The board of directors’ report

 

MEMBERS OF THE BOARD OF DIRECTORS

 

In 2016, the SSI Board of Directors (BOD) has carried out activities in accordance with the Company’s Charter and Management Regulation.

The BOD consists of 6 members, two (02) of whom, Mr. Ngo Van Diem and Mr. Bui Quang Nghiem, are independent members. The structure of the BOD balances an appropriate ratio between members with experience and expertise in management, law, finance and securities, as well as their roles (executive members, non-executive members and independent members). Accordingly, at least 1/3 of the board members must be independent and non-executive members in order to ensure the objectivity and independence in BOD activities. The regulation on the number of independent non-executive board members is stated clearly in the Company’s Charter.

The list of board members, the ratio of share ownership with voting right at the Company as of 31 December 2016 is as follows: 

 

Mr. Nguyen Duy Hung

Chairman cum Chief Executive Officer (CEO)

Mr. Hung is the Founder of Saigon Securities Inc.

He is also the Founder and Chairman of The PAN Group - a leading company in agriculture and high quality packaged food industry.

 

Mr. Ngo Van Diem

Board Member

Mr. Diem has more than 30 years of experiences in foreign and domestic investments, state-owned enterprise reform, and industrial zone development and economic integration when holding middle and senior positions in Government agencies. He was the former Chairman of the State Committee for Cooperation and Investment, former Director of the State Council for Appraisal, former Director of Vietnam Industrial Zones Board of Management and former Vice Director of the Prime Minister’s Research Council. Mr. Diem graduated from Leipzig University and has a PhD in Economics from Martin Luther University from Germany.

 

Mr. Nguyen Hong Nam

Board Member

Mr. Nam has been a successful business executive in various areas. He holds a Master of Science from Lugansk University, Ukraine.

 

Mr. Bui Quang Nghiem

Board Member

Mr. Nghiem is the Director of Nghiem & Chinh Lawyers and Vice Chairman of Ho Chi Minh Law Association. He graduated from Halle University, Germany.

 

Mr. Nguyen Duy Khanh

Board Member

Mr. Khanh holds a Bachelor of Finance, George Washington University, the United States.

Mr. Khanh used to work with SSI during the implementation of the Reforming Consultancy Project provided by McKinsey (2010). He also helped in the founding of SSI International Corp., and made significant contribution to its successes.

 

Mr. Hironori Oka

Board Member

Mr. Hironori Oka has over 20 years of experiences in the finance and securities fields, holding various positions in Japan, Hong Kong, the United States, Singapore and Taiwan. He used to be in charge of many senior positions in Daiwa Group Inc. and started to assume the leading position since 1994. During the period, he gained in-depth knowledge and experience in management and supervision of a number of areas such as services, products, clients, and operations of Daiwa Group and its subsidiaries, branches, and affiliates - entities under management in relevant countries or areas within scope of powers.

Mr. Oka is currently the Executive Managing Director, Head of Asia and Oceania region, and Chairman and CEO of Daiwa Capital Markets Hong Kong Limited. 

 

 

SSI did not make any changes to board members in 2016. Board members maintained their activities as usual during their terms without any abnormal events leading to member changes in 2016.

 

ROLES, RESPONSIBILITIES AND ACTIVITIES OF THE BOARD OF DIRECTORS

The BOD assumes the responsibility of orienting, guiding, managing and supervising the Company’s activities (including business activities), unless it falls under the authority of the Annual General Shareholder’s Meeting (GSM) and Investors.

 

BOD exercises its functions by issuing resolutions. The management policy of the Company is expressed via compliance with the law, the charter and management regulation of the company, and via resolutions of the GSM and of the BOD. These documents are kept at the Company’s head office and publicized to all shareholders. The shareholders have equal rights in viewing, copying and referencing these documents according to regulations.

 

When carrying out their functions and responsibilities, the BOD must comply with the law, the Company’s Charter, the Resolution of the GSM and the Management Regulation of the Company. In case the decision passed by the BOD is against the law or the Company’s Charter, causing loss for the Company, the members in favor of such decision must take joint responsibility and indemnify the Company; members who voted against such decision will be exempted.

