by VNH’s
current investing policy.
01
Share Buyback and Discount
While VNH trades at a discount to its NAV per share, the
Board believes that an excellent use of the Fund’s capital
is to repurchase shares for immediate cancellation. Such
repurchases provide a certain, near immediate and
substantial return on the capital used, accreting value
to NAV per share; they provide liquidity to shareholders
and limit the discount at which VNH’s shares trade.
Shareholders approved a renewal of the share buyback
authority at an EGM on 9 July 2018, with an increase from
10% to 14.99% of shares outstanding.
Since the last AGM in September 2017, the Fund has
repurchased and cancelled 7,836,916 shares. The 52 week
average discount at which VNH’s shares have traded has
narrowed over the past year from 19.0% to 13.6% on 28
September 2018. The Board is pleased to note that the 52
week average discount of VNH is now narrower compared
to the other two London listed Vietnam funds.
VietNam Holding LimitedAnnual Report 2018 Continuation vote, Tender Offer and move to the
Performance
London Stock Exchange’s Premium List
The NAV per share fell by 2.0% to $3.061 in the six months
VNH is required to put forward a Continuation Vote at
to 30 June 2018. Over the same period the Vietnam All
this year’s AGM. A separate Circular is being published
Share Index (the VNAS Index) fell by 5.0%. For the full
with detail of the AGM agenda which includes the
financial year 2017/18 VNH’s NAV increased by 6.6%,
Continuation Vote and a number of other proposals. In
compared to a full year gain of 14.9% in the VNAS Index.
summary, in addition to the usual AGM business, these
are:
•
VNH is proposing a Tender offer for up to 15% of its
outstanding shares at a 2% discount to realised NAV;
• Moving VNH’s listing from the AIM market to the
Premium List of the London Stock Exchange;
•
Re-domiciling VNH from the Cayman Islands to
Guernsey;
•
•
The adoption of revised Articles of Incorporation; and
Continuation of VNH for a further five years
While the performance of the Vietnamese stock market
and the Fund has been disappointing in the final months
of this fiscal year, driven in part by US Dollar strength
and broad concerns about Emerging Markets, the
fundamentals in Vietnam continue to be strong. As a
result, valuations across the portfolio look increasingly
attractive. Dynam Capital provides a more detailed
portfolio and performance analysis in their report below.
Milton Lawson has advised the Company that he wishes
The Board is also pleased to note that Dynam Capital is
to step down from the VNH board. Accordingly he is not
in the process of re-domiciling to Guernsey as a Guernsey
offering himself for re election at the AGM. The rest of
Financial Services Commission regulated
Investment
the Board would like to thank him for his contribution to
Manager. This re-domiciliation will enable a number
their deliberations over the past year during a period of
of potential investors (who can only invest in vehicles
significant change at VNH and wish him every success in
managed by regulated fund managers) to invest in VNH.
the future.
Further details on the various proposals, and the reasons
The Board would like to thank shareholders for their
why the Board believes that they are in the best interests
support and look forward to a continued active dialogue.
of shareholders are contained in the Circular. Shareholders
are urged to review this document and vote in favour of
Sean Hurst, Chairman
the various proposals at the forthcoming AGM.
VietNam Holding Limited
8 October 2018
02
VietNam Holding LimitedAnnual Report 2018 Investment Managers’ Report
The performance of the Company and the Vietnamese
Liquidity remains low in much of the broader market and
stock-market overall in 2018 is a story in two distinct
is very concentrated in the main constituents of the Index.
parts. The first six months saw a bull-run in Vietnam
Vinamilk (VNM) and Mobile World Group (MWG) remain
equities reminiscent of 2007 when the Vietnam Index last
the two ‘go-to’ stocks for foreign investors (the latter
peaked, and all managers appeared to have the Midas
trading at a premium to market price of c. 25%). During
touch. Conditions in late 2017 appeared relatively benign,
the year we have taken profits in VNM and continued to
and the interest in M&A in Vietnam surged, with Thai and
build a position in Mobile World Group. Vinamilk, one of
Singaporean conglomerates bidding for significant stakes
the first listed stocks, and a former SOE, has been the
in Vinamilk, and the froth ran down the side of Sabeco’s
long-awaited listing (it had technically IPO’ed almost ten
stalwart of the Vietnam stock-market for the last 15
years. MWG is a more recent success story in Vietnam,
years ago). By 31 December 2017 the VN index reached
generating eye-watering multiples of return for its private
1000 and the Vietnam equity market’s increase of over
equity backers at IPO and then powering ahead once
50% made it a top performer. When the Fund reported
listed; the management team are taking their knowledge
its December 2017 performance, the NAV per share had
of retail of electronic devices (mainly mobile phones) into
increased 17.8% and share price had risen 23.1%, and the
the broader retail space, quickly gaining market share in
MSCI EM index had also risen by 34.3%. The ebullience
groceries and other areas. Stocks such as VNM and MWG
continued until early April, with the VN index reaching
are now well-known and well-researched names for all
an all-time high of 1204.33, a year-on-year increase of
investors in Vietnam. A much broader coverage of stocks
almost 65% in USD term, and then the music abruptly
is required for a value-investing fund as such VNH, and
stopped playing and guests began to leave the party.
that calls for specialized on-the-ground research.
The sharp correction is different from ten years ago. The
Performance of VNH
Vietnam equity market is a different animal: the stocks
The VN All Share Index Total Return (VNASTR) gained
are more widely held, the market capitalization reached
17.2% during the period under review. By comparison, the
USD 178 billion versus USD 32 billion and there are 1,498
VNH NAV finished the fiscal year with a more modest
listed companies versus 249 at the end of 2007. That
6.6%. The divergence between this particular benchmark
said, it is a market where domestic investors are fickle
and the Fund’s NAV performance is partly explained by
and react quickly to the flows of foreign capital. As the
the widening performance gap between large-cap stocks
US started to raise interest rates, a decade on from the
that drive the VNASTR and the mid-cap stocks in the
Lehman crisis, broad EM flows turned negative, and hot
portfolio of VNH. During the review period, the trailing
money also left VN, with domestic investors choosing to
P/E of the VN30 Index expanded by 48.5% from 13.4x in
retreat and watch from the sidelines. In the last months
03 Jul 2017 to its peak of 19.9x in 09 Apr 2018; the trailing
of the financial year, VNAS retreated completely, giving
P/E of the VN70 Index grew by only 6.2% from 12.9x to
up all its gains, and ending 5 percent down since 31st
13.7x. In other words, the VN30 Index was trading at a
December 2017, with the MSCI EM index also retreating to
45.4% premium to the VN70 Index at the ‘peak’ compared
negative 7.7%. in the same period. Over the full financial
to just a 3.9% premium at the beginning of the period.
year VNAS had increased 14.9% and the MSCI EM index
This resulted from the large inflows into IPOs, new listings,
rose 5.8%; during the same period the Fund’s NAV per
and state divestments, lifting the value of stocks such as
share was up 6.6% and the share price increased 13.5%.
Vinamilk, Sabeco, Binh Son Refinery, PV Power, Genco 3,
Techcombank, VPBank, Vinhomes, and Vincom Retail.
In December 2017 ThaiBev controversially acquired a
53.6% stake in Vietnam’s beer giant Sabeco (one of the
03
VietNam Holding LimitedAnnual Report 2018 Strategic investors showed their willingness to pay a
Dong. Vietnam is susceptible to further VND weakness,
significant premium for major shares in marque brand-
and likely higher levels of inflation than the Government is
owners; financial institutions, including ETFs and open-
willing to admit. Vietnam could be an unexpected winner
ended funds, flocked to large liquid large cap stocks, and
in a lengthy trade war with China, as its manufacturing
local retail investors followed suit using margin lending.
sector has developed and advanced, however the
The valuation premium of the VN30 constituents over
ramifications for ASEAN, which accounts for 10.1% of
the broader VN70 index members has remained at above
Vietnam’s exports is also far from clear. There is value in
40% even after the bear market correction. We think it
some of the growth stocks, and with forecast EPS growth
is reasonable to believe that the valuation gap between
in excess of 20%, a P/E valuation for the market of 14x is
the two sets of index members would revert to more
not demanding. That said, VND depreciation is likely to be
reasonable levels in the future.
above the 20-year trend of 2% and closer to 3%.
Strategy of VNH
In the short-term the VN-Index may suffer, or move
The spectacular growth and then the rapid correction of
sideways, due to concerns on a prolonged trade war
the Vietnamese stock market over such a short period
and capital outflows from emerging markets in general.
of time has necessitated adjustments (at least in terms
Nevertheless, we remain positive on Vietnam’s long
of expectations) on the part of all Vietnam investment
term outlook for the following three reasons. Firstly, the
managers. As a long-term value investor, we see three
continued development of the banking sector which
dynamic factors that will allow investors get exposure to
is healthier after emerging from the painful process of
Vietnam. Firstly, new large-cap IPOs and listings in both
resolving bad debts incurred during the past financial
SOE and private sector will offer attractive investment
crisis: Bancassurance and other financial products and
opportunities for investors and remain a key investment
services will contribute non-interest income, which may
theme for several years. Secondly, the Vietnam equity
be needed as credit growth is controlled at a level of 18%.
market could become a member of the MSCI Emerging
Secondly, a more sustainable and deeper real-estate
Market Index by 2020, necessitating more regional funds
market as long-planned urban infrastructure becomes
to hold Vietnamese stocks. Lastly, the structure and
closer to reality (metro and overhead railways). Lastly,
sources of domestic capital will continue to develop,
a richer and emergent middle class will drive consumer
increasing the number of local ETFs, mutual funds and
behaviour: as Vietnam’s per capita GDP passes USD
market-access products, including derivatives. The last
2,500 there are increasing amounts of disposable income,
two factors will help drive market liquidity and depth. The
for upgrades to education, housing and transportation
first factor will enable the Fund, as a value investor, to
options (more cars) and discretionary purchases of
research, analyse and select a number of privatisation
consumer goods.
prospects, and pre-IPO candidates that meet our strict
criteria of growth combined with sound commitments to
After the year-end Dynam Capital took over the
sustainable ESG practices.
2018 Outlook
management of the Fund (commencing on 16 July 2018).
The team is focused on continuing the value-driven
mandate of the Fund. Being a value investor comes at a
The outlook for the next year is uncertain. Higher interest
price: there will be periods of underperformance against
rates in the US, will provide additional strength to the
the index. The Manager is focused on building a diversified
USD; for much of the year the fund flows from EM has
portfolio, constructed with robust limits to sectors
been negative, and with continuing uncertainty on trade
tariffs and the prospects of a lengthy trade war with
China, there could be further pressure on the Vietnam
and individual positions, but also to focus on mid-cap
companies, often where liquidity is low.
Dynam Capital Management
04
VietNam Holding LimitedAnnual Report 2018 Top Five Portfolio Companies
Hoa Phat Group (HPG)
SHARE INFORMATION (as at 30 Jun 18)
Stock Exchange
Date of listing
Market capitalization (USD million)
Free float
Foreign ownership
2018 price/earnings ratio
VIETNAM HOLDING’S INVESTMENT
Date of first investment
Ownership
Percentage of NAV
Internal rate of return (annualized)
Sources: Annual Reports and Bloomberg
About the Company
HOSE
15 November 2007
3,552
58.8%
39%
8.5
20 June 2013
0.47%
8.2%
43%
FINANCIAL INDICATORS
Equity capital (USD million)
Revenues (USD million)
Revenue growth (in VND)
EBIT (USD million)
NPAT (USD million)
EPS (VND)
EPS growth
Gross margin
EBIT margin
ROE
D/E
Current ratio
Sustainability Strategy
2016
871.7
1,448.1
18.7%
351.2
295.1
3,404
82.0%
26.2%
23.6%
35.3%
0.3x
1.5x
2017
1,411.0
2,010.6
38.8%
425.5
349.1
3,883
14.1%
23.1%
21.2%
30.7%
0.4x
1.8x
Starting out as a small construction equipment trading
As a key player in the heavy industrial segment, HPG
company in 1992, Hoa Phat Group (HPG) has become one
recognizes the importance of a sustainable development
of the leading industrial manufacturing groups in Vietnam
strategy encompassing new product development,
specialising in the production of construction steel, steel
pipes, office furniture and equipment. Steelmaking
production efficiency improvements, energy efficiency,
environment protection and CSR activities.
continues to be the core business and contributes over
86% of total revenue and profit. In 2017, HPG had a local
ESG Achievements
market share of 24% and 26% in construction steel and
HPG will launch hot rolled coil steel in 2019 and become
steel pipes respectively.
the first enterprise to produce this product in Vietnam.
