VIETNAM ENTERPRISE INVESTMENTS LIMITED

ANNUAL

REPORT

2022

Vietnam

Enterprise

Investments

Limited

Contents

1. Chair’s Statement

2. Company Overview and Strategy

3. Portfolio Manager’s Report

4. ESG and Climate Change Report

5. Corporate Governance Statement

6. Report of the Audit and Risk Committee

7. Board of Directors

8. Annual General Meeting

9. Report of the Board of Directors

10. Independent Auditors’ Report

11. Statement of Financial Position

12. Statement of Comprehensive Income

13. Statement of Changes in Equity

14. Statement of Cash Flows

15. Notes to the Financial Statements

16. Corporate Information

17. Investor Information

18. Glossary

1. Chair’s Statement

Dear Shareholders,

We are pleased to report the performance

of Vietnam Enterprise Investments Limited

(“VEIL” or the “Company”) for the year ended 31

December 2022.

The Investment Environment

The economy in Vietnam rebounded

impressively from 2021, with GDP growth of

8.0% in 2022, the fastest annual growth rate in

the last ten years, despite the challenging global

financial markets due to rising inflation, the

Global Central Banks’s aggressive rate hikes and

the Russia-Ukraine war.

With a population of around 100 million

people, Vietnam’s GDP per capita hit US$4,110,

an increase of 10.8% year-on-year (“YoY”) to

officially enter the upper middle-income group.

The macro environment was largely unchanged,

benefitting mostly from Government price

stabilisation, the State Bank of Vietnam’s

monetary policies, and a stronger-than-expected

external position thanks to US$22.4 billion of

disbursed FDI, an increase of 13.5% YoY, driven

by an increasing proportion of tech players, for

example, Apple, Samsung, and others, which

helped Vietnam to transform from low value

production to the electronic clusters.

The trade balance remained positive at US$11.2

billion vs. US$4.0 billion in 2021. Inflation

remained under control at 3.2%, and the

currency depreciated by just 3.5% against the

US$ in 2022.

With a credit growth increase of 14.5% and the

credit-to GDP ratio cooling, we expect there

to be less uncertainty in the financial markets

in 2023, as investor sentiment continues to

improve.

Despite this solid macro-economic data, the

Vietnamese stock market had a disappointing

year, with the Vietnam Index (“VN Index”) down

34.1% in 2022 in US$ and 26.2% in GBP.

The downtrend followed with the general

decline of global benchmarks due to the macro

headwinds that were evident across global

equity markets throughout the year.

Coupled with the domestic factors of credit

restraints and regulatory tightening causing

nervousness in the retail market, made for a

tough year.

Stock market underperformance and a derating

in valuations notwithstanding, the market will

still need to overcome the liquidity constraints

as a result of bond market movements in recent

months in order to regain its losses over the

medium-term.

Recognising that the liquidity issue is a major

concern for both investors and businesses, the

Government has proactively made changes to

the Decree 65 on regulating private placements

and trading of privately placed corporate bonds

which may result in a potential relaxation of

requirements for both bond investors and issuers

alike with effect from 5 March 2023.

Market liquidity has also declined, averaging

US$737.4 million in daily turnover compared with

US$948.4 million in 2021.

However, in terms of valuation, Vietnam looks

attractive at a PER of 9.8x, a 38.4% discount to

the five-year average PER of 15.9x with 2023

earnings growth forecast at 6.2%.

Additionally, compared with regional valuations,

Vietnam remains attractive relative to peers,

such as Thailand, the Philippines or Malaysia.

Foreign investors turned into strong net buyers

of US$1.4 billion in 2022 from November since

the market dropped in late April 2022 driven

by attractive valuations, as well as a shift in

direction from the US market to emerging

markets after the US dollar softened in late 2022.

Performance

In terms of the Company’s own performance,

given the large decline in the stock market,

VEIL’s Net Asset Value (“NAV”) decreased by

35.7% in US$ and 27.5% in GBP. The discount

started the year at 13.7% and ended the year at

10.7%.

A key underperforming allocation of the

Company during the first half of the year was

the allocation to residential property stocks

such as Dat Xanh Group (DXG) and Khang Dien

House (KDH) that were negatively impacted by

concerns on the property market given the high

interest rate environment and credit restraints.

The Company aggressively reduced its position

in residential property players in the second half

of 2022 and remained underweight in this sector

at the year end. However, on a three-year rolling

basis, VEIL has outperformed the VN Index by

7.6%.

Vietnam Enterprise Investments Limited - Annual Report 2022

The Company’s strategy continues to focus

on three investment themes: the increase in

size of the new middle-class, robust domestic

consumption, and infrastructure development.

These are the key growth drivers for Vietnam’s

macro development.

Accordingly, VEIL was overweight on three

sectors in 2022 – Banks, Retail and Industrial

Parks – via key portfolio holdings, including:

Vietnam Prosperity Bank (VPB) and Asia

Commercial Bank (ACB), which are high

performing banks, Mobile World Group (MWG),

the biggest player in retail industry and in our

view, a strong beneficiary of Vietnam’s rising

middle-income class spending, FPT Corporation

(FPT), the leading technology, software and

services company in the country, and Becamex

IDC (BCM), the biggest industrial park developer

with more than ten industrial parks along the

country, which benefits from strong FDI inflows

into Vietnam.

Share Buybacks

In 2022, US$61.1 million was spent repurchasing

6,808,169 shares (2019-2021: 6,046,031 shares)

which represents 3.26% of the weighted average

of outstanding shares. The average discount at

which shares were bought back was 19 % and

this resulted in a 0.78% accretion to NAV per

share in 2022.

We continue to actively monitor our share price

and discount to NAV and remain committed to

executing buybacks when deemed appropriate

to generate accretive value for shareholders.

Environmental, Social and Governance

VEIL continues to expand its environmental,

social and governance (“ESG”) and climate

change programme and team workforce.

We remain committed to fully-integrating ESG

considerations into all aspects of the Company’s

investment activity, building the function for

ESG scoring for the portfolio, reporting on

climate change risk and VEIL is a pioneer in

Vietnam in this respect.

ESG goes beyond social responsibility, it also

provides a perspective on risk mitigation and

value creation.

As a long-term investor committed to

sustainability, all investments made by VEIL are

subject to a rigorous ESG screening process

adopted by Dragon Capital group (the “Group”).

The Group created its own proprietary ESG

management system, with the assistance of

the International Finance Corporation (IFC) to

ensure that the Company adheres to best-in-

class practices.

These policies and procedures are applied to

VEIL’s entire investment universe.

Outlook

Looking forward, Vietnamese Government

shows strong determination to achieve its GDP

growth target of 6.5% for 2023 and control

inflation within a range of 4.5-5.0%.

However, approximately US$13 billion of

corporate bonds will mature in 2023, the

majority in the second half of 2023, meaning

default risk is still a concern in a high-rate

environment.

It is important to note that aggregate earnings

figures are heavily weighted towards sectors

such as real estate, which have been heavily

sold and are underperforming due to the high

interest rate environment and sector-wide

liquidity constraints.

Beyond the short-term volatility, we believe

accumulating high-quality stocks is a

fundamental focus for medium- to long-

term performance as the market volatility

subsides and provides interesting stock picking

opportunities.

This means selecting stocks in a disciplined

manner with strong balance sheets, solid

fundamentals, and excellent corporate

governance, which remains at the core of our

strategy.

These companies are best positioned to be able

to demonstrate resilience against global and

domestic challenges, mitigating downside risk

and leading to favourable EPS growth in 2023.

In that context, I am confident in the Company’s

ability to continue to identify the best

companies with solid management, profitability

and long-term business growth.

Thank you for your continued support.

1. Chair’s Statement (Continued)

Gordon Lawson

Chair

Vietnam Enterprise Investments Limited

25 April 2023

Vietnam Enterprise Investments Limited - Annual Report 2022

2. Company Overview and Strategy

Investment Objective

VEIL’s objective is to seek medium to long-term

capital appreciation of its assets.

Benchmark

VEIL does not benchmark against any index.

However, VEIL looks to outperform the Vietnam

Index (the “VN Index”), a capitalisation-

weighted index of all companies listed on the Ho

Chi Minh Stock Exchange, on a rolling three-year

basis. The VN Index is available on Bloomberg

on “VNINDEX VN Equity <GO>”.

Business Model

VEIL was incorporated in the Cayman Islands

on 20 April 1995 under the Companies Law

(Revised), Cap. 22, of the Cayman Islands as an

exempted company with limited liability and is a

closed-end investment fund.

VEIL is the longest running fund focused on

Vietnam and the largest which invests primarily

in listed and pre-IPO companies in Vietnam

that offers attractive growth and value metrics,

good corporate governance, and alignment with

Vietnam’s underlying growth drivers.

On 5 July 2016, VEIL’s shares were admitted to

the premium segment of the Official List of the

Financial Conduct Authority, and to trading on

the London Stock Exchange’s main market for

listed securities.

On 18 July 2017, VEIL was included in the FTSE

250 Index.

Investment Policy

Asset Allocation

VEIL seeks to achieve its investment objective

by investing in companies primarily operating in,

or with significant exposure to Vietnam.

Whilst VEIL’s portfolio will reflect a focus

on Vietnam, VEIL may also invest up to, in

aggregate, 20% of Net Asset Value (“NAV”) at

the time of investment, in companies operating

in, or with significant exposure to Cambodia and

Laos.

VEIL expects that the majority of the

investments comprising the portfolio will be

equity securities admitted to trading on the

Ho Chi Minh Stock Exchange, the Hanoi Stock

Exchange, the Unlisted Public Company Market

(“UPCoM”) or on other stock exchanges.

VEIL may, nonetheless, invest in unlisted equity

securities and listed or unlisted debt securities

or loan instruments.

The companies in which VEIL will invest may

have any market capitalisation and may operate

in any industry. In respect of the debt securities

in which VEIL may invest, these may be fixed or

floating rate and may have any credit rating or

may be unrated.

VEIL may seek exposure to securities directly

or indirectly and VEIL may use derivatives for

investment purposes and efficient portfolio

management.

VEIL may invest in investment companies

that have, as their main objective, a focus on

investing in securities falling within VEIL’s

investment policy.

Investments in other investment companies

will not exceed 10% of NAV at the time of

investment.

VEIL does not intend to take legal or

management control of any investee company.

VEIL may also hold cash or other short-term

investments such as commercial papers or

certificates of deposit.

Under normal market conditions, it is expected

that VEIL will be substantially fully invested in

investments meeting its investment policy.

However, where considered prudent to do so

(for example, in the event of a lack of suitable

investment opportunities or in times of falling

markets or market volatility), VEIL’s portfolio

may reflect a significant weighting to cash or

other short-term investments.

Investment Restrictions

VEIL will observe the following investment

restrictions in each case calculated at the time

of investment:

(a) No more than 20% of the gross

assets of VEIL may be exposed to the

creditworthiness or solvency of a single

counterparty;

(b) No more than 20% of the gross assets of

VEIL may be invested in any one issuer;

and

(c)

No more than 40% of the gross assets of

VEIL may be invested in any one industrial

sector.

Vietnam Enterprise Investments Limited - Annual Report 2022

2. Company Overview and Strategy (Continued)

Borrowing

VEIL is permitted to borrow money and to

charge its assets. VEIL will not have aggregate

borrowings in excess of 20% of VEIL’s NAV at

the time of borrowing.

VEIL may borrow for the purposes of capital

flexibility, including for investment purposes.

The Board will oversee the level of gearing

in VEIL, and will review the position with the

Investment Manager on a regular basis.

Changes to Investment Policy

No material change will be made to the

investment policy without the approval of

shareholders by ordinary resolution.

In the event of a breach of the investment policy

set out above and the investment and borrowing

restrictions set out therein, the Investment

Manager shall inform the Board upon becoming

aware of the same, and if the Board considers

the breach to be material, notification will be

made to a Regulatory Information Service.

Key Performance Indicators

At each Board meeting, the Directors consider

a number of performance measures to assess

VEIL’s success in achieving its objectives.

The key performance indicators (KPI) are

established industry measures, and are as

follows:

NAV and Share Price

The Board monitors the

NAV and share price

performance of VEIL on a quarterly, one, three

and five-year rolling basis

as provided in the

Portfolio Manager’s Report on pages 5 to 12.

Performance for one, three and five years

are

also provided in the Portfolio Manager’s Report

for reference purposes.

Performance Against Reference

Performance is measured against the VN Index,

on a three-year rolling basis.

The Board also considers peer group

comparative performance over a range of time

periods, taking into consideration the different

investment policies and objectives of those

companies.

Discount/Premium to NAV

The discount/premium relative to the NAV

represented by the share price is closely

monitored by the Board.

The objective is to avoid large fluctuations in

the discount relative to similar single country

investment companies investing in Asia (ex-

Japan) by the use of share buybacks subject to

market conditions.

A graph showing the

share price discount/

premium relative to the NAV

is also shown in the

Portfolio Manager’s Report on pages 5 to 12.

Board Composition

The Board supports the principle of boardroom

diversity.

The selection policy of the Board is to appoint

the best qualified person for the job, by

considering factors such as diversity of thought,

experience and qualifications for the effective

conduct of VEIL’s

business

New appointments are identified against the

requirements of VEIL’s business and the need to

have a balanced Board.

As at 31 December 2022, the Board consisted of

five Independent Non-Executive Directors and

one Non-Independent Non-Executive Director.

During the reporting period, Sarah Arkle,

Independent Non-executive Director, was

appointed on 5 January 2022.

Detailed information on the Board’s

independence, composition and diversity is

provided under the Corporate Governance

Statement on page 31.

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report

Performance Overview

A combination of factors both globally and

domestically resulted in Vietnam’s equity market

delivering one of the worst global performances

during 2022. The Vietnam Index (“VN Index”),

the reference index of Vietnam Enterprise

Investments Limited (“VEIL”), dropped 34.1%,

total return in USD term, whilst VEIL fell 35.7%

during the year. For both Vietnam and VEIL, the

magnitude of the drop in 2022 was the biggest

since the global financial crisis in 2008. Beyond

the external factors that affected the rest of

the world, such as the geopolitical conflict in

Ukraine, aggressive interest rate rises from the

FED and the zero-COVID strategy in China,

Vietnam also grappled with its own domestic

issues. A crackdown on the bond market,

coupled with concerns in the property sector,

triggered a severe liquidity drought in the

economy in the second half of 2022, that soured

sentiment for investors. As a result of this macro

backdrop the Real Estate & Construction and

Materials & Resources sectors in particular were

significantly impacted. The Banking sector

also experienced considerable impact from the

macro factors at play although performance was

polarised between two groups: State-owned

commercial banks (“SOCB”s) and private banks.

On the other hand, non-cyclical and more

consumer-centric sectors such as Retail, Food

& Beverage, and Software & Services sectors

generally all held up remarkably well in what

was clearly a difficult year for the market.

VN Index Information (Rolling 3-year)

Source: Dragon Capital, Bloomberg

600

800

1,00

1,200

1,40

1,60

500

1,000

1,500

000

2,500

VN Index

US$m

Volume

VN Index

12/2019

06/2020

12/2020

06/2021

12/2021

06/2022

12/2022

Source: Dragon Capital, Bloomberg

One Year Performance (% in US$ terms)

(50.0)

(

40.0)

(

30.0)

(

20.0)

(

10.0)

10.0

12/2021

02/2022

04/2022

06/2022

08/2022

10/202

2/20

VEIL - USD (NAV)

VN Index - USD

VN30 Index - USD

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

Investment Portfolio – Ten Largest Investments (as of 31 December 2022)

Company

Ticker

Sector

Market value

NAV

Total

return

Initial acquisition

US$

Vietnam Prosperity

Bank

VPB

Banking

209,265,370

12.9

(27.6)

1 December 1995

Asia Commercial Bank

ACB

Banking

195,737,121

12.1

(23.4)

1 December 1996

Mobile World Group

MWG

Retail

129,465,431

8.0

(38.6)

3 October 2014

Hoa Phat Group

HPG

Material &

Resources

101,544,433

6.3

(50.5)

18 June 2009

Vietcombank

VCB

Banking

93,717,138

5.8

(1.9)

7 February 2012

FPT Corporation

FPT

Software

Servi&ces

76,411,937

4.7

(2.1)

3 July 2008

PVGas

GAS

Energy

72,156,059

4.4

4.7 23 November 2010

Becamex IDC

BCM

Software

Ser&vices

70,428,160

4.3

22.6

7 December 2017

Vinhomes

VHM

Real Estate and

Construction

68,975,548

4.3

(41.8)

18 May 2018

Phu Nhuan Jewelry

PNJ

Consumer

Durables

57,515,042

3.5

22.6

9 March 2010

Total 10 investments

1,075,216,238

Source: Dragon Capital and Bloomberg (total return in US$ terms in respective index)

Attribution Analysis

Real Estate & Construction and Materials &

Resources Sectors

Real Estate, especially Residential Real Estate,

was by far the most impacted amongst the

major sectors last year, dropping 45.6% year-

on-year (“YoY”), well under the VN Index.

There

were a number of big-name casualties from

Novaland, the second biggest listed property

company, to household names ranging from

mid-size such as Phat Dat Real Estate, to

smaller-sized such as DIC Group or FLC Group,

all of which experienced share price falls greater

than 80% during the year. Fortunately, none

of these equities were held by VEIL during the

period. For VEIL’s investee companies, even

Vinhomes (“VHM”), the largest listed property

company in Vietnam, and Khang Dien House

(“KDH”), despite both being fundamentally

strong and financially healthy companies, still

fell as much as 41.8% and 44.2% respectively,

and underperformed the VN Index. On the other

hand, VEIL’s holding in Becamex IDC (“BCM”),

one of the biggest industrial park developers in

Vietnam, fared much better than its residential

counterparts, rising 22.6% and representing one

of the strongest share price performances in the

property sector.

Despite arguably the worst market conditions

for the property sector in the last decade, VHM

was still able to, for the third year running,

deliver net profit after minority interest (“NPAT-

MI”) of more than US$1 billion, the second

highest profit number in a listed company.

Nevertheless, VHM’s figure of US$1.2 billion

NPAT-MI achieved in 2022 was still down

26% YoY and just above 2020’s profit level.

Financially, VHM’s balance sheet and liquidity

were in a much better position than many of

its peers with a total debt to equity ratio of

just 0.2x and a net debt to equity ratio of just

0.1x. VHM was one of the few developers that

saw strong growth in outstanding pre-sales,

which, in this environment, is an indication of

the company’s ability to bring new supply to the

market, hitting US$4.6 billion (up 105% YoY).

By the end of 2022, VHM’s shares were trading

at an undemanding 1.4x price-to-book ratio

(“PBR”) and 7.3x price-to-EPS ratio (“PER”), an

all-time low valuation range for the company.

Whilst VEIL envisioned that the issues facing

the property market now may take some time

to resolve, the long-term development trends of

the country are well placed to continue, with an

urbanisation ratio, estimated to be around 40%.

VHM, as the largest and one of the most efficient

developers today is well positioned to be at the

forefront of that growth.

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

KDH, a highly reputable developer that has

been well-known for its conservate approach to

business strategy, also did not escape a tough

2022. The company reported a drop of 8.3%

YoY in NPAT-MI, the first time the company

reported negative earnings growth in the last

ten years. Similar to VHM, KDH’s financials are

well-managed with net debt to equity of just

0.3x. Meanwhile, despite a muted outlook to

2023, KDH is well-prepared to continue with the

launch of two new projects this year, Privia and

Clarita, which will serve to support profits during

2024 and 2025. Looking further ahead, good

progress has been made with the company’s

mega project in Binh Tan district for a potential

launch in two years’ time. With its proven track

record and strong financial structure, in VEIL’s

opinion KDH is one of the best positioned

companies in the property sector, at a time

where uncertainty remains a significant factor.

Whilst classified under Real Estate &

Construction sector, the drivers for the industrial

park sector are quite different to that of the

residential sector. Demand for industrial land

banks remained robust in 2022 with total FDI

disbursement reaching an all-time high of US$22

billion. BCM delivered a crisis-defying NPAT-

MI growth of 20.0%, driven by strong leasing

revenue from existing projects at Cay Truong

and the recently expanded Bau Bang industrial

park. The greatly anticipated joint venture

with Capitaland announced in late 2021 to co-

develop 18.9 hectares in Binh Duong New City

project, worth over US$240 million is still on-

going as the company continues to work on the

legal process to structure the important deal.

This transaction should be an important catalyst

for BCM’s share price in the future.

After two years of exceptional growth, 2022

saw a substantial drop in share price for the

Materials sector following the dramatic decline

in new developments in the property sector in

late 2022. VEIL’s sole exposure to the sector

is Hoa Phat Group (“HPG”), Vietnam’s largest

domestic steel company, which also had a

disappointing year with NPAT-MI dropping

75.4% YoY, the biggest annual drop in earnings

since the company’s listing in 2007. Whilst the

first half of the year was challenging, HPG was

still able to generate US$520 million in NPAT-MI.

The eventful second half of the year, however,

triggered the company to record losses in

both quarters in the second half of the year,

totaling US$160 million. By the end of 2022,

HPG was trading at just 1.1x PBR, the lower end

of its 5-year PBR range. Similar to the property

sector, the outlook for the materials sector

in general and the steel sector in particular

is likely to remain subdued in the short term.

Nevertheless, given the ongoing structural

trends in urbanization mentioned earlier, the

growth story for both sectors remain bright over

the longer-term.

Ten Year Record

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Total net ssets

(US$m)

473.78

512.94

792.65

974.80

1,553.28

1,440.02

1,474.62

1,799.69

2,606.98

1,622.58

Total net ssets

(GBPm)

n/a

788.91

1,148.24

1,130.67

1,113.13

1,316.57

1,924.75

1,348.89

NAV per share

(US$)

3.07

3.40

3.59

4.41

7.06

6.56

6.76

8.30

12.21

7.85

NAV per share

(GBP)

n/a

3.57

5.22

5.15

5.10

6.07

9.01

6.53

Share price

(US$)

2.47

2.82

2.99

n/a

Share price

(GBP)

n/a

2.96

4.42

4.57

4.745

5.45

7.65

5.83

Earnings per

share (US$)

0.64

0.32

0.15

0.82

2.64

(0.50)

0.20

1.52

3.90

(4.42)

Discount to

NAV (%)

(19.54)

(17.06)

(16.71)

(17.09)

(15.27)

(11.26)

(6.96)

(10.21)

(15.09)

(10.65)

Source: Dragon Capital

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

Major Sector Return and Contribution (as of 31 December 2022)

Sector

Portfolio return

VN Index return

Portfolio contribution

Consumer Durables

23.1

(24.7)

0.5

Software & Services

1.6

(1.9)

(0.0)

Food & Beverage

7.3

(10.3)

(0.1)

Transportation

(14.3)

(23.0)

(0.1)

Energy

1.1

(9.9)

(0.5)

Capital Goods

(69.8)

(58.2)

(1.7)

Diversified Financials

(53.2)

(52.2)

(2.8)

Retail

(37.9)

(36.1)

(4.9)

Materials & Resources

(48.3)

(46.1)

(5.2)

Source: Dragon Capital, Bloomberg

Banking Sector

The banking sector had a mixed year with varied

performances among the constituents within the

sector. The highly volatile nature of the market

in 2022 meant larger names were favoured

over smaller alternatives due to a perception

of greater stability. Specifically, SOCBs such as

Vietcombank (“VCB”) and BIDV (“BID”) both

delivered strong share price performances with

VCB dropping only 1.9% and BID up 0.5%. On

the other hand, private banks, especially those

with a high exposure to the corporate bond

and property sector, were de-rated heavily.

Within VEIL’s banking investments, beside

VCB, the top two private-bank holdings Asia

Commercial Bank (“ACB”) and VPBank (“VPB”),

both outperformed the sector and the reference

index VN Index, although still experienced share

price falls of 23.4% and 27.6%, respectively.

