Report awards promote transparency

Most of listed companies in Vietnam had recognised the significance of an annual report as a principal blueprint and a key way to communicate with the public, helping draw more attention from potential partners and investors, said Phan Thi Tuong Tam, CEO of the Ho Chi Minh Stock Exchange (HOSE) and chief of the Annual Report Awards organising committee.

The most outstanding result over the past seven years of the annual contest had been the improved awareness of the need for transparency and determination to deliver credible reports among listed companies, Tam told this year’s awards ceremony last Saturday.

The event honoured the best 50 annual reports out of nearly 700 entries from companies listed on HOSE and Hanoi Stock Exchange (HNX). Among the winners, 38 companies are listed on HOSE and 12 on HNX.

Vinamilk, the country’s biggest dairy company, came first with the highest score. It also secured the Best Corporate Governance prize, which was introduced this year for the first time. Bao Viet Holdings came second after securing the top prize in 2012 and 2013.

The Sustainability Reporting Awards, also part of the competition, comprised of one first prize, one second prize and three consolation prizes. Bao Viet Holdings took the first, Vinamilk the second, while the three consolation prizes went to Hau Giang Pharmaceuticals (for completeness), Sacombank (for reliability) and Imexpharm Drugs Co. (for layout).

The World Bank’s International Finance Corporation (IFC) and the British-based Association of Chartered Certified Accountants joined the judging of the sustainability reporting, selecting five of the 58 annual reports that included sustainable development issues.

Tam, head of the organising committee and the selection board, said this year saw a narrowing in the quality between the top 50. “The weaknesses often seen in previous years have been clearly addressed. For example, business activities received deeper analysis, with reasons and solutions included. The contents included risk issues, with typical risks analysed in detail. Development strategies and plans and objectives were outlined,” she remarked.

Dominic Scriven, CEO of Dragon Capital said “There’s still a long way to go before the annual reports reach international standards, but the programme and its communication campaigns and the winning entries will continue to create more milestones for the improvements in reporting quality, helping promote market transparency.”

However, he claimed the annual reports by large provided Dragon Capital with roughly a third of the information the firm needed for its investment analyses. Therefore, in order to know more about the companies, the firm has to use other channels such as the media, partners and direct dialogue with the companies.

ACCA member Nguyen Viet Thinh, consulting partner at PwC Vietnam and team leader for judging sustainable development reporting, said there had been greater attention to detail this year, and more information was provided on the parties involved, including employees, local communities and suppliers, marking a wider focus than seen in last year’s reports that only highlighted charitable and social activities.

He added the competing companies used IFC reporting guidelines on sustainable development, and the Global Reporting Initiative’s guidelines on sustainable development reporting. Many reports mentioned the IFC and GRI criteria. “Some companies used G4 standards as references for the first time,” Thinh said.

The Vietnam Annual Report Awards competition has been organised seven times by HOSE, VIR’s sister publication Dau Tu Chung Khoan and HNX, with Dragon Capital as the sole sponsor. The programme is technically supported by IFC, ACCA and independent experts. The eighth competition will kick off in early 2015.

Tam, chief of the organising board, said integrity, transparency, professionalism and creativity would continue to be key benchmarks, while corporate governance and sustainable development would carry on their significance.

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