As of 31 December 2017, HPG had 11 subsidiaries with a
For energy saving and environmental protection, HPG
large workforce of 15,944 employees, up +23.7% YoY.
has installed a system for the collection and treatment
Recent Developments
of redundant gases and heat, in order to run an internal
thermal power plant that covers 50% of the total power
2017 was a successful year for HPG and the company
demand of the Integrated Complex. The company also
achieved its highest operational results in its 25-year
applied different kinds of methods to re-circulate 100% of
history. HPG posted revenue and profit growth of 38% and
water in all its production lines, and to reduce dust using
21% YoY, respectively, mainly contributed by construction
modern dust filtering systems.
steel and steel pipe. Total sales volume reached over 3
million tonnes of steel products (25% growth of YoY), in
In 2017, the company continued to sponsor a number of
which construction steel contributed 2.2 million tonnes,
social responsibility campaigns such as “Heartbeat love”,
steel pipe 600,000 tonnes and pre-galvanized steel
“Spring of love”, “Charitable meal-Honorable hearts” and
making up the balance.
“Join hand with students and for the community”.
HPG is finalising the Hoa Phat Dung Quat Steel Integrated
ESG Challenges
in Quang Ngai Province with an annual
Complex
projected capacity of more than four million tonnes
Although steel is a recyclable material, primary steel
making is energy intensive and poses challenges of
of steel. The project is fully integrated from iron ore to
minimizing environmental pollution. The company is
billets, construction steel, high-quality steel, hot rolled
compliant with all local environmental standards and
coil steel, steel pipe, steel sheet and prestressed steel.
will aim to apply international industry standards for its
HPG is targeting to be included in the Top 50 list of world
new plants. HPG needs to measure the carbon footprint
leading steel enterprises with targeted annual revenues of
emission of its current energy usage, compare it with the
approximately USD5 billion by 2020.
sector benchmark and apply appropriate strategies to
mitigate the effects. The company is also diversifying its
Other traditional business segments, such as office
activities into the food chain and agribusiness sectors.
furniture and equipment achieved encouraging results.
HPG also diversified
into the agricultural sector,
generating revenue and profit from animal feeds and
husbandry products.
05
VietNam Holding LimitedAnnual Report 2018
Phu Nhuan Jewelry (PNJ)
Top Five Portfolio Companies
SHARE INFORMATION (as at 30 Jun 18)
Stock Exchange
Date of listing
Market capitalization (USD million)
Free float
Foreign ownership
2018 price/earnings ratio
VIETNAM HOLDING’S INVESTMENT
Date of first investment
Ownership
Percentage of NAV
Internal rate of return (annualized)
Sources: Annual Reports and Bloomberg
About the Company
HOSE
23 March 2009
614
64.4%
49.0%
16.4
8 December 2009
2.6%
7.8%
34%
FINANCIAL INDICATORS
Equity capital (USD million)
Revenues (USD million)
Revenue growth (in VND)
EBIT (USD million)
NPAT (USD million)
EPS (VND)
EPS growth
Gross margin
EBIT margin
ROE
D/E
Current ratio
2016
65.3
373.0
11%
31.6
19.6
2,661
500%
16%
8%
30%
1.0
1.5
2017
128.5
478.1
28%
41.3
31.6
4,185
57%
17%
9%
33%
0.3
2.6
less than 20% of sales, a sharp reduction from around
PNJ is the leading manufacturer and retailer of jewelry
40% during the 2011 to 2015 period. Additionally, inventory
products in Vietnam. The company has an experienced
levels and production processes have been optimized by
team comprised of jewelry designers and over 1,000 skilled
implementing an ERP system.
goldsmiths. PNJ is the only jewelry house in Vietnam with
a production capacity of 4 million units per annum. The
Sustainability Strategy
company has 29-years of experience in the industry, with
PNJ’s Sustainable Development strategy was established
a professionally managed and well-respected brand.
based on the UN’s 17 Sustainable Development Goals. The
strategy is built upon five pillars, which are (i) Economic
PNJ offers a product range from low-end to luxury jewelry
growth via full concentration on core jewelry business, (ii)
to serve different client segments across its nationwide
Social development by providing proper annual training
network of 269 retail stores (2016: 219 and 2015: 186)
to employees, (iii) environmental protection through
including 202 Gold Class, 63 Silver Class, and 4 Premium
processing of toxic waste in an environmental-friendly
Class stores, alongside over 3,000 wholesalers. Its closest
manner and promotion of energy efficient focused
competitor operates around one-fourth of PNJ’s store
practices, (iv) Labor force development by creating a safe
network. The company currently enjoys a market share
and unprejudiced working atmosphere to not only attract
of 28%.
but also nurture talent, and (v) Community building via
effective investments in community projects.
PNJ aims to become one of the top players in the Asian
jewelry industry after exiting (and fully providing for) all
ESG Achievements
non-core investments it made in 2016. The company has
PNJ has firm policies in place to ensure that its precious
cooperated with consultants from Italy (Value Partners)
stone purchases are from legitimate sources rather than
and international jewelers in the U.S. (Zales and Tiffany
conflict zones. The company has also reduced its raw
& Co.) to enhance its jewelry designs, craftsmanship,
material waste to below the industry standard of 1%.
manufacturing capability, and retail systems
In April 2018, the roles of Chairperson and CEO were
Recent Developments
PNJ’s 2017 performance was strong with its profit after
segregated.
tax (PAT) increasing 61% YoY on a reported basis, and
Since 2012, PNJ has implemented several HR projects,
41% on a recurring basis. The growth was mostly due
such as
restructuring
its organizational hierarchy,
to revenue contribution of the high-margin retailing
standardizing the hiring process, reforming the HR
segment increasing to 52% from 48% in 2016; on the back
operating model, building a leadership competency
of 21% same-store-sale-growth.
framework and setting KPIs. These efforts have played a
vital role in PNJ delivering its recent impressive business
PNJ has changed
its product mix to
increase
its
results.
profitability. The strategy is to focus on the higher gross
margin Jewelry segment (29%), while lowering its low
gross margin gold bar trading segment (less than 2%).
ESG Challenges
The company has been in the spotlight during the
Thus, sales from jewelry segment has replaced that of
year due to investigations into Dong A Bank, and the
gold bar trading to become the key contribution to its
husband of the Chairwoman of PNJ. This has impacted
sales mix. Accordingly, gold bar trading now constituted
its reputation among some investors, although there has
been no financial impact.
06
VietNam Holding LimitedAnnual Report 2018 Saigon Cargo Service Corporation (SCS)
Top Five Portfolio Companies
SHARE INFORMATION (as at 30 Jun 18)
Stock Exchange
Date of listing
Market capitalization (USD million)
Free float
Foreign ownership
2018 price/earnings ratio
VIETNAM HOLDING’S INVESTMENT
Date of first investment
Ownership
Percentage of NAV
Internal rate of return (annualized)
Sources: Annual Reports and Bloomberg
UPCOM
12 Jul 2017
459.20
99.12%
19.34%
21.1
15 Sept 2017
4.35%
9.84%
124%
FINANCIAL INDICATORS
Equity capital (USD million)
Revenues (USD million)
Revenue growth (in VND)
EBIT (USD million)
NPAT (USD million)
EPS (VND)
EPS growth
Gross margin
EBIT margin
ROE
D/E
Current ratio
2016
33.5
21.6
45.4%
12.6
10.7
5,012
80.0%
72.4%
58.2%
31.8%
0.1x
2.3x
2017
39.8
25.6
18.6%
16.9
15.0
6,599
31.6%
77.0%
65.8%
37.4%
0.01x
4.3x
About the Company
ESG Achievements
Since its establishment in 2008, Saigon Cargo Service
In order to reach the targets in energy saving and
Corporation (SCS) has strengthened its position to
environmental protection, SCS has used technology:
become the leading air cargo terminal operator at Ho Chi
(i) information management to control and check cold
Minh City’s Tan Son Nhat airport. SCS offers a wide range
store systems; (ii) Applying inverter technology for air
of services from customs paperwork, security screening,
conditioner system to save more energy; (iii) Applying
packing, storing and consolidating airfreight.
BMS system for lighting system and ventilation fan, in
reduce energy waste; and (iv) using LED lighting system
During the initial stages of its operation in 2008, SCS
to reduce electricity consumption. In 2017, total energy
had only three clients, including Cargolux, Cardigair and
consumption efficiency showed
improvements over
Lufthansa airlines. As of June 2018, SCS has 28 airlines
previous years.
in its customer base, and handles approximately 36%
of total air cargo throughput volume at Tan Son Nhat
ESG Challenges
airport.
Recent Developments
Given its financial strength, and nationwide demand,
SCS is now looking for M&A opportunities to expand
to other airports in the north and the central regions
SCS reported good 2017 results with revenue and profit
of Vietnam. However, most M&A targets have weak
growth of 18.6% and 40.5% YoY, respectively. The two
corporate governance, lack transparency and have cross
key contributors to profit growth were the improvement
share-holdings. Therefore, the issue of how to manage
in service pricing and the reduction of interest expense
high inorganic growth and maintain a culture of good
burden. SCS has the opportunity to grow its market share
corporate governance is considered as a key challenge for
over the next three years as it operates at 53% of its
SCS.
designed capacity while its two main competitors (TCS
and Vietnam Airlines) are at full capacity. SCS is also the
only air cargo terminal in Vietnam having a container
freight station, warehouse and bonded warehouse.
Sustainability Strategy
Operating in an industrial sector which requires significant
energy input, SCS’s main sustainability development
strategy focusses on applying different solutions to save
and reuse energy efficiently, improving production and
business processes and protecting the environment.
07
VietNam Holding LimitedAnnual Report 2018
FPT Corporation (FPT)
SHARE INFORMATION (as at 30 Jun 18)
Stock Exchange
Date of listing
Market capitalization (USD million)
Free float
Foreign ownership
2018 price/earnings ratio
VIETNAM HOLDING’S INVESTMENT
Date of first investment
Ownership
Percentage of NAV
Internal rate of return (annualized)
Sources: Annual Reports and Bloomberg
Top Five Portfolio Companies
HOSE
13 Dec 2006
1,108
73.9%
49%
12.3
8 Jan 2007
1.19%
6.5%
16%
FINANCIAL INDICATORS
Equity capital (USD million)
Revenues (USD million)
Revenue growth (in VND)
EBIT (USD million)
NPAT (USD million)
EPS (VND)
EPS growth
Gross margin
EBIT margin
ROE
D/E
Current ratio
2016
414.9
1,721.8
4%
132.8
86.7
2919
3%
21%
4%
21%
1.0
1.2
2017
497.7
1,858.0
8%
137.9
127.7
4299
47%
23%
4%
26%
0.4
1.4
About the Company
Sustainability Strategy
FPT, founded in 1988, operates as a software developer,
FPT’s sustainability strategy is guided by technological
provider of IT and telecom services, and distributor/
retailer of IT and communication products. The company
innovations with commitments to the highest level of
customer satisfaction and the country’s prosperity as
has held the leading position in the local IT industry
a whole. Its sustainable development model consists of
since 1996. In an industry that typically has high staff
three pillars, which are (i) Profit, achieved by competitive
turnover, FPT has some advantage through its 100%
enhancements, (ii) People, driven by developments of
owned subsidiary, FPT University. The company employs
human resources and community activities, and (iii)
the largest engineer workforce in Vietnam, with 32,092
Planet, via environmental protection.
employees, +13% increase over last year; including 13,400
engineers and technology experts. FPT offers outsourcing
ESG Achievements
services to more than 550 globally well-known customers
In 2017, the company spent nearly USD 1.7 million on
and partners, including 64 customers in the Fortune 500.
social responsibility activities and created around 4,000
Additionally, the company owns a comprehensive telecom
new jobs. FPT has a strong focus on training. Each
infrastructure with a main North-South link, that has
employee received 9 training courses, with a total of 56
recently been upgraded from copper wire to fiber-optic
hours, up 36% YoY in 2017. The training budget was USD
cables. The private telecom network has enabled FPT to
3.6 million, up 103% YoY. The company also established
expand its telecom services to all 64 provinces of Vietnam.
the FPT Corporate University (FCU) on the foundation
FPT aims to become an internationally recognized full
of the FPT Leadership Institute (FLI) to promote FPT as
IT services provider. With that goal in mind, it has been
an education provider. The building received the EDGE
focusing on expanding its overseas markets.