For ACB, a consumer-centric bank, 2022 was

a good year with NPAT-MI growth of 42.5%

YoY, achieved by a strong increase in both net

interest income (“NII”) of 24.2% and net fee

income (NFI) of 21.8%. The bank’s net interest

margin (NIM) improved to 4.35% in 2022 from

4.13% in 2021, on the back of further expansion

in retail lending from 63.5% to 65.7%. The other

strong driver of profit growth was the fall in

provisioning expenses by 97.9% YoY, thanks to

the reversal of the special COVID-provisioning

and a testament to the bank’s conservative

approach and strong asset quality. At the same

time, non-performing loans (“NPL”) were stable

at only 0.74%, one of the lowest figures in the

sector. As at the end of 2022, ACB was trading

at just 1.3x PBR, whilst this is a premium to most

of the private bank peers, the valuation remains

towards the lower end of the bank’s 5-year PBR

range. For VEIL, the current valuation presents

an attractive prospect for long-term investment

in a bank that is highly regarded for the strength

of its asset quality and is well-positioned to

weather the current storm.

VPB had a more challenging year in 2022 as

Asset Allocation by Asset Class1

31 December 2022

31 December 2021

Equities

99.3

99.4

Cash

0.7

0.6

100.0

For asset allocation by sector, please see Note 5 to the Financial Statements.

Cash includes cash and cash equivalents, receivables and payables.

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

tough economic conditions impacted both its

parent bank, and in particular its consumer

finance arm, FE Credit (“FEC”). On the whole,

2022 NPAT-MI was still up 55.0% YoY thanks

to the one-off booking of upfront fees for

its new bancassurance* deal with AIA, worth

around US$250 million. Strong credit growth

of 29.2% at the parent bank was a highlight for

the year which subsequently drove NII up 32.1%

on a YoY basis. However, as the tough macro

conditions began to bite in the second half of

the year, FEC’s loan book growth started to

fall off and ended the year with an estimated

2.7% contraction. Provisioning expenses on

a consolidated basis rose 16.9% YoY as FEC’s

lending segment was significantly affected

by the economic hardship. Looking forward

to 2023, one of the big focuses for VPB will

undoubtedly be on the strategic placement of a

15% stake in the business to Sumitomo Banking

Corporation, a deal that was first mentioned

by VPB’s chairman at the 2021 AGM. The

completion of this placement will propel VPB to

become one of the biggest banks in Vietnam by

charter capital, placing VPB at the forefront of

* Bancassurance is an arrangement between a bank and an insurance

company allowing the insurance company to sell its products to the bank's

client base. This partnership arrangement can be proﬁtable for both

companies.

the top-tier banks that can compete on a similar

level with the group of SOCBs.

VCB, VEIL’s top pick in the SOCBs, sailed

through 2022 with flying colours. The bank

posted US$1.3 billion in NPAT-MI, up 36.4% YoY,

for 2022. This was the first time VCB, or any

bank in Vietnam, had recorded a net profit of

more than US$1 billion. In doing so, VCB also

eclipsed VHM as the most profitable listed

company in Vietnam. Earnings were driven by

solid NII growth of 26.0%. Similar to ACB, VCB’s

cautious approach during the COVID-19 period,

and in general, meant that the bank was able to

reserve some of its previous years’ provisions,

leading to a fall of 17.5% YoY in provisioning

expenses. Along with ACB, VCB was also well-

known for its strong asset quality with a stable

NPL ratio below 1% throughout 2022 and ended

the year at just 0.68% with an over loan-loss

coverage ratio at 317%. At the end of 2022, VCB

was trading at 2.8x PBR, twice the valuation of

most listed banks in Vietnam, a clear indication

of VCB’s status as the preferred bank for

investors that wish to gain exposure to the

banking system in Vietnam.

(35.71)

(5.42)

16.12

19.66

11.19

(34.07)

(8.36)

7.57

18.20

7.03

(36.08)

(6.51)

15.72

20.58

5.49

VEIL (NAV)

VNI (benchmark)

VN30 (comp)

Source: Dragon Capital, Bloomberg

Cumulative Performance (% in US$ terms)

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

Retail, Food & Beverage and Other Sectors

VEIL’s investments in the Retail sector were

represented by Mobile World Group (“MWG”)

and Phu Nhuan Jewelry (“PNJ”). The sector

enjoyed robust performance for much of 2022,

although by the end of the year, only PNJ’s

star remained undimmed. MWG, the biggest

retailer in Vietnam of mobile phones, consumer

electronics and groceries, held up well against

general market volatility until mid-September,

before falling in the fourth quarter of 2022 to

end the year with an overall share price decline

of 38.6%. This sharp fall was due to an abrupt

drop in demand for consumer electronics

products, leading to a 15.4% YoY drop in Net

Sales and a 60.4% YoY drop in NPAT-MI in the

fourth quarter. On the other hand, 2022 was a

strong year for PNJ as the company rebounded

from the significant impact of 2021’s COVID-19

lockdowns. The company posted 73.3% YoY

growth in Net Sales and 76.0% YoY growth in

NPAT-MI. Both top and bottom-line numbers

are well above the pre-COVID level of sales and

earnings. Given the liquidity crunch in late 2022,

the outlook for the retail sector this year, like the

rest of the economy, is expected to be bumpy

with slowing demand. Looking further ahead

to the longer-term outlook, much of the retail

sector, especially in grocery and jewelry, remains

highly fragmented, presenting a significant

growth opportunity. The attractions of the

sector are further compounded by the steady

rise in disposable income and the investment

case for PNJ and MWG remain compelling for

investors who want exposure to Vietnam’s

growing middle-class income.

NAV and share price are based on US$.

0.0

0.5

1.0

1.5

2.0

2.5

12/2021

03/2022

06/2022

09/2022

12/2022

No. of Shares (Million

Turnover Volume (RHS)

Price-US$ (LHS)

NAV-US$ (LHS)

Share Price & NAV

Source: Dragon Capital

(50)

(40)

(30)

(20)

(10)

Jan-05

Nov-06

Aug-08

Jun-10

Mar-12

Jan-14

Oct-15

Aug-17

May-19

Mar-21

Dec-22

Discount/Premium to NAV (%)

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

Food & Beverage sector returned to the

spotlight in a year when investors were looking

for value rather than growth. The sector is

dominated by Vinamilk (“VNM”), the biggest

dairy company in Vietnam, and Sabeco

(“SAB”) the biggest brewery in Vietnam.

Both outperformed the VN Index with SAB’s

share price rising 14.6% and VNM only falling

5.7% during the year.

From a fundamental

perspective, 2022 was a difficult year for VNM

with net sales and NPAT-MI falling 1.6% and

19.2%, respectively. The company will likely

see some relief in falling input prices which

should provide a better cushion for 2023’s

earnings. However, with more than 50% market

share in the dairy industry, VNM is now facing

increasing competition from up-and-coming

dairy producers across all segments. Thus,

whilst 2023’s outlook could be a return to

growth for the company, VEIL believes it could

be challenging for VNM to deliver double-digit

growth for both top and bottom lines this year.

The company is trading at 21x PER at the end

of 2022, a relatively expensive valuation for

its growth prospects. For SAB, the company

recorded exceptional growth in both net

sales and NPAT-MI, up 32.6% and 42.1% YoY,

respectively. To a significant extent this was a

reflection of the fact that 2022 saw the reopen

of restaurants and borders from the COVID-19

lockdowns in 2021 which to helped bring SAB’s

business back to pre-COVID levels. Similar to

VNM (0.8% holding), SAB (0.9% holding) is also

trading at a premium valuation of 20.8x PER for

2022. Whilst the company does have a stronger

growth story, its thin liquidity (average 30-day

turnover of US$2 million) poses a challenge for

investors seeking to build a substantial position

in the company.

Within non-cyclical sectors, FPT Corporation

(“FPT”) in the Software & Services sector, was

perhaps the most resilient both in term of share

price and business performance. FPT’s share

price was well ahead of the market, up 1.3%

in 2022 when it posted top and bottom-line

growth of 23.4% and 22.4%, respectively. This

growth was underpinned by solid performance

across the board in the technology (+23% YoY),

telecom (+16% YoY) and education (+53% YoY)

segments. The pandemic during 2020-2021

triggered a significant digital transformation

requirement in all sectors, and as such, VEIL

expects FPT to continue to benefit from this

long-term trend over the coming years.

Performance

31 December 2022

31 December 2021

Total net assets (US$)

1,622,581,751

2,606,977,922

Total net assets (GBP)

1,348,891,152

1,924,750,049

Number of outstanding shares

206,725,678

213,533,847

NAV per share (US$)

7.85

12.21

NAV per share (GBP)

6.53

9.010

Share price (GBP)

5.83

7.65

Discount to NAV (%)

10.7%

(15.1)

GBP/US$ exchange rate

1/0.831324

1/0.738307

Ongoing charges (%)

1.90

1.89

Following the listing on the London Stock Exchage, the share price is quoted in GBP only.

Calculated as operational expenses divided by average NAV for the year. Ongoing charges have been prepared in accordance with the Association of

Investment Companies (“AIC”) recommended methodology.

31 December 2022

31 December 2021

NAV returns (US$)

(37.76)

44.86

NAV returns (GBP)

(29.92)

46.19

Share price returns (GBP)

(23.79)

40.37

VN Index (price return - VND terms)

(32.78)

35.73

VN Index (total return - US$ terms)

(34.07)

39.00

Source: Bloomberg

Vietnam Enterprise Investments Limited - Annual Report 2022

3. Portfolio Manager’s Report (Continued)

Period’s High and Low

Year to 31 December 2022

Year to 31 December 2021

High

Low

High

Low

NAV per share (US$)

12.62

5.79

12.62

8.00

NAV per share (GBP)

9.64

5.60

9.47

5.83

Share price (GBP)

7.91

5.00

7.80

10.48

Source: Dragon Capital, London Stock Exchange

Source of Income (US$)

Year to

31 December 2022

Year to

31 December 2021

Interest income

114,291

22,395

Dividend income

9,663,187

7,505,712

Net changes in fair value of financial

assets at fair value through profit or loss

(891,697,124)

721,527,436

Gains on disposals of investments

4,865,100

157,569,945

Total

(877,054,546)

886,625,488

Source: Dragon Capital

Outlook

In 2022 during which several significant macro

and domestic themes arose simultaneously to

result in historically significant share price falls

in Vietnam, VEIL is naturally mindful of what

opportunities 2023 could produce for investors.

Globally, the effects of high inflation and high

interest rates will continue for some time.

Meanwhile, the world is preparing itself for a

long conflict in Ukraine. However, the reopening

of China following the country’s strict lockdown

should have a positive effect on Vietnam in both

trade and tourism. Domestically, GDP growth

this year is unlikely to be as pronounced as last

year. The Government has set a target of 6.5%,

down from 8.0% last year, reflecting the slow-

down in demand from the high level of interest

rates in Vietnam and elsewhere. Inflation was

under control in 2022, at just 3.2%, a compelling

figure compared with global comparators and

should be well-managed again in 2023. After

the most aggressive rate hike cycle in recent

memory from the Federal Reserve in 2022, the

US Dollar is unlikely to be strengthening much

further from this point. Thus, the FX rate should

also be more stable this year. The Government

has, since the close of the year, swiftly worked

on various initiatives to address the difficulties

in the property and banking sectors. Over time,

these initiatives are expected to improve the

financial conditions in Vietnam. Barring the

reoccurrence of further unexpected macro

events, 2023 should be a year of rebuilding for

Vietnam.

For 2023, Dragon Capital’s Top-80*, which

represents 70.1% of the VN Index, is forecast

to deliver only 1.8% in EPS growth, even below

2020’s COVID-year of 5.6%, although on average

the shares are trading at just 8.9x PER on a

forward basis. The valuation of the market, as

well as most of its constituents, remain at the

lower end of its 5-year range, providing an

appealing entry point for medium-to-long term

investment. Thus, while the short-term outlook

for Vietnam remains subdued, the country’s

structural growth story remaining intact. It

is anticipated that 2023 will therefore be an

important year for long-term investors, such

as VEIL, to position for the next growth phase.

VEIL continues to actively screen for these

unique opportunities that will not only survive

the current period but thrive after it.

Vu Huu Dien

Portfolio Manager

Vietnam Enterprise Investments Limited

25 April 2023

* The Dragon Capital’s Top-80 is the 80 biggest companies by market

capitalisation listed across three exchanges, adjusted by free ﬂoat and

screened by liquidity and ESG critierias.

Vietnam Enterprise Investments Limited - Annual Report 2022

Summary of Key ESG Metrics

As a long-term investor committed to

sustainability,

Vietnam Enterprise Investments

Limited (“VEIL”) has integrated ESG

considerations throughout its investment

process. VEIL screens and assesses the ESG

performance of all investee companies, except

for those in the financial sector. Greenhouse gas

emissions of the VEIL’s portfolio are presented

using the TCFD’s recommended metric of

weighted average carbon intensity (“WACI”),

in comparison to local benchmarks. Three key

environment, social and governance (“ESG”)

activities and metrics were summarised and

presented in Table 1 below.

Table 1: Summary of ESG Activities and Metrics

in 2022

ESG integration

throughout

the investment

process

ESG analysis was conducted

for 100% of non-financial

investee companies in

portfolio

WACI of VEIL’s

portfolio

116 ton CO

e/$M invested

48% lower than Vietnam Index

(“VN Index”)

Number of

engagements

on ESG

17 engagement activities:

8 with research/public

institutions and policy makers,

and

9 with investee companies

VEIL’s Commitment to Responsible

Investment

At VEIL, responsible investment is essential for

its stakeholders and the greater good of society.

As such, VEIL’s investment strategy emphasises

ESG factors in its investment decisions and

integrates them throughout its investment

process to optimise risk-adjusted performance.

VEIL recognises the interconnectedness of

climate change, greenhouse gas emissions,

and biodiversity loss, and are committed to

addressing these global challenges as active,

long-term investors. VEIL also encourages

its investee companies to improve their

sustainability practices and engage with

policymakers to promote positive change.

Together, VEIL strives to create sustainable

value for all stakeholders and contribute to

a better future for its communities and the

environment.

VEIL’S ESG Journey: From Compliance to

Opportunity

Compliance

VEIL has been committed to integrating ESG

factors into its investment strategy for over 20

years. The journey which started with a focus

on compliance and governance and evolved

into a more holistic approach that emphasises

risk management and opportunities for

development, and improvement. VEIL embarked

on its ESG journey more than two decades

ago, prioritising compliance to meet regulatory

requirements and uphold ethical standards. This

included avoiding investments in companies

engaged in controversial and unsustainable

activities. In 2002, Dragon Capital group (the

“Group”)* implemented its first environmental

and social management system, which has since

been continuously improved and upgraded.

Risk Management:

VEIL recognises that effective management of

ESG risks is essential for long-term financial

performance. To achieve this, VEIL has shifted

its focus to risk management, starting with

identifying and assessing ESG risks in potential

investments through thorough screening

and analysis. VEIL also manages ESG risks

continuously through ongoing engagement with

investee companies to ensure they meet ESG

obligations. VEIL collaborates with an Asian

leading service provider on climate technology

to enhance its ability to assess financial risks

associated with climate change and carbon

emissions. VEIL’s proactive approach to ESG risk

management allows for continuous improvement

and identification of opportunities that align

with its values. The Group’s ESG Management

System (“ESMS”) is integrated seamlessly into

every aspect of its investment process.

Opportunities

VEIL actively encourages its investee companies

to adopt sustainable practices through

engagement and advocacy, using its influence

as an investor to promote positive change. VEIL

also seeks potential investment opportunities

in companies that demonstrate strong financial

results and good ESG ethics, which align with

VEIL’s investment objectives. In addition,

VEIL engages with external stakeholders,

policymakers, and supports the development of

innovative financing mechanisms for biodiversity

and ecological services, such as biodiversity

* Dragon Capital Group Limited and its subsidiaries and afﬁliates including

investment managers, corporate parents, subsidiaries and funds and SMAs

under any such entities’ management.

4. ESG and Climate Change Report

Vietnam Enterprise Investments Limited - Annual Report 2022

credits and carbon markets, to incentivise and

encourage companies to invest in conservation

efforts while generating financial returns for

investors.

Capacity Building

ESG capacity building is critical to VEIL’s

success in implementing its ESG strategy which

can help VEIL

ensure the necessary skills,

knowledge, and resources to effectively manage

ESG risks and opportunities and generate long-

term value for its investors. ESG Core Team

members attend training seminars and engage

with stakeholders throughout the year to build

expertise in ESG analysis and management. VEIL

also collaborates with external partners and

organisations to stay up to date with the latest

ESG standards and regulations, and to drive

better corporate ESG disclosure.

ESG Management System, Procedure and

Updates

The ESMS involves an 8-step ESMS screening

procedure, which includes:

(1)

a pre-screening check against an exclusion

list and to identify high-risk areas;

(2) 43 in-depth questions to assess investee

companies’ environmental and social

(“E&S”) performance in accordance with

the IFC’s eight Performance Standards;

and

(3) a post-investment monitoring and

engagement process.

Expanding the ESG Core Team

The ESG Core Team, composed of senior

members from different departments of the

Group and supported by the Research division,

oversees the ESG integration process. In

response to the growing complexity of ESG

challenges in the investment industry, the Group

has recently expanded its ESG Core Team

by hiring dedicated specialists in 2022 and

early 2023. The newly hired ESG Manager and

Analyst are responsible for enhancing the team’s

expertise, identifying significant developments

in international ESG standards, and ensuring

compliance across all investments made by

VEIL.

Further Integrating ESMS Into the Investment

Process

By integrating the ESMS into the Group’s

internal systems from the very beginning, the

ESG Core Team can now closely monitor all

investments made by VEIL for compliance. The

team has gone one step further by digitising

the ESMS into the newly-established internal

knowledge database, IRIS. This centralised

record-keeping system allows the VEIL’s

Portfolio Manager to efficiently manage and

track all current and potential investments

while maintaining a record of past incidents and

engagements. IRIS ensures that VEIL stays on

top of its ESG obligations and responsibilities,

making it easier for the Portfolio Manager to

make informed investment decisions that align

with its values. For instance, IRIS maintains

a centralised record of past incidents and

engagements, such as instances where VEIL

engaged with stakeholders on ESG issues

or incidents where VEIL faced challenges in

meeting its ESG commitments.

Upgrading the ESMS

The updating process of the ESMS has been

started since 2022. The new system is expected

to better address key areas of focus in the

current ESMS framework whilst streamlining

other areas that are rarely triggered for VEIL’s

investees.

4. ESG and Climate Change Report (Continued)

DRAGON CAPITAL’S ESG JOURNEY

2002

FIRST ESG POLICY

Dragon Capital started

frist ESG policy and

management

system

2016

RIGOROUS ESG

MANAGEMENT SYSTEM

The system adopted IFC

performance standard

and OECD pronciples

2022

UPGRADING ESG

MANAGEMENT SYSTEM

Consolidate multiple

ESG standards worldwide

2005

CARBON NEUTRAL

For space 1 and 2

activities of Dragon

Capital’s operation

2008

VLCA INITIATIVE

Start to co-orgarise and

sole sponsor, and maintain

for 15 years

2013

PRI SIGNATORY

Start membership

2020

TCFD ADOPTATION

Disclose climate-related

risks throughout

the portfolio

DRAGONCAPITAL.COM

Figure 1: The Group’s ESG Journey and

Milestones

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

The current ESMS screening procedure was

originally established to evaluate the E&S risks

of non-financial enterprises in Vietnam. The

financial sector and, specifically, the Banking

sector, which is the biggest sector in the VN

Index. A screening process has been established

which references IFC ESG guidebook’s

indicators for financial institutes.

Trial screenings have been carried out and the

performance of the banks will be monitored

in order to help the ESG Core Team refine the

current process before incorporating it into the

new ESMS.

Active Ownership

Active ownership has been a key element of

VEIL’s and the Group’s approach to promoting

good corporate governance and safeguarding

its shareholders interests. The three main

components of the ESG Core Team’s active

ownership strategy are: advocacy, voting rights

and engagement.

Advocacy

Advocacy is essential for responsible investors

to promote sustainability and accountability in

the financial sector.

ESG practices face significant challenges

in Vietnam, including a lack of awareness

among local businesses, companies, and

weak enforcement. To help overcome these

challenges, the Group is committed to

advocating for promoting ESG awareness and

adoption in Vietnam. The ESG Core Team is

dedicated to promoting ESG practices and

driving positive change within the capital

market. The Group participates workshops

and seminars to enhance understanding

of ESG issues and work with policymakers,

institutions, and business associates to improve

ESG practices. The Group’s sole sponsorship

of the Vietnam Listed Companies Awards from

2008 until its transformation demonstrates its

commitment to transparency and disclosure.

The Group is also a member and sponsor of

several local and international initiatives for

sustainability and governance, as listed in Table

2 on page 16.

Voting Rights

VEIL believes that exercising its voting rights is a

critical component of responsible investing. The

Group, on behalf of VEIL and at the approval of

the Board of Directors, participates diligently

and prudently in all shareholder meetings called

by its investee companies, whether general or

extraordinary, to protect its interests and those

of its investees. VEIL recognises the importance

of adapting to changes in the voting landscape

and ensuring that all its e-votes are properly

registered. While in-person voting remains an

essential feature of the voting process, VEIL

also acknowledges the growing popularity

of e-voting as a convenient and accessible

alternative.

Through voting, VEIL seeks to promote

sustainable practices and drive positive change

in the companies it invests in.

Engagement

The Group believes that it has a fiduciary

responsibility to actively monitor and engage

with the investee companies in which VEIL

invests, as this engagement is a primary and

essential tool within the ESG framework to

promote positive steps towards improving

ESG practices and disclosures. The ESG Core

Team regularly communicates with all of VEIL’s

investee companies to assess their strategies,

ensure they are meeting expectations and

objectives, and encourage them to disclose

material ESG issues and report on their actions.

Through frequent conversations and discussions

with senior management, the Group shares

its expertise on company business strategy

and development, mergers and acquisitions,

operational performance, remuneration, ESG

issues, and general risk management, as well as

addressing more specific issues such as climate

change.

For serious incidents requiring detailed

engagement, the Group may engage specialist

service providers who contribute their expertise.

In such cases, the Group sets engagement

objectives based on the specific issues and

circumstances of investee companies. If an

investee company fails to meet appropriate

standards or represents a risk to shareholder

value, the Group works to encourage and

guide improvement. Overall, engagement is

a critical component of the Group’s approach

to responsible investing and is integral to

promoting positive change within investee

companies.

Table 3 and Table 4 on the pages 17 to 20 set

out some examples of engagements in 2022.

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Institutional

Investors

Group on

Climate Change

(“IIGCC”)

Member Since 2010

IIGCC is an investor network on climate change; IIGCC

works with business and policy makers, as well as investors

to help mobilise capital for the transition to a more

sustainable economy.

Asian Corporate

Governance

Association

(“ACGA”)

Member Since 2010

ACGA is an independent organisation dedicated to

implementing effective corporate governance practices

throughout Asia. ACGA believes that good governance

is fundamental to the region’s economies and capital

markets.

Principles for

Responsible

Investment

(“PRI”)

Member Since 2013

The Group believes that joining UN PRI as a signatory

highlights its ongoing commitment to the promotion of a

more sustainable financial system. It also helps the Group’s

professionals to engage with and learn from their peers

about the challenges related to ESG.

Nexus for

Development

Member Since 2013

Nexus for Development drives access to finance in

developing economies across Asia to increase sustainable

energy and water resource development, advance climate

positive solutions, and scale local implementers.

The Vietnam

Institute of

Directors

(“VIOD”)

Member Since 2018

Established in 2018, VIOD aims to advance board

professionalism, promote business ethics and transparency,

create a pool of independent directors, build a network

to connect corporate leaders and stakeholders, and help

companies gain investor confidence.

Dragon Capital

Chair in

Biodiversity

Economics at

the University

of Exeter

Appointed in May 2020

The creation of the “Dragon Capital Chair in Biodiversity

Economics” will look to address the central question of

whether there is any correlation between biodiversity and

the success of the economy and whether individuals and

organisations can, and should, place an economic value on

biodiversity.

Institute of

Strategy Policy

on Natural

Resources and

Environment

(“ISPONRE”)

Strategic agreement to strengthen biodiversity since 2019

Undertakes the E&S valuation of Ca Mau’s wetland and Pu

Mat national park that demonstrates the economic value

of biodiversity and the consequences of their degradation.

Thus, advocating for mainstreaming considerations for

the conservation and restoration of biodiversity and

ecosystems values.

