ARAs honour top-tier yearly reports

Businesses receive recognition for outstanding financial and corporate reporting at Vietnam’s Annual Report Awards in Ho Chi Minh City, Photo: Le Toan

Lasting legacy

Vietnam’s Annual Report Awards (ARAs), organised by VIR, the Ho Chi Minh City Stock Exchange (HOSE), and the Hanoi Stock Exchange (HNX), with support from Dragon Capital, will celebrate their 10th anniversary this Tuesday, July 25, in Ho Chi Minh City.

According to VIR’s editor-in-chief Le Trong Minh, the ARAs have had a major impact on Vietnam’s reporting standards in the past decade.

In particular, the ARAs have honoured the most outstanding reports in Vietnam, as well as created added value for the practice. Besides financial results, annual reports have been encouraged to include details on risk management, investor relations, sustainability reporting, and corporate governance.

Nguyen Thi Hoang Lan, deputy CEO of HNX, noted that these practices were generally non-existent in Vietnam in 2008, when the ARAs started. “No other publication can express a firm’s visions, strategy, and creativity like the annual report. Companies can use the report as a powerful communication tool to investors, and the ARAs have successfully promoted this idea in Vietnam,” said Lan.

Dragon Capital chairman Dominic Scriven, meanwhile, recalled the time when annual reports in Vietnam were only three pages long. After 10 years, the ARAs have grown from a reports competition into a strong advocate for sustainability and corporate governance.

Most importantly, the ARAs have built the foundation for Vietnam’s Sustainability Index, launched by HOSE in 2017.

Le Hai Tra, deputy CEO of HOSE and head of the ARAs’ Organising Committee and Selection Board, emphasised that sustainability is an important factor in attracting foreign capital.

“Through the ARAs, listed firms now understand that they must adopt good practices on governance and sustainability if they’re looking for foreign investors,” Tra said.

Big changes in 2017

To celebrate their 10th-anniversary milestone and lasting impact on Vietnam’s annual reporting, the ARAs have made major changes in their 2017 edition. This year, for the first time ever, the reports have been evaluated by four leading audit firms:

Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers.

Out of 638 participating reports, 125 made it to the final round, where they were judged based on content (75 per cent of the points awarded) and presentation (the remaining 25 per cent). Some firms earned bonus points for preparing the reports under International Financial Reporting Standards and for providing an English version. This is a new addition for 2017.

To enhance fairness, the number of judges for this year’s ARAs was increased from seven to nine. These new members hail from the Vietnam Securities Depository and the Vietnam Chamber of Commerce and Industry.

As part of the 10th-anniversary celebration, on July 25, the ARAs will also reward individuals who made special contributions to the programme over the past decade. As usual, the award categories are divided into the Top 10, the Top 30, and the Top 50. There are also separate awards for corporate governance and sustainability.

The ARAs’ sustainability judge To Vi Hung, head of Accounting at Rosneff Vietnam and member of the Association of Chartered Certified Accountants, noted an improvement in sustainability reporting this year. According to Hung, most of the Top 10 reports have adopted the G4 version of the Global Reporting Initiative. Some reports also included the 17 Sustainability Goals from the United Nations.

Looking forward

Following the ARAs’ 10th anniversary, there is a lot more to be done as Vietnam pursues emerging market status.

Minh expressed his hope to see businesses’ greater efforts in preparing annual reports and making information disclosures. “This is crucial for the transparency and sustainable growth of the Vietnamese market,” he said.

To enhance objectivity and the ARAs’ reputation in the global market, the organisers will invite a wider variety of business groups, professional circles, and policymakers from Vietnam and overseas to join the Selection Board.

Tra acknowledged that sustainability reporting and risk management are still at their early stages in Vietnam. It will take more time for listed companies to get used to global standards – during which, the ARAs will continue to promote these practices.

Scriven is set on supporting the ARAs in the years to come. He noted that as the world enters the digital era, annual reporting in Vietnam will also change. Scriven is interested to see how technology will continue to affect firms in their communications with investors.

“Future editions of the ARAs should also address the issue of independent and diverse board members in Vietnam,” he suggested.

Looking back on 10 years of the ARAs

- 2008: The first edition of the ARAs was organised by Dragon Capital, HOSE, and VIR.

- 2009: In the second edition, firms listed on HNX were eligible for entry, raising the number of participants to 46. For the first time, participating companies included details on cash management, as well as their provisions for declines in stock prices and inventories.

- 2010: Starting from this year, all annual reports on HNX and HOSE were automatically eligible for participation, and the firms did not have to author the reports themselves. The number of reports grew nine-fold thanks to this decision.

- 2011: Although still based on Circular No.09/2010/TT-BTC, the fourth edition introduced stricter criteria to serve institutional investors’ need for high-quality information.

- 2012: The ARAs celebrated their fifth anniversary. Vuong Dinh Hue, then-Minister of Finance and current Deputy Prime Minister, attended the awards ceremony to celebrate this milestone.

- 2013: The ARAs introduced the Sustainability Reporting Awards. Representatives from the International Finance Corporation and the Association of Chartered Certified Accountants joined the Selection Board.

- 2014: A separate award for governance was introduced. Five companies with the most outstanding reports on corporate governance were honoured for their work.

- 2015: The preliminary round was joined by independent experts from the Ho Chi Minh City University of Economics and Law. The Selection Board also welcomed a new judge from the State Securities Commission.

- 2016: This marked the first year that all listed firms were required to disclose information in English, in the context of Vietnam’s efforts to qualify as an emerging market and attract international investors. The three companies with the most drastically improved reports received the ARA Outstanding Improvements Award.

- 2017: The ARAs hit their 10th milestone, welcoming new judges from the Vietnam Securities Depository and the Vietnam Chamber of Commerce and Industry. Reports complying with International Financial Reporting Standards and those with an English version will be rewarded.