(Excellence in Design for Greater Efficiencies), awarded by
Recent Developments
the IFC. Additionally, the Administrative Building of FPT
University won the 2014 Green Architecture Award, hosted
FPT delivered strong business results in 2017. Net sales
by the Vietnam Architects’ Association. Furthermore, its
were up 8% YoY and Net profits were up 47% YoY. One
university and data centers have also implemented energy
of the key contributors to earnings growth was the one-
efficiency solutions to reduce CO2 emission annually.
off profits from spinning-off stakes in the FPT Trading and
Retail businesses. The company’s performance was also
ESG Challenges
driven by Software Outsourcing. All of FPT’s outsourcing
FPT has continued to improve the effectiveness of its
markets registered robust revenue growth, such as Japan
corporate governance to ensure operations transparency
up 26% YoY, the U.S. up 17% YoY, the E.U. up 7% YoY,
and efficiency. Effective Balanced Scorecard (BSC) and
and APAC countries up 33% YoY. The Japanese market
management training has been successfully offered and
contributed the largest (58%) share of the company’s
applied in all business units at FPT.
outsourcing sales.
08
VietNam Holding LimitedAnnual Report 2018
Viet Capital Securities (VCI)
Top Five Portfolio Companies
SHARE INFORMATION (as at 30 Jun 18)
Stock Exchange
Date of listing
Market capitalization (USD million)
Free float
Foreign ownership
2018 price/earnings ratio
VIETNAM HOLDING’S INVESTMENT
Date of first investment
Ownership
Percentage of NAV
Internal rate of return (annualized)
Sources: Annual Reports and Bloomberg
HOSE
07 July 2017
431.18
95.00%
40.63%
10.1
21 April 2017
4.41%
9.38%
48.00%
FINANCIAL INDICATORS
Equity capital (USD million)
Revenues (USD million)
Revenue growth (in VND)
EBIT (USD million)
NPAT (USD million)
EPS (VND)
EPS growth
Gross margin
EBIT margin
ROE
D/E
Current ratio
2016
56.1
39.9
27.5%
24.2
15.0
2,404
-31.6%
70.6%
60.8%
29.8%
0.9x
1.8x
2017
131.5
66.9
77.3%
42.5
28.5
4,020
67.2%
71.2%
63.5%
29.0%
0.6x
2.6x
About the Company
Sustainability Strategy
VCI, founded in 2007, has dominated the investment
VCI’s long-term strategy is to remain the top-rated
banking (IB) field in Vietnam during the last seven years.
The company helped advise and close several of Vietnam’s
investment banker in Vietnam. Therefore, the company
will continue to focus on institutional brokerage. VCI’s IB
major capital market transactions for leading industry
team have proven ability in closing private placements
players including Mobile World (2014), Argo Nutrition
and IPO deals. Institutional brokerage and IB divisions
International (2015), VietJet Aviation (2016), Vietnam
typically generate higher margins, setting VCI apart
Prosperity Bank (2017) and Techcombank (2018).
from some local competitors, who concentrate on the
more capital intensive and highly competitive local retail
Due to strong support from its IB division, VCI commands
brokerage sector.
the leading position in institutional brokerage with 24%
market share in 2017, and 25% in the first half of 2018.
ESG Achievements
Overall, the company has been ranked one of the top
In a people-business, VCI has focused on providing
three brokerages in Vietnam. VCI’s institutional sales
staff with competitive base salaries, with incentives to
department is well regarded for its extensive global client
encourage higher productivity and quality. Each year VCI
base, technology platform, execution, research, and
makes charitable donations and sponsors local endeavors,
corporate access.
which in recent years have included daycare centers
for children with disabilities, support for poor farmers,
VCI is led by a professional Board of Directors with a
families, and students, and healthcare programs.
majority of non-executive directors.
Recent Developments
VCI’s activities abides by SSC guidance per Decision
105/ QD-UBCK, dated 26 February 2013, governing risk
VCI’s H1 2018 performance was encouraging. Net revenue
management systems in securities companies.
reached VND 1,027.9bn, up +74.3% YoY, and net profit
after tax was VND 530.6bn, up +93.1% YoY. The company’s
ESG Challenges
IB division, institutional brokerage team, and principal
Staff turnover in the research department of VCI is still
investment unit contributed significantly to VCI’s H1 2018
high compared to peers. Therefore, retaining talent
NPAT growth. Partly due to the successful Techcombank
continues to be a significant challenge.
deal in H1 2018, the brokerage segment and investment
banking segment, collectively grew by 324.8% YoY.
In August 2018, VCI opened its foreign ownership limit
(FOL) to 100%, which helped improve daily liquidity of the
company.
09
VietNam Holding LimitedAnnual Report 2018 Directors’ Report
The Company is a closed-ended investment company,
Auditor
incorporated on 20 April 2006 in the Cayman Islands. The
KPMG Audit LLP, being eligible, has expressed
its
Company’s Ordinary shares (“Shares”) were admitted
willingness to continue in office.
to trade on AIM (formerly the Alternative Investment
Market) of the London Stock Exchange in June 2006.
Subsequent events
The Company’s investment objective is to achieve long-
to 30 June 2018, please refer to note 16 Subsequent
term capital appreciation by investing in a diversified
Events, of the Financial Statements.
For a summary of significant events occurring subsequent
portfolio of companies that have high growth potential
at an attractive valuation.
By Order of the Board
The Company has no employees.
Results and distributions
Philip Scales
Director
The results for the year ended 30 June 2018 are set out
8 October 2018
in the Statement of Comprehensive Income on page 20.
A review of the Company’s activities is contained in the
Chairman’s Statement on pages 1-2.
Particulars of the authorised and issued share capital
are set out in note 5 Share Capital of the Financial
Statements.
Directors
The Directors holding office during the financial year and
to date were as follows:
Sean Hurst (Chairman) (appointed 13 October 2017)
Hiroshi Funaki (appointed 22 September 2017)
Milton Lawson (appointed 20 September 2017)
Damien Pierron (appointed 13 October 2017)
Philip Scales (appointed 20 September 2017)
Min-Hwa Hu Kupfer (retired 21 September 2017)
Professor Dr. Rolf Dubs (retired 21 September 2017)
Nguyen Quoc Khanh (retired 21 September 2017)
10
VietNam Holding LimitedAnnual Report 2018 Sustainability Report
Sustainability principles
Key sustainability issues
Vietnam’s
stable macroeconomic
and
political
In the past, in Vietnam there has been a general lack
environment,
impressive
increase
in foreign direct
of comprehensive information on sustainability issues
investment (FDI), and rapid economic growth have
and specific company ESG criteria: such as the level of
been bringing significant social benefits to the country,
CO2 emissions, waste water treatment, employee health
particularly
reflected
in
improved
living standards
and welfare, and remuneration and independence of
and higher per capita GDP. However, like many other
company boards. Recently, however, Vietnam has made
emerging markets, Vietnam and its business community
considerable progress in the early stages of sustainable
are facing increasing challenges to strike a good balance
investment. Since 2005 Vietnam has introduced significant
between economic growth and sustainability on several
milestones in legal framework including the Enterprise
dimensions.
and Securities Laws, corporate governance regulations
for
listed companies, requirements related to the
Vietnam Holding (VNH), as a long-term value investor
corporate disclosure of information for the stock market,
in Vietnam, strongly believes that sustainability-minded
and regulations on corporate governance in the banking
companies can outperform their peers in the longer run.
sector. On 26 June 2017, a decree on corporate governance
Such companies focus on areas that support their long-
for public companies was announced. Earlier last year, on
term business development, rather than just focusing
23 March 2017, the Ho Chi Minh Stock Exchange (HOSE)
on short-term earnings uplifts: balancing and aligning
announced the initiation of a Sustainability Index which
interest between stakeholders, providing a diverse
promotes ESG standards for its member companies. The
and satisfactory workplace for employees, enhancing
Vietnam Sustainability Index is based on OECD Principles
productivity and profitability through research and
of Corporate Governance, the GRI Standards, current
development activities, and investing in environmental
regulations on information disclosure and corporate
sustainability.
governance, and advice from experts, market insiders
and financial organizations. Along with the evolution of
Based on these principles, VNH
is committed to
the equity market, the increasing presence of institutional
the application of sound sustainability criteria in its
investors in Vietnam helps bring ESG practices of Vietnam
value investing approach. The Company integrates a
business community closer to international standards.
consideration of ESG standards in its investment processes
In April 2017, under the Vietnam Corporate Governance
despite the lack of consistent reporting on ESG matters
Initiative led by IFC with the supports from SSC, HOSE,
that is inherent in emerging markets. A custom-made
questionnaire for Vietnamese companies formed the
and HNX, the Vietnam Institutes of Directors (VIOD) was
established to promote corporate governance standards
basis of the Company’s ESG analysis toolkit. VNH chooses
and best practices in Vietnamese corporate sector. The
to invest in enterprises which meet its requirements in
CEO of VNH’s Investment Manager, Mr. Vu Quang Thinh,
both financial and ESG matters.
was elected as a board member of the organization,
together with other
leading corporate governance
VNH avoids knowingly making
investments
into
practitioners in the market.
Companies involved in products and services with known
negative effects such as businesses dealing in tobacco,
Significant challenges remain in the area of enforcement,
firearms, distilled alcohol and gambling, and companies
particularly related to environmental issues, where the
engaged in pollution, child labor, or other damaging
problems may be complex and might need collaboration
business practices.
at many levels of authority.
11
VietNam Holding LimitedAnnual Report 2018 Shareholder voting
Over the past fiscal year VNH voted at the Annual General
Meetings (AGMs) of every portfolio company in which the
Company held an equity position at the time of the AGM.
During this reporting period the Investment Manager
attended 26 AGMs in which a total of more than 240
individual agenda items were proposed. The investment
team considered each issue based on strategic merits
and long-term profitability.
As a practice, the Investment Manager discussed with
the investee companies’ BODs regarding most significant
issues, and in most cases, VNH voted for the agenda items
proposed by the companies’ Boards of Directors. VNH
abstained from voting in two cases: (i) where there was a
proposal for a short lock-up period of ESOP shares and (ii)
a merger plan with controversial corporate governance.
UN PRI
Through the long-term relationships of the Investment
Manager’s senior staff and advisors, and during the past
twelve eventful years as an investor in Vietnam, VNH
has developed a strong local and international network
of partnerships. At its AGM in 2009, shareholders voted
to endorse the comprehensive alignment of VNH’s
investment policy with the United Nations’ Principles
for Responsible Investment (UN PRI), the world’s leading
proponent of responsible investment. Consequently, ESG
factors are now fully incorporated into our investment
analysis and engagement strategy. On top of this, we
report annually on our responsible investment activities
through the PRI Transparency Report.