 

In 2016, the BOD maintained business activities according to the Law, the Company’s Charter and Management Regulation. In addition, the BOD made several efforts to enhance the company’s managerial capacity in accordance with current laws and in line with regional as well as global practice. Specifically:

  • The BOD ensures that the number of BOD meetings and the number of invited members meet legal requirements and effectiveness while specifying each member’s role, differentiating between independent and executive members in order to ensure maximum interest for shareholders.
  • The BOD approves Resolutions which fit the Company’s vision and business strategy for each specific period, ensuring the interests of clients, shareholders and employees, respecting associates, contributing to the building of a strong business community which will provide social values and eventually fulfill the Company’s mission.
  • The BOD monitors the implementation of resolutions issued by the GMS and the BOD while evaluating the effectiveness of these resolutions; regularly reviews policies and regulations of the Company and make timely adjustments in accordance with new situations and requirements.
  • The BOD decides on the direction, leads and supervises on a regular basis all activities of the Management as well as supporting departments, ensuring that the Management’s leadership is in line with the company’s regulations and policies.

 

The BOD has carried out 05 meetings including 02 direct meetings on 25 April and 19 September 2016 and 03 meetings based on written surveys on 14 March, 28 July and 23 November 2016. All BOD meetings were attended by 100% of its members, who discussed and voted on every issue.

The contents of the meetings and Resolutions approved by the BOD are as follows:

 

 

ACTIVITIES OF THE SUB-COMMITTEES UNDER THE BOARD OF DIRECTORS

The corporate governance model was designed to include the BOD’s independent subcommittees, taking responsibilities for risk management and internal auditing in order to assist the BOD in implementing these functions. Currently, the BOD has appointed its independent members to take charge of risk management and internal audit.

Activities of independent board members in charge of risk management

  • Review and comment on risk policies and limits before submitting to the BOD for approval;
  • Review the reports of the CEO, Risk Management Department and other related units on risk management;
  • Evaluate the effectiveness of risk management of the Company as a whole.

 

Activities of independent board members in charge of internal audit

  • Review and appraise issues related to organizational structure of internal audit, draft internal audit strategy and policy before submitting to the BOD for approval;
  • Inspect and evaluate the compliance of accounting standards and procedures, and operating principles of internal audit;
  • Report to the BOD on activities and performance of internal audit during the year; recommend proposals to resolve shortcomings and constraints in order to enhance business operation of the Company;
  • Advise the BOD on the establishment of internal audit strategy and policy.

 

ACTIVITIES OF THE CHAIRMAN

The Chairman is responsible for overall guidance of BOD’s activities in accordance with the functions, tasks, and powers provided for in the Company Charter as well as the current provisions of the Law, particularly:

  • Preparing action programs and plans of the BOD;
  • Preparing programs, agenda, and documents for the meetings; convening and chairing BOD meetings;
  • Organizing the adoption of BOD resolutions;
  • Supervising the implementation of the BOD resolutions;
  • Chairing GSM and BOD meetings.

 

The Chairman also acted as the CEO of SSI, leading the Board of Management and employees to effectively carry out the resolutions of the GSM and the BOD on business plans, investment plans and other activities. The plurality of offices was adopted by the annual GSM.

 

ACTIVITIES OF INDEPENDENT BOD MEMBERS

Independent BOD members are assigned to carry out responsibilities related to risk management and internal audit as presented in the section on activities of the subcommittees. In addition, these members also participate in the BOD’s meetings to critically comment on strategic orientation proposals, business plans; supervise and prepare monthly reports on activities of the BOD and the results of supervising the Board of Management, and send the reports to board members as prescribed by the Company’s Charter.

