1. CORPORATE INFORMATION
 
SSI Securities Corporation (“the Company”) is a joint stock company established under the Corporate Law of Vietnam, Operating License No. 3041/GP-UB dated 27 December 1999 issued by Ho Chi Minh City People’s Committee and the first Business Registration No. 056679 dated 30 December 1999 issued by Ho Chi Minh City Department of Planning and Investment. The Company operates under Securities Trading License No. 03/GPHDKD issued by the State Securities Commission on 5 April 2000 and subsequent amended licenses.
 
As at 17 December 2018, the Company officially changed its name to SSI Securities Corporation (former name: Saigon Securities Incorporation) under License No. 104/GPDC-UBCK granted by Chairman of State Securities Commission dated 17 December 2018 amending Securities Trading License No. 03/GPHDKD.
 
The Company’s initial charter capital was VND 6,000,000,000. The charter capital has been supplemented from time to time in accordance with amended licenses. As at 31 December 2018, in accordance with the latest Amended License No. 03/GPDC-UBCK granted by the Chairman of State Securities Commission, which has been effective since 23 January 2019, the Company’s total charter capital was VND 5,100,636,840,000.
 
The Company’s primary activities are to provide brokerage service, securities trading, underwriting for securities issues, custodian service, finance advisory service, finance and investment advisory service, margin lending services and derivatives trading. The Company’s Head Office is located at 72 Nguyen Hue Boulevard, District 1, Ho Chi Minh City, Vietnam. As at 31 December 2018, the Company has branches located in Ho Chi Minh City, Hanoi, Hai Phong, Vung Tau and Nha Trang, and transaction offices located in Ho Chi Minh City and Hanoi.
 
The number of the Company’s employees as at 31 December 2018 was 1,026 persons (31 December 2017: 887 persons).
 
Company’s operation 
 
Capital
 
As at 31 December 2018, total charter capital of the Company is VND 5,100,636,840,000, owners’ equity including non-controlling interests is VND 9,155,664,527,633 and total assets are VND 23,825,626,725,361.
 
Investment objectives
 
As the biggest listed securities company in Vietnam stock market, the Company’s principal activities are to provide brokerage service, securities trading, finance and investment advisory service, custodian service, underwriting for securities issues, margin lending service and derivatives trading. The Company’s goals are to become a partner with clients, to focus all resource and initiatives to bring success to all stakeholders. 
 
Investment restrictions 
 
The Company is required to comply with Article 44 under Circular No. 210/2012/TT-BTC dated 30 November 2012 providing guidance on establishment and operation of securities companies, Circular No. 07/2016/TT-BTC dated 18 January 2016 amended some articles of Circular No. 210/2012/TT-BTC and other applicable regulations on investment restrictions. The current applicable practices on investment restrictions are as follows:   
 
Securities company is not allowed to purchase, contribute capital to invest in real-estate assets except for the purpose of use for head office, branches, and transaction offices directly serving professional business activities of the securities company.
 
Securities company may invest in real-estate investment and fixed assets on the principle that the carrying value of the fixed assets and real-estate investment should not exceed fifty percent (50%) of the total value of assets of the securities company.
 
Securities company is not allowed to use more than seventy percent (70%) of its owners’ equity to invest in corporate bonds. Securities company, licensed to engage in self-trading activity, is allowed to trade listed bonds in accordance with relevant regulation on trading Government bonds. 
 
Securities company must not by itself, or authorize another organization or individuals to: Invest in shares or contribute capital to companies that owned more than fifty percent (50%) of the charter capital of the securities company, except for purchasing of odd lots at the request of customers; Make joint investment with an affiliated person of five percent (5%) or more in the charter capital of another securities company; Invest more than twenty percent (20%) in the total currently circulating shares or fund certificates of a listing organization; Invest more than fifteen percent (15%) in the total currently circulating shares or fund certificates of an unlisted organization, this provision shall not apply to member fund, ETF fund or open-end fund certificates; Invest or contribute capital of more than ten percent (10%) in the total paid-up capital of a limited liability company or of a business project; Invest more than fifteen percent (15%) of its owners’ equity in a single organization or of a business project; Invest more than seventy percent (70%) of its total equity in shares, capital contribution and a business project, specifically invest more than twenty percent (20%) of its total owners’ equity in unlisted shares, capital contribution and a business project.
 
Securities company is allowed to establish or purchase an asset management company as a subsidiary. In that case, securities company is not required to follow the above restrictions.
 
Subsidiaries 
 
As at 31 December 2018, the Company had two (02) directly owned subsidiaries as follows: 
 
 
Besides, as at 31 December 2018, the Company had one (01) indirectly owned by SSI IMF subsidiary named SSI International Corporation. 
 