12
VietNam Holding LimitedAnnual Report 2018
Corporate Governance Report
Corporate Governance
An independent Investment Manager, Dynam Capital has
The Board of the Company has recently adopted
been appointed to manage the portfolio in accordance
the Quoted Companies Alliance (“QCA”) Corporate
with the Investing Policy and internal guidelines set by the
Governance Code in line with the London Stock Exchange’s
Board. The investment team at Dynam Capital, who are
recent changes to the AIM Rules requiring all AIM-listed
based in Ho Chi Minh City, have extensive experience in
companies to adopt and comply with a recognised
the Vietnamese market and their principals also sit on the
corporate governance code. The report, which sets out in
Investment Committee of VietNam Holding Limited.
broad terms how the Company complies with QCA at this
point in time, is available from the Company’s website.
A key component of the Company’s strategy is a strong
The Board will provide annual updates on compliance
Environmental, Social and Governance policy (“ESG”)
with the code.
which is monitored closely by both the board of the
Company and Dynam Capital.
The Directors also comply with AIM Rules and other
relevant UK regulations, including the Market Abuse
Further details are on both the Company and Dynam
Regulations relating to directors’ dealings, which came
Capital’s websites:
into effect on July 3, 2016. Accordingly, the Company has
adopted a code for directors’ dealings in securities of the
http://www.vietnamholding.com
Company based on AIM Rule 21.
http://www.dynamcapital.com
The QCA is clear that it is the responsibility of the
Principle 2 – Seek to understand and meet shareholder
Chairman to ensure the Company applies the Code for
needs and expectations.
the benefit of its stakeholders. It is constructed around 10
The Company
is
committed
to
listening and
broad principles, accompanied by an explanation of what
communicating openly with its shareholders to ensure
those principles entail together with a set of disclosure
that its strategy, business model and performance are
requirements.
clearly understood. All Board members have responsibility
for shareholder liaison but shareholder contact is mainly
The following sets out how the Company seeks to comply
dealt with by the Chairman of the Company and
with each of the 10 principles.
Chairman of the Management Committee in close liaison
with the Company Advisors.
Principle 1 – Establish a strategy and business model
which promote long-term value for shareholders.
Copies of the annual and interim reports are sent to all
The Company’s investment objective is to achieve long-
shareholders and copies can be downloaded from the
term capital appreciation by investing in a diversified
website. Other Company information is also available on
portfolio of companies that have high growth potential
the website.
at an attractive valuation. This is principally achieved by
investing in the securities of public companies in Vietnam,
In addition, the Company holds an AGM in each year, which
and in the securities of foreign companies if a majority
gives investors the opportunity to enter into dialogue with
of their assets and/or operations are based in Vietnam.
the Board and for the Board to receive feedback and take
The Company may also invest in equity securities or
action as necessary. The Investment Manager also holds
securities that have equity features, such as bonds that
an annual conference in Ho Chi Minh which current and
are convertible into equity.
prospective investors are invited to attend.
13
VietNam Holding LimitedAnnual Report 2018 The Board reviews proxy voting reports and any significant
Principle 4 – Embed effective risk management,
negative response is discussed with relevant shareholders
considering both opportunities and
threats,
and, if necessary, where appropriate or possible, action is
throughout the organisation.
taken to resolve any issues. In the interest of transparency
The Company’s activities expose it to a variety of financial
and best practice, the level of proxy votes
risks: market risk (including currency risk and price risk),
(for, against and vote withheld) lodged on each resolution
Risk management is carried out by the Board who identify
is declared at all general meetings and in future will be
and evaluate financial risks in close co-operation with the
credit risk, liquidity risk and cash flow interest rate risk.
announced
Investment Manager. Details of risk factors are contained
in the notes to the financial statements.
Principle 3 – Take into account wider stakeholder and
social responsibilities and their implications for long-
The Board has established a risk register which is tailored
term success.
to the Company’s business. This is a live document which
The Company’s investment policy is closely aligned
will be maintained on an on-going basis.
with the UN Principles for Responsible Investing (PRI).
Investment decisions are made by combining sound
Principle 5 – Maintain the board as a well-functioning,
financial analysis with an evaluation of material ESG
balanced team led by the chair.
issues. ESG factors are also an integral part of the portfolio
The Board has five members, all of whom are independent
management process. This active engagement aims to
non-executive and all of whom were appointed in
improve investee companies’ ESG performance measured
September/October 2017 following the retirement of the
by key performance indicators. The investment decision
previous board in September 2017.
process gives equal weight to rigorous financial analysis
and interactive sustainability research. The Company
The board is supported by four committees - audit,
believes that this approach helps to reduce portfolio
investment, management and remuneration committees.
volatility and broadens sound risk management with the
All board members are currently members of all
objective to deliver superior long-term profits to investors.
committees – the Company is going through a period of
The Company’s stakeholders
include shareholders,
October 2017 and further changes are planned in 2018.
members of staff of its professional advisers, suppliers,
auditors, bankers, regulators, industry bodies and the
The Board has also very recently appointed an additional
surrounding communities of where its investments are
Administrator based in Guernsey to provide corporate
considerable change following the changes in September/
located.
governance, secretarial and compliance services to the
Company. Until June 2018 these back up services were
The Board is regularly updated on wider stakeholder
provided by the former Investment Manager.
views and issues concerning the Portfolio both formally
at Board meetings and informally through conversations.
Each director is required to allocate sufficient time to
Representatives involved with the portfolios are invited to
meet the requirements of their role including attendance
join Board meetings and provide a report to the Board.
at all Board meetings, the Annual General Meeting and
Engagement in this manner enables the Board to receive
committees of which they are a member.
feedback and equips them to make decisions affecting
the business.
14
VietNam Holding LimitedAnnual Report 2018
Corporate Governance Report
(Continued)
As a minimum the Board aims to hold 4 meetings each
The Board will consider using external advisers to review
year with further ad hoc meetings held as required. Given
and evaluate the effectiveness of the Board in future to
the level of corporate activity, as at 19 September 2018, 7
supplement its own internal evaluation processes.
board meetings had been held since the 2017 AGM with all
directors attending each meeting.
Principle 8 – Promote a corporate culture that is
based on ethical values and behaviours.
Going forward the Company intends to report annually
The Board recognises that their decisions regarding
on the number of Board and Committee meetings held
strategy and risk impacts the corporate culture of
during the year and the attendance record of individual
Directors.
the Company as a whole and therefore will impact
performance. The Board is also mindful that the tone and
culture it sets will impact many aspects of the Company
Principle 6 – Ensure that between them the directors
and the way that stakeholders behave and form views.
have the necessary up-to-date experience, skills and
capabilities.
The Company’s main stakeholders are its shareholders,
The Board members have a range of skills covering
third party service providers and the employees of its
investment management, legal, banking, compliance
professional advisers and service providers. The Board
and corporate governance as well as prior experience of
welcomes the views of all stakeholders, and in particular
acting as directors of companies listed on AIM. A profile
its shareholders who can contact the Directors by email
of each board member is included in at the end of this
/ telephone.
Annual Report.
The Company’s Nomad and lawyers are consulted on
advisers instigated a detailed review of all aspects of
any matters where the external expertise is required, and
the Company’s operations. As a result of the review, a
external advisers attend board meetings as invited by
number of actions have been implemented as detailed in
the Chairman to report and/or discuss specific matters
RNS announcements made and reports contained in the
relevant to the Company.
2017 Interim Financial Statements and this Annual Report.
On their appointments in 2017, the Board along with its
Principle 7 – Evaluate board performance based on
The corporate governance arrangements that the Board
clear and relevant objectives, seeking continuous
have now adopted are designed to ensure that the
improvement.
Company delivers value to its shareholders in line with its
A summary of each Directors experience and skill set is
investment objective.
outlined on the website. The Directors are also identified
and their roles and responsibilities are highlighted in the
The Company has adopted, a share dealing code for
Report and Accounts.
directors’ dealings in securities of the Company which is
in accordance with the requirements of the Market Abuse
The Board intends to undertake performance evaluations
Regulation.
by the end of 2018 (one year after their appointments).
The issue of succession planning will also be considered.
As described earlier, the Company also maintains an
active ESG policy further details of which are available
Board appointments are made after consultation with
from the website.
advisers and with major shareholders in some cases.
Detailed due diligence is carried out on all new potential
board candidates.
http://www.vietnamholding.com/sustainability/policy
15
VietNam Holding LimitedAnnual Report 2018 Principle 9 – Maintain governance structures and
current investment policy. As Milton Lawson does not
processes that are fit for purpose and support good
intend to stand for re-election at the 2018 AGM, the board
decision-making by the board.
will appoint a new Investment Committee chairman on
The Directors are responsible for reviewing and approving
his retirement
the following:
•
•
•
•
•
•
•
Strategy and management
Policies and procedures
Financial reporting and controls
Capital structure
Contracts
The Management Committee, chaired by Hiroshi Funaki
is responsible for reviewing the overall structure of the
Company and liaising closely with the Company’s advisors
to consider any changes to be implemented.
The Remuneration Committee, chaired by Damien Pierron
Shareholder documents / Press announcements
meets annually to review fees paid to non-executive
Adherence to Corporate Governance and best
directors. For the financial year ended 30 June 2019, the
practice procedures
Board intends to include separate reports from each
In monitoring these key topics, the Board will be developing
committee.
its Committee structure as well as the interaction with the
Notices of previous shareholder meetings are available
new Administrator appointed as detailed in this report.
from the website and going forward, the Board intends
to include the results of votes cast at general meetings in
Principle 10 – Communicate how the company is
RNS announcements.
governed and is performing by maintaining a dialogue
http://w w w.vietnamholding.com/investor-relations/
with shareholders and other relevant stakeholders.
shareholder-circular
The Board maintains
four committees: an Audit
Committee, an Investment Committee, a Management
The Company will continue to communicate with
Committee and a Remuneration Committee. All
shareholders through:
Committees are made up of all five Directors who work
closely on all board and committee matters. The Board
also appoints the Investment Manager and is responsible
for reviewing the performance of the portfolio and
adherence with the investment policy. Additionally, the
board must approve all investments which are over 4% of
•
•
•
•
•
the Annual Report and Accounts and Interims;
the Annual General Meeting;
the daily announcement of the estimated NAV;
the monthly investor report;
ad hoc RNS announcements; and
NAV at the time of investment.
updates on the website.
The Audit Committee, chaired by Philip Scales,
is
Corporate Governance issues are currently considered by
responsible for appointing the external auditors, subject
the Board as a whole.
to shareholder approval, and reviewing the results of all
audits. It is also responsible for reviewing internal business
On behalf of the Board of Directors:
controls and audit procedures.
The Investment Committee, chaired by Milton Lawson, is
responsible for monitoring the interaction between the
Sean Hurst
Chairman
Board and the Investment Manager and for reviewing the
8 October 2018
16
VietNam Holding LimitedAnnual Report 2018 Independent Auditors’ Report
To the Shareholders of
VietNam Holding Limited
CO Services Cayman Limited
Willow House, Cricket Square
PO Box 1008
George Town, Grand Cayman
Cayman Islands, KY1-1001
KPMG LLP
16 Raffles Quay #22-00
Hong Leong Building
Singapore, 048581
T: +65 6213 3388
F: +65 6225 0984
W: www.kpmg.com
Report on the audit of the financial statements
Other information
We have audited the financial statements of VietNam
Holding Limited (‘the Company’), which comprise the
statement of financial position as at 30 June 2018, the
statements of comprehensive income, the statement of
changes in equity and the statement of cash flows for the
year then ended, and notes to the financial statements,
including a summary of significant accounting policies, as
set out on pages 19-40.
Vietnam Holding Asset Management Limited, the
Investment Manager of the Company, and the directors
of the Company (“the directors”) are responsible for the
other information contained in the annual report. The
other information is defined as all information in the
annual report other than the financial statements and
our auditors’ report thereon.
We have obtained all other information prior to the date
In our opinion, the accompanying financial statements
of this auditors’ report.
are properly drawn up in accordance with the provisions of
the International Financial Reporting Standards (‘IFRSs’)
as adopted by the European Union so as to give a true and
fair view of the financial position of the Company as at
30 June 2018 and of the financial performance, and cash
flows of the Company for the year ended on that date.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (‘ISAs’). Our responsibilities
under those standards are further described in the
‘Auditors’ responsibilities for the audit of the financial
statements’ section of our report. We are independent
of the Company in accordance with the International
Our opinion on the financial statements does not cover
the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report in this
Ethics Standards Board for Accountants Code of
regard.