Vietnam Listed

Company

Awards

(“VLCA”)

Co-organiser and sole sponsor since 2008

VLCA has been coorganised by the Ho Chi Minh Stock

Exchange (“HOSE”), the Hanoi Stock Exchange (HNX), the

Vietnam Investment Review (“VIR”)* and the Group. Since

2013, a further ESG awareness push, VLCA’s organisers

have launched a more general industry-wide initiative in

the form of the Sustainability Reporting Awards and Best

Corporate Governance Awards.

* Established in 1991 by the Ministry of Planning and Investment (then the State Committee for Investment and Cooperation) – the Government’s

macroeconomic and social development policy think-tank – VIR has crossed a long path towards becoming Vietnam’s leading economics and business

newspapers.

Table 2: List of Membership with Research/Public Institutes

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Table 3: Engagement with Research/Public Institutes and Policy Makers

Time

Events

Organisers

Topics/outcomes

March

2022

Conference

themed ESG - a

business model

for sustainable

development

The Group, Nordic

Embassies in

Vietnam, and

Fullbright School

of Public Policy and

Management

The event featured high-profile speakers

from the private and public sectors who

elaborated on the importance of ESG and

raised awareness that sustainability is

of equal importance as profitability. The

conference aimed to promote a business

model for sustainable development and

encourage the adoption of ESG practices in

the business community.

September

2022

Conference

themed

Leadership and

Good Governance

in Sustainability

and Climate

Change

The Group, Deloitte

Vietnam, VIOD, the

State Securities

Commission

(“SSC”), HOSE

Raising awareness of the issues of

sustainable development and governance

associated with Climate Change Governance

through specific policies in each enterprise

through general leadership as well as

the board of directors and the board of

management.

October

2022

The Birds, Bears,

Bulls - discussion

The Group,

University of Exeter,

Jefferies

The discussion covered potential solutions

to the dilemma of the devastation of growth

and economic activity on ecosystems, and

consider how we can best measure the true

value of biodiversity to the economy.

October

2022

Biodiversity

Preference Survey

and Discussion

with the Group’s

Investment and

ESG Core Team

The Group’s

Investment and

ESG Core Team,

Professor Ben

Groom and his

colleague Ben

Balmford from

University of Exeter.

The Group’s Investment and ESG Core

Team participated in an online Biodiversity

Preference Survey to understand people’s

preferences for biodiversity. The survey

results were compared with those of the UK

public to promote a better understanding

of biodiversity’s value and inform decision-

making for sustainable investments

prioritising biodiversity conservation.

November

2022

Collaborated

with ISPONRE

to organise a

workshop for the

announcement of

research results

on the valuation

of ecosystem

services of two

key biodiversity

areas in Vietnam.

ISPONRE,

Symmetry with

the sponsor of the

Group

Launch research findings on the valuation of

ecosystem services provided by mangroves

in Ca Mau and Pu Mat National Parks. The

event also featured a joint research project

exploring private financing options for

biodiversity and ecological services.

November

2022

The green

economy forum

EuroCham

The Group facilitated connections between

policy makers, experts, and enterprises to

discuss green and sustainable finance. The

conference provided valuable input for the

SSC to develop policies and regulations

relevant to the Vietnamese context.

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Time

Events

Organisers

Topics/outcomes

December

2022

Annual corporate

governance forum

VIOD, VIR

Promotes good governance practices

through networking, discussions, and talks.

The forum addresses pressing issues such as

ESG and climate change challenges, driving

positive change in corporate governance

practices.

December

2022

VLCA

The Group was the

sponsor

VLCA brings together over 100 listed

companies to promote disclosure of both

financial and non-financial information

in alignment with good practices and

national regulations. The awards recognise

companies that demonstrate excellence in

corporate transparency and sustainability,

encouraging a culture of accountability and

driving positive change in Vietnam’s capital

markets.

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Table 4: Examples of Engagement with Investee Companies

Company A

Industry

Real Estate

Issue

ESG follow up

Details of

engagement

As a pipeline project of Company A (the “Project”) was subjected to be monitored

periodically because of overall ESG issues and the controversies on a biosphere

reserve.

Decision and

outcome

The Project was not located within Can Gio biosphere reserve and approved by

the Government. However, several issues that needed to be monitored, e.g. E&S

impacts mitigation measures, plan and implementation, waste management, sand

exploitation.

The follow up meeting about the Project informed that:

•

Company A was engaging third parties consultants and biodiversity experts

to do research on biodiversity around the Project site and propose mitigation

measures.

•

The waste management was followed District People Committee’s plan.

The follow up meeting regarding overall ESG issues provided more insights that

Company A had the ESG policy which focused on developing net zero megacities,

and more ESG staff were being recruiting to support oversee ESG issues.

Neutral:

To be monitored - The Group needs to keep monitoring the Project.

Company B

Industry

Software

Issue

ESG performance dialogue with Investor Relations and ESG officers of Company B

Details of

engagement

The Group was engaging Company B to improve their ESG report and Greenhouse

Gas (“GHG”) emission disclosure as a listed company.

Company B was also very interested in how to improve their ESG report and

implementation to meet international investors’ expectation in terms of ESG.

Decision and

outcome

The discussion focused on:

•

The indicator to assess ESG (the Group introduced the indicator used in VLCA

2022).

•

GHG emission calculation and strategy to disclose and reduce GHG (the Group

introduced some consultants to support FRT in GHG emission inventory).

•

The Group also shared the importance of estimation and disclosure of GHG

emission for the corporate level (comply to Circular 96/2020/TT-BTC and

support for investor to report align with Task Force on Climate-Related

Financial Disclosures (“TCFD”)).

There were a lot of standards and frameworks on ESG. The Group needs to keep

updating to meet the standards and frameworks.

Positive

: The Group and Company B will keep in touch in discussion of ESG

reporting and GHG emission.

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Company C

Industry

Chemical

Issue

ESG assessment and dialogue with top management

Details of

engagement

In March 2022, the Group has contracted with an E&S expert to conduct E&S

assessment of Company C. Company C was excluded from the investment universe

of the Group in 2021 due to lack of information. The Group thought that Company

C’s chemical production could have linked to hazardous substance. However, the

financial performance of Company C was very good, thus in early 2022 the Group

decided to do a comprehensive ESG assessment with the support from E&S experts.

Decision and

outcome

The E&S assessment were based on the following methods:

•

Dialogue with top management to assess how their attitude to ESG in their

operation.

•

Review all E&S documents, e.g. EIA report, monitoring reports, environmental

certificates, etc.

•

Site visit and interview local people living near to the project.

Key results of assessments - The chemical factories:

• Highly automated production process with equipment well-maintained,

airtight and closed systems.

•

No effluent discharge to environment thanks to 100% circulation.

•

Air emission control system is well installed and operated.

•

Compliance with national safety standards and good track record of workplace

and fire safety.

Given the well equipment of wastewater, air, and solid waste treatment system of

Company C as well as the Environmental and Social Management Plan, the E&S

impacts and risks were well controlled compared against other peers. The top

management was also highly focus on environmental, health, safety, and social

management.

Positive:

The E&S risks were assessed much lower than what the Group initially

thought about. Therefore, Company C was removed from the Group’s exclusion list

and could be invested by VEIL.

6 Other Companies

Industry

Multiple sectors

Issue

ESG assessment and monitoring

Details of

engagement

Meeting with management to understand the strategy on ESG as well as ESG

practices of these companies.

Decision and

outcome

The meeting information helps to improve/confirm the Group’s view on the ESG

performance of these companies. During the meeting, the Group was trying to

encourage these companies to disclose material ESG issues and to report what they

were doing.

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Taskforce on Climate-Related Financial

Disclosures Report

Governance & Strategy

Climate change has progressively become a

central topic in ESG discussions. The Board of

Directors of VEIL recognises the importance

of understanding of the challenges posed

to Vietnam, its economy, businesses and

communities by climate change and had

appointed a Board member, Entela Benz-Saliasi,

who is a specialist in the subject with noted

credentials.

In continuation from 2021, the Board of Directors

had chosen to follow the recommendations

of the TCFD, which include four pillars:

Governance, Strategy, Risk Management and

Metrics & Targets. TCFD remains in favour with

regulatory support in the UK (where VEIL is

listed) and Hong Kong (where the Investment

Manager is regulated).

In order to meet the complexities of, and the

rising focus on, climate change, the Group has

elected to retain the service of a third-party

specialist, Intensel Limited (“Intensel”), to

continue its analysis of the impact of climate

change on VEIL’s portfolio.

The subscription to Intensel’s Software-as-a-

Service (“SaaS”) will allow the ESG Core Team

to perform an analysis of the impact of climate

change on VEIL’s portfolio on an on-demand

basis, both periodically and at any time there

are changes to the investees in the portfolio.

SaaS customisation feature also allows for

greater accuracy of the analysis.

The assessment of ESG risks in the portfolio has

become a regular agenda item for the Board

of Directors’ discussions since 2021. The key

assumptions and findings in relation to VEIL’s

portfolio as at the end of 2022 are discussed in

the sections below.

Risk Management

Defining Climate Risk

Under TCFD recommendations, the two

primary climate related risks are “Physical Risk”

(extreme weather conditions) and “Transition

Risk” (regulatory and carbon). The Nationally

Determined Contribution (“NDC”) committed

by Vietnam, being a developing country, under

the Paris Agreement is much less onerous than

those of more developed countries. As such,

Transition Risk is less of an issue for Vietnam

than Physical Risk.

Table 5: Examples of Climate-related Risk

Examples of Physical Risk

Acute Physical

Risk

Event-driven impacts, such as

from extreme weather events

and the increased frequency

of such events, (Including

wildfires, droughts and

hurricanes, among others).

Chronic

Physical Risk

Overall shifts in climatic

behavior, such as temperature

and precipitation patterns, sea

level rise, etc.

Examples of Transition Risk

Policy and

Legal Risk

Policy changes (e.g., carbon

taxes, permit restrictions, etc.)

and legal risks (e.g., lawsuits).

Technology

Risk

Disruptive technologies

reducing demand for products

or services.

Market Risk

Shifts in supply chain and

consumer demand for

products.

Reputational

Risk

Changing public perceptions

of products or companies.

Physical Risk

Vietnam’s geographical features, being located

close to the equator and having a long coastline

with rapid urbanisation in the Mekong Delta,

mean the country is susceptible to a number

of extreme weather conditions: (1) river

flooding; (2) rainfall floods; (3) storm surges;

(4) typhoons; (5) sea level rise; and (6) extreme

heat. Figure 2 on page 22 presents the two

typical climate hazards of typhoon and extreme

heat over Asia Continent, which shows that

Vietnam is located in the vulnerable areas to

these hazards, and the impacts keep increasing.

Shared Socioeconomic Pathways (“SSP”)

and Representative Concentration Pathways

(“RCP”) are two frameworks used to project

future climate scenarios based on different

sets of assumptions about socioeconomic and

technological factors.

RCP scenarios were developed by the

Intergovernmental Panel on Climate Change

(“IPCC”) in 2014, while SSP scenarios were

developed by a group of researchers in 2016.

SSP scenarios are more recent and provide a

more comprehensive set of assumptions about

socioeconomic and technological developments.

One key difference between the two scenarios

is that SSP scenarios explicitly consider

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

different possible pathways for socioeconomic

development, while RCP scenarios assume a

more linear progression of economic growth and

energy use.

Another difference is that SSP scenarios

include a wider range of possible outcomes for

greenhouse gas emissions, while RCP scenarios

focus on four specific emissions trajectories,

labeled RCP2.6, RCP4.5, RCP6, and RCP8.5,

which correspond to different levels of radiative

forcing by the end of the 21st century.

In general, SSP scenarios provide a more

nuanced and flexible set of assumptions for

modeling future climate scenarios, while

RCP scenarios provide a more focused set of

emissions trajectories for comparison. Both

frameworks are widely used in climate modeling

and research, and are important tools for

understanding the potential impacts of climate

change and the actions needed to mitigate it.

For its analysis of Physical Risk, the Group

evaluates the potential VaR of the physical

assets which are most critical to the operation

of VEIL’s investee companies under different

RCP scenarios in the target period 2030-2050.

This exercise gives the Group an insight into

the potential damage each weather event

would have on these assets and VEIL’s investee

companies.

The SaaS methodology for Physical Risk analysis

used of peer-reviewed models for the regions.

The predictive datasets used are recommended

by the IPCC CMIP5 RCP and SSP scenarios

to reflect climate change. Various AI models

(LSTM, CNN, SVM etc.) are used to generate

increase the data quality and speed up the

computing process.

Figure 2: Climate hazard impact over Asia Continent in 2020 (historic) against in 2030 and 2050

(RCP 8.5 scenarios)

Typhoon Wind Speed

Historic

Typhoon Wind Speed (km/h)

Miles

Low: 0

High: 268

2200

2400

4800

7200

9000

Historic

Typhoon Wind Speed

2030

Typhoon Wind Speed (km/h)

Miles

Low: 0

High: 324

2200

2400

4800

7200

9000

2030

Typhoon Wind Speed

2050

Typhoon Wind Speed (km/h)

Miles

Low: 0

High: 381

2200

2400

4800

7200

9000

2050

Heat Map

Historic

Extreme Heat (°C)

Miles

Low: -3.5

High: 47.2

1050

2100

4200

6300

8400

Historic

Heat Map

2030

Extreme Heat (°C)

Miles

Low: -2.3

High: 49.7

1050

2100

4200

6300

8400

2030

Heat Map

2050

Extreme Heat (°C)

Miles

Low: 1.3

High: 51

1050

2100

4200

6300

8400

2050

Vietnam Enterprise Investments Limited - Annual Report 2022

4. ESG and Climate Change Report (Continued)

Climate Assumption

A fundamental debate when it comes to climate

change has been the projected pathway of

the impact of climate change under different

scenarios.

The scenarios that have been chosen for VEIL’s

analysis are presented in Table 6 below.

Table 6: Assumption of Climate Scenarios

RCP

SSP

Description

RCP 8.5

SSP 8.5

Business-as-usual scenario

without additional efforts

to constrain emissions,

resulting warming of more

than 4

RCP 4.5

SSP 4.5

Intermediate scenario that

declines by 50% on 2050

levels by 2100, expected to

result in warming of more

than 2

RCP 2.6

SSP 2.6

Net zero pathway that aims

to keep global warming

below 2

Transition Risk

Whilst Vietnam remains comfortably on track

to not exceed its disclosed NDCs, due to its

status as a developing country, the Government

recognises the climate change risks facing the

country.

Thus, at the 26th and 27th United Nation

Climate Change Conference, the Prime Minister

of Vietnam made a commitment to reach net-

zero emissions for the country by 2050.

This announcement shows not only that

the Government of Vietnam recognise the

challenges it faces but also its determination

to transform the economy and to contribute to

solve the climate change issue.

In view of the limited availability of data, the

Group has utilised Intensel’s SaaS platform to

approximate the TCFD’s suggested metrics

of GHG emissions and WACI for assessing

Transition Risk. The platform employs carbon

sector intensity, measured in terms of tons of

emitted per one million dollars of revenue.

Additionally, the WACI for the local benchmark

indexes of VN Index and VN30 Indexwas

calculated using the Intensel’s carbon sector

intensity and the calculation formula proposed

by MSCI (2020)*.

* MSCI ESG Metrics Calculation Methodology, December 2020

SSP Loss for Year 2050

8.31

9.07

10.45

Loss in %

2.6

8.5

4.5

RCP Loss for Year 2050

8.41

9.18

10.51

Loss in %

2.6

8.5

4.5

Figure 3: Physical Climate VaR for Different Climate Scenarios

Vietnam Enterprise Investments Limited - Annual Report 2022

Metrics

TCFD recommends that reporting entities

disclose management metrics regarding relevant

climate-related risks and forward-looking

targets.

For the Group and VEIL, both remain an

immense challenge because of the scarcity of

any carbon or climate data disclosures among

listed companies in Vietnam. Furthermore,

the methodology and the models used to

estimate the metrics recommended by TCFD

remain relatively new in Vietnam. The following

disclosed metrics by VEIL were resulted from

Intensel’s SaaS platform, which enable VEIL

to understand its climate-related risks and

eventually provide the targets in near future.

Physical Risk Metrics

Climate Value-at-Risk (“CVaR”) - measures

the maximum amount of loss to be incurred

over a one-year period given that a one in

one-hundred-year extreme event occurs (for

all climate hazards that affect the asset).

CVaR can be thought of as potential loss over

the exposure of the asset if in % or $ loss if

measuring the absolute loss.

The VaRs of different climate scenarios for the

year of 2050 were presented in Figure 3 on

page23. RCP and SSP scenarios were reported.

Transition Risk Metrics

The four key metrics of GHG emission

recommended by TCFD were calculated for VEIL

and are presented in Table 7 below.

• WACI: portfolio’s exposure to carbon-

intensive companies, expressed in ton

e/$M revenue;

•

Total carbon emission for scope 1 and 2:

the absolute GHG emissions associated

with VEIL’s portfolio, expressed in ton CO

equivalent;

• Carbon footprint: total carbon emission

for VEIL normalised by the market value of

VEIL, expressed in ton CO

e/$M invested;

and

• Carbon intensity: volume of carbon

emission per million dollars of revenue,

expressed in ton CO

e/$M revenue.

Table 7: Key GHG emission metrics of VEIL in

2022

Key metrics

Values

WACI

116

ton CO

e/$M revenue

Total Carbon

emission scope 1

&2 of VEIL

154,000

ton CO

Carbon footprint

ton CO

e/$M invested

Carbon intensity

151

ton CO

e/$M revenue

A comparison WACI of VEIL against other

local and regional benchmarks, e.g. Emerging

markets, VN Index, VN30 Index, is an important

practice for evaluating performance, managing

risk, and gaining insights of the portfolio into

the markets.

Figure 4 below presents the WACI for 2022 of

VEIL against three indexes i) Emerging Markets

ESG Learders (EM) (value in 2021), ii) VN Index;

and iii) VN30 Index (values as of 30 December

2022). WACI of VEIL is about 17% lower than

that of VN30 Index, and about 48% lower than

those of VN Index and EM.

4. ESG and Climate Change Report (Continued)

250

WACI in 2022

Emerging

Markets ESG

Leader

VN Index

VN30 Index

VEIL

200

225

222

139

116

150

100

Figure 4: WACI of VEIL Versus Other Indexes

Vietnam Enterprise Investments Limited - Annual Report 2022

Forward-looking Target

As part of its commitment to TCFD reporting,

the Group,

on behalf of VEIL, aim to further

collaborate with regulatory bodies wto

encourage and enable greater disclosure of

carbon information by listed companies. In

addition, the Group will explore opportunities to

establish a process and/or platform for carbon

credit certification and trading, in order to

support the transition to a low-carbon economy

and drive positive environmental impact.

The Modern Slavery Act 2015

The Modern Slavery Act 2015 (the “Act”)

requires companies to meet the reporting

requirements of Section 54 of the Act and to

produce a modern slavery and human trafficking

statement.

As an investment fund, VEIL has no direct

employees, whilst its supply chain consists

mainly of professional services providers and

the like. Therefore, the reporting provisions of

the Act do not apply to VEIL directly.

Day-to-day management of the investments,

including investment decision making,

monitoring and divestment, is carried out

by the Investment Manager, Dragon Capital

Management (HK) Limited, part of the Dragon

Capital group.

Nevertheless, VEIL has put a statement on

its website to demonstrate its commitment

and responsibility, as a FTSE 350 constituent,

to the reporting provisions of the Act. The

statement can be found on the following

website: https://www.veil-dragoncapital.com/

modern-slavery-statement/.

4. ESG and Climate Change Report (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement

Introduction

The Board of Directors is committed to high

standards of corporate governance and has put

in place a framework for corporate governance

which it believes is appropriate for a listed

investment company.

Compliance with Corporate Governance

Codes

The Board of Directors of the Company has

considered the Principles and Provisions of the

AIC Code of Corporate Governance (the “AIC

Code”).

The AIC Code addresses the Principles

and Provisions set out in the UK Corporate

Governance Code (the “UK Code”), as well as

setting out additional Provisions on issues that

are of specific relevance to the Company.

The Board of Directors considers that reporting

against the Principles and Provisions of the AIC

Code, which has been endorsed by the Financial

Reporting Council, provides more relevant

information to shareholders.

It is the Board of Directors’ view that the

Company has complied with the Principles and

Provisions of the AIC Code during the year

ended 31 December 2022.

The AIC Code is available on the AIC website

(www.theaic.co.uk).

The AIC Code includes an explanation of

how the AIC Code adapts the Principles and

Provisions set out in the UK Code to make them

relevant for investment companies.

Table 1 on pages 39 to 44 under this Corporate

Governance Statement describes how the Board

of Directors has applied the 17 Principles of the

AIC Code in practice during the year ended 31

December 2022.

Section 172 of the UK Companies Act 2006

The Board of Directors is aware of the duty

under Section 172 of the UK Companies Act

2006 for directors of UK companies to act in the

way which they consider, in good faith, would

be most likely to promote the success of the

Company for the benefit of its members as a

whole and, in doing so, to have regard (amongst

other matters) to:

(a) the likely consequences of any decision in

the long-term;

(b) the interests of the company’s employees;

(c)

the need to foster the company’s business

relationships with suppliers, customers and

others;

(d) the impact of the company’s operations on

the community and the environment;

(e) the desirability of the company

maintaining a reputation for high

standards of business conduct; and

(f)

the need to act fairly as between members

of the company.

(the “s.172 matters”).

Section 172 of the UK Companies Act 2006 is

not directly applicable to the Company as a non-

UK company.

However, in accordance with Provision 5 of

the 2019 AIC Code, the Board of Directors

is required to disclose how the s.172 matters

have been considered in board discussions and

decision-making.

The Company maintains a long-term strategy

with no employees.

The Board of Directors and the Investment

Manager have adequate and regular shareholder

liaison.

During the reporting period, the Board of

Directors and the Investment Manager have

taken steps to explicitly use the Company’s

investments and influence to advocate for a

low-carbon, environmentally sustainable and

inclusive economy.

This aims to deliver long-term sustainable

returns through different aspects including

making better decisions by systematically

and explicitly integrating ESG factors into the

investment process.

More information on the Company’s operations,

conduct of business, and fair treatment can be

found in the ESG and Climate Change Report on

pages 13 to 25.

Listing Rule 9.8.4C

Listing Rule 9.8.4C requires the Company

to include certain information in a single

identifiable section of this annual report or

a cross reference table indicating where the

information required in LR 9.8.4 R is set out.

The Directors of the Company confirm that there

are no disclosures to be made in this regard,

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

other than in accordance with LR 9.8.4(5)

and LR 9.8.4(6), the information of which is

detailed in Note 10 to the financial statements

(under “Directors’ fees”), and LR 9.8.4(10), the

information of which is detailed on page 34

under “Directors’ Interests in Contracts”.

Directors

The following were Directors of the Company

during the year to 31 December 2022 and to the

date of this annual report:

• Gordon Lawson: Chair (from 30 June

2022)

• Entela Benz-Saliasi: Senior Independent

Non-Executive Director (from 30 June

2022)

• Vi Peterson: Independent Non-Executive

Director

• Low Suk Ling: Independent Non-Executive

Director

• Sarah Arkle: Independent Non-Executive

Director (appointed on 5 January 2022)

• Dominic Scriven O.B.E: Non-Executive

Director

• Stanley Chow: Chair (until 30 June 2022)

As at 31 December 2022, the Board of Directors

consisted of six Non-Executive Directors, five

of whom were independent of the Investment

Manager, whose individual knowledge and

experience provide a balance of skills and

expertise relevant to the Company and it was

considered that they commit sufficient time to

the Company’s affairs.

The biographical details of the Directors are

provided on pages 50 to 51.

The Chair, Gordon Lawson, is non-executive and

independent of the Investment Manager.

The Chair leads and ensures the effectiveness of

the Board of Directors in all matters relating to

the Company, including receiving accurate and

timely information.

There is a clear separation of roles and

responsibilities between the Chair of the Board

of Directors, the Chairs of the various Board

Committees (the Audit and Risk Committee,

the Management Engagement Committee and

the Nomination and Remuneration Committee),

the Directors of the Company as a whole, the

Investment Manager and the Company’s other

third-party service providers.

Dominic Scriven O.B.E is the Director of

Dragon Capital Group Limited, the parent of

the Investment Manager and also acts as the

Chairman of the Dragon Capital group.