Associates

 

As at 31 December 2018, the Company had one (01) associate presented on the consolidated financial statements as follows:

 

 

Key characteristics of the Company’s operation which affect the Company’s consolidated financial statements
 
The Company’s profit after tax for the year 2018 was VND 1,302,937,242,559, which made an increase of 12.2% (amounted to VND 141,832,646,336) in comparison to the year 2017 owing to the following reasons:
 
Despite the decline of the Company’s brokerage market share and transaction volume in quarter 4, growth rate of revenue from brokerage services in 2018 was 45.1%, equivalent to VND 351,295,490,322. Besides, brokerage service expense increased VND 256,994,228,745. Furthermore, SSI also witnessed an increase by 36.8%, equivalent to VND 191,218,300,694 in revenue from margin activities.
 
Growth rate of interest income from held-to-maturity investments was 58.8%, equivalent to VND 265,220,089,403, higher than the growth of interest expense which was VND 192,959,333,722.
 
Finance income by VND 265,824,273,906, mainly thanks to gain from disposal of associates (PDN and VFG). 
 
2. BASIS OF PRESENTATION 
 
2.1 Applied accounting standards and system
 
The consolidated financial statements of the Company expressed in Vietnam dong (“VND”) are prepared and presented in accordance with Vietnamese Enterprise Accounting System, the accounting regulation and guidance applicable to securities companies as set out in Circular No. 210/2014/TT-BTC dated 30 December 2014, Circular No. 334/2016/TT-BTC dated 27 December 2016 amending, supplementing and replacing Appendices No. 02 and No. 04 of Circular No. 210/2014/TT-BTC, Circular No. 146/2014/TT-BTC dated 6 October 2014 providing guidance on financial regime applicable to securities companies and asset management companies and other Vietnamese Accounting Standards promulgated by the Ministry of Finance as per:
 
Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 1);
 
Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2);
 
Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 3);
 
Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and 
 
Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).
2.2 Basis on consolidation
 
The consolidated financial statements comprise the financial statements of SSI Securities Corporation (the parent company) and its subsidiaries as at 31 December 2018. 
 
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the parent company obtains control, and continued to be consolidated until the date that such control ceases.
 
The financial statements of the parent company and subsidiaries are prepared for the same reporting year using the consistent accounting policies.
 
All intra-company balances, incomes and expenses, and unrealized gains or losses resulting from intra-company transactions are eliminated in full.
 
Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries which are not held by the Company, and are presented separately in the consolidated income statement and within equity in the consolidated statement of financial position, separately from parent shareholders’ equity. 
 
2.3 Registered accounting documentation system
 
The Company’s registered accounting documentation system is the General Journal Voucher system.
 
2.4 Fiscal year
 
The Company’s fiscal year starts on 1 January and ends on 31 December.
 
The Company also prepares its consolidated interim financial statements for the six-month period from 1 January to 30 June and its quarterly financial statements for the three-month periods ended 31 March, 30 June, 30 September and 31 December each year.
 
2.5 Accounting currency
 
The consolidated financial statements are prepared in Vietnam dong (“VND”), which is the accounting currency of the Company.
 
3. STATEMENT ON COMPLIANCE WITH VIETNAMESE ACCOUNTING STANDARDS AND SYSTEMS
 
Management confirms that the Company has complied with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System, accounting guidance applicable to securities companies and statutory requirements relevant to preparation and presentation of the consolidated financial statements. 
 
Accordingly, the accompanying consolidated statement of financial position, consolidated income statement, consolidated statement of cash flows, consolidated statement of changes in owners’ equity and notes to the consolidated financial statements, including their utilisation are not designed for those who are not informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam.
 
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
4.1 Cash and cash equivalents
 
Cash and cash equivalents comprise cash on hand, cash at banks and short-term, highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.
 
Cash deposited by customers for securities trading and cash deposited by securities issuers are presented off-balance sheet.
 
4.2 Financial assets at fair value through profit and loss (FVTPL)
 
Financial assets recognized at fair value through profit and loss are financial assets that satisfy either of the following conditions:
 
a) It is classified as held for trading. A financial asset is classified as held for trading if:
 
it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
 
there is evidence of a recent actual pattern of short-term profit-taking; or
 
it is a derivative (except derivative that is a financial guarantee contract or effective hedging instrument).
 
b) Upon initial recognition, a financial asset is designated by the entity as at fair value through profit and loss as it meets one of the following criteria:
 
The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the asset or recognising gains or losses on a different basis; or
 
The assets are part of a group of financial assets which are managed and their performance is evaluated on a fair value basis, in accordance with the Company’s risk management policy or investment strategy.
 
Financial assets at FVTPL are initially recognized at cost (acquisition cost of the assets excluding transaction cost arising from the purchase) and subsequently recognized at fair value. 
 
Increase in the difference arising from revaluation of financial assets at FVTPL in comparison with the previous year is recognized into the consolidated income statement under “Gain from revaluation of financial assets at FVTPL”. Decrease in the difference arising from revaluation of financial assets at FVTPL in comparison with the previous year is recognized into the consolidated income statement under “Loss from revaluation of financial assets at FVTPL”.
 
Transaction costs relating to the purchase of the financial assets at FVTPL are recognized when incurred as expenses in the consolidated income statement.