Ethics for Professional Accountants (‘IESBA Code’), the
Accounting and Corporate Regulatory Authority Code of
Professional Conduct and Ethics for Public Accountants
and Accounting Entities (‘ACRA Code’), together with the
ethical requirements that are relevant to our audit of the
financial statements in Singapore, and we have fulfilled
our other ethical responsibilities in accordance with
these requirements, the IESBA Code and the ACRA Code.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Responsibilities of the directors for the financial
statements
The directors are responsible for the preparation of
financial statements that give a true and fair view in
accordance with the provisions of the IFRSs, and for
devising and maintaining a system of internal accounting
controls sufficient to provide a reasonable assurance that
assets are safeguarded against loss from unauthorised use
or disposition; and transactions are properly authorised
and that they are recorded as necessary to permit the
preparation of true and fair financial statements and to
We have determined that there are no key audit matters
maintain accountability of assets.
to communicate in our report.
17
VietNam Holding LimitedAnnual Report 2018
In preparing the financial statements, the directors
•
Evaluate the appropriateness of accounting policies
are responsible for assessing the Company’s ability to
used and the reasonableness of accounting estimates
continue as a going concern, disclosing, as applicable,
and related disclosures made by the directors.
matters related to going concern and using the going
•
Conclude on the appropriateness of the directors’
concern basis of accounting unless management either
use of the going concern basis of accounting and,
intends to liquidate the Company or to cease operations,
based on the audit evidence obtained, whether
or has no realistic alternative but to do so.
a material uncertainty exists related to events or
conditions that may cast significant doubt on the
The directors’ responsibilities
include overseeing the
Company’s ability to continue as a going concern. If
Company’s financial reporting process.
we conclude that a material uncertainty exists, we
are required to draw attention in our auditors’ report
Auditors’ responsibilities for the audit of the financial
to the related disclosures in the financial statements
statements
or, if such disclosures are inadequate, to modify our
Our objectives are to obtain reasonable assurance about
opinion. Our conclusions are based on the audit
whether the financial statements as a whole are free from
evidence obtained up to the date of our auditors’
material misstatement, whether due to fraud or error,
report. However, future events or conditions may
and to issue an auditors’ report that includes our opinion.
cause the Company to cease to continue as a going
Reasonable assurance is a high level of assurance, but is
concern.
not a guarantee that an audit conducted in accordance
•
Evaluate the overall presentation, structure and
with ISAs will always detect a material misstatement
content of the financial statements, including the
when it exists. Misstatements can arise from fraud or
disclosures, and whether the financial statements
error and are considered material if, individually or in
represent the underlying transactions and events in
the aggregate, they could reasonably be expected to
a manner that achieves fair presentation.
influence the economic decisions of users taken on the
basis of these financial statements.
We communicate with the directors regarding, among
other matters, the planned scope and timing of the audit
As part of an audit in accordance with ISAs, we exercise
and significant audit findings, including any significant
professional
judgement and maintain professional
deficiencies in internal controls that we identify during
scepticism throughout the audit. We also:
our audit.
•
Identify and assess
the
risks of material
We also provide the directors with a statement that
misstatement of the financial statements, whether
we have complied with relevant ethical requirements
due to fraud or error, design and perform audit
regarding independence, and communicate with them
procedures responsive to those risks, and obtain
all relationships and other matters that may reasonably
audit evidence that is sufficient and appropriate
be thought to bear on our independence, and where
to provide a basis for our opinion. The risk of not
applicable, related safeguards.
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
The engagement partner on the audit resulting in this
as fraud may involve collusion, forgery, intentional
independent auditors’ report is Hong Cho Hor Ian.
omissions, misrepresentations, or the override of
internal controls.
• Obtain an understanding of internal controls relevant
KPMG LLP
to the audit in order to design audit procedures that
Public Accountants and
are appropriate in the circumstances, but not for the
Chartered Accountants
purpose of expressing an opinion on the effectiveness
of the Company’s internal controls.
Singapore, 8 October 2018
18
VietNam Holding LimitedAnnual Report 2018 Statement of Financial Position
As at 30 June 2018
Assets
Cash and cash equivalents
Investments in securities at fair value
Accrued dividends
Receivables on sale of investments
Other receivables
Total Assets
Equity
Share capital
Retained earnings
Total Equity, representing net
assets attributable to shareholders
Liabilities
Payables on purchase of investments
Other payables
Accrued expenses
Payables on Redemption
Total liabilities
Total equity and liabilities
Note
2018 USD
2017 USD
3
5
3,122,618
200,017,349
469,406
101,485
-
10,323,903
208,273,147
155,582
-
13,318
203,710,858
218,765,950
122,020,264
79,964,849
141,822,097
68,713,405
201,985,113
210,535,502
403,069
134
1,129,493
193,049
4,981,932
139
3,248,377
-
1,725,745
203,710,858
8,230,448
218,765,950
The financial statements on pages 19 to 40 were approved by the
Board of Directors on 8 October 2018 and were signed on its behalf by
Sean Hurst
Philip Scales
Chairman of the Board of Directors
Chairman of the Audit Committee
The accompanying notes form an integral part of these financial statements
19
VietNam Holding LimitedAnnual Report 2018 Statement of Comprehensive Income
As at 30 June 2018
Dividend income from equity securities at
fair value through profit or loss
Net gain from investments in securities
at fair value through profit or loss
Note
2018 USD
2017 USD
3,716,081
4,561,766
7
13,419,988
30,275,746
Net foreign exchange loss
(105,071)
(119,173)
Interest income from investments in
securities
3,815
90,314
Net Investment Income
17,034,813
34,808,653
Investment management fees
Incentive fees
Advisory fees
Administrative and accounting fees
Custodian fees
Directors’ fees and expenses
Brokerage fees
Audit fees
Publicity and investor relations fees
Insurance costs
Administrative expenses
Risk management expenses
Technical assistance for investee companies
8
8
10
9
8
3,845,714
-
59,528
140,231
195,123
636,387
165,839
47,675
132,668
15,000
102,333
429,037
13,834
2,880,552
3,132,919
107,815
111,404
172,607
349,872
58,455
41,904
154,520
15,000
224,164
216,062
28,395
Total operating expenses
5,783,369
7,493,669
Change in net assets attributable to
11,251,444
27,314,984
shareholders
Basic and diluted earnings per share
14
0.16
0.49
The accompanying notes form an integral part of these financial statements
20
VietNam Holding LimitedAnnual Report 2018
Statement of Changes in Equity
As at 30 June 2018
Share
Capital
USD
Reserve for
own shares
USD
Retained
earnings
USD
Total
USD
Balance at 1 July 2016
125,521,247
(20,043,799)
41,398,421
146,875,869
Total comprehensive income for the year
Change in net assets attributable to
shareholders
Total comprehensive income
Contributions and distributions
Issuance of ordinary shares
Repurchase of own shares (note 5)
-
-
41,030,628
-
-
-
-
(4,685,979)
Total contributions and distributions
41,030,628
(4,685,979)
27,314,984
27,314,984
27,314,984
27,314,984
-
-
-
41,030,628
(4,685,979)
36,344,649
Balance at 30 June 2017
166,551,875
(24,729,778)
68,713,405
210,535,502
Balance at 1 July 2017
166,551,875
(24,729,778)
68,713,405
210,535,502
Total comprehensive income for the year
Change in net assets attributable to
shareholders
Total comprehensive income
Contributions and distributions
Issuance of ordinary shares
Repurchase of own shares (note 5)
-
-
93,166
-
-
-
-
(19,894,999)
Total contributions and distributions
93,166
(19,894,999)
11,251,444
11,251,444
11,251,444
11,251,444
-
-
-
93,166
(19,894,999)
(19,801,833)
Balance at 30 June 2018
166,645,041
(44,624,777)
79,964,849
201,985,113
The accompanying notes form an integral part of these financial statements
21
VietNam Holding LimitedAnnual Report 2018 Statement of Cash Flows
As at 30 June 2018
Note
2018 USD
2017 USD
Cash flows from operating activities
Change in net assets attributable to shareholders
11,251,444
27,314,984
Adjustments to reconcile change in net assets
attributable to shareholders to net cash from
operating activities:
Dividend income
Interest income
Net gain from investments in securities at fair
value through profit or loss
Purchase of investments
Proceeds from sale of investments
Net foreign exchange loss
(Increase)/decrease in receivables on sale of
investments
(3,716,081)
(4,561,766)
(3,815)
(90,314)
(13,419,988)
(30,275,746)
(130,485,216)
(87,232,623)
147,582,138
56,483,302
105,071
(99,317)
119,173
3,055,910
(Decrease)/increase in accrued expenses
(2,118,884)
26,546
(Decrease)/increase in other payables
Increase in payable on redemption
Dividends received
Interest received
(5)
193,049
3,402,257
14,967
2
-
5,238,629
101,846
Net cash from/(used in) operating activities
12,705,620
(29,820,057)
Cash flows from financing activities
Issuance of ordinary shares *
Repurchase of own shares
Warrants issuance cost
5
-
(19,894,999)
93,166
39,667,862
(4,685,979)
-
Net cash (used in)/from financing activities
(19,801,833)
34,981,883
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate fluctuations on cash held
(7,096,213)
10,323,903
(105,072)
5,161,826
5,281,215
(119,138)
Cash and cash equivalents at end of the year
3,122,618
10,323,903
* On 25 September 2017, the Company announced that in partial payment of the incentive fee amounting to US$ 208,861 which was due to the Company’s
Investment Manager, VietNam Holding Asset Management Limited (“VNHAM”), for the year ended 30 June 2017, 88,899 ordinary shares of US$1.00 each in
the Company (“Ordinary Shares”) then held as treasury shares were transferred to VNHAM (the “Transfer”). The Transfer took place in late September 2017.
The accompanying notes form an integral part of these financial statements
22
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements
As at 30 June 2018
1
THE COMPANY
VietNam Holding Limited (“VNH” or “the Company”) is a closed-end investment holding
company incorporated on 20 April 2006 as an exempt company under the Companies
Law in the Cayman Islands and commenced its operations on 15 June 2006, to invest
principally in securities of former State-owned Entities (“SOEs”) in Vietnam, prior to, at or
after the time such securities become listed on the Vietnam stock exchange, including the
initial privatisation of the SOEs. The Company may also invest in the securities of private
companies in Vietnam, whether Vietnamese or foreign owned, and the securities of foreign
companies if a significant portion of their assets are held or operations are in Vietnam.
The investment objective of the Company is to achieve long-term capital appreciation by
investing in a diversified portfolio of companies that have high growth potential at an
attractive valuation.
During the Extraordinary General Meeting in April 2015 the shareholders voted in favour
of the continuance resolution, authorising the Company to operate in its current form
through to the 2018 Annual General Meeting when a similar resolution will be put forward
for shareholders’ approval.
VietNam Holding Asset Management Limited (“VNHAM”) has been appointed as the
Company’s Investment Manager and is responsible for the day-to-day management of the
Company’s investment portfolio in accordance with the Company’s investment policies,
objectives and restrictions.
Standard Chartered Bank, Singapore Branch and Standard Chartered Bank (Vietnam)
Limited are the custodian and the sub-custodian respectively. Standard Chartered Bank,
Singapore Branch is also the administrator.
The registered office of the Company is CO Services Cayman Limited, Willow House, Cricket
Square, PO Box 1008 George Town, Grand Cayman, Cayman Islands, KY1-1001.
2
PRINCIPAL ACCOUNTING POLICIES
(a) Statement of compliance
These financial statements have been prepared in accordance with the International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
(b) Basis of preparation
The financial statements are presented in United States dollars (“USD”), which is the
Company’s functional currency. They are prepared on a fair value basis for financial assets
and financial liabilities at fair value through profit or loss. Other assets and liabilities are
stated at amortised cost.