Dominic Scriven O.B.E is, therefore, not

considered to be independent of the Investment

Manager.

There are no Executive Directors on the Board

of Directors.

Details of the individual board remuneration of

Directors of the Company and their beneficial

interests in the Company as well as details of the

Committees and their composition are disclosed

in this Corporate Governance Statement.

Dominic Scriven O.B.E does not participate in

any Committee.

New Directors of the Company are provided

with an induction programme, which is designed

and approved by the Board of Directors as a

standard procedure.

Following the appointment, the Chair reviews

and agrees with new Directors of the Company

their training and development needs covering

specific Company matters as well as industry

issues.

The Board of Directors is supplied, via the

Investment Manager and other service providers,

with sufficient information to enable the

Directors of the Company to discharge their

duties.

The Investment Manager, with the support of the

Company’s legal advisers, provides the Board

of Directors with regular updates on regulatory

issues and on the latest corporate governance

rules and regulations.

Directors’ Duties and Responsibilities

The Directors of the Company have adopted a

set of Reserved Powers, which establish the key

purpose of the Board of Directors and detail its

major duties.

These duties cover the following areas of

responsibility:

• Statutory obligations and public

disclosure;

• Strategic matters and financial reporting;

• Board composition and accountability to

shareholders;

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

• Risk assessment and management,

including reporting, compliance,

monitoring, governance and control;

• Review the portfolio, assess strategy,

assess the performance and cost of service

providers;

•

Act as a point of contact for shareholders,

independent of the Investment Manager;

and

• Other matters having material effects on

the Company.

These Reserved Powers of the Board of

Directors have been adopted by the Directors

of the Company to demonstrate clearly the

importance with which the Board of Directors

takes its fiduciary responsibilities and as an

ongoing means of measuring and monitoring

the effectiveness of its actions.

The Board of Directors meets at least quarterly.

Each meeting is attended by representatives

from the Investment Manager. Representatives

from the Investment Manager also attend

relevant Committee meetings if requested by

the relevant Committee Chairs.

Open, constructive debate and discussion

is encouraged by the Chair of the Board of

Directors and each Committee’s Chair to ensure

that the best interests of the shareholders and

the Company are maintained.

The Board of Directors has standing agenda

items for its quarterly scheduled Board meetings

and periodic Audit and Risk Committee,

Management Engagement Committee and

Nomination and Remuneration Committee

meetings to review the Investment Manager’s

performance, risk management and other

matters relating to the operations and regulation

of the Company.

This includes reviewing the portfolio

performance, attribution analysis, contributors

and detractors to performance, weightings

and portfolio information including purchases

and sales, risks, fees, ESG as well as the macro

economy and stock market outlook.

The Board of Directors also performs a review

of the share price performance, the discount

and the share buyback policy, as well as credit

facilities.

The Board of Directors sets the overall Company

strategy and regularly reviews its progress to

ensure that its goals and objectives are being

met.

The Board of Directors continually monitors the

share price discount to Net Asset Value (“NAV”)

daily and exercises its right to buy back shares

when the Board of Directors considers that it is

in shareholders’ interests to do so.

The matter is reviewed at each quarterly Board

meeting with the Directors of the Company

receiving updates from the Investment Manager,

Corporate Broker, and auditor.

Board and Committees

The Board of Directors has established three

committees:

• Audit and Risk Committee

• Management Engagement Committee

• Nomination and Remuneration Committee

The responsibilities of the three Committees are

described below.

Dominic Scriven O.B.E does not participate in

any Committee.

On 14 June 2022, the Company announced the

reconstitution of the Committees as follows:

Audit and Risk Committee

• Chair: Entela Benz-Saliasi

• Members: Sarah Arkle, Low Suk Ling

Management Engagement Committee

• Chair: Sarah Arkle

• Members: Gordon Lawson, Vi Peterson

Nomination and Remuneration Committee

• Chair: Vi Peterson

• Members: Entela Benz-Saliasi, Low Suk

Ling

As of 31 December 2022, the Board consists of

six Non-executive Directors, five of whom are

independent of the Investment Manager, whose

individual knowledge and experience provide

a balance of skills and expertise relevant to the

Company and it is considered that they commit

sufficient time to the Company’s affairs.

The Board has established three committees:

the Audit and Risk Committee, the Management

Engagement Committee and the Nomination

and Remuneration Committee. All members of

the committees are independent.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

Dominic Scriven O.B.E who is the Chairman

of Dragon Capital Group Limited, the ultimate

parent of the Investment Manager, does not

participate in any Committee.

The Nomination and Remuneration Committee

is responsible for ensuring that the Board

comprises the appropriate balance and

composition of skills, experience, length of

service, knowledge of the Company and

diversity (including gender and ethnic diversity)

as well as determining a fair and market-

competitive compensation for members of the

Board.

As of 31 December 2022, two out of the six

Board members originate from an Asian ethnic

background (Vietnam and Singapore) and four

out of the six Board members are female.

Audit and Risk Committee

The Audit Committee was formed on the listing

of the Company on the main market of the

London Stock Exchange on 5 July 2016.

With effect from 1 July 2018, the Audit

Committee was expanded to become the Audit

and Risk Committee.

Detailed information on the Audit and Risk

Committee can be found in the Report of the

Audit and Risk Committee on pages 46 to 49.

Management Engagement Committee

The Management Engagement, Nomination &

Remuneration Committee was formed upon

listing of the Company on the main market of

the London Stock Exchange on 5 July 2016.

With effect from 1 July 2018, the Management

Engagement, Nomination & Remuneration

Committee was split into the Management

Engagement Committee and the Nomination

and Remuneration Committee.

The Chair of the Management Engagement

Committee reports to the Board of Directors

after each meeting on all matters within its

duties and responsibilities.

The Management Engagement Committee

makes recommendations to the Board of

Directors as it deems appropriate on any area

within its remit where action or improvement is

needed.

The Board of Directors considers the

arrangements for the provision of investment

management services to the Company on an

on-going basis and a formal review is conducted

annually by the Management Engagement

Committee which consists solely of Directors

of the Company independent of the Investment

Manager.

The review considers investment strategy,

investment process, performance and risk and

is carried out through meetings between the

Management Engagement Committee and the

Investment Manager.

As part of this review, the Board of Directors

considered the quality and continuity of the

personnel assigned to handle the Company’s

affairs, the investment process and the results

achieved to date.

The Directors of the Company believe that the

Investment Manager has the resources and

ability to deliver the results which they seek.

During the reporting period, the Management

Engagement Committee met twice to discuss

and assess service providers covering marketing

and research, fund administration, custody,

corporate broker, Board platform, auditor, and

investment management of the Company.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee

performs an annual review of the skills,

experience, length of service and knowledge

about the Company for each Director of

the Company and the structure, size and

composition (including gender) of the Board of

Directors.

The skills, experience and length of service of

each Director of the Company are detailed in the

Directors’ biographies on pages 50 to 51.

The selection policy of the Board of Directors

is to appoint the best qualified person for the

job, by considering diversity of the Board of

Directors, in order to achieve a combination of

skills, experience and knowledge.

The Board of Directors is satisfied that the

current blend of diversity, skills and experience

prompts informed decision making and does not

deem it necessary to alter the mix at present.

The Nomination and Remuneration Committee

periodically reviews the level of Directors’ fees

relative to other comparable companies and in

light of the Directors’ responsibilities.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

In doing so, the Nomination and Remuneration

Committee has access to independent research.

The policy of the Board of Directors is that

the remuneration of Non-executive Directors

should reflect the responsibilities of the Board

of Directors, the experience of the Board of

Directors as a whole and be fair and comparable

to that of other investment companies of similar

size, capital structure and investment objective.

Details of the Directors’ remuneration can be

found on page 30 and in Note 10 to the financial

statements. The Directors’ interests (including

interests of connected persons) can be found in

the Report of the Board of Directors on pages

53 to 55.

The Nomination and Remuneration Committee,

which is entirely comprised of Independent

Directors of the Company, regularly reviews the

structure, size and composition of the Board of

Directors and makes recommendations to the

Board with regard to any adjustments that seem

appropriate, considers the rotation and renewal

of the Board of Directors, approves candidate

specifications for all Board appointments,

approves the process by which suitable

candidates are identified and short-listed, and

nominates candidates for consideration by the

full Board, whose responsibility is to formally

make appointments.

During the reporting period, the Nomination and

Remuneration Committee met three times to

discuss succession planning, monitor and review

key person risk and conduct ongoing review of

the Board and committee composition.

Following the Committee’s approved plan, Sarah

Arkle, Independent Non-Executive Director, was

appointed on 5 January 2022.

On 30 June 2022, Stanley Chou stepped down

as the Chair of the Company and resigned from

the Board of Directors.

Stanley Chou had served as a director of

Vietnam Growth Fund Limited, a fund also

managed by the Dragon Capital group, until its

merger with the Company, following which he

joined the Board of Directors of the Company in

January 2016.

The Board of Directors elected Gordon Lawson,

Senior Independent Non-executive Director, to

replace Stanley Chou as Chair of the Company

effective on 1 July 2022.

Entela Benz-Saliasi replaced Gordon Lawson as

the Senior Independent Non-executive Director,

also effective on 1 July 2022.

As at 31 December 2022, the independence of

the Board of Directors is maintained as five of

the six Non-Executive Directors are independent

of the Investment Manager.

The Nomination and Remuneration Committee

also confirms that the knowledge and

experience of the Directors of the Company

is adequate to provide a balance of skills and

expertise which are relevant to the Company.

Directors’ Remuneration Report

The Nomination and Remuneration Committee

is responsible for determining the level of

Directors’ fees.

The terms of reference are available on request.

The Board of Directors has prepared this

Remuneration Report in accordance with the

recommendations of the AIC Code.

The Company’s Remuneration Policy for

the Directors of the Company takes into

consideration the principles of the UK Code

and the AIC’s recommendations regarding the

application of those principles to investment

companies.

Directors’ remuneration is determined by the

Nomination and Remuneration Committee.

All of the Directors of the Company are non-

executive, and their fees are set within the

limits of the Company’s Restated and Amended

Memorandum and Articles of Association (the

“Articles”) which limit the aggregate fees

payable to the Board of Directors per annum to

US$400,000.

The level of this cap may be increased by a

resolution of the shareholders from time to time.

Subject to this overall limit, the policy of the

Board of Directors is that the remuneration

of Non-executive Directors should reflect the

nature of their duties, responsibilities and

the value of their time spent, and be fair and

comparable to that of other investment trusts

and companies that are similar in size, have

a similar capital structure and have a similar

investment objective.

No shareholder views were sought in setting the

Remuneration Policy although any comments

received from shareholders would be considered

on an on-going basis.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

Fee rates have been established by reference to

current market levels and are as follows:

• Member of Board only: US$45,000 per

annum;

• Chair of the Board: +US$10,000 per

annum;

• Chair of the Audit and Risk Committee:

+US$5,000 per annum;

• Member of the Audit and Risk Committee:

+US$2,500 per annum;

• Chair of the Management Engagement

Committee: +US$5,000 per annum;

• Member of the Management Engagement

Committee: +US$2,500 per annum;

• Chair of the Nomination and Remuneration

Committee: +US$5,000 per annum; and

• Member of the Nomination and

Remuneration Committee: +US$2,500 per

annum.

Board Independence, Composition and

Diversity

The Board of Directors supports the principle of

boardroom diversity and the Parker Review.

The selection policy of the Board of Directors

is to appoint the best qualified person for the

job, by considering factors such as diversity

of thought, experience and qualifications, and

ethnic and gender diversity, for the effective

conduct of the Company’s business.

New appointments are identified against the

requirements of the Company’s business and the

need to have a balanced Board of Directors.

As at 31 December 2022, the Board consisted of

five Independent Non-Executive Directors and

one Non-Independent Non-Executive Director.

Listing Rule 9.8.6

The Directors of the Company confirm that, as

at 31 December 2022, the Company has met the

targets on board diversity set out in Listing Rule

9.8.6(9)(a), with 66.67% of the individuals on

the Board of Directors being women (including

the senior independent director) and two out

of six directors being from minority ethnic

backgrounds.

Table 2 on page 45 has been constructed using

data provided by the Directors on a voluntary

basis. Each director received an email containing

the same table format as set out on page 45 and

was asked to tick the boxes applicable to them.

Directors’ Appointment and Policy on

Payment of Loss of Office

Each Director has an appointment letter with the

Company. The terms of the appointment provide

that a Director will be subject to re-election at

each Annual General Meeting (“AGM”).

A Director may be removed from office

following three months’ notice.

The Board of the Directors does not have a

formal policy requiring Directors to stand down

after a certain period. The Board of Directors has

established the Nomination and Remuneration

Committee which regularly reviews structure,

size, gender and composition of the Board

of Directors and makes recommendations

to the Board of Directors with regard to any

adjustments that seem appropriate.

Directors’ & Officers’ liability insurance cover

is maintained by the Company on behalf of the

Directors.

Appointment

•

All the Directors of the Company are non-

executive, appointed under the terms of

Letters of Appointment.

• The Directors of the Company will be

subject to election at the first AGM after

their appointment and to re-election

annually thereafter.

• New appointments to the Board of

Directors will be placed on the fee scale

applicable to all Directors of the Company

at the time of appointment (currently

US$45,000).

• No incentive or introductory fees will be

paid to encourage a directorship.

• The Directors of the Company are not

eligible for bonuses, pension benefits,

share options, long-term incentive

schemes or other benefits.

• The Company indemnifies the Directors

of the Company for costs, charges, losses,

expenses and liabilities which may be

incurred in the discharge of duties, as a

Director of the Company.

Performance, Service Contracts, Compensation

and Loss of Office

•

No Director of the Company has a service

contract.

• Compensation will not be due upon

leaving office.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

•

No Director of the Company is entitled to

any other monetary payment of any asset

of the Company.

Re-election of Directors

All Directors of the Company stand for re-

election annually at the AGM.

The Nomination and Remuneration Committee

considers the effectiveness of individual

directors and makes recommendations to the

Board of Directors in respect of re-elections.

Conflict of Interests

Directors are fiduciaries, so must act in good

faith and in the best interests of the Company,

avoid or recuse themselves from conflicts of

interest, and not use their position or knowledge

gained from the Company for any personal

profit or advantage (beyond their agreed

remuneration).

Only Directors of the Company who have no

material interest in the matter being considered

will be able to participate in the Board approval

process.

Directors of the Company are required to

disclose all actual and potential conflicts of

interest to the Chair in advance of any proposed

external appointment.

In deciding whether to approve an individual

Director’s participation, the other Directors of

the Company will act in a way they consider

to be acting in good faith in assessing the

materiality of the conflict in accordance with the

Company’s Articles.

The Board of Directors believes that its powers

of authorisation of conflicts of interest have

operated effectively.

The Board of Directors also confirms that its

procedures for the approval of conflicts of

interest, if any, have been followed by the

Directors.

As at 31 December 2022, none of the Directors

of the Company had a material interest in any

contract which is significant to the Company’s

business other than Dominic Scriven O.B.E

in relation to the investment management

agreement dated 23 May 2016 between the

Company and the Investment Manager (the

“Investment Management Agreement”) as

further detailed on page 54 under “Directors’

Interests in Contracts”.

The Board notes that an affiliate of the

Investment Manager holds two convertible

notes issued by Intensel Limited (“Intensel”) (a

Hong Kong company which provides climate

risk analysis) in an aggregate amount of

US$400,000, as disclosed by the Company in

previous Annual Reports.

Entela Benz-Saliasi continues to have a material

interest in, and is a director of, Intensel,

which may provide services in the future to

the Company (such as analysis of investee

companies), but any such services are not

expected to be materially significant.

As at 31 December 2022, the Company had not

engaged Intensel to provide any services.

The Directors’ holdings in the Company can be

found in the Report of the Board of Directors on

pages 53 to 55.

Performance Evaluation

The Board of Directors undertakes an annual

evaluation of its own performance and that of its

committees and individual Directors, including

the Chair.

The Board of Directors also considers the

independence of each Director.

The Board of Directors is satisfied that the

performance of each committee and individual

Director, including the Chair, is effective and that

they demonstrate commitment to their role.

Induction/Information and Professional

Development

The Directors of the Company are provided,

on a regular basis, with key information on the

Company’s policies, regulatory requirements

and internal controls.

Regulatory and legislative changes affecting

Directors’ responsibilities are advised to the

Board of Directors as they arise along with

changes to best practice from, amongst others,

the Company Secretary and the Auditor.

Advisers to the Company also prepare reports

for the Board of Directors from time to time on

relevant topics and issues.

When a new Director of the Company is

appointed to the Board of Directors, he/she

will be provided with all relevant information

regarding the Company and his/her duties and

responsibilities as a Director of the Company.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

In addition, a new Director of the Company

will also spend time with representatives of

the Investment Manager in order to learn more

about its processes and procedures.

Attendance at Scheduled Meetings of the

Board and its Committees for the Year

Table 1 on page 49 in the Report of the Audit

and Risk Committee lists the number of Board

and Committee meetings attended by each

Director.

During the year ended 31 December 2022,

there were four Board meetings, two Audit and

Risk Committee meetings, two Management

Engagement Committee meetings and three

Nomination and Remuneration Committee

meetings.

Relationship with the Investment

Manager, the Company Secretary and the

Administrator

The Board of Directors has delegated various

duties to external parties including the

management of the investment portfolio, the

custodial services (including safeguarding

of assets), registration services and day-to-

day company secretarial, administration and

accounting services.

Each of these contracts was entered into after

full and proper consideration by the Board of

Directors of the quality and cost of services

offered, including the control systems in

operation in so far as they relate to the affairs of

the Company.

Investment Manager

Dragon Capital Management (HK) Limited is the

Investment Manager of the Company.

Under the Investment Management Agreement,

the Investment Manager is entitled to receive a

monthly management fee for its services, which

accrues daily based on the prevailing NAV.

With effect from 1 July 2021, the management

fee was amended to 1.85% per annum of NAV for

the first US$1.25 billion of the Company’s NAV,

reducing to 1.65% per annum for NAV between

US$1.25 billion and US$1.5 billion and further

reducing to 1.50% per annum for NAV above

US$1.5 billion.

The Investment Manager is not entitled to a

performance fee.

The Investment Manager’s appointment will

continue until terminated under the provisions

of the Investment Management Agreement.

The Company has the right to terminate the

Investment Management Agreement giving

24 months’ notice in writing to the Investment

Manager.

The Investment Management Agreement may

also be terminated with immediate effect on

the occurrence of certain events, including

insolvency or material and continuing breach.

The Investment Manager has invested the

assets of the Company with a view to spreading

investment risk in accordance with its published

investment policy as set out in the Portfolio

Manager’s Report on pages 5 to 12.

The Board of Directors, on the advice of the

Management Engagement Committee, continues

to believe that, in light of the Company’s

strategy and performance, the appointment of

the Investment Manager on the terms set out

above and in Note 10 to the financial statements

is in the best interest of the Company’s

shareholders as a whole.

Both the Board of Directors and the Investment

Manager have formalised agreements and have

a clear understanding of the operational policies

laid out between the parties.

These rules are detailed in the Investment

Management Agreement or in other policies

such as the Company’s discount control policy.

The Board of Directors is ultimately responsible

for ensuring that sound systems of internal

control of the Company are maintained to

safeguard shareholders’ investments and the

Company’s assets.

The Audit and Risk Committee undertakes

an annual review of the effectiveness of the

Company’s systems of internal control and

the Directors of the Company believe that an

appropriate framework is in place to ensure that

sound systems of internal control are maintained

by the Company.

Furthermore, the Board of Directors has an

ongoing process for identifying, evaluating

and managing risks to which the Company is

exposed including those contained within the

performance of the investment management

activities.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

The principal risks and uncertainties facing

the Company are disclosed in the Report of

the Audit and Risk Committee on pages 46

to 49. These principal risks and uncertainties

are monitored as part of the normal oversight

process.

Risk management and the operation of the

internal control systems within the Company are

primarily the responsibility of the Investment

Manager, which operates under commercial

independence with flexibility to ensure that

principal risks and uncertainties are clearly

managed and that systems of control operate

effectively and efficiently.

The Investment Manager monitors the

Company’s activities on a daily basis and

ensures that the appropriate controls are

exercised over the Company’s assets.

The systems of internal control operated by

the Company are designed to manage rather

than eliminate risk of failure in achieving its

objectives and will only provide reasonable

and not absolute assurance against material

misstatement or loss.

The Board of Directors receives and considers

reports regularly from the Investment Manager,

with ad hoc reports and information supplied to

the Board of Directors as required.

The Investment Manager takes decisions as to

the purchase and sale of individual investments,

within the delegated authority established by

the Board of Directors.

The Investment Manager complies with the risk

limits as determined by the Board of Directors

and has systems in place to monitor cash flows,

the liquidity and other financial risk of the

Company.

The Investment Manager and Standard

Chartered Bank (the “Administrator”) also

ensure that all Directors of the Company

receive, in a timely manner, all relevant financial

information about the Company’s portfolio.

Representatives of the Investment Manager,

the Corporate Broker and the Company’s legal

advisers attend Board meetings as required,

enabling the Directors to probe further on

matters of concern.

The Directors have access to the advice and

service of the Company Secretary through its

appointed representative who is responsible to

the Board of Directors for ensuring that Board

procedures are followed, and that applicable

rules and regulations are complied with.

The Board of Directors, the Investment Manager

and those service providers operate in a

supportive, co-operative and open environment.

At each Board meeting, a representative of the

Investment Manager is in attendance to present

verbal and written reports covering local and

global macro-economy, its activity, the portfolio

and investment performance over the preceding

period.

Ongoing communication with the Board of

Directors is maintained by formal meetings and

ad-hoc conversations.

The Investment Manager ensures that Directors

of the Company have timely access to all

relevant management, financial and regulatory

information to enable informed decisions to be

made.

The Investment Manager contacts the Board of

Directors as required for specific guidance on

particular issues.

The Board of Directors has delegated the

exercise of voting rights attaching to the

securities held in the portfolio to the Investment

Manager.

The Investment Manager follows a proxy voting

policy when voting, which provides for certain

matters to be reviewed on a case-by-case basis.

Proxy voting is an important part of the

corporate governance process, and the

Investment Manager views its obligation to

manage the voting rights of the shares in

investee companies seriously as it would

manage any other asset. Consequently, votes

are cast both diligently and prudently, based on

the Investment Manager’s reasonable judgment

of what will best serve the financial and

governance considerations of the Company.

So far as is practicable, and with the

authorisation by the Board of Directors, the

Investment Manager votes at all of the meetings

called by companies in which the Company

invests.

In order to do this, the Investment Manager

agrees its stance on a variety of key corporate

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

governance issues, including disclosure and

transparency, board composition, committee

structure, director independence, auditor

rotation and social and environmental issues.

These guidelines form the basis of its proxy

voting decisions, although they are equally cast

on a case-by-case basis, taking into account the

individual circumstances of each vote.

The Investment Manager has strictly integrated

ESG considerations throughout its investment

process. The screening and assessment on the

ESG issues have been applied on all investee

companies, except for those in the financial

sector.

Administrator and Custodian

Custody and fund administration services are

undertaken by Standard Chartered Bank.

Company Secretary

The Company appointed Maples Secretaries

(Cayman) Limited as its Company Secretary with

effect from 21 October 2013.

Relations with Stakeholders

The Board of Directors recognises the benefits

of engaging with the shareholders of the

Company and other key stakeholders in order to

ensure that the Board of Directors is aware, and

can take account, of their views during Board

discussions and when the Board of Directors

makes decisions.

As a result, the following processes and

initiatives are in place:

Liaison With Investors

Since the COVID-19 pandemic began, the

Dragon Capital group has hosted a series

of webinars to keep clients and prospective

investors informed of developments in Vietnam.

These mainly focus on stock market, economy

and key investment themes, with Q&A where

discussions usually centre around the funds,

particularly the Company.

Environment and Community

The Dragon Capital group has engaged in the

following activities during the year under review:

• Obtained carbon neutral status for the

Dragon Capital group’s internal operations

through participation in an accredited

scheme involving the planting of trees

at primary schools to offset our carbon

footprint.