 

PERFORMANCE EVALUATION OF THE BOARD OF MANAGEMENT

The Board of Management ran the Company to efficiently implement the Resolution of GSM and of the BOD regarding business plan and investment plan, significantly contributing to the exceeding of 2016 business target, firmly maintaining the leading market share in HOSE and HNX. The Board of Management fully performed the assigned tasks related to organizing and running SSI’s daily business in accordance with the good corporate governance practices, actively and timely proposing initiatives and measures to improve the business and management performance. Reports to GSM and BOD has been timely prepared and submitted with good quality. Information was disclosure in compliance with the law in transparent, adequate and honest manner.

 

PERFORMANCE EVALUATION OF THE COMPANY

SSI has had a successful business year thanks to suitable business strategies based on accurate socio-economic predictions.

By the end of 2016, the Company recorded VND 2,312 billion in consolidated income, a 28% increase compared to 2015 and achieving 160% of the revenue target. The 2016 consolidated profit before tax was VND 1,056.8 billion, exceeding the profit target by 11.24%. The Company’s consolidated asset was VND 13,228 billion, of which VND 7,152.6 billion was owners’ equity.

In 2016, SSI continued to hold the number 1 position in brokerage market share on both HOSE and HNX, with 13.69% and 11.03% respectively.

In the context of decreased interest rate, more strictly managed monetary policy for investment in securities, SSI could still ensure our treasury trading activities fully and timely meet investors’ demand for margin lending. SSI’s funding sources did not only ensure liquidity but also significantly contribute to our profitability.

By mobilizing over VND 7,900 billion from institution and retail investors both inside and outside of Vietnam, SSI Asset Management (SSIAM) has proven its leading position in Vietnam’s asset management industry. This is also the only Vietnamese company to successfully mobilize funds in a foreign market. 

Investment Banking has also shown growth potentials via several successful deals worth hundreds of millions of dollars, such as advisory service for offering 78.38 million shares of Vietnam Dairy Products Joint Stock Company (VNM – HOSE); advisory service for the sale of shares of Hau Giang Pharmaceutical JSC (DHG - HOSE); private placement advisory service for No Va Land Investment Group Corporation (NVL - HOSE) under the book building method

By the end of 2016, SSI has had 3 associated companies which are the The PAN Group (PAN - HOSE), Vietnam Fumigation Joint Stock Company (VFG - HOSE) and Dong Nai Port Joint Stock Company (PDN - HOSE), with positive business results, contributing to the consolidated income of the entire company.

SSI continued to ensure security for liquidity management, without any risks occurring. Along with that, the support system, which was coordinated smoothly, with specific strategies and solid operations, well-invested technology infrastructure, also contributed to the achievements of 2016.

 

BUSINESS PLANS AND ORIENTATION IN 2017

In 2017, there will be unpredictable events on a global scale. Macro-economic will face the challenges of inflation and exchange rates. The domestic market is not big enough due to weak purchasing power and the average income per capita of only USD 2,215. Even if more resources are directed towards the domestic market in 2017, it’s still unlikely that we will see a breakthrough.

In 2017, the National Assembly has announced the GDP growth target of 6.7%, together with macro-economic stability and social security. In order to achieve this target, the Government is moving steadily towards building an enabling Government model. The business community believes that the decision to build an enabling, transparent Government which acts to serve the people and businesses will not only stop at the Government but also become the guideline for all other Central and local agencies, authorities. They will do as they say and make it as convenient as possible for businesses and people to operate legal businesses and contribute to the country’s development.

The stock market will become more attractive for investors by enhancing the transparency of the market and the strictness of audit standards so that investors can properly consider and compare investment decisions. Raising market ranking is an important factor in attracting foreign investment in 2017, meeting all the requirements of an emerging market: free money flow transfer, easing the ownership ratio of foreign investors, minimum liquidity and market capitalization.

SSI steps into the year 2017 with innovative activities which enhance competitiveness, building a business plan suitable for the 4th scientific and technological revolution and global integration. SSI is also fulfilling the mission of “connecting capital to opportunities”, focusing on improving the quality of human resource, building business culture, complying with the law and business management regulations in the best ways possible.