The Company’s shares were issued in USD and the listing of the shares on the AIM market
of the London Stock Exchange is in USD. The performance of the Company is measured
and reported to the investors in USD, although the primary activity of the Company is
to invest in the Vietnamese market. The Board considers the USD as the currency that
most faithfully represents the economic effects of the underlying transactions, events and
conditions.
23
VietNam Holding LimitedAnnual Report 2018 The preparation of financial statements in accordance with IFRS as adopted by the European
Union requires management to make judgements, estimates and assumptions that affect
the application of policies and the reported amounts of assets and liabilities, income and
expense. The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making judgements about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
The estimated and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
An operating segment is a component of the Company that engages in business activities
from which it may earn revenues and incur expenses, including revenues and expenses
that relate to transactions with any of the Company’s other components. The Company
is engaged in a single segment of business, being investment in Vietnam. The Board, as
a whole, has been determined as constituting the chief operating decision maker of the
Company. The key measure of performance used by the Board to assess the Company’s
performance and to allocate resources is the total return on the Company’s net asset value
(“NAV”) calculated as per the prospectus.
The accounting policies set out below have been applied consistently to all periods presented
in these financial statements.
(c) Foreign currency translation
Transactions in foreign currencies other than the functional currency are translated at the
rate ruling on the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are re-translated to USD at the rates ruling on the year-end date.
Foreign currency exchange differences arising on translation and realised gains and losses
on disposals or settlements of monetary assets and liabilities are included in the statement
of comprehensive income. Foreign currency exchange differences relating to financial
instruments at fair value through profit or loss are included in the realised and unrealised
gains and losses on those investments. All other foreign currency exchange differences
relating to other monetary items, including cash and cash equivalents, are included in net
foreign exchange gains and losses in the statement of comprehensive income.
(d) Financial instruments
(i) Classification
The Company classifies all its investments as financial assets at fair value through profit or
loss category. Financial instruments are classified at fair value through profit or loss upon
initial recognition. These include financial assets that are not held for trading purposes
and which may be sold. These are investments in exchange-traded securities and unlisted
securities.
Financial assets that are classified as loans and receivables include accrued dividends, cash
and cash equivalents, and receivables on sale of investments. Cash and cash equivalents
are measured at amortised cost. Financial liabilities that are not at fair value through profit
or loss include accrued expenses.
24
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
2
PRINCIPAL ACCOUNTING POLICIES (Continued)
(d) Financial instruments (Continued)
(ii) Recognition
Financial assets and liabilities at fair value through profit or loss are recognised initially on
the trade date, which is the date that the Company becomes a party to the contractual
provisions of the instrument. Other financial assets and liabilities are recognised on the
date they are originated.
Financial assets and financial liabilities at fair value through profit or loss are recognised
initially at fair value, with transaction costs recognised in profit or loss. Financial assets or
financial liabilities not at fair value through profit or loss are recognised initially at fair value
plus transaction costs that are directly attributable to their acquisition or issue.
(iii) Derecognition
A financial asset is derecognised when the Company no longer has control over the
contractual rights that comprise that asset. This occurs when the rights are realised, expire
or are surrendered.
Financial assets that are sold are derecognised, and the corresponding receivables from
the buyer for the payment are recognised on the trade date, being the date the Company
commits to sell the assets.
A financial liability is derecognised when the obligation specified in the contract is
discharged, cancelled or expired.
(iv) Measurement
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date in the
principal or, in its absence, the most advantageous market to which the Company has
access at that date. The fair value of a liability reflects its non-performance risk.
When available, the Company measures the fair value of an instrument using the quoted
price in an active market for that instrument. A market is regarded as ‘active’ if transactions
for the asset or liability take place with sufficient frequency and volume to provide pricing
information on an ongoing basis. The Company measures instruments quoted in an active
market at last traded price.
If there is no quoted price in an active market, then the Company uses valuation techniques
that maximise the use of relevant observable inputs and minimise the use of unobservable
inputs. The chosen valuation technique incorporates all of the factors that market
participants would take into account in pricing a transaction.
The Company recognises transfers between levels of the fair value hierarchy as at the end
of the reporting period during which the change has occurred.
In the previous year, the Company used quotes obtained from brokers to determine the fair
value of an unlisted equity security with a carrying value of USD3,864,056 which was 1.84%
of the net assets of the Company, while the Company used valuation techniques to value
a convertible bond with a carrying value of USD1,179,177 which was 0.56% of the net assets
25
of the Company.
VietNam Holding LimitedAnnual Report 2018 Any increases or decreases in values are recognised in the statement of comprehensive
income as an unrealised gain or loss.
(v) Gains and losses on subsequent measurement
Gains and losses arising from a change in the fair value of financial instruments are
recognised in the statement of comprehensive income.
(vi) Impairment
Financial assets that are stated at cost or amortised cost are reviewed at each reporting
date to determine whether there is objective evidence of impairment. If any such indication
exists, an impairment loss is recognised in the statement of comprehensive income as the
difference between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the financial asset’s original effective interest rate.
If in a subsequent period the amount of an impairment loss recognised on a financial
asset carried at amortised cost decreases and the decrease can be linked objectively to an
event occurring after the write-down, the impairment is reversed through the statement
of comprehensive income.
(vii) Cash and cash equivalents
Cash comprises current deposits with banks and fixed deposits. Cash equivalents are short-
term highly liquid investments that are readily convertible to known amounts of cash, are
subject to an insignificant risk of changes in value, and are held for the purpose of meeting
short-term cash commitments rather than for investment or other purposes.
(e) Offsetting
Financial assets and liabilities are offset and the net amount is reported in the statement of
financial position when, and only when, the Company has a legally enforceable right to set
off the recognised amounts and the transactions are intended to be settled on a net basis
or simultaneously, e.g. through a market clearing mechanism.
(f) Amounts due to/from brokers
Amounts due to/from brokers represent security purchases and sales transactions which
are contracted for but not yet delivered at the end of the reporting period.
(g) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares are recognised as a deduction from equity, net of any tax effects.
Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration
paid, which includes directly attributable costs, net of any tax effects, is recognised as
a deduction from equity. Repurchased shares are classified as treasury shares and are
presented in the reserve for own share account. When treasury shares are sold or reissued
subsequently, the amount received is recognised as an increase in equity, and the resulting
surplus or deficit on the transaction is presented in non-distributable capital reserve.
26
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
2
PRINCIPAL ACCOUNTING POLICIES (Continued)
(h) Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised
in profit or loss except to the extent that it relates to items recognised directly in equity or
in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for
the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. The measurement of deferred taxes reflects the tax consequences that
would follow the manner in which the Company expects, at the reporting date, to recover
or settle the carrying amount of its assets and liabilities. Deferred tax is measured at
the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to taxes levied by the same tax authority
on the same taxable entity.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
In determining the amount of current and deferred tax, the Company takes into account
the impact of uncertain tax positions and whether additional taxes and interest may be
due. The Company believes that its accruals for tax liabilities are adequate for all open tax
years based on its assessment of many factors, including interpretations of tax law and
prior experience. This assessment relies on estimates and assumptions and may involve a
series of judgements about future events. New information may become available that
causes the Company to change its judgement regarding the adequacy of existing tax
liabilities; such changes to tax liabilities will impact tax expense in the period that such a
determination is made.
At present, no income, profit, capital, or capital gain taxes are levied in the Cayman
Islands, and accordingly, no provision for such taxes has been recorded by the Company
in the accompanying financial statements. In the event that such taxes are levied, the
Company has received an undertaking from the Governor in Cabinet of the Cayman Islands
exempting it from all such taxes for a period of twenty years from 2 May 2006.
The Company is liable to Vietnamese tax of 0.1% (2017: 0.1%) on the sales proceeds of the
onshore sale of equity investments.
27
VietNam Holding LimitedAnnual Report 2018 (i) Interest income and expense
Interest income and expense is recognised in the statement of comprehensive income using
the effective rate method.
Interest income includes the amortisation of any discount or premium on zero coupon
bonds, which is taken as income on the basis of yield to redemption, from the date of
purchase.
(j) Dividend income
Dividend income is recognised in profit or loss on the date on which the right to receive
payment is established. For listed equity securities, this is usually the ex-dividend date. For
unlisted equity securities, this is usually the date on which the shareholders approve the
payment of a dividend. Dividend income from equity securities designated as at fair value
through profit or loss is recognised in profit or loss as a separate line item.
(k) Fee and commission expense
Fees and commission expenses are recognised in profit or loss as the related services are
performed.
(l) Earnings per share
The Company presents basic and diluted earnings per share data for its ordinary shares.
Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted earnings per share is
determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding, adjusted for own shares held,
for the effects of all potentially dilutive ordinary shares, which comprise warrants granted
to shareholders.
3
FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
Financial assets of the Company include investments in securities at fair value, cash and
cash equivalents and accrued dividends. Financial liabilities comprise payables on purchase
of investments and accrued expenses. Accounting policies for financial assets and liabilities
are set out in note 2.
The Company’s investment activities expose it to various types of risk that are associated
with the financial instruments and the markets in which it invests. The most important
types of financial risk to which the Company is exposed are market risk, currency risk,
interest rate risk, credit risk and liquidity risk.
Asset allocation is determined by the Company’s Investment Manager who manages the
distribution of the assets to achieve the investment objectives. Divergence from target
asset allocations and the composition of the portfolio is monitored by the Investment
Manager.
28
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
3
FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Continued)
Market risk
Market risk is the risk that the value of a financial asset will fluctuate as a result of changes
in market prices, whether or not those changes are caused by factors specific to the
individual asset or factors affecting all assets in the market. The Company is exposed to
market risk within its securities purchased in the Vietnamese market.
The overall market positions are monitored continuously by the Investment Manager and at
least quarterly by the Board.
The Company’s investments in securities are exposed to market risk and are disclosed by
the following generic investment types:
2018
Fair Value
in USD
2018
% of Total
Assets
2017
Fair Value
in USD
2017
% of Total
Assets
Investments in listed securities
200,017,349
98.19
203,229,914
92.89
Investments in an unlisted equity security
Investments in a convertible bond
-
-
-
-
3,864,056
1,179,177
1.77
0.54
200,017,349
98.19
208,273,147
95.20
At 30 June 2018, a 5% reduction in the market value of the portfolio would have led to a
reduction in NAV and profit or loss of USD10,000,867 (2017: USD10,413,657). A 5% increase
in market value would have led to an equal and opposite effect on NAV and profit or loss.
Currency risk
The Company may invest in financial instruments and enter into transactions denominated
in currencies other than its functional currency. Consequently, the Company is exposed to
risks that the exchange rate of its currency relative to other currencies may change and
have an adverse effect on the value of the Company’s assets or liabilities denominated in
currencies other than USD.
The Company’s net assets are calculated every month based on the most up to date
exchange rates while the general economic and foreign currency environment is
continuously monitored by the Investment Manager and reviewed by the Board at least
once each quarter.
The Company may enter into arrangements to hedge currency risks if such arrangements
become desirable and practicable in the future in the interest of efficient portfolio
management.
29
VietNam Holding LimitedAnnual Report 2018 As at 30 June 2018, the Company had the following foreign currency exposures:
Vietnamese Dong
Pound Sterling
Swiss Franc
Euro
2018 Fair
Value in
USD
2017 Fair
Value in
USD
201,848,361
208,636,021
12,747
5,728
727
(19)
35,844
2,353
201,902,680
208,639,082
At 30 June 2018, a 5% reduction in the value of the Vietnamese Dong, Pound Sterling, Swiss
Franc, Euro versus the US Dollar would have led to a reduction in NAV and profit or loss of
USD 10,092,418 (2017: USD10,431,801), USD637 (2017: USD36), USD 286 (2017: USD(1)) and
USD1,792 (2017: USD118) respectively. A 5% increase in value would have led to an equal and
opposite effect.
Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The majority of the Company’s financial assets are non-interest-bearing. Interest-bearing
financial assets and interest-bearing financial liabilities mature or reprice in the short-term,
no longer than twelve months. As a result, the Company is subject to limited exposure to
interest rate risk due to fluctuations in the prevailing levels of market interest rates.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an
obligation or commitment that it has entered into with the Company.
At 30 June 2018, the following financial assets were exposed to credit risk (including
settlement risk): cash and cash equivalents, receivables on sale of investments and other
receivables. The total amount of financial assets exposed to credit risk amounted to
USD3,693,509 (2017: USD11,671,980).
Substantially all of the assets of the Company are held by the Company’s custodian,
Standard Chartered Bank, Singapore Branch. Bankruptcy or insolvency of the custodian
may cause the Company’s rights with respect to cash and securities held by the custodian
to be delayed or limited. The Company monitors its risk by monitoring the credit quality
and financial positions of the custodian the Company uses.
30
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
3
FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Continued)
Liquidity risk
The Company, a closed-end investment company, invests in companies through listings
on the Vietnam stock exchanges. There is no guarantee however that the Vietnam stock
exchanges will provide liquidity for the Company’s investments. The Company also invests
in equity securities which are not listed on stock exchanges. The Company may have to
resell such investments in privately negotiated transactions.
The Company’s overall liquidity risks are monitored on at least a quarterly basis by the
Board. The Company is a closed-end investment company so shareholders cannot redeem
their shares directly from the Company.
Payables on purchase of investments, other payables, accrued expenses and payables on
redemption of the Company are generally payable within one year.
4
OPERATING SEGMENTS
Information on gains and losses derived from investments are disclosed in the statement
of comprehensive income.
The Company is domiciled in the Cayman Islands. Entity wide disclosures are provided
as the Company is engaged in a single segment of business, investing in Vietnam. In
presenting information on the basis of geographical segments, segment investments and
the corresponding segment net investment income arising thereon are determined based
on the country of domicile of the respective investment entities.
All of the Company’s investments in securities at fair value are in Vietnam as at 30 June
2018 and 30 June 2017. All of the Company’s investment income can be attributed to
Vietnam for the years ended 30 June 2018 and 30 June 2017.
5
SHARE CAPITAL
Ordinary shares of USD1 each
The ordinary shares have been created pursuant to the Companies Law in the Cayman
Islands. The Company was incorporated with an authorised share capital of USD100,000,000
divided into 100,000,000 ordinary shares of USD1 each. On 23 September 2010, during its
Annual General Meeting, the shareholders approved that the Company’s authorised share
capital be increased by USD100,000,000, divided into 200,000,000 shares of a nominal or
par value of USD1.00 each. According to the Companies Law and articles of association,
the Company may from time to time redeem all or any portion of the shares held by the
shareholders upon giving notice of not less than 30 calendar days to the shareholders.
On 6 June 2006, the Board resolved that 56,250,000 ordinary shares would be allotted at a
placing price of USD2 per ordinary share.
31
VietNam Holding LimitedAnnual Report 2018 2018 No.
of shares
2017 No.
of shares
Total shares issued and fully paid (after repurchases and
82,729,439
65,342,620
cancellations) at beginning of the year
Shares issued upon exercise of warrants during the year
-
19,941,819
Shares cancellation
(16,740,766)
(2,555,000)
65,988,673
82,729,439
Repurchased and reserved for own shares
At beginning of the year
(9,427,772)
(10,487,673)
During the year
(7,401,893)
(2,126,783)
Shares reissued to ordinary shares
88,899
631,684
Shares cancellation
16,740,766
2,555,000
-
(9,427,772)
Total outstanding ordinary shares with voting rights
65,988,673
73,301,667
On 23 September 2010, during its annual general meeting, the shareholder approved a
Share Repurchase Programme. The approvals were renewed at the Company’s annual
general meetings in 2011, 2012, 2013, 2014, 2015, 2016 and 2017.
As a result, as at 30 June 2018 the Company has 65,988,673 (2017: 73,301,667) ordinary
shares with voting rights in issue (excluding the reserve for own shares), and nil (2017:
9,427,772) are held as reserve for own shares.
The Company does not have any externally imposed capital requirements.
The Company’s general intention is to reinvest the capital received on the sale of
investments. However, the Board may from time to time and at its discretion, either use
the proceeds of sales of investments to meet the Company’s expenses or distribute them to
shareholders. Alternatively, the Board of Directors may redeem ordinary shares with such
proceeds for shareholders pro rata to their shareholding upon giving notice of not less than
30 calendar days to shareholders (subject always to applicable law) or repurchase ordinary
shares at a price not exceeding the last published net asset value per share.
32
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
5
SHARE CAPITAL (Continued)
Warrants
On 19 May 2015, the Company issued a Prospectus for a bonus issue of warrants to
shareholders pro rata, on the basis of one warrant for every three ordinary shares held. The
exercise dates of these warrants were 1 June 2016, 1 December 2016 and 1 June 2017 with
the exercise price of USD1.998. A total of 19,977,746 warrants were issued and admitted to
trading on the AIM Market. As at 30 June 2018, nil (2017: nil) warrants are outstanding.
During the year, there was an exercise of nil (2017: 19,941,819) warrants to subscribe for nil
(2017: 19,941,819) ordinary shares at a price of USD1.998 per ordinary share.
The proceeds that arise on the warrant exercise for the year were USDnil (2017:
USD39,843,754). The net proceeds arising on the exercise of the warrants will be invested in
accordance with the Company’s investment policy.
6
NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
Total equity of USD201,985,113 (2017: USD210,535,502) represents net assets attributable
to shareholders. There is no difference between net assets attributed to shareholders
calculated as per the prospectus and in accordance with the Company’s policy (2017: none).
7
NET GAIN FROM INVESTMENTS IN SECURITIES AT FAIR VALUE THROUGH PROFIT OR
LOSS
2018 USD
2017 USD
Net gain from investments in securities at fair
value through profit or loss:
Realised gain
49,457,762
14,944,033
Adjustment to fair value of investments in
(36,037,774)
15,331,713
securities at fair value through profit or loss
13,419,988
30,275,746
8
RELATED PARTY TRANSACTIONS
Investment management fees
The Company’s Shareholders approved an amendment to the Investment Manager
Agreement as detailed in the Company’s circular dated 16 August 2013. Pursuant to the
amended agreement the Investment Manager is entitled to receive a monthly management
fee, paid in the manner set out as below:
• On the amount of the Net Asset Value of the Company up to and including USD100
million, one-twelfth of two per cent.;
33
VietNam Holding LimitedAnnual Report 2018 • On the amount of the Net Asset Value of the Company above USD100 million up to
and including USD150 million, one-twelfth of 1.75 per cent.; and
• On the amount of the Net Asset Value of the Company that exceeds USD150 million,
one-twelfth of 1.50 per cent.
The management fee accruing to the Investment Manager for the year to 30 June 2018 was
USD3,845,714 (2017: USD2,880,552).
Incentive fees
The Company will pay the Investment Manager an incentive fee equal to 15 per cent of the
Excess Performance amount each year, subject to certain criteria being met. The fee is
calculated and payable as set out in the Investment Management Agreement Side Letter
dated 11 September 2013. Excess performance amount is calculated as follows:
Excess Performance amount = (A – B) x C
Where:
A is the closing NAV per share as at the end of the reporting period.
B is equal to the higher of:
(i) the Initial High Water Mark increased by five per cent per annum on a compound basis;
and
(ii)the highest previous value for A in respect of a reporting period in which an incentive fee
was paid, increased by five per cent per annum on an compound basis.
C is equal to the time weighted average number of shares in issue as at the end of the
reporting period.
2018 USD
2017 USD
Performance fee
-
3,132,919
The Company has a payable amounting to USD 1,044,306 to the Investment Manager. The
Company entered a deed of termination and settlement with the Investment Manager on
26 June 2018 to early terminate the investment management agreement. The payable is a
compensation payment in respect of the early termination.
Directors’ fees and expenses
The Board determines the fees payable to each Director, subject to a maximum aggregate
amount of USD350,000 (2017: USD350,000) per annum being paid to the Board as a whole.
The Company also pays reasonable expenses incurred by the Directors in the conduct of the
Company’s business including travel and other expenses. The Company pays for directors
and officers liability insurance coverage. The charges for the year for the Directors fees were
USD514,832 (2017: USD257,000) and expenses were USD121,555 (2017: USD92,872). Included
in the fees paid for the year of USD514,832 was an amount of USD175,000 which related
to performance fees paid to the former Chairman. The net amount of fees therefore,
exclusive of performance fees, payable to both the previous and current board members
was USD339,832. As announced on 6 September 2018, USD125,000 was refunded to the
Company by the former board.
34
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
8
RELATED PARTY TRANSACTIONS (Continued)
Directors’ ownership of shares and warrants
As at 30 June 2018, none of the Directors directly held ordinary shares of the Company
(2017: 131,371 shares, those share belongs to the previous board members). Mr. Funaki is a
Director of Discover Investment Company which holds 3,600,000 ordinary shares in VNH
representing 5.5% of the issued share capital.
9
CUSTODIAN FEES
Custodian fees are charged at a minimum of USD12,000 (2017: USD12,000) per annum
and received as a fee at 0.08% on the assets under administration (“AUA”) per annum.
Custodian fees comprise safekeeping fees, transaction fees, money transfer fees and other
fees. Safekeeping of unlisted securities up to 20 securities is charged at USD12,000 (2017:
USD12,000) per annum. Transaction fees, money transfers fees and other fees are charged
on a transaction basis.
The charges for the year for the Custodian fees were USD195,123 (2017: USD172,607).
10
ADMINISTRATIVE AND ACCOUNTING FEES
The administrator receives a fee of 0.07% per annum for AUA less than USD100,000,000; or
0.06% per annum for AUA greater than USD100,000,000 calculated on the basis of the net
assets of the Company, subject to an annual minimum amount of USD5,500 per month.
The charges for the year for the Administration and Accounting fees were USD140,231 (2017:
USD111,404).
11
CONTROLLING PARTY
The Directors are not aware of any ultimate controlling party as at 30 June 2018 or 30 June
2017.
12
FAIR VALUE INFORMATION
For certain of the Company’s financial instruments not carried at fair value, such as cash
and cash equivalents, accrued dividends, other receivables, receivables/payable upon
sales/purchase of investments and accrued expenses, the amounts approximate fair value
due to the immediate or short term nature of these financial instruments.
Other financial instruments are measured at fair value on the statement of comprehensive
income.
Fair value estimates are made at a specific point in time, based on market conditions
and information about the financial instrument. These estimates are subjective in nature
and involve uncertainties and matters of significant judgement and therefore, cannot be
determined with precision. Changes in assumptions could significantly affect the estimates.
35
VietNam Holding LimitedAnnual Report 2018 •
Level 1: Inputs that are quoted market prices (unadjusted) in active markets for
identical instruments. This level includes listed equity securities on exchanges (for
example, Ho Chi Minh Stock Exchange).
•
Level 2: Inputs other than quoted prices included within Level 1 that are observable
either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level includes
instruments valued using: quoted prices for identical or similar instruments in markets
that are considered less than active; quoted market prices in active markets for similar
instruments; or other valuation techniques in which all significant inputs are directly or
indirectly observable from market data.
•
Level 3: Inputs that are not based on observable market data (i.e. unobservable
inputs). This level includes all instruments for which the valuation technique includes
inputs not based on observable data and the unobservable inputs have a significant
effect on the instrument’s valuation.
The table below analyses financial instruments measured at fair value at the reporting date
by the level in the fair value hierarchy into which the fair value measurement is categorised.
The amounts are based on the values recognised in the statement of financial position. All
fair value measurements below are recurring.