• Implemented a ‘Zero To Landfill’ waste and

recycling policy;

• Encouraged employees to reduce their

own environmental impact through a cycle

to work scheme;

• Procurement of all electricity usage in the

Dragon Capital group’s property portfolio

from renewable sources;

• Facilitated employees taking advantage of

‘Give As You Earn’ for personal charitable

donations;

• Held various employee events to raise

money for designated charities;

• Empowered young people in difficult

circumstances who show high learning

potential, especially young women, by

paying tuition fees throughout their study.

In addition to financial support, these

scholarships also focus on developing the

character, solidarity and mutual support

mindset of the students to motivate them

to contribute to the community after

graduation;;

• Actively participated in sponsorship of

students of The Foreign Trade University,

the next generation of financial market

participants; and

•

Under the motto of ‘Giving The Best To

The Children’, the Dragon Capital group,

in collaboration with charity organisations,

awarded scholarships to children who were

affected by the COVID-19 pandemic.

Shareholder Engagement

The Board believes that the maintenance of

good relations with shareholders is important

for the long-term prospects of the Company.

It has, since admission, sought to engage with

shareholders.

Where appropriate, the Chair and other

Directors of the Company are available for

discussion about governance and strategy

with major shareholders and the Chair ensures

communication of shareholders’ views to the

Board of Directors.

The Board of Directors receives a monthly

analysis of beneficial shareholders of the

Company.

During the year ended 31 December 2022, the

Investment Manager had periodic meetings

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

with shareholders to discuss aspects of the

Company’s performance.

The Directors of the Company are made fully

aware of their views.

The Chair and Directors of the Company make

themselves available as and when required to

address shareholder queries.

Shareholders wishing to raise questions

are encouraged to write to the Company’s

Administrator at the address shown on page 93

or contact the Investment Manager using the

contact details also provided on page 94.

The Board of Directors believes that the AGM

provides an appropriate forum for investors to

communicate with the Board of Directors and

encourages participation.

The AGM will be attended by at least one

Director of the Company.

There is an opportunity for individual

shareholders to question the Directors of the

Company at the AGM.

Details of proxy votes received in respect

of each resolution will be made available to

shareholders at the AGM and will be posted on

the Company’s website and the London Stock

Exchange’s website following the AGM.

The Chair actively leads and other Directors

participate in discussions on, or approves

the content of, all significant external

communications.

During this process, relevant stakeholders such

as the Investment Manager, the Auditors, the

Legal Adviser and the Corporate Broker are

engaged as and when required.

The Board of Directors aims to keep

shareholders informed and up to date with

information about the Company.

This includes information contained within

annual reports, interim (semi-annual) reports,

the PRIIPs KID, quarterly reports, monthly

reports, weekly reports, factsheets and frequent

webinars, as well as notices of any significant

event to registered shareholders.

The Company’s website (www.veil-

dragoncapital.com) displays the latest news,

price and performance information and portfolio

details. Shareholders also have the opportunity

to have the latest Company information

downloaded from the website.

The Company also releases information through

the London Stock Exchange.

Internal Audit

The Company does not have its own internal

audit function but places reliance on the internal

audit, compliance and other control functions of

its service providers.

Internal Control

The Audit and Risk Committee is responsible for

reviewing the effectiveness and efficiency of the

Company’s systems of internal control.

The Board of Directors reviews the ongoing

processes for identifying, evaluating and

monitoring the principal risks and uncertainties

faced by the Company.

Detailed information on the risk management

and internal controls in relation to the

Company’s financial reporting process can

be found in the Report of the Audit and Risk

Committee on pages 46 to 49.

Principal Risks and Uncertainties

The Directors confirm that they have carried

out a robust assessment of the principal risks

and uncertainties facing the Company, including

those that would threaten its business model,

future performance, solvency or liquidity on a

quarterly basis.

This includes an assessment of strategic,

business, financial, operational, IT and

compliance risks.

The principal risks and uncertainties identified

by the Board, together with the way in which

the Board seeks to manage those risks and

uncertainties, can be found in the Report of the

Audit and Risk Committee on pages 46 to 49.

The Directors of the Company have not

identified any other principal risk or uncertainty

during the reporting period.

Viability Statement

The Directors of the Company have assessed

the prospects of the Company over a three-year

period to 31 December 2025.

The Directors of the Company believe that this

period is appropriate because it would provide

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

the Investment Manager the time needed to

successfully unlock the value of the Company’s

underlying portfolio.

In their assessment of the viability of the

Company, the Directors of the Company have

considered each of the Company’s principal risks

and uncertainties, including the total collapse

of one or more of the Company’s significant

holdings, together with the Company’s income

and expenditure projections, credit facility and

assets that are easily realisable and that can be

sold to meet funding requirements.

Following the detailed analysis of the Board of

Directors, it has concluded that, based on the

Company’s current position, the principal risks

and uncertainties that the Company faces and

their potential impact on its future development

and prospects, there is a reasonable expectation

that the Company will be able to continue in

operation and meet its liabilities when they fall

due over the three-year period to 31 December

2025.

Going Concern

The Directors of the Company have reviewed

the liquidity of the Company’s portfolio and the

Company’s ability to meet its obligations as they

fall due for a period of at least 12 months from

the date that these financial statements were

approved.

On the basis of that review and after due

consideration of the balance sheet and activities

of the Company and the Company’s assets,

liabilities, commitments and financial recourses,

the Directors of the Company have concluded

that the Company has adequate resources

to continue its operational existence for the

foreseeable future.

For this reason, the Directors of the Company

have adopted the going concern basis in

preparing the financial statements.

Annual General Meeting

The AGM took place at 2406, 24/F, 9 Queen’s

Road, Central, Hong Kong on 14 July 2022 at

3:00pm (Hong Kong time). The result of the

AGM can be found on page 52.

Authority for Share Buyback and Discount

Management

The shareholders approved at the Company’s

AGM on 14 July 2022 a special resolution to

undertake share buybacks up to a maximum

amount equal to 14.99% of the issued share

capital.

This special resolution was passed and shall

expire on the earlier of 31 December 2023 and

the conclusion of the Company’s next annual

general meeting.

The intention of the Directors of the Company

is to implement an active discount management

policy if they believe it to be in shareholders’

interests as a whole and as a means of

correcting any imbalance between the supply of

and demand for the Company’s Ordinary Shares

of US$0.01 each (the “Shares”).

A share buyback programme was carried out

in 2022. The details of the share buyback

programme in 2022 can be found on the

London Stock Exchange website https://

www.londonstockexchange.com/stock/VEIL/

vietnam-enterprise-investments-limited/analysis.

In total 6,808,169 Shares were bought back

during the year, representing 3.08% of

the issued share capital, for an aggregate

consideration of US$ 61,104,723.

The Shares bought back are held in treasury.

As at 31 December 2022, the Company held

14,195,068 Shares in treasury.

Following the above buybacks, the total number

of Shares in issue was 206,725,678 (excluding

Shares held in treasury) as at 31 December 2022.

This number represents the total voting rights in

the Company and may be used by shareholders

as the denominator for the calculations by which

they can determine if they are required to notify

their interest in, or a change to their interest in

the Company under the Disclosure Guidance

and Transparency Rules (“DTR”) of Financial

Conduct Authority (“FCA”).

The Directors of the Company will only make

such buybacks through the market at prices

(after allowing for costs) below the relevant

prevailing NAV per Share under the guidelines

established from time to time by the Board.

Buybacks of Shares may be made only in

accordance with Cayman law, the DTR and

the authority granted by shareholders at the

Company’s AGM on 14 July 2022.

Under the FCA’s Listing Rules, the maximum

price that may be paid by the Company on

the buybacks of any Share pursuant to a

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

general authority is 105% of the average of the

middle market quotations for the Shares for

five business days immediately preceding the

date of buybacks or, if higher, that stipulated

by regulatory technical standards referred to

in Article 5(6) of the UK version of the Market

Abuse Regulation (EU) No. 596/2014 (which

forms part of UK law by virtue of the European

Union (Withdrawal) Act 2018).

Shares bought back by the Company may be

cancelled or held in treasury (up to a maximum

of 10% of the total number of issued Shares at

any time may be held in treasury).

Shares may be re-issued from treasury but,

unless previously approved by shareholders, will

not be issued at a price which, taking account

of issue expenses, would be less than the last

reported NAV per Share.

A buyback of Shares pursuant to the share

buyback programme on any trading day may

represent a significant proportion of the daily

trading volume in the Shares on the main market

of the London Stock Exchange (and could

exceed the 25% limit of the average daily trading

volume of the preceding 20 business days as

referred to in the UK version of Commission

Delegated Regulation (EU) No. 2016/1052

on buyback programmes, which forms part

of UK law by virtue of the European Union

(Withdrawal) Act 2018).

Any buyback of Shares by the Company will

be notified by an announcement through a

Regulatory Information Service by no later than

7:30am (UK time) on the following business day.

Shareholders should note that the buyback

of Shares by the Company is at the absolute

discretion of the Directors of the Company and

is subject, amongst other things, to the amount

of cash available to the Company to fund such

buybacks.

Accordingly, no expectation or reliance should

be placed on the Directors of the Company

exercising such discretion on any one or more

occasions.

Management Shares

Dragon Capital Limited holds 1,000

management shares of the Company.

Dragon Capital Limited is 100% owned by

Dragon Capital Group Limited which is the

ultimate parent company of the Investment

Manager of the Company.

The management shares shall not be redeemed

by the Company, and do not carry any right to

dividends.

In a winding up, management shares are entitled

to a return of paid-up nominal capital out of the

assets of the Company, but only after the return

of nominal capital paid up on Ordinary Shares.

The management shares each carry one vote on

a poll. Subject always to the requirements of the

rules of any exchange on which the Company’s

shares may be trading from time to time, the

holders of the management shares have the

right to appoint two individuals to the Board of

Directors.

Substantial Shareholdings

As at 31 December 2022, the following

shareholders owned more than 10% of the

Company’s issued Ordinary Share capital:

Inter Fund Management S.A.

• Number of Ordinary Shares held:

27,423,467

•

% of total Ordinary Shares in issue: 13.27%

Bill & Melinda Gates Foundation

• Number of Ordinary Shares held:

24,670,745

•

% of total Ordinary Shares in issue: 11.75%

Shareholders need to comply with the notification

and disclosure requirements set out in Chapter

5 of the Transparency Rules of the UK Financial

Conduct Authority.

If it comes to the attention of the Directors that

a shareholder has not within the requisite period

disclosed their holding in the Company, the

Company may, inter alia, at the discretion of the

Directors, notify the shareholder that their shares

in relation to the holding shall not be entitled to

a vote, either in person or in proxy, at any general

meeting of the Company.

Vietnam Enterprise Investments Limited - Annual Report 2022

Table 1: 17 Principles of the AIC Code in Practice During the Year Ended 31 December 2022

AIC Code Principle

VEIL’s application

A successful company is led

by an effective board, whose

role is to promote the long-

term sustainable success of

the company, generating

value for shareholders and

contributing to wider society.

(Incorporates relevant

content from UK Code

Principle A)

The Board of Directors meets at least quarterly to assess the

Company’s performance, viability, risk, and value over the short,

medium and long term.

The effectiveness of the Board of Directors and the Chair is

reviewed regularly as part of the internal control process led by

the Nomination and Remuneration Committee.

The board should establish

the company’s purpose,

values and strategy, and

satisfy itself that these and

its culture are aligned.

All

directors must act with

integrity, lead by example

and promote the desired

culture. (UK Code Principle B)

The Board of Directors holds quarterly strategy meeting during

which it can discuss important issues faced by the Company

and the industry, and exchange ideas about the future outlook

of the business.

The Board of Directors agrees a strategy and monitors

performance against this agreed strategy on an ongoing basis.

The Board of Directors hires an external third party to conduct

a formal evaluation on its own performance every three years.

The last Board evaluation report was done in 2021 by Amrop, a

global leadership Advisory and Executive consultant firm. The

next Board evaluation will be done in 2024.

The board should ensure

that the necessary resources

are in place for the company

to meet its objectives and

measure performance against

them.

The board should

also establish a framework

of prudent and effective

controls, which enable risk to

be assessed and managed.

(UK Code Principle C)

The Board of Director considers that the Company is

adequately resourced to meet its objectives and is satisfied

that it is able to effectively measure its performance against

them.

The Board of Directors has established a schedule of internal

controls and key risks, which enable it to plan, measure and

manage how it mitigates threats to its performance, and

prioritises its resources in doing so.

These schedules are reviewed on a quarterly basis by its Audit

and Risk Committee.

The Investment Manager also reports to the Board of Directors

on the Company’s performance when measured against its

industry peers at each Board meeting, from which the Board of

Directors is able to determine whether or not its performance

is satisfactory, and what actions, if any, are needed to make

improvement.

5. Corporate Governance Statement (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

AIC Code Principle

VEIL’s application

In order for the company

to meet its responsibilities

to shareholders and

stakeholders, the board

should ensure effective

engagement with, and

encourage participation from,

these parties.

(UK Code

Principle D)

The Board of Directors receives regular reports from the

Investment Manager in relation to shareholder engagement as

part of an extensive investor relations programme.

Shareholders are encouraged to attend the Annual General

Meeting (“AGM”), where the Board of Directors presents on

investment performance and strategy.

Whenever physical attendance is not possible, measures are

put in place for shareholders to submit any questions to the

Board of Directors and the Investment Manager in advance of

the meeting).

Shareholders are invited to attend various webinars and

presentations, where the Investment Manager provide an

update of the Company’s performance and the stock market.

Stakeholders are also able to access and review all key

Company literature on its website (www.veil-dragoncapital.

com).

Questions may be directed to the Board of Directors or the

Investment Manager, via the registered office or a dedicated

email address (veil@dragoncapital.com).

The Investment Manager also reports to the Board of Directors

regularly on its broader stakeholder engagement, as set out

under Relations with stakeholders on page 35.

E. [Intentionally left blank]*

The chair leads the board and

is responsible for its overall

effectiveness in directing

the company.

They should

demonstrate objective

judgement throughout their

tenure and promote a culture

of openness and debate.

addition, the chair facilitates

constructive board relations

and the effective contribution

of all non-executive directors,

and ensures that directors

receive accurate, timely and

clear information.

(UK Code

Principle F)

The Chair of the Company encourages active participation

at Board meetings, including setting the agenda items for

discussion.

The Board of Directors receives a comprehensive suite of

regular information, including in-depth reports from the

Investment Manager of performance, attribution, transactions

and exposures on a monthly and quarterly basis.

The quarterly Board meetings also include detailed reports

on the financial and operational activities of the Investment

Manager and the Dragon Capital group, including costs,

liquidity, risk, investor relations, PR, IT, regulatory, legal and

compliance matters and HR.

At these meetings, the Investment Manager also provides a

quarterly update on environmental, social and governance

(“ESG”) integration, which is a standing agenda item.

The Board also invites relevant service providers to present

their activities and insights including the Company’s broker,

fund administrator, and auditor.

Furthermore, Board meetings provide the opportunity for

the Chairs of each Committee to present a summary of the

activities of their Committee, with minutes from the meetings

included in the Board papers.

5. Corporate Governance Statement (Continued)

* In accordance with the AIC Code, Principle E from the UK Code is not relevant for externally managed investment companies.

Vietnam Enterprise Investments Limited - Annual Report 2022

AIC Code Principle

VEIL’s application

The board should consist of

an appropriate combination

of directors (and, in

particular, independent

non-executive directors)

such that no one individual

or small group of

individuals dominates the

board’s decision making.

(Incorporates relevant

content from UK Code

Principle G)

The Board of Directors has delegated responsibility to key

Committees, as well as engaging the Investment Manager under

a formal investment management and services agreement.

As at 31 December 2022, the Board of Directors comprised

an Independent Non-executive Chair and four Independent

Non-executive Directors, each of whom is independent of the

Investment Manager, and one Non-Independent Non-executive

Director.

There is a clear division of responsibilities between the Board

of Directors and the Investment Manager.

As such, the Board of Directors considers that its decision

making is not dominated by an individual or small group of

individuals.

Non-executive directors

should have sufficient

time to meet their board

responsibilities. They

should provide constructive

challenge, strategic guidance,

offer specialist advice and

hold third party service

providers to account.

(Incorporates relevant

content from UK Code

Principle H)

The Directors of the Company consider they have sufficient

time to meet their Board responsibilities.

The Board of Directors meet quarterly to discuss the

Company’s activities with the Investment Manager.

At such meetings, the Board of Directors has the opportunity

to provide constructive challenge and strategic guidance

in relation to both the Company’s and its service providers’

performance and methods through direct communication with

the Investment Manager.

The Board of Directors carries out a formal review of its service

providers’ performance (including the Investment Manager) on

an annual basis.

The board, supported by the

company secretary, should

ensure that it has the policies,

processes, information, time

and resources it needs in

order to function effectively

and efficiently.

(UK Code

Principle I)

Maples Secretaries (Cayman) Limited provides company

secretarial services to the Company and, together with external

specialist advisors, ensures that Board of Directors procedures

and any applicable rules and regulations are observed.

Such services also include advice and support to the Board of

Directors on all governance matters and on the discharge of

their duties as Directors of the Company.

The Directors of the Company are able to take independent

external professional advice to assist with the performance of

their duties at the Company’s expense.

5. Corporate Governance Statement (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

AIC Code Principle

VEIL’s application

Appointments to the

board should be subject

to a formal, rigorous and

transparent procedure, and

an effective succession plan

should be maintained.

Both

appointments and succession

plans should be based on

merit and objective criteria

and, within this context,

should promote diversity

of gender, social and ethnic

backgrounds, cognitive

and personal strengths.

(Incorporates relevant

content from UK Code

Principle J)

The Nomination and Remuneration Committee is responsible

for proposing candidates for appointment to the Board of

Directors and for overseeing the recruitment process.

The Nomination and Remuneration Committee comprises of

only Independent Directors.

The Nomination and Remuneration Committee applies

principles of independence, transparency and objectivity in

the recruitment of any new Director, and promotes diversity

and balance in terms of gender, ethnicity, and professional

backgrounds. All appointments are based on merit, with a focus

on identifying and seeking the required skills, expertise and

experience that is needed to supplement the existing Board.

The board and its committees

should have a combination

of skills, experience and

knowledge.

Consideration

should be given to the length

of service of the board as

a whole and membership

regularly refreshed.

(UK

Code Principle K)

The varying backgrounds and wide-ranging experience of

the Directors of the Company, including in the investment

and financial services sectors, commercial businesses and

academia, ensures broad cognitive diversity, which is viewed as

key in assisting effective challenge and discipline.

Biographies of the Board of Directors are set out on pages

50 to 51 and demonstrate the strength of experience in the

areas required to provide effective strategic leadership and

appropriate governance of the Company.

The Board of Directors seeks to ensure an appropriate balance

between continuity and experience, and the positive benefits

of refreshing membership and the development of a diverse

Board.

During the year ended 31 December 2022, one new

Independent Non-executive Director was appointed.

Annual evaluation of the

board should consider

its composition, diversity

and how effectively

members work together

to achieve objectives.

Individual evaluation should

demonstrate whether

each director continues to

contribute effectively.

(UK

Code Principle L)

The Board of Directors conducts an annual review of its

performance and that of its individual Director at its year-end

Board meeting.

During this annual review, evaluation is made of, and

consideration is given to, the effectiveness of the Board of

Directors’ current methods of working, both with itself, and

with the Investment Manager.

Practical issues are highlighted and a collaborative approach

is used with the Investment Manager to seek improvement in

areas where it is deemed to be beneficial.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

AIC Code Principle

VEIL’s application

The board should establish

formal and transparent

policies and procedures to

ensure the independence

and effectiveness of external

audit functions and satisfy

itself on the integrity of

financial and narrative

statements. (Incorporates

relevant content from UK

Code Principle M)

The Board of Directors has delegated the assessment of the

external audit function and the review of the integrity of

the Annual Report and Interim Report to the Audit and Risk

Committee.

KPMG has been the Company’s external auditor since 2008 and

the Audit and Risk Committee has undertaken an assessment

of KPMG’s performance in respect of the annual statutory

audit of the Company for the year ended 31 December 2022,

which concluded that KPMG had performed satisfactorily

(see “External Auditor” in the Report of the Audit and Risk

Committee on pages 46 to 49).

The Audit and Risk Committee also performed a detailed

review of the 2021 Annual Report, the 2022 Interim Report

and this 2022 Annual Report, as well as reviewing supporting

papers from the Investment Manager and other service

providers, in order to ensure the integrity of the statements.

The activities of the Audit and Risk Committee can be found in

the Report of the Audit and Risk Committee on pages 46 to 49.

The board should present

a fair, balanced and

understandable assessment

of the company’s position

and prospects.

(UK Code

Principle N)

The Audit and Risk Committee reviewed the financial and

narrative statements in the 2022 Interim Report and 2022

Annual Report, as well as supporting papers and evidence from

the Investment Manager in relation to this area.

The Audit and Risk Committee concluded that the published

reports were consistent with the ‘fair, balanced and

understandable’ requirement and advised the Board of

Directors accordingly.

The Board of Directors considered the Audit and Risk

Committee’s advice and performed its own review before

reaching the same conclusion.

The board should establish

procedures to manage risk,

oversee the internal control

framework, and determine

the nature and extent of the

principal risks the company

is willing to take in order

to achieve its long-term

strategic objectives.

(UK

Code Principle O)

Day-to-day risk management is undertaken by the Investment

Manager and overseen by the Audit and Risk Committee which

receives detailed reports quarterly on the risk management and

internal control functions.

The Dragon Capital group’s systems of internal control are

administered by the Investment Manager and designed to

manage as far as possible the principal risks of the Company.

Further information can be found in the Principal Risks and

Uncertainties and Viability Statement sections in this Corporate

Governance Statement on pages 36 to 37 and in the Report of

the Audit and Risk Committee on pages 46 to 49.

Vietnam Enterprise Investments Limited - Annual Report 2022

5. Corporate Governance Statement (Continued)

AIC Code Principle

VEIL’s application

Remuneration policies

and practices should

be designed to support

strategy and promote long-

term sustainable success.

(Incorporates relevant

content from UK Code

Principle P)

The Directors’ remuneration policy is in accordance with

the provisions of the UK Code for Non-executive Directors’

remuneration.

The Directors of the Company receive fixed fees without any

performance related elements.

The Nomination and Remuneration Committee also has

oversight of the Company’s remuneration policies and

practices, and seeks to ensure these are tied to the strategy

and long-term sustainable success of the Company.

A formal and transparent

procedure for developing

policy on remuneration

should be established.

director should be involved

in deciding their own

remuneration outcome.

(Incorporates relevant

content from UK Code

Principle Q)

As set out in the Directors’ Remuneration Report disclosed

in this Corporate Governance Statement, the Directors of the

Company are paid on a fixed-fee basis, as recommended by the

Nomination and Remuneration Committee, and approved by

the Board of Directors.

Dominic Scriven O.B.E has permanently waived his rights to

receive Directors’ fees for his services as a Director of the

Company.

Directors should exercise

independent judgement and

discretion when authorising

remuneration outcomes,

taking account of company

and individual performance,

and wider circumstances.

(UK Code Principle R)

The Directors of the Company are remunerated on the basis

of a flat standard fee supplemented by additional Committee

membership and chairmanship fees.

There are no performance-related aspects to Directors’

remuneration.

Vietnam Enterprise Investments Limited - Annual Report 2022

Table 2:

Board Diversity Data Collection

(a) Table for reporting on gender identity or sex

Number

of board

members

Percentage of

the board

Number

of senior

positions on

the board

(CEO, CFO,

SID and Chair)

Number in

executive

management*

Percentage

of executive

management*

Men

33.33%

N/A

Women

66.67%

N/A

(b) Table for reporting on ethnic background

Number

of board

members

Percentage of

the board

Number

of senior

positions on

the board

(CEO, CFO,

SID and Chair)

Number in

executive

management*

Percentage

of executive

management*

White British

or other White

(including

minority-white

groups)

66.67%

N/A

Mixed/Multiple

Ethnic Groups

Asian/Asian

British

33.33%

N/A

Black/African/

Caribbean/Black

British

Other ethnic

group, including

Arab

Not specified/

prefer not to say

* There are no executive positions within the Company.

5. Corporate Governance Statement (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

Composition

The Audit and Risk Committee is chaired by

Entela Benz-Saliasi and its members include

Sarah Arkle and Low Suk Ling who were all

Independent, Non-executive Directors.

The Audit and Risk Committee met twice during

the year under review. Table 1 on page 49 in the

Report of the Audit and Risk Committee shows

the attendees of the Audit and Risk Committee

meetings.

The Company’s Auditors and Investment

Manager’s representatives were invited to attend

meetings as necessary.

In the opinion of the Board, the Audit and Risk

Committee of the Company complies with the

recommendations and requirements of the AIC

Code of Corporate Governance (the “AIC Code”)

since the listing on the main market of the

London Stock Exchange on 5 July 2016.

Role and Responsibilities

The role of the Audit and Risk Committee is to

assist the Board in applying financial reporting

and internal control principles and to maintain

an appropriate relationship with the Auditors.

The Audit and Risk Committee assesses the

prospects of the Company and principal risks

and uncertainties facing the Company.

The Audit and Risk Committee, as a result,

reasonably expects that the Company will be

able to continue in operation and meet its

liabilities as they fall due over the period of their

assessment.

The responsibilities are set out in formal Terms

of Reference which are regularly reviewed. In the

year under review, the main duties undertaken

were:

Financial Reporting

The Audit and Risk Committee shall monitor

the integrity of the financial statements of

the Company, including its annual and interim

reports, interim management statements and

any other formal announcement relating to its

financial performance and review significant

financial reporting issues and judgments which

they contain.

Where the Audit and Risk Committee is not

satisfied with any aspect of the proposed

financial reporting, it shall report its views to the

Board.

Risk

The Audit and Risk Committee shall oversee the

process of identifying, assessing, and controlling

both the Company and portfolio risks to prevent,

mitigate or transfer such risks.

In particular, the Audit and Risk Committee shall

review and challenge where necessary:

• Investment risks comprising, but not

limited to, market, credit, liquidity,

leverage, political, compliance risk and

ESG and climate change-related risks; and

• Business operational risks.

Internal Controls and Risk Management Systems

The Audit and Risk Committee shall review the

adequacy and effectiveness of the Company’s

internal financial controls and internal control

and risk management systems and review and

approve the statements to be included in the

annual report concerning internal controls and

risk management.

Internal Audit

The Audit and Risk Committee shall consider

at least once a year whether there is a need

for an internal audit function and provide an

explanation of the reasons for an absence of

such a function for inclusion in the relevant

section of the annual report.

The Audit and Risk Committee had also

reviewed the ESG market practice and climate

change related risks during the reporting year.

In particular, the Company was asked to switch

from ESG score level to ESG KPI disclosure.

In addition, it will implement to benchmark

transition risk to local and EM benchmarks.

External Audit

The Audit and Risk Committee shall monitor

and review the external auditor’s quality,

independence and objectivity and make

recommendations to the Board in relation to the

appointment, re-appointment and removal of

the external auditor.

Conflicts

The Audit and Risk Committee shall provide

oversight and guidance to the Board in relation

to actual and potential conflicts of interest

between the Company and any related party or

provider of services to the Company.

6. Report of the Audit and Risk Committee

Vietnam Enterprise Investments Limited - Annual Report 2022

6. Report of the Audit and Risk Committee (Continued)

Related parties shall mean the members of the

Board, the Investment Manager and/or its parent

and sister companies (the “Investment Manager

Group”) together with the owners and directors

of the Investment Manager Group.

Internal Controls and Risk Management

Systems in Relation to the Company’s

Financial Reporting Process

The Audit and Risk Committee is responsible for

reviewing the effectiveness of the Company’s

system of internal control.

The Board reviews the ongoing processes for

identifying, evaluating and monitoring the

principal risks and uncertainties faced by the

Company.

This process, together with key procedures

established with a view to providing effective

and efficient financial control, has been in place

throughout the year ended 31 December 2022.

The Board recognises that these control

systems can only be designed to manage, rather

than eliminate, the risk of failure to achieve

business objectives, and provide reasonable,

but not absolute, assurance against material

misstatement or loss.

Risk assessment and the review of internal

controls are undertaken by the Audit and Risk

Committee, in the context of the Company’s

overall investment objective.

During the reporting period, the Audit and

Risk Committee reviewed and improved the

existing Enterprise Risk Management Framework

template which is being used to monitor

the various principal risks and uncertainties

including the key business, operational,

compliance, ESG and financial risks facing the

Company.

Given the nature of the Company’s activities and

the fact that most functions are sub-contracted,

the Directors have obtained information from

key third party service providers regarding the

controls operated by them in order to enable the

Board to make an appropriate risk and control

assessment.

The Board has reviewed the scope of the Audit

and Risk Committee and is satisfied that all

principal risks and uncertainties to which the

Company is subject are appropriately managed.

External Auditor

The Audit and Risk Committee reviews and

makes recommendations to the Board with

regard to the re-appointment of the external

auditor, taking into account its qualifications,

expertise and resources, independence and the

effectiveness of the external audit process.

The Audit and Risk Committee meets with the

external auditor at least once a year to discuss

any key issue arising from the audit and/or

monitor the external auditor’s compliance with

the relevant ethical and professional guidance

on the rotation of the audit partner, the level

of fees paid by the Company compared to the

overall fee income of the firm, office and partner

and other related requirements.

KPMG Limited (“KPMG”) was first appointed

as the Company’s external auditor in 2008 and

during the audit tenure from 2008 to 2022, four

audit partners have been rotated to perform the

service.

KPMG’s rotation policies are consistent with

the Code of Ethics of the International Ethics

Standards Board for Accountants (the “IESBA”)

and require the firm to comply with any stricter

applicable rotation requirement.

The firm’s partners are subject to periodic

rotations of their responsibilities for audit

clients under applicable laws, regulations,

independence rules and KPMG International

policy.

These requirements place limits on the number

of consecutive years that partners in certain

roles may provide statutory audit services to a

client, followed by a ‘time-out’ period during

which time these partners may not participate in

the audit, provide quality control for the audit,

consult with the engagement team or the client

regarding technical or industry-specific issues or

in any way influence the outcome of the audit.

During the reporting period, a new partner has

been assigned to audit the Company’s financial

statements and processes.

KPMG also has policies, which are consistent

with the IESBA principles and applicable laws

and regulations, which address the scope of

services that can be provided to audit clients.

KPMG’s policies require the audit engagement

partner to evaluate the threats arising from

the provision of non-audit services and the

safeguards available to address those threats.

Vietnam Enterprise Investments Limited - Annual Report 2022

Fees paid to KPMG for audit, audit-related, and

non-audit services are set out in Note 10 to the

financial statements and summarised below.

In order to safeguard the auditor’s

independence and objectivity, the Company

only engaged a KPMG affiliate to perform non-

audit services where such affiliate was clearly

best suited to perform the service, and the

provision of service did not pose any conflict of

interest with the audit or audit-related work.

• 2022: US$114,655 (including fees of FRC’s

inspection: US$32,400)

• 2021: US$82,000

The Audit and Risk Committee reviews the

effectiveness and efficiency of the audit

provided by KPMG on an annual basis and

remains satisfied with the effectiveness

and efficiency of the audit based on their

performance.

The Financial Reporting Council (the “FRC”) in

the UK performed a routine review of the audit

of the financial statements of the Company for

the year ended 31 December 2020.

The FRC’s assessment for the audit work of the

external auditor, i.e. KPMG, was concluded with

no key findings arising from the review.

Audit Review

The Audit and Risk Committee reviewed the

performance and qualification of the external

auditor every year as part of good corporate

governance.

The conclusion remains that there are limited

choices for auditors in Vietnam with relevant

experience and that KPMG is the only FRC

qualified auditor in Vietnam.

Prior to the Audit and Risk Committee meeting

held on 5 April 2019, the Chair of the Audit

and Risk Committee requested a review of the

external auditor, KPMG.

The Audit and Risk Committee conducted

a tender process in order to make

recommendations to the Board of Directors

regarding which external auditor should be

appointed for the Company going forward.

The Audit and Risk Committee engaged with

various audit firms as a potential replacement,

however, only one audit firm responded

positively.

The Audit and Risk Committee noted that the

candidate was presently the internal auditor of

the Dragon Capital group which could pose a

conflict of interest.

In addition, the candidate’s Vietnam office is not

yet approved by the FRC.

As such the VEIL board is satisfied that there are

no independence concerns.

In addition, the balance of fees paid to the

auditor is reasonable and that the VEIL has

a track record of disclosing the appropriate

information about these services in its filings.

The Audit and Risk Committee reviews the

effectiveness and efficiency of the audit

provided by KPMG and remains satisfied with

the effectiveness and efficiency of the audit.

The Board of Directors accepted and approved

this conclusion at a board meeting held shortly

after the relevant Audit and Risk Committee

meeting.

The re-appointment of KPMG was proposed

at the next AGM held on 14 July 2022 and the

resolution was passed.

Entela Benz-Saliasi

Chair of the Audit and Risk Committee

Vietnam Enterprise Investments Limited

25 April 2023

6. Report of the Audit and Risk Committee (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

6. Report of the Audit and Risk Committee (Continued)

Table 1: Attendance of the Board and the Committees Meetings for the Year Ended 31 December

2022

Director

Board meetings

ARC meetings

MEC meetings

NRC meetings

Gordon Lawson

4/4

1/2

2/2

Entela Benz-Saliasi

4/4

2/2

3/3

Vi Peterson

4/4

2/2

3/3

Low Suk Ling

4/4

2/2

3/3

Sarah Arkle

4/4

1/2

Dominic Scriven O.B.E

4/4

Stanley Chou

2/4

1/2

ARC = Audit and Risk Committee / MEC = Management Engagement Committee / NRC = Nomination and Remuneration Committee

On 30 June 2022, Stanley Chou stepped down as the Chair of the Company and resigned from the

Board. Gordon Lawson replaced Stanley Chou as the Chair of the Company. Entela Benz-Saliasi

replaced Gordon Lawson as the senior independent non-executive director.

On 1 July 2022, the Board Committees were reconstituted as follows:

Committee

Chair

Member

Audit and Risk

Entela Benz-Saliasi

Sarah Arkle

Low Suk Ling

Management Engagement

Sarah Arkle

Gordon Lawson

Vi Peterson

Nomination and Remuneration

Vi Peterson

Entela Benz-Saliasi

Low Suk Ling

Sarah Arkle

Independent

Non-executive

Director

Low Suk Ling

Independent

Non-executive Director

Vi Peterson

Independent

Non-executive Director

Entela Benz-Saliasi

Senior Independent

Non-executive Director

Gordon Lawson

Chair & Independent

Non-Executive Director

Dominic Scriven O.B.E

Non-executive

Director

Vietnam Enterprise Investments Limited - Annual Report 2022

7. Board of Directors

Independent Non-executive Director

Chair of the Nomination and Remuneration Committee

(Appointed April 2018)

Vi Peterson

Vi is an international business consultant based in Melbourne

Australia, with extensive experience across a diverse range of

senior management roles and non-executive directorships in

the private sector, public sector (trade diplomacy) and not-for-

profit / university sector. She came back in 1993 to establish the

ANZ Bank’s greenfield operations in Vietnam. She later served

as Australia’s Senior Trade Commissioner to Vietnam until 1999.

In 2000 she established a consultancy firm specialising in the

provision of strategic advice to companies operating in emerging

markets, helping them to navigate the complex political, cultural

and regulatory environment in Asia. Concurrently until 2021, she

was the co-founder and Executive Director of The Alliance for

Safe Children, a US not-for-profit corporation with a global mission to reduce the rising toll of child

mortality arising from preventable injuries in Asia by advocating and raising funds for prevention

program with governments and institutional donors.

Chair & Independent Non-Executive Director

(Appointed July 2014 / Chari from July 2022)

Gordon Lawson

Educated at Birmingham University, Gordon earned an MBA

from Cranfield Business school, and worked with Salomon

Brothers/Citigroup, London before founding Pendragon in

1999. He later became Chairman of Indochina Capital Vietnam

plc. He is an advisor and director of various companies. He

was also certified from Society of Investment Analysts exams.

During his professional career and as Chair of Audit and Risk

Committee, he has analysed audited financial statements in

depth as well as worked with auditors for various accounting

policies, practices, and governance.

Senior Independent Non-executive Director

Chair of the Audit and Risk Committee

(Appointed May 2019 / Senior INED from July 2022)

Entela Benz-Saliasi

Ms. Benz-Saliasi holds a PhD in Financial Asset Management and

Engineering. She has served as Adjunct Associate Professor at

Department of Finance, HKUST Business School in Hong Kong for

more than 13 years. Alongside teaching, she has been acting as a

consultant for Impact and ESG Investing since 2007. She has done

extensive industry work on the value of ESG and Climate Risk on

company financial performance. She is the founder and CEO of

Intensel, a fintech company that leveraged AI/ML and geospatial

data for assessing climate risks. She sits on various boards in Hong

Kong and the Philippines. As a financial professional she worked in

the Investment bank and hedge fund industry before moving into

a more academic role. In that role, she acquired comprehensive

experience in analyzing financial statements, accounting policies,

practices, and governance.

Vietnam Enterprise Investments Limited - Annual Report 2022

Independent Non-executive Director

(Appointed July 2021)

Low Suk Ling

Suk Ling currently serves as General Counsel for Marsh

McLennan Asia, the largest operating company of Marsh &

McLennan Companies, a global professional services firm

with business in risk management, insurance and investment

advising.

In this role, she looks after legal and compliance at

Marsh and Mercer in Asia.

Independent Non-executive Director

Chair of the Management Engagement Committee

(Appointed January 2022)

Sarah Arkle

Sarah Arkle is an investment professional with over thirty

years’ experience. Originally working for Save and Prosper

Group and WI Carr (Overseas) Ltd, she joined Threadneedle

Asset Management (now Columbia Threadneedle) in 1983.

She held various positions there, including ten years as Chief

Investment Officer, before retiring in 2011. Since 2011 Sarah

has been a member of the Prince’s Trust Women Supporting

Women Group and was a non-Executive Director of F&C

Investment Trust and Chair of JPMorgan Emerging Markets

Investment Trust.

Non-executive Director

(Appointed May 1995)

Dominic Scriven O.B.E

Dominic graduated from Exeter University in 1985 with a

degree in Law and Sociology. Shortly thereafter, he went

to Hong Kong, where he worked in fund management and

broking with M&G, Sun Hung Kai, Citicorp and Peregrine.

In 1991 he moved to Hanoi and studied Vietnamese for two

years before co-founding Dragon Capital in 1994. Dominic

was awarded an OBE in 2006 for his contribution to relations

between the UK and Vietnam. For his work in developing the

country’s capital markets, the HCMC People’s Committee

gave him a Recognition Award in 2008, and the President of

Vietnam bestowed a Labor Order, Third Class on him in 2014.

His interests and passions range from Vietnamese art – to

biodiversity and eliminating the illegal trade in wildlife.

7. Board of Directors (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

8. Annual General Meeting

Annual General Meeting Summary

The Board of Directors of the Company announced that at the Annual General Meeting of the

Company held on 14 July 2022 (the “2022 AGM”), the resolutions numbered 1 to 9 in the notice of

meeting for the 2022 AGM were passed by the required majority on a poll vote.

Special Resolution

(9) To authorise the Company generally and

unconditionally to make market purchases

of its Ordinary Shares of US$0.01 par value

each provided that:

(i)

the maximum aggregate number

of Ordinary Shares that may be

purchased is 14.99 per cent. of issued

and outstanding share capital as at 31

May 2022 (i.e. 31,302,245 shares);

(ii) the minimum price which may be paid

for each Ordinary Share is US$0.01;

(iii) the maximum price (excluding

expenses) which may be paid for each

Ordinary Share is the higher of:

(a) 105 per cent. of the average

market value of an Ordinary

Share in the Company for the five

business days prior to the day the

purchase is made; and

(b) the higher of the price of the

last independent trade and the

highest current independent

bid as stipulated by Technical

Standards referred to in Article

5 (6) of the UK Market Abuse

Regulation; and

(iv) the authority conferred by this

resolution shall expire on 31 December

2023 or, if earlier, at the conclusion

of the Company’s next annual general

meeting save that the Company may,

before the expiry of the authority

granted by this resolution, enter into a

contract to purchase Ordinary Shares

which will or may be executed wholly

or partly after the expiry of such

authority.

Ordinary Resolutions

To receive and adopt the audited financial

statements for the year ended 31 December

2021 together with the auditor’s and Directors’

reports thereon..

(1)

To re-appoint KPMG Limited of Vietnam as

auditor of the Company and to authorise

the Board to fix their remuneration.

(2) To re-elect Gordon Lawson as a Director of

the Company.

(3) To re-elect Vi Peterson as a Director of the

Company.

(4) To re-elect Entela Benz-Saliasi as a

Director of the Company.

(5) To re-elect Low Suk Ling as a Director of

the Company.

(6) To elect Sarah Arkle as a Director of the

Company.

(7) To re-elect Dominic Scriven as a Director

of the Company.

Vietnam Enterprise Investments Limited - Annual Report 2022

9. Report of the Board of Directors

The Directors of Vietnam Enterprise Investments

Limited (“the Company”) present their report

and the audited financial statements of the

Company for the year ended 31 December 2022.

Principal Activity

The Company is an investment holding company

incorporated as an exempted company with

limited liability in the Cayman Islands on 20

April 1995. The shares of the Company have

been listed on the main market of the London

Stock Exchange since 5 July 2016 (until 4 July

2016: listed on the Irish Stock Exchange). The

principal activity of the Company is investing

directly or indirectly in a diversified portfolio of

listed and unlisted securities in Vietnam.

Results and Dividends

The Company’s profit for the year ended 31

December 2022 and its financial position at

that date are set out in the attached financial

statements. The Directors have taken the

decision not to pay a dividend in respect of the

year ended 31 December 2022 (2021: Nil).

Share Capital

Details of movements in the Company’s share

capital during the year are presented in Note

8. As at 31 December 2022, the Company

had 206,725,678 Ordinary Shares and 1,000

Management Shares outstanding (31 December

2021: 213,533,847 Ordinary Shares and 1,000

Management Shares).

Directors

The Directors of the Company during the year

were:

Non-executive Director:

• Dominic Scriven O.B.E

Independent Non-executive Directors:

•

Gordon Lawson – Chair (from 1 July 2022)

•

Stanley Chou – Chair (until 30 June 2022)

• Vi Peterson

• Entela Benz–Saliasi – Senior Independent

Non-executive Director (from 1 July 2022)

• Low Suk Ling

• Sarah Arkle (from 5 January 2022)

In accordance with Article 91 of the Restated

and Amended Memorandum and Articles of

Association (the “Articles”), the Independent

and Non-independent Non-executive Directors

are required to submit themselves for re-

election at the next occurring Annual General

Meeting (“AGM”). Save for Stanley Chou, who

resigned from the Board effective 30 June 2022,

all of the Independent Non-executive Directors

were duly re-appointed at the AGM held on

14 July 2022 following the expiry of their

respective terms. Dominic Scriven O.B.E also

submitted himself for re-election and was duly

re-appointed.

Directors’ Rights to Acquire Shares or

Debentures

At no time during the year was the Company

a party to any arrangement to enable the

Company’s Directors or their respective spouses

or minor children to acquire benefits by means

of the acquisition of shares in, or debentures of,

the Company or any other body corporate.

Directors’ Interests in Shares

Dominic Scriven O.B.E, a Non-executive Director

of the Company, is a beneficial shareholder of

the Company, holding 86,423 Ordinary Shares

of the Company as at 31 December 2022 (31

December 2021: 36,423 Ordinary Shares).

Dominic Scriven O.B.E also has indirect

interests in shares of the Company as he is

a key shareholder of Dragon Capital Group

Limited, the parent company of Dragon Capital

Limited which holds the Management Shares

of the Company. Dragon Capital Group Limited

is also the ultimate parent company of Dragon

Capital Management (HK) Limited, which

is the Investment Manager of the Company

and Dragon Capital Markets Limited. As at 31

December 2022, Dragon Capital Markets Limited

beneficially held 1,685,359 Ordinary Shares of

the Company for investment and proprietary

trading purposes (31 December 2021: 1,010,359

Ordinary Shares).

Gordon Lawson, Chair of the Company, is a

beneficial shareholder of the Company, holding

25,000 Ordinary Shares of the Company as at

31 December 2022 (31 December 2021: 25,000

Ordinary Shares).

Sarah Arkle, an Independent Non-executive

Director, is a beneficial shareholder of the

Company, holding 9,696 Ordinary Shares of the

Company as at 31 December 2022 (31 December

2021: 4,696 Ordinary Shares).

Vietnam Enterprise Investments Limited - Annual Report 2022

Apart from the above, no other Director had a

direct or indirect interest in the share capital of

the Company, or its underlying investments at

the end of the year, or at any time during the

year.

Directors’ Interests in Contracts

There were no contracts of significance in

relation to the Company’s business in which a

Director of the Company had a material interest,

whether directly or indirectly, at the end of the

year or at any time during the year.

Substantial Shareholders

As at 31 December 2022, the following

shareholders owned more than 10 percent of the

Company’s issued Ordinary Share capital:

Inter Fund Management S.A.

• Number of Ordinary Shares held:

27,423,467

•

% of total Ordinary Shares in issue: 13.27%

Bill & Melinda Gates Foundation

• Number of Ordinary Shares held:

24,670,745

• % of total Ordinary Shares in issue:11.93%

Subsequent Events

Details of the significant subsequent events

of the Company are set out in Note 14 to the

financial statements.

Auditors

KPMG Limited, Vietnam

Directors’ Responsibility in Respect of the

Financial Statements

The Board of Directors is responsible for

ensuring that the financial statements of the

Company are properly drawn up so as to give

a true and fair view of the financial position of

the Company as at 31 December 2022 and of its

financial performance and its cash flows for the

year then ended. When preparing these financial

statements, the Board of Directors is required

to:

• adopt appropriate accounting policies

which are supported by reasonable and

prudent judgments and estimates and then

apply them consistently;

• comply with the requirements of

International Financial Reporting

Standards (“IFRS”) or, if there have been

any departures in the interest of true and

fair presentation, ensure that these have

been appropriately disclosed, explained

and quantified in the financial statements;

• maintain adequate accounting records and

an effective system of internal controls;

• prepare the financial statements on

a going concern basis unless it is

inappropriate to assume that the Company

will continue its operations in the

foreseeable future; and

• control and direct effectively the Company

in all material decisions affecting its

operations and performance and ascertain

that such decisions and/or instructions

have been properly reflected in the

financial statements.

The Board of Directors is also responsible for

ensuring that proper accounting records are

kept which disclose, with reasonable accuracy at

any time, the financial position of the Company.

It is also responsible for safeguarding the assets

of the Company and hence for taking reasonable

steps for the prevention and detection of fraud

and other irregularities.

The important events that have occurred during

the year ended 31 December 2022 are described

in the Chair’s Statement and the Corporate

Governance Statement.

A detailed description

of the principal risks and uncertainties faced by

the Company are set out in the Report of the

Audit and Risk Committee.

The Directors confirm to the best of their

knowledge that:

• the financial statements have been

prepared in conformity with IFRS and give

a true and fair view of the assets, liabilities,

financial position and profit or loss of the

Company, and the undertakings included

in the financial statements taken as a

whole, as required by the United Kingdom

Financial Conduct Authority Disclosure

Guidance and Transparency Rule (“DTR”)

4.1.12R and are in compliance with the

requirements set out in the Companies

Law;

• the Annual Report and financial statements

include a fair review of the development

and performance of the business and

the position of the Company and the

undertakings included in the financial

statements taken as a whole, together

with a description of principal risks and

uncertainties that they face; and

9. Report of the Board of Directors (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

Signed on behalf of the Board by:

Gordon Lawson

Chair

25 A

pril 2023

Entela Benz-Saliasi

Senior Independent Non-executive Director

25 Ap

ril 2023

• the Annual Report and financial

statements, taken as a whole, are fair,

balanced and understandable and provide

the information necessary for shareholders

to assess the Company’s position,

performance, business model and strategy.

The Directors confirm that they have complied

with the above requirements in preparing the

financial statements.

Approval of the Financial Statements

The Board of Directors hereby approves the

accompanying financial statements which give

a true and fair view of the financial position of

the Company as at 31 December 2022, and of its

financial performance and its cash flows for the

year then ended in accordance with IFRS.

9. Report of the Board of Directors (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

10. Independent Auditors’ Report

Vietnam Enterprise Investments Limited - Annual Report 2022

10. Independent Auditors’ Report (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

10. Independent Auditors’ Report (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

10. Independent Auditors’ Report (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022

11. Statement of Financial Position

As at 31 December 2022

Note

31 December 2022

31 December 2021

Change

US$

in %

CURRENT ASSETS

Financial assets at fair value through

profit or loss

5(i)

1,618,524,206

2,602,412,178

Other receivables

666,012

1,686,695

Balances due from brokers

1,883,932

1,232,092

Cash and cash equivalents

14,488,971

9,853,132

TOTAL ASSETS

1,635,563,121

2,615,184,097

(37.46)

CURRENT LIABILITIES

Balances due to brokers

10,230,853

4,209,904

Accounts payable and accruals

2,750,517

3,996,271

TOTAL LIABILITIES

12,981,370

8,206,175

58.19

EQUITY

Issued share capital

2,067,265

2,135,347

Share premium

448,805,801

509,842,442

Retained earnings

1,171,708,685

2,095,000,133

TOTAL EQUITY

1,622,581,751

2,606,977,922

(37.76)

TOTAL LIABILITIES AND EQUITY

1,635,563,121

2,615,184,097

(37.46)

NUMBER OF ORDINARY SHARES IN

ISSUE

206,725,678

213,533,847

NET ASSET VALUE PER ORDINARY

7.85

12.21

(35.71)

Dominic Scriven O.B.E

Director

Vietnam Enterprise Investments Limited

Approved by the Board of Directors on 25 A

pril 2023

The accompanying notes are an integral part of these financial statements

Vietnam Enterprise Investments Limited - Annual Report 2022

12. Statement of Comprehensive Income

For the year ended 31 December 2022

The accompanying notes are an integral part of these financial statements

Note

2022

2021

US$

INCOME

Interest income

114,291

22,395

Dividend income

9,663,187

7,505,712

Net changes in fair value of financial assets at

fair value through profit or loss

5(ii)

(891,697,124)

721,527,436

Gains on disposals of investments

4,865,100

157,569,945

TOTAL INCOME

(877,054,546)

886,625,488

EXPENSES

Administration fees

(1,282,084)

(1,382,403)

Custody fees

(1,005,938)

(985,863)

Directors’ fees

(287,500)

(189,090)

Management fees

(36,552,469)

(40,552,937)

Legal and professional fees

(669,043)

(849,392)

Brokerage fees

(100,000)

Finance costs

(1,827,256)

(3,222,924)

Withholding taxes

(5,119)

(2,381)

Other operating expenses

(122,697)

(103,883)

TOTAL EXPENSES

(41,852,106)

(47,388,873)

NET (LOSS)/PROFIT BEFORE EXCHANGE GAINS

(918,906,652)

839,236,615

EXCHANGE GAINS

Net foreign exchange (losses)/gains

(4,384,796)

728,717

(LOSS)/PROFIT BEFORE TAX

(923,291,448)

839,965,332

Income tax

NET (LOSS)/PROFIT AFTER TAX FOR THE YEAR

(923,291,448)

839,965,332

OTHER COMPREHENSIVE INCOME FOR THE YEAR

TOTAL COMPREHENSIVE (LOSS)/INCOME FOR

THE YEAR

(923,291,448)

839,965,332

TOTAL COMPREHENSIVE (LOSS)/INCOME

FOR THE YEAR ATTRIBUTABLE TO ORDINARY

SHAREHOLDERS

(923,291,448)

839,965,332

BASIC (LOSSES)/EARNINGS PER ORDINARY

(4.42)

3.90

Vietnam Enterprise Investments Limited - Annual Report 2022

13. Statement of Changes in Equity

For the year ended 31 December 2022

The accompanying notes are an integral part of these financial statements

Issued

Share Capital

Premium

Retained

Earnings

Total

US$

Balance at 1 January 2021

2,169,360

542,487,042

1,255,034,801

1,799,691,203

Total comprehensive income for

the year:

Net profit for the year

839,965,332

Transactions with shareholders,

recognised directly in equity:

Repurchase of Ordinary Shares

(34,013)

(32,644,600)

(32,678,613)

Balance at 1 January 2022

2,135,347

509,842,442

2,095,000,133

2,606,977,922

Total comprehensive income for

the year:

Net loss for the year

(923,291,448)

Transactions with shareholders,

recognised directly in equity:

Repurchase of Ordinary Shares

(68,082)

(61,036,641)

(61,104,723)

Balance at 31 December 2022

2,067,265

448,805,801

1,171,708,685

1,622,581,751

Vietnam Enterprise Investments Limited - Annual Report 2022

14. Statement of Cash Flows

For the year ended 31 December 2022

The accompanying notes are an integral part of these financial statements

Note

2022

2021

US$

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit for the year

(923,291,448)

839,965,332

Adjustments for:

Interest income

(114,291)

(22,395)

Interest expense

702,256

1,722,924

Dividend income

(9,663,187)

(7,505,712)

Net changes in fair value of financial assets at

fair value through profit or loss

891,697,124

(721,527,436)

Gains on disposals of investments

(4,865,100)

(157,569,945)

(45,534,646)

(44,937,232)

Net cash flows from subsidiaries and joint

ventures carried at fair value

46,610,750

77,527,696

Changes in other receivables and balances due

from brokers

(651,840)

(1,232,092)

Changes in balances due to brokers and

accounts payable and accruals

4,775,195

5,237,023

5,199,459

36,595,395

Proceeds from disposals of investments

715,502,831

561,091,049

Purchases of investments

(665,057,633)

(584,961,158)

Interest received

114,291

22,395

Interest paid

(702,256)

(1,722,924)

Dividends received

10,683,870

6,737,391

Net cash generated from operating activities

65,740,562

17,762,148

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings

160,000,000

420,000,000

Repayments of borrowings

(160,000,000)

(420,000,000)

Repurchase of Ordinary Shares

(61,104,723)

(32,678,613)

Net cash used in financing activities

(61,104,723)

(32,678,613)

NET INCREASE/(DECREASE) IN CASH AND CASH

EQUIVALENTS

4,635,839

(14,916,465)

Cash and cash equivalents at the beginning of the

year

9,853,132

24,769,597

CASH AND CASH EQUIVALENTS AT THE END OF

THE YEAR

14,488,971

9,853,132

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements

For the year ended 31 December 2022

These notes form an integral part, of and should be read in conjunction with, the accompanying

financial statements.

1. THE COMPANY

Vietnam Enterprise Investments Limited (the “Company”) is a closed-end investment fund

incorporated as an exempted company with limited liability in the Cayman Islands on 20 April 1995.

It commenced operations on 11 August 1995, the date on which the initial subscription proceeds were

received.

The investment objective of the Company is to invest directly or indirectly in publicly or privately

issued securities of companies, projects and enterprises issued by Vietnamese entities, whether

inside or outside Vietnam.

The Company’s Ordinary Shares have been listed on the main market of the London Stock Exchange

since 5 July 2016 (until 4 July 2016: listed on the Irish Stock Exchange). The Company is established

for an unlimited duration. As required by the Company’s Restated and Amended Memorandum and

Articles of Association (the “Articles”), at the annual general meeting (“AGM”) held on 18 June 2020,

a special resolution to wind up the Company on 31 December 2022 was put to the meeting but was

not passed. In accordance with the Articles, the Company will put before the AGM in 2025 a special

resolution to wind up the Company effective on 31 December 2027.

The Company had the following investments in subsidiaries and joint venture as at 31 December

2022, for the purpose of investment holding:

Subsidiaries

Country of incorporation

Principal activities

% ownership

Grinling International Limited

British Virgin Islands

Investment holding

100%

Wareham Group Limited

British Virgin Islands

Investment holding

100%

Goldchurch Limited

British Virgin Islands

Investment holding

100%

VEIL Holdings Limited

British Virgin Islands

Investment holding

100%

Venner Group Limited

British Virgin Islands

Investment holding

100%

Rickmansworth Limited

British Virgin Islands

Investment holding

100%

VEIL Infrastructure Limited

British Virgin Islands

Investment holding

100%

Amersham Industries Limited

British Virgin Islands

Investment holding

100%

Balestrand Limited

British Virgin Islands

Investment holding

100%

Joint operation

Country of incorporation

Principal activities

% ownership

Dragon Financial Holdings Limited

British Virgin Islands

Investment holding

90.16%

As at 31 December 2022 and 31 December 2021, the Company had no employees.

2. BASIS OF PREPARATION

(a) Statement of compliance

The Company’s financial statements for the year ended 31 December 2022 have been prepared in

accordance with IFRS.

(b) Basis of measurement

These financial statements have been prepared on the historical cost basis, except for financial

instruments classified as financial assets at fair value through profit or loss which are measured at fair

value. The methods used to measure fair value are described in Note 3(c)(iii).

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

These financial statements are presented in United States Dollar (“US$”), which is the Company’s

functional currency.

Functional currency is the currency of the primary economic environment in which the Company

operates. If indicators of the primary economic environment are mixed, then management uses its

judgment to determine the functional currency that most faithfully represents the economic effect

of the underlying transactions, events and conditions. The Company’s investments and transactions

are denominated in US$ and VND. Share subscriptions and dividends are made and paid in

US$. Borrowings are made in US$. The expenses (including management fees, custody fees and

administration fees) are denominated and paid in US$. Accordingly, management has determined

that the functional currency of the Company is US$.

(d) Use of estimates and judgments

In preparing these financial statements, management has made judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are

recognised prospectively.

In particular, information about significant areas of estimation, uncertainty and critical judgments in

applying accounting policies that have significant effect on the amounts recognised in the financial

statements are discussed as follows:

Assessment as investment entity

Entities that meet the definition of an investment entity within IFRS 10 - Consolidated Financial

Statements are required to account for investments in controlled entities, as well as investments in

associates and joint ventures, at fair value through profit and loss. Subsidiaries that provide investment

related services or engage in permitted investment related activities with investees continue to be

consolidated unless they are also investment entities.

The criteria which define an investment entity are currently as follows:

• An entity that obtains funds from one or more investors for the purpose of providing those

investors with investment services;

• An entity that commits to its investors that its business purpose is to invest funds solely for

returns from capital appreciation, investment income or both; and

•

An entity that measures and evaluates the performance of substantially all of its investments on

a fair value basis..

The Board of Directors has made an assessment and concluded that the Company meets the above

listed criteria of an investment entity. The investment objective of the Company is to provide

shareholders with attractive capital returns by investing directly or indirectly through its subsidiaries in

a diversified portfolio of listed and unlisted securities in Vietnam. The Company has always measured

its investment portfolio at fair value. The exit strategy for all investments held by the Company and

its subsidiaries is assessed regularly, documented and submitted to the Investment Committee for

approval.

The Company also meets the additional characteristics of an investment entity, in that it has more

than one investment; the investments are predominantly in the form of equities and similar securities;

it has more than one investor and its investors are not related parties. The Board has concluded

that the Company therefore meets the definition of an investment entity. These conclusions will be

reassessed on an annual basis for changes in any of these criteria or characteristics.

Vietnam Enterprise Investments Limited - Annual Report 2022

Fair value of financial instruments

The most significant estimates relate to the fair valuation of subsidiaries and the fair valuation of

financial instruments with significant unobservable inputs in their underlying investment portfolio.

The Board has assessed the fair valuation of each subsidiary to be equal to its net asset value at the

reporting date, and the primary constituent of net asset value across subsidiaries is their underlying

investment portfolio.

Within the underlying investment portfolio, the fair value of financial instruments that are not traded in

an active market is determined by using valuation techniques. The Board uses its judgments to select

a variety of valuation methods and make assumptions that are mainly based on market conditions

existing at each reporting date.

Impairment of financial assets

The Directors determine the allowance for impairment of financial assets on a regular basis. This

estimate is based on the Company’s historical experience and informed credit assessment and

including looking forward information.

(e) Going concern

The Directors have made an assessment of the Company’s ability to continue as a going concern

and are satisfied that the Company has adequate resources to continue in operational existence

for the foreseeable future (being a period of 12 months from the date these financial statements

were approved). Furthermore, the Directors are not aware of any material uncertainties that may

cast significant doubt upon the Company’s ability to continue as a going concern, having taken into

account the liquidity of the Company’s investment portfolio and the Company’s financial position in

respect of its cash flows, borrowing facilities and investment commitments. Therefore, the financial

statements have been prepared on the going concern basis.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies have been applied consistently to all periods presented

in these financial statements.

(a) Subsidiaries and joint operation

Subsidiaries are investees controlled by the Company. The Company controls an investee when it is

exposed to, or has rights to, variable returns from its involvement with the investee and has the ability

to affect those returns through its power over the investee.

Joint venture is a joint arrangement whereby the Company has joint control and rights to the net

assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

The Company is an investment entity and measures investments in its subsidiaries and joint ventures

at fair value through profit or loss (see Note 2(d)). In determining whether the Company meets the

definition of an investment entity, the Board considered the Company and its subsidiaries as a whole.

In particular, when assessing the existence of investment exit strategies and whether the Company

has more than one investment, the Board took into consideration the fact that all subsidiaries and

joint venture were formed in connection with the Company in order to hold investments on behalf of

the Company.

(b) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the

Company at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional

currency at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated

in foreign currencies that are measured at fair value are translated into the functional currency at the

exchange rate at the date on which the fair value was determined.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

Foreign currency differences arising on translation are recognised in profit or loss as net foreign

exchange gain or loss, except for those arising on financial instruments at fair value through profit

or loss (“FVTPL”), which are recognised as a component of net changes in fair value of financial

instruments at FVTPL.

(i)

Recognition and initial measurement

The Company initially recognises financial assets and financial liabilities at fair value on the trade

date, which is the date on which the Company becomes a party to the contractual provisions of the

instrument. Other financial assets and financial liabilities are recognised on the date on which they

are originated.

A financial asset or financial liability is measured initially at fair value plus, for an item not at FVTPL,

transaction costs that are directly attributable to its acquisition or issue.

(ii) Classification and subsequent measurement

Classification of financial assets

On initial recognition, the Company classifies financial assets as measured at amortised cost or FVTPL.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not

designated as at FVTPL:

•

it is held within a business model whose objective is to hold assets to collect contractual cash

flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of

principal and interest.

All other financial assets of the Company are measured at FVTPL.

Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset

is held at a portfolio level because this best reflects the way the business is managed and information

is provided to management. The information considered includes:

•

The documented investment strategy and the execution of this strategy in practice. This includes

whether the investment strategy focuses on earning contractual interest income, maintaining a

particular interest rate profile, matching the duration of the financial assets to the duration of

any related liabilities or expected cash outflows or realising cash flows through the sale of the

assets;

•

How the performance of the portfolio is evaluated and reported to the Company’s management;

•

The risks that affect the performance of the business model (and the financial assets held within

that business model) and how those risks are managed;

• How the investment manager is compensated: e.g. whether compensation is based on the fair

value of the assets managed or the contractual cash flows collected; and

• The frequency, volume and timing of sales of financial assets in prior periods, the reasons for

such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are

not considered sales for this purpose, consistent with the Company’s continuing recognition of the

assets.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

The Company has determined that it has two business models:

•

Held-to-collect business model:

this includes cash and cash equivalents, balances due from

brokers and other receivables. These financial assets are held to collect contractual cash flows.

•

Other business model:

this includes directly held investments and investments in subsidiaries

and joint ventures. These financial assets are managed and their performance is evaluated, on a

fair value basis, with frequent sales taking place.

Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, “principal” is defined as the fair value of the financial asset on

initial recognition. “Interest” is defined as consideration for the time value of money and for the credit

risk associated with the principal amount outstanding during a particular period of time and for other

basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the

Company considers the contractual terms of the instrument. This includes assessing whether the

financial asset contains a contractual term that could change the timing or amount of contractual cash

flows such that it would not meet this condition. In making this assessment, the Company considers:

•

contingent events that would change the amount or timing of cash flows;

• leverage features;

• prepayment and extension features;

• terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse

features); and

•

features that modify consideration of the time value of money (e.g. periodical reset of interest

rates).

Reclassifications

Financial assets are not reclassified subsequent to their initial recognition unless the Company were

to change its business model for managing financial assets, in which case all affected financial assets

would be reclassified on the first day of the first reporting period following the change in the business

model.

Subsequent measurement of financial assets

•

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or

dividend income and expense and foreign exchange gains and losses, are recognised in profit or loss.

Financial assets at FVTPL include directly held investments and investments in subsidiaries and joint

ventures.

•

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method.

Interest income and foreign exchange gains and losses are recognised in profit or loss. Any gain or

loss on derecognition is also recognised in profit or loss.

Cash and cash equivalents, balances due from brokers and other receivables are included in this

category.

Financial liabilities – Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

A financial liability is classified as at FVTPL if it is held-for-trading, it is a derivative or it is designated

as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains

and losses, including any interest expense, are recognised in profit or loss.

Other financial liabilities are subsequently measured at amortised cost using the effective interest

method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any

gain or loss on derecognition is also recognised in profit or loss.

Financial liabilities measured at amortised cost include balances due to brokers and accounts payable

and accruals.

(iii) Fair value 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 a mid price, because this

price provides a reasonable approximation of the exit 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 transfer between levels of the fair value hierarchy as at the end of the

reporting period during which the change has occurred.

(iv) Amortised cost measurement

The “amortised cost” of a financial asset or liability is the amount at which the financial asset or

financial liability is measured on initial recognition minus principal repayments, plus or minus the

cumulative amortisation using the effective interest method of any difference between that initial

amount and the maturity amount and, for financial assets, adjusted for any loss allowance.

(v) Impairment

The Company recognises loss allowances for expected credit losses (“ECLs”) on financial assets

measured at amortised cost.

The Company measures loss allowances at an amount equal to lifetime ECLs, except for following,

which are measured at 12-month ECLs:

•

Financial assets that are determined to have low credit risk at the reporting date; and

• Other financial assets for which credit risk (i.e. the risk of default occurring over the expected

life of the asset) has not increased significantly since initial recognition.

When determining whether the credit risk of a financial asset has increased significantly since

initial recognition and when estimating ECLs, the Company considers reasonable and supportable

information that is relevant and available without undue cost or effort. This includes both quantitative

and qualitative information and analysis, based on the Company’s historical experience and informed

credit assessment and including forward-looking information.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

The Company assumes that the credit risk on a financial asset has increased significantly if it is more

than 30 days past due.

The Company considers a financial asset to be in default when:

• the debtor is unlikely to pay its credit obligations to the Company in full, without recourse by

the Company to actions such as realising security (if any is held); or

•

the financial asset is more than 90 days past due.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a

financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12

months after the reporting date (or a shorter period if the expected life of the instrument is less than

12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over

which the Company is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present

value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance

with the contract and the cash flows that the Company expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

However, if the financial assets were credit-impaired, then the estimate of credit losses would be

based on a specific assessment of the expected cash shortfalls and on the original effective interest

rate.

Credit-impaired financial assets

At each reporting date, the Company assesses whether financial assets carried at amortised cost

are credit-impaired. A financial asset is “credit-impaired” when one or more events that have a

detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of a debtor;

•

a breach of contract such as a default or being more than 90 days past due; or

•

it is probable that the debtor will enter bankruptcy or other financial reorganisation.

Presentation of allowance for ECLs in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying

amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable

expectations of recovering a financial asset in its entirety or a portion thereof.

(vi) Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the

financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction

in which substantially all of the risks and rewards of ownership of the financial asset are transferred

or in which the Company neither transfers nor retains substantially all of the risks and rewards of

ownership and does not retain control of the financial asset.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

On derecognition of a financial asset, the difference between the carrying amount of the asset (or

the carrying amount allocated to the portion of the asset that is derecognised) and the consideration

received (including any new asset obtained less any new liability assumed) is recognised in profit or

loss. Any interest in such transferred financial assets that is created or retained by the Company is

recognised as a separate asset or liability.

The Company enters into transactions whereby it transfers assets recognised in its statement of

financial position but retains either all or substantially all of the risks and rewards of the transferred

assets or a portion of them. If all or substantially all of the risks and rewards are retained, then the

transferred assets are not derecognised. Transfers of assets with retention of all or substantially all of

the risks and rewards include sale and repurchase transactions.

The Company derecognises a financial liability when its contractual obligations are discharged or

cancelled or expired.

On derecognition of a financial liability, the difference between the carrying amount extinguished and

the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised

in profit or loss.

(vii) Offsetting

Financial assets and liabilities are offset and the net amount presented in the statement of financial

position when, and only when, the Company has a legally enforceable right to offset the amounts and

intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis for gains and losses from financial instruments at

FVTPL and foreign exchange gains and losses.

(d) Cash and cash equivalents

Cash and cash equivalents comprise deposits with banks and highly liquid financial assets with

maturities of three months or less from the date of acquisition that are subject to an insignificant

risk of changes in their fair value and are used by the Company in the management of short-term

commitments, other than cash collateral provided in respect of derivatives and securities borrowing

transactions.

(e) Share capital

Issuance of share capital

Management Shares and Ordinary Shares are classified as equity. The difference between the issued

price and the par value of the shares less any incremental costs directly attributable to the issuance

of shares is credited to share premium.

Repurchase of Ordinary 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.

Par value of repurchased shares is presented as deductions from share capital and the excess over

par value of repurchased shares is presented as deductions from share premium. When repurchased

shares are sold or reissued subsequently, the amount received is recognised as an increase in share

capital and share premium which is similar to the issuance of share capital.

(f) Segment reporting

The Company is organised and operates as one operating segment – investment in equity securities

in Vietnam. Consequently, no segment reporting is provided in the Company’s financial statements.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

(g) Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will

be required to settle the obligation. Provisions are determined by discounting the expected future

cash flows at a pre-tax rate that reflects current market assessments of the time value of money and

the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.

(h) Interest income

Interest income, including interest income from non-derivative financial assets at fair value through

profit or loss, are recognised in profit or loss, using the effective interest method. The effective

interest rate is the rate that exactly discounts the estimated future cash payments or receipts, without

consideration of future credit losses, over the expected life of the financial instrument or through to

the next market based repricing date to the net carrying amount of the financial instrument on initial

recognition.

Interest received or receivable are recognised in profit or loss as interest income.

(i) 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 in a separate line item.

(j)

Net income from financial instruments at fair value through profit or loss

Net income from financial assets at fair value through profit or loss include all realised and unrealised

fair value changes and foreign exchange differences, but excludes interest and dividend income.

Net realised gain/loss from financial assets at fair value through profit or loss is calculated using the

weighted average cost method.

(k) Expenses

All expenses, including management fees and incentive fees, are recognised in profit or loss on an

accrual basis.

(l)

Basic earnings per share and Net Asset Value per share

The Company presents basic earnings per share (“EPS”) for its Ordinary Shares. Basic EPS is calculated

by dividing net profit or loss attributable to the Ordinary Shareholders by the weighted average

number of Ordinary Shares outstanding during the year. The Company did not have potentially

dilutive shares as of 31 December 2022 and 2021.

Net asset value (“NAV”) per share is calculated by dividing the NAV attributable to the Ordinary

Shareholders by the number of outstanding Ordinary Shares as at the reporting date. NAV is

determined as total assets less total liabilities. Where Ordinary Shares have been repurchased, NAV

per share is calculated based on the assumption that those repurchased Ordinary Shares have been

cancelled.

(m) Related parties

(a)

A person, or a close member of that person’s family, is related to the Company if that person:

(i)

has control or joint control over the Company;

(ii)

has significant influence over the Company; or

(iii)

is a member of the key management personnel of the Company.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

(b) An entity is related to the Company if any of the following conditions applies:

(i)

The entity and the Company are members of the same group (which means that each

parent, subsidiary and fellow subsidiary is related to the others);

(ii)

One entity is an associate or joint venture of the other entity (or an associate or joint

venture of a member of a group of which the other entity is a member);

(iii)

The entity and the Company are joint ventures of the same third party;

(iv)

One entity is a joint venture of a third entity and the other entity is an associate of the third

entity;

(v)

The entity is a post employment benefit plan for the benefit of employees of either the

Company or an entity related to the Company;

(vi)

The entity is controlled or jointly controlled by a person identified in (a);

(vii)

A person identified in (a)(i) has significant influence over the entity or is a member of the

key management personnel of the entity (or of a parent of the entity); or

(viii) The entity, or any member of a group of which it is a part, provides key management

personnel services to the Company.