Level 1
USD
Level 2
USD
Level 3
USD
Total
USD
2018
Financial assets classified at fair
value upon initial recognition
Investments in securities
188,095,761
11,921,588
-
200,017,349
2017
Financial assets classified at fair value
upon initial recognition
Investments in securities
182,827,649
24,266,321
1,179,177
208,273,147
The level in the fair value hierarchy within which the fair value measurement is categorised
in its entirety is determined based on the lowest level input that is significant to the fair
value measurement in its entirety. Assessing whether an input is significant requires
judgement including consideration of factors specific to the asset or liability. Moreover, if a
fair value measurement uses observable inputs that require significant adjustment based
on unobservable inputs, that fair value measurement is a Level 3 measurement.
36
VietNam Holding LimitedAnnual Report 2018
Notes to the Financial Statements (Continued)
As at 30 June 2018
12
FAIR VALUE INFORMATION (Continued)
Valuation techniques used in measuring Level 3 fair values, as well as the significant
unobservable inputs used:
Investment type
Valuation technique
Significant unobservable
inputs
Inter-relationship between key
unobservable inputs & fair value
Convertible bond
Discounted cash flows (in
Risk-adjusted discount rate
The estimated fair value will
valuing the straight bond);
(2018: N/A; 2017: 8.50%);
increase (decrease) if:
and
Dividend yield (2018: N/A;
•
the risk-adjusted discount
Black-Scholes model (in
2017: 4.32%)
valuing the conversion
feature)
rate was lower (higher);
•
the dividend yield was
lower (higher)
Although the Company believes that its estimates of fair value are appropriate, the use
of different assumptions could lead to different measurements of fair value. The directors
consider that any reasonably possible changes to the unobservable input will not result in
a significant financial impact.
LEVEL 3 RECONCILIATION
Financial assets at fair value through profit or loss
2018 USD
2017 USD
Balance at 1 July
Purchases
Sales
Total gains and losses recognised in profit or loss *
1,179,177
1,911,733
-
(895,613)
(283,564)
-
(894,897)
162,341
Balance at 30 June
-
1,179,177
* Total gains or losses recognised in profit or loss for assets and liabilities held at the end of the reporting period, as included
in the statement of comprehensive income.
37
VietNam Holding LimitedAnnual Report 2018 13
CLASSIFICATIONS OF FINANCIAL ASSETS AND LIABILITIES
The table below provides a breakdown of the line items in the Company’s statement of
financial position to the categories of financial instruments.
Fair Value
through
profit or loss
Loans &
recievables
USD
Other
liabilities
USD
Total
carrying
amount USD
Note
2018
Cash and cash equivalents
Investments in securities at fair value
Accrued dividends
Receivables on sale of investments
Other receivables
Payables on purchase of investments
Other payables
Accrued expenses
2017
Cash and cash equivalents
-
3,122,618
3
200,017,349
-
-
-
-
469,406
101,485
-
200,017,349
3,696,509
-
-
-
-
-
-
-
-
-
-
403,069
193,183
1,129,493
1,725,745
-
-
-
-
-
Investments in securities at fair value
3
208,273,147
Accrued dividends
Receivables on sale of investments
Other receivables
-
-
-
10,323,903
-
155,582
-
13,318
208,273,147
10,492,803
-
-
-
-
-
-
3,122,618
200,017,349
469,406
101,485
-
203,710,858
403,069
193,183
1,129,493
1,725,745
10,323,903
208,273,147
155,582
-
13,318
218,765,950
Payables on purchase of investments
Other payables
Accrued expenses
-
-
-
-
-
-
-
-
4,981,932
4,981,932
139
3,248,377
8,230,448
139
3,248,377
8,230,448
38
VietNam Holding LimitedAnnual Report 2018 Notes to the Financial Statements (Continued)
As at 30 June 2018
14
EARNINGS PER SHARE
The calculation of basic and diluted earnings per share at 30 June 2018 was based on change
in net assets attributable to ordinary shareholders of USD11,251,444 (2017: USD27,314,984)
and the weighted average number of shares outstanding of 70,298,637 (2017: 55,760,831).
The warrants of the Company had been fully exercised as of the last year end.
15
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
A number of new standards and amendments to standards are effective for annual periods
beginning after 1 July 2017 and earlier application is permitted; however, the Company has
not early applied these new or amended standards in preparing these financial statements.
The one new standard potentially relevant to the Company is IFRS 9 Financial Instruments
(“IFRS9”), which is discussed below.
IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments:
Recognition and Measurement (“IAS 39”). IFRS 9 includes revised guidance on the
classification and measurement of financial instruments, a new expected credit loss
model for calculating impairment on financial assets and new general hedge accounting
requirements. It also carries forward the guidance on recognition and derecognition of
financial instruments from IAS 39.
IFRS 9 is effective for the Company’s annual reporting periods beginning on or after 1 July
2018, with early adoption permitted.
Classification of financial assets and financial liabilities
IFRS 9 contains three principal classification categories for financial assets: measured at
amortised cost, fair value through other comprehensive income (FVOCI) and fair value
through profit or loss (FVTPL). IFRS 9 classification is generally based on the business
model in which a financial asset is managed and its contractual cash flows. The standard
eliminates the existing IAS 39 categories of held-to-maturity, loans and receivables and
available-for-sale. Under IFRS 9, derivatives embedded in contracts where the host is a
financial asset in the scope of the standard are never bifurcated. Instead, the whole hybrid
instrument is assessed for classification.
IFRS 9 largely retains the existing requirements in IAS 39 for the classification of financial
liabilities. However, although under IAS 39 all fair value changes of liabilities designated
under the fair value option are recognised in profit or loss, under IFRS 9 fair value changes
are generally presented as follows:
39
VietNam Holding LimitedAnnual Report 2018 •
The amount of change in the fair value that is attributable to changes in the credit risk
of the liability is presented in OCI; and
•
•
The remaining amount of change in the fair value is presented in profit or loss.
Based on the Company’s initial assessment, this standard is not expected to have a
material impact on the classification of financial assets and financial liabilities of the
Company. This is because:
•
The financial instruments classified as held-for-trading under IAS 39 will continue to be
classified as such under IFRS 9;
• Other financial instruments currently measured at FVTPL under IAS 39 are designated
into this category because they are managed on a fair value basis in accordance with
a documented investment strategy. Accordingly, these financial instruments will be
mandatorily measured at FVTPL under IFRS 9; and
•
Financial instruments currently measured at amortised cost are: cash and cash
equivalents, accrued dividends, and other receivables. These instruments meet the
solely principal and interest criterion and are held in a held-to-collect business model.
Accordingly, they will continue to be measured at amortised cost under IFRS 9.
Impairment of financial assets
IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ model. The
new impairment model also applies to certain loan commitments and financial guarantee
contracts but not to equity investments. Under IFRS 9, credit losses are recognised earlier
than under IAS 39. Based on the Company’s initial assessment, changes to the impairment
model are not expected to have a material impact on the financial assets of the Company.
This is because:
•
The majority of the financial assets are measured at FVTPL and the impairment
requirements do not apply to such instruments; and
•
The financial assets at amortised cost are short-term (i.e. no longer than 12 months),
of high credit quality and/or highly collateralised. Accordingly, the expected credit
losses on such assets are expected to be small.
16
SUBSEQUENT EVENT
The investment manager for the Company has changed to Dynam Capital Management
Limited effective on 16 July 2018.
40
VietNam Holding LimitedAnnual Report 2018
Key Parties
Directors
Mr. Hiroshi Funaki
Mr. Sean Hurst
Mr. Milton Lawson
Mr. Damien Pierron
Mr. Philip Scales
Investment Manager
Corporate Broker (AIM)
finnCap Ltd.
60 New Broad Street
London EC2M IJJ
United Kingdom
Administrator, Custodian and Trustee
Standard Chartered Bank
VietNam Holding Asset Management Ltd
7 Changi Business Park Crescent
(Until 15 July 2018)
Level 3, Securities Services
Collas Crill Corporate Services Limited
Singapore 486028
Registrar
Computershare Investor Services (Cayman) Ltd
One Capital Place
PO Box 897
George Town KY1-1103
Grand Cayman
Cayman Island
UK Legal Adviser
Stephenson Hardwood LLP
1 Finsbury Circus,
London EC2M 7SH
United Kingdom
Independent Auditor
KPMG LLP
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
Floor 2, Willow House
Cricket Square
PO Box 709
George Town, Grand Cayman
Cayman Islands, KY1-1107
Dynam Capital Management Ltd
(From 16 July 2018)
PO Box 10008, Willow House
Cricket Square
Grand Cayman KY1-1001
Cayman Islands
Registered Office, Company Secretary
and Cayman Islands Legal Advisor
c/o CO Services Cayman Limited
Willow House, Cricket Square
PO Box 10008
George Town, Grand Cayman
Cayman Islands, KY1-1001
Nominated Adviser (AIM)
finnCap Ltd.
60 New Broad Street
London EC2M IJJ
United Kingdom
41
VietNam Holding LimitedAnnual Report 2018 Directors’ Profiles
Sean Hurst (Chairman, Chairman of Buyback
Hiroshi Funaki (Chairman of the Management
Committee) was co-founder, Director and CIO of
Committee) has been actively
involved
in raising,
Albion Asset Management, a French regulated asset
researching and trading Vietnam funds for 23 years. He
management company, from 2005-2009. He
is an
worked at Edmond de Rothschild Securities from 2000
experienced multi-jurisdictional Director including roles
to 2015 where he led the Investment Companies team,
at London/AIM-listed funds and numerous offshore
focusing on Emerging Markets and Alternative Assets.
and UCITS funds. In addition to advising companies
Prior to that he was Head of Research at Robert Fleming
on launching both offshore and onshore investment
Securities, also specialising in closed-end funds. He
funds he is currently Non-Executive Chairman of JPEL
currently acts as a consultant to a number of emerging
Private Equity Ltd and Non-Executive Director at CIAM
market investors. He has a BA in Mathematics and
Opportunities Fund and Satellite Event-Driven UCITS
Philosophy from Oxford University and is a UK resident.
Fund. Mr Hurst was formerly a Non-Executive Director
of AIM-listed ARC Capital Holdings Ltd. He holds an MBA
in Finance from CASS Business School in London and is a
Milton Lawson (Chairman of the
Investment
resident of France.
Committee) was resident in Vietnam from 1993 to 2017
prior to his retirement from his position as Managing
Lawyer of Freshfields Bruckhaus Deringer LLP’s Ho Chi
Philip Scales (Chairman of Audit Committee) has
Minh City office in June 2017. Mr. Lawson joined Freshfields
over 40 years’ experience working in offshore corporate,
Bruckhaus Deringer LLP in 1997, having previously headed
trust, and third party administration. For 18 years, he was
Sinclair Roche and Temperley’s Vietnam practice since
Managing Director of Barings Isle of Man (subsequently
1993. During Mr. Lawson’s full-time practice in Vietnam
to become Northern Trust) where he specialised in
for the last 20 years, he has worked on many of the
establishing offshore fund structures, latterly in the
leading transactions involving investment in Vietnam. Mr.
closed-ended arena (both listed and unlisted entities).
Lawson holds both Bachelor of Arts and Master’s degrees
Mr. Scales subsequently co-founded IOMA Fund and
in Philosophy from the University of Lancaster and is a
Investment Management Limited (now named FIM
UK resident.
Capital Limited) where he is a Deputy Chairman. He is
a Fellow of the Institute of Chartered Secretaries and
Administrators and holds a number of directorships of
Damien Pierron
(Chairman of Remuneration
listed companies and collective investment schemes. He
Committee) is currently Managing Director at Société
is an Isle of Man resident.
Generale in Dubai, where he is heading the coverage for
Family Offices and Wealthy Families in Middle East and
Russia. He has fifteen years’ experience in M&A, private
equity, equity derivatives, wealth management and
investment banking gained at, among others, Lafarge
Holcim, OC&C Strategy Consultants and Natixis. Mr.
Pierron is a CFA charterholder and holds a Degree
in Mathematics, Physics and Economy from Ecole
Polytechique in Paris and a Masters Degree in Quantitative
Innovation from Ecole Nationale Superieure des Mines de
Paris. He is a Dubai resident.
42
VietNam Holding LimitedAnnual Report 2018