Dragon Capital Group Limited, together with its subsidiaries (including Dragon Capital Management

(HK) Limited), associates, and investment companies/funds under their management, are considered

related parties to the Company.

(n) Standards issued but not yet effective

A number of new standards and amendments to standards are effective for annual periods beginning

after 1 January 2022 and earlier application is permitted; however, the Company has not early adopted

the new or amended standards that may be relevant in preparing these financial statements.

The following applicable new and amended standards and interpretation are not expected to have a

significant impact on the Company’s financial statements.

•

Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2;

•

Definition of Accounting Estimates – Amendments to IAS 8;

• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments

to IAS 12; and

•

Classification of Liabilities as Current or Non-Current – Amendments to IAS 1.

4. TRANSACTIONS WITH RELATED PARTIES

Dominic Scriven O.B.E, a non-executive Director, is a beneficial shareholder of the Company, holding

86,423 Ordinary Shares of the Company as at 31 December 2022 (31 December 2021: 36,423 Ordinary

Shares). Dominic Scriven O.B.E also has indirect interests in the share capital of the Company as he is

a shareholder of Dragon Capital Group Limited, the parent company of Dragon Capital Limited which

holds the Management Shares of the Company. Dragon Capital Group Limited is also the ultimate

parent company of Dragon Capital Management (HK) Limited, which is the Investment Manager of

the Company, and Dragon Capital Markets Limited. As at 31 December 2022, Dragon Capital Markets

Limited beneficially held 1,685,359 Ordinary Shares of the Company for investment and proprietary

trading purposes (31 December 2021: 1,010,359 Ordinary Shares).

Gordon Lawson, Chair of the Company, is a beneficial shareholder of the Company, holding 25,000

Ordinary Shares of the Company as at 31 December 2022 (31 December 2021: 25,000 Ordinary

Shares).

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

Sarah Arkle, an Independent Non-executive Director, is a beneficial shareholder of the Company,

holding 9,696 Ordinary Shares of the Company as at 31 December 2022 (31 December 2021: 4,696

Ordinary Shares).

During the year, the Directors, with exception of Dominic Scriven O.B.E, earned US$287,500 (2021:

US$189,090) for their participation in the Board of Directors of the Company.

During the year, total broker fees paid to Ho Chi Minh City Securities Corporation – an associate of

Dragon Capital Group Limited and one of the securities brokers of the Company and its subsidiaries

– amounted to US$964,829 (2021: US$671,844). As at 31 December 2022, the broker fee payable to

this broker was US$11,765 (31 December 2021: US$4,477).

5. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

(i)

Financial assets at fair value through profit or loss reported in the statement of financial

position:

31 December 2022

31 December 2021

US$

Directly held investments (a)

691,582,819

1,137,326,975

Investments in subsidiaries and joint ventures (b)

926,941,387

1,465,085,203

1,618,524,206

2,602,412,178

(a) The cost and carrying value of directly held investments of the Company were as follows:

31 December 2022

31 December 2021

US$

Listed equity investments:

At cost

609,474,199

700,877,999

Unrealised gains

33,328,132

436,448,976

At carrying value

642,802,331

1,137,326,975

Unlisted investments:

At cost

49,586,064

3,762,362

Unrealised losses

(805,576)

(3,762,362)

At carrying value

48,780,488

691,582,819

1,137,326,975

Movements of investments directly held by the Company during the year were as follows:

31 December 2022

31 December 2021

US$

Opening balance

1,137,326,975

769,940,680

Purchases

665,057,633

584,961,158

Sales

(710,637,731)

(403,521,104)

Unrealised (losses)/gains

(400,164,058)

185,946,241

Closing balance

691,582,819

1,137,326,975

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

(b) Investments in subsidiaries and joint ventures are fair valued at the net asset value of the

subsidiaries and joint ventures with the major part being attributable to the underlying investment

portfolio. The underlying investment portfolio is valued under the same methodology as directly held

investments of the Company, with any other assets or liabilities within subsidiaries and joint ventures

fair valued in accordance with the Company’s accounting policies. All cash flows to/from subsidiaries

and joint ventures are treated as an increase/decrease in the fair value of the subsidiary and joint

ventures.

The net assets of the Company’s subsidiaries and joint ventures comprised:

31 December 2022

31 December 2021

US$

Financial assets at fair value through profit or loss (c)

920,080,847

1,455,238,030

Other receivables

1,190,577

1,417,772

Balances due from brokers

4,637,370

3,730,792

Cash and cash equivalents

8,419,685

4,698,609

Total assets

934,328,479

1,465,085,203

Balances due to brokers

7,387,092

Total liabilities

7,387,092

Net assets

926,941,387

1,465,085,203

Movements in the carrying value of investments in subsidiaries and joint ventures during the year

were as follows:

31 December 2022

31 December 2021

US$

Opening balance

1,465,085,203

1,007,031,704

Net cash flows from subsidiaries and joint ventures

(46,610,750)

(77,527,696)

Fair value movements in investments in

subsidiaries and joint ventures

(491,533,066)

535,581,195

Closing balance

926,941,387

1,465,085,203

joint ventures of the Company were as follows:

31 December 2022

31 December 2021

US$

Listed equity investments:

At cost

701,740,542

733,697,244

Unrealised gains

218,340,305

721,540,786

At carrying value

920,080,847

1,455,238,030

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

Movements of investments held by the subsidiaries and joint ventures of the Company during the

year were as follows:

31 December 2022

31 December 2021

US$

Opening balance

1,455,238,030

983,928,129

Purchases

645,324,861

569,500,379

Sales

(677,281,563)

(386,253,924)

Capital redemption by investee company

(43,046,070)

Unrealised (losses)/gains

(503,200,481)

331,109,516

Closing balance

920,080,847

1,455,238,030

Investment portfolio by sector was as follows:

31 December 2022

31 December 2021

US$

Banking

627,916,500

930,989,729

Real Estate & Construction

360,597,434

726,542,405

Material & Resources

139,133,224

347,931,918

Retail

129,465,431

250,350,072

Diversified Financials

97,330,605

110,950,794

Software & Services

76,411,937

111,191,175

Consumer Durables

57,515,042

43,307,640

Energy

72,156,059

31,876,434

Food & Beverages

29,002,780

13,801,493

Transportation

22,134,654

25,623,344

Net monetary assets kept by

subsidiaries and joint ventures

6,860,540

9,847,174

1,618,524,206

100

2,602,412,178

100

(d) Restrictions

The Company receives income in the form of dividends from its investments in unconsolidated

subsidiaries and joint ventures and there are no significant restrictions on the transfer of funds from

these entities to the Company.

(e) Support

The Company provides or receives ongoing support to/from its subsidiaries and joint ventures for

the purchase/sale of portfolio investments. During the year, the Company received support from

its unconsolidated subsidiaries and joint ventures as noted in Note 5(b). The Company has no

contractual commitments or current intentions to provide any other financial or other support to its

unconsolidated subsidiaries and joint ventures.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

(ii) Net change in fair value of financial assets at fair value through profit or loss reported in the

statement of comprehensive income:

2022

2021

US$

Unrealised (losses)/gains of investments directly

held by the Company

(400,164,058)

185,946,241

Fair value movements in investments in

subsidiaries and joint ventures

(491,533,066)

535,581,195

(891,697,124)

721,527,436

6. CASH AND CASH EQUIVALENTS

31 December 2022

31 December 2021

US$

Cash in banks

14,488,971

9,853,132

7. ACCOUNTS PAYABLE AND ACCRUALS

31 December 2022

31 December 2021

US$

Management fees

2,514,533

3,670,990

Administration fees

173,984

263,281

Other payables

62,000

2,750,517

3,996,271

8. ISSUED SHARE CAPITAL AND SHARE PREMIUM

31 December 2022

31 December 2021

US$

Authorised:

500,000,000 Ordinary Shares at par value of

US$0.01 each

5,000,000

300,000,000 Conversion Shares at par value of

US$0.01 each

3,000,000

1,000 Management Shares at par value of

US$0.01 each

8,000,010

Issued and fully paid:

220,920,746 Ordinary Shares at par value of

US$0.01 each (31 December 2021: 220,920,746

Ordinary Shares at par value of US$0.01 each)

2,209,207

1,000 Management Shares at par value of

US$0.01 each

2,209,217

Treasury Shares:

Ordinary Shares

(141,952)

(73,870)

Shares in circulation:

Ordinary Shares

2,067,255

2,135,337

Management Shares

Outstanding issued share capital in circulation

2,067,265

2,135,347

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

Holders of Ordinary Shares present in person or by proxy or by authorised representative shall

have one vote and, on a poll, every holder of Ordinary Shares present in person or by proxy or by

authorised representative shall have one vote for every Ordinary Share of which he is the registered

holder. The Ordinary Shares carry rights to dividends as set out in Articles 106 to 114 of the Articles.

In a winding up, the Ordinary Shares carry a right to a return of the nominal capital paid up in respect

of such Ordinary Shares, and the right to share in the manner set out in the Articles in surplus assets

remaining after the return of the nominal capital paid up on the Ordinary Shares and Management

Shares, provided that in a winding up the assets available for distribution among the members are

more than sufficient to repay the whole of the nominal capital paid up at the commencement of

the winding up. No holder of Ordinary Shares has the right to request the redemption of any of his

Ordinary Shares at his option or to require his Ordinary shares to be redeemed by the Company.

The Company may, in its complete discretion, consider requests from holders of Ordinary Shares to

have their Ordinary Shares redeemed by the Company. The Company may also, from time to time,

repurchase its shares, including fraction of shares.

The Conversion Shares carry the exclusive right to dividends in respect of assets attributable to

the Conversion Shares, in accordance with the provisions of Articles 106 to 114. No dividend or

other distribution shall be declared, made or paid by the Company on any of its shares by reference

to a record date falling between the Calculation Date and the Conversion Date as set out in the

Articles. The new Ordinary Shares to be issued on conversion shall rank in full pari passu with the

existing Ordinary Shares for all dividends and other distributions with a record date falling after the

conversion date. In order for the holder of the Conversion Shares to participate in the winding up of

the Company, the Conversion Shares, if any, which are in existence at the date of the winding up of

the Company will for all purposes be deemed to have been automatically converted into Ordinary

Shares and Deferred Shares immediately prior to the winding up, on the same basis as if conversion

occurred 28 business days after the calculation date arising as a result of the resolution or the court

to wind up the Company.

Until conversion, the consent of the holders of the Conversion Shares voting as a separate class and

the holders of the Ordinary Shares voting as a separate class shall be required in accordance with the

provisions of Article 14 to effect any variation or abrogation in their respective class rights.

During the year, no Conversion Shares were in issue, and no Conversion Shares were in issue as at 31

December 2022 and 2021.

The Management Shares shall not be redeemed by the Company, and do not carry any right to

dividends. In a winding up, Management Shares are entitled to a return of paid up nominal capital

out of the assets of the Company, but only after the return of nominal capital paid up on Ordinary

Shares. The Management Shares each carry one vote on a poll. The holders of the Management

Shares have the exclusive right to appoint two individuals to the Board.

As at 31 December 2022 and 2021, the following shareholder owned more than 10% of the Company’s

issued Ordinary Share capital:

31 December 2022

31 December 2021

Number of

Ordinary

held

% of total

Ordinary

Shares in

issue

Number of

Ordinary

held

% of total

Ordinary

Shares in

issue

Inter Fund Management S.A.

27,423,467

13.27

26,491,515

12.41

Bill & Melinda Gates Foundation

24,670,745

11.93

25,087,859

11.75

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

Movements in Ordinary Share capital during the year were as follows:

Year ended

31 December 2022

Year ended

31 December 2021

US$

Balance at the beginning of the year

213,533,847

2,135,337

216,935,108

2,169,350

Repurchase of Ordinary Shares

during the year

(6,808,169)

(68,082)

(3,401,261)

(34,013)

Balance at the end of the year

206,725,678

2,067,255

213,533,847

2,135,337

Movements in share premium during the year were as follows:

Year ended

31 December 2022

Year ended

31 December 2021

US$

Balance at the beginning of the year

509,842,442

542,487,042

Repurchase of Ordinary Shares during the year

(61,036,641)

(32,644,600)

Balance at the end of the year

448,805,801

509,842,442

9. NET ASSET VALUE PER ORDINARY SHARE

The calculation of the NAV per Ordinary Share was based on the equity of the Company as at 31

December 2022 of US$1,622,581,753 (31 December 2021: US$2,606,977,922) and the number of

outstanding Ordinary Shares in issue as at that date of 206,725,678 shares (31 December 2021:

213,533,847 shares).

10. FEES

The management, administration and custody fees are calculated based on the NAV of the

Company.

Administration fees

Standard Chartered Bank (the “Administrator”) is entitled to receive a fee of 0.048% (2021: 0.048%)

of the gross assets per annum, payable monthly in arrears and subject to a minimum monthly fee

of US$4,000 per fund. During the year, total administration fees amounted to US$1,282,084 (2021:

US$1,382,403). As at 31 December 2022, an administration fee of US$173,984 (31 December 2021:

US$263,281) was payable to the Administrator.

Custody fees

Standard Chartered Bank (the “Custodian”) is entitled to receive a fee of 0.04% (2021: 0.04%) of

the assets under custody per annum, payable monthly in arrears and subject to a minimum monthly

fee of US$500 per custody account. In addition, the Custodian is entitled to US$20 per listed

transaction. During the year, total custody fees amounted to US$1,005,938 (2021: US$985,863).

There were no custody fees payable as at 31 December 2022 and 2021.

Directors’ fees

During the year, total directors’ fees amounted to US$287,500 (2021: US$189,090). There were no

directors’ fees payable as at 31 December 2022 and 2021. Dominic Scriven O.B.E has permanently

waived his rights to receive directors’ fees for his services as Director of the Company.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

Management fees

The management fee is calculated and accrued daily on the following basis:

•

1.85% per annum on the first US$1.25 billion of the NAV;

• 1.65% per annum on the portion of the NAV in excess of US$1.25 billion and less than or equal

to US$1.5 billion; and

•

1.5% per annum on the portion of the NAV above US$1.5 billion.

During the year, total management fees amounted to US$36,552,469 (2021: US$40,552,937). As

at 31 December 2022, a management fee of US$2,514,533 (31 December 2021: US$3,670,990)

remained payable to the Investment Manager.

Audit and non-audit fees

During the year, included in the legal and professional fees of the Company were audit and related

fees amounting to US$114,655 (2021: US$82,000) paid to the auditor, KPMG Limited. In addition,

the non-audit fees payable to KPMG LLP, a network firm of KPMG Limited, were US$30,000 in 2022

(2021: US$30,000).

11. INCOME TAX

Under the current law of the Cayman Islands and the British Virgin Islands, the Company and its

subsidiaries and joint ventures are not required to pay any taxes in the Cayman Islands or the

British Virgin Islands on either income or capital gains and no withholding taxes will be imposed on

distributions by the Company to its shareholders or on the winding-up of the Company.

Vietnam tax

In accordance with Circular No. 103/2014/TT-BTC issued by the Ministry of Finance of Vietnam taking

effective from 1 October 2014 proving guidelines on the fulfilment of tax obligations of foreign

entities, foreign individuals doing business in Vietnam or earning income in Vietnam, the Company is

subject to 20% capital assignment tax on net gains from the transfer of capital, not being considered

as tax on gains from the transfer of securities per Vietnamese regulations, 0.1% withholding tax on

proceeds of transferring securities, certificates of deposits and 5% withholding tax on the interest

received from any Vietnamese entities. Dividends distributed from after-tax profits by Vietnamese

investee companies to foreign corporate investors are not subject to Vietnamese withholding taxes.

Hong Kong tax

A fund would be exposed to Hong Kong Profits Tax (“HKPT”) if:

a) it carries on trade or business in Hong Kong;

b) profits from that trade or business have a Hong Kong source;

c) those profits are not capital profits; and

d) the profits are not exempted under the Offshore Persons Exemption or the Funds Exemption.

Under such circumstances, HKPT will be charged at a rate of 16.5% (2021: 16.5%) in respect of any

profits which arise in or are derived from Hong Kong and which are not capital profits or exempt

profits.

The Offshore Persons Exemption is provided under Section 20AC of the Inland Revenue Ordinance

(“IRO”) and applies to exempt non-fund and non-resident persons from HKPT subject to satisfying

certain conditions. Effective from 1 April 2019, the Funds Exemption under Section 20AN of the IRO

provides that funds within the meaning of Section 20AM, resident and non-resident, will be exempt

from HKPT subject to certain conditions.

The Directors believe the Company satisfies all of the requirements for the Funds Exemption under

Section 20AN of the IRO post 1 April 2019 and therefore shall not be subject to Hong Kong tax.

See Note 13(B) for further details.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

12. BASIC (LOSSES)/EARNINGS PER ORDINARY SHARE

The calculation of basic (losses)/earnings per Ordinary Share for the year was based on the net

loss for the year attributable to the Ordinary Shareholders of US$923,291,448 (2021: net profit of

US$839,965,332) and the weighted average number of Ordinary Shares outstanding of 209,066,958

shares (2021: 215,418,418 shares) in issue during the year.

(a) Net profit attributable to the Ordinary Shareholders

Year ended

31 December 2022

Year ended

31 December 2021

US$

Net (loss)/profit attributable to the Ordinary

Shareholders

(923,291,448)

839,965,333

(b) Weighted average number of Ordinary Shares

Year ended

31 December 2022

Year ended

31 December 2021

Issued Ordinary Shares at the beginning of the

year

213,533,847

216,935,108

Effect of Ordinary Shares repurchased during the

year

(4,466,889)

(1,516,690)

Weighted average number of Ordinary Shares

209,066,958

215,418,418

Year ended

31 December 2022

Year ended

31 December 2021

US$

Basic (losses)/earnings per Ordinary Share

(4.42)

3.90

13.

FINANCIAL RISK MANAGEMENT AND UNCERTAINTY

A. Financial risk management

The Company and its subsidiaries mainly invest in listed and unlisted investments in Vietnam, and

are exposed to credit risk, liquidity risk and market risks arising from the financial instruments

they hold. The Company has formulated risk management policies and guidelines which govern its

overall business strategies, its balance for risk and its general risk management philosophy, and has

established processes to monitor and control transactions in a timely and accurate manner. In essence,

the Company and its Investment Manager practise portfolio diversification and have adopted a range

of appropriate restrictions and policies, including limiting the Company’s cash investment in each

investment to not more than 20% of the Company’s capital at the time of investment. Nevertheless,

the markets in which the Company operates and the investments that the Company makes can provide

no assurance that the Company will not suffer a loss as a result of one or more of the risks described

above, or as a result of other risks not currently identified by the Investment Manager.

The nature and extent of the financial instruments outstanding at the reporting date and the risk

management policies employed by the Company are discussed in the following notes.

(a) 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, resulting in a financial loss to the Company.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

The Company’s listed and unlisted investments will only be traded on or subject to the rules of

recognised stock exchanges or with counterparties which have, or whose parent company has been

approved based on a set of defined criteria by the Investment Manager. All transactions in listed and

unlisted securities are settled/paid for upon delivery using approved brokers. The risk of default is

considered minimal since the delivery of securities sold is made only once the broker has received

payment. A purchase payment is only made once the securities have been received by the broker. If

either party fails to meet their obligations, the trade will fail.

As at 31 December 2022 and 2021, the Company’s credit risk arose principally from its other

receivables, balances due from brokers and cash and cash equivalents.

The maximum exposure to credit risk faced by the Company is equal to the carrying amounts of these

balances as shown on the statement of financial position. The maximum exposure to credit risk at the

reporting date was as follows:

31 December 2022

31 December 2021

US$

Other receivables (i)

666,012

1,686,695

Balances due from brokers (i)

1,883,932

1,232,092

Cash and cash equivalents (ii)

14,488,971

9,853,132

17,038,915

12,771,919

The Company invests substantially all of its assets in its subsidiaries together with which it is managed

as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments:

Disclosures are met by providing disclosures on the credit risk of the underlying financial assets held

by the subsidiaries.

As at 31 December 2022 and 2021, the subsidiaries’ credit risk arose principally from the subsidiaries’

other receivables, balances due from brokers and cash and cash equivalents.

The maximum exposure to credit risk faced by the subsidiaries is equal to the carrying amounts of

other receivables, balances due from brokers and cash and cash equivalents which were as follows at

the reporting date:

31 December 2022

31 December 2021

US$

Other receivables (i)

1,190,577

1,417,772

Balances due from brokers (i)

4,637,370

3,730,792

Cash and cash equivalents (ii)

8,419,685

4,698,609

14,247,632

9,847,173

(i) Other receivables and balances due from brokers

Other receivables represented dividends receivable from investee companies. Balances due from

brokers represented receivables from sales of securities. Credit risk relating to these amounts was

considered as minimal due to the short-term settlement period involved.

No receivables as at 31 December 2022 and 2021 were past due.

(ii) Cash and cash equivalents

Cash and cash equivalents of the Company and its subsidiaries were held mainly with well-known

financial institutions in Singapore and Vietnam. Regarding the credit rating profile of these financial

institutions, the Directors believe credit risks from these deposits was minimal and do not expect that

these financial institutions may default and cause losses to the Company.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations

associated with its financial liabilities that are settled by delivering cash or other financial assets.

The Company also regularly monitors current and expected liquidity requirements to ensure that it

maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term.

As at 31 December 2022 and 2021, all the contractual maturities of non-derivative financial liabilities

of the Company and its subsidiaries were payable within a year.

Market risk is the risk that changes in market prices, such as equity prices, interest rates and foreign

exchange rates, will affect the income of the Company and the value of its holdings of financial

instruments. The objectives of market risk management is to manage and control market risk

exposures within acceptable parameters, while optimising the return on risk.

Equity price risk

Equity price risk is the risk that the fair values of equities decrease as a result of changes in the levels

of the equity indices and the values of individual securities. The trading equity price risk exposure

arises from the Company’s investment portfolio. The Company is exposed to equity price risk on all

of its directly held and underlying listed and unlisted equity investments for which an active over-the-

counter market exists.

The Company’s equity price risk is managed by the Investment Manager who

seeks to monitor the risk through a careful selection of securities within specified limits.

Equity price risk for the Company’s underlying listed investments principally relates to investments

listed on the Ho Chi Minh City Stock Exchange and the Hanoi Stock Exchange in Vietnam. The

Investment Manager’s best estimate of the effect on net assets and losses due to a reasonably possible

change in equity indices, with all other variables held constant was as follows:

Change in

index level

Effects on

net assets

Change in

index level

Effects on

net assets

2022

2021

US$m

Market Indices

VN Index

1,082

1,362

VN Index

(68)

(1,082)

(52)

(1,362)

Equity price risk for the Company’s underlying unlisted investments principally related to investments

in over-the-counter and private equities in Vietnam. Valuation of these investments is made using

appropriate valuation methodologies. The methodology of valuation of these investments takes into

consideration a variety of factors, which means that the unlisted investments are also exposed to

equity price risk.

Interest rate risk

The Company and its subsidiaries are exposed to risks associated with the effect of fluctuations in the

prevailing levels of floating market interest rates on its financial position and cash flows. The Company

and its subsidiaries have the ability to borrow funds from banks and other financial institutions in

order to increase the amount of capital available for investments. Consequently, the level of interest

rates at which the Company and its subsidiaries can borrow will affect the operating results of the

Company and its subsidiaries. The Investment Manager monitors overall interest sensitivity of the

Company and its subsidiaries on a monthly basis.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

The table below summarises the Company’s exposure to interest rate risk. Included in the table are

the Company’s assets and liabilities at carrying value, categorised by maturity date. The net interest

sensitivity gap represents the contractual amounts of all interest sensitive financial instruments.

Up to 1 year

1 – 5 years

Non-interest

bearing

Total

31 December 2022

US$

ASSETS

Other receivables

666,012

Balances due from

brokers

1,883,932

Cash and cash

equivalents

14,488,971

TOTAL ASSETS

14,488,971

2,549,945

17,038,915

LIABILITIES

Balances due to

brokers

(10,230,853)

Accounts payable and

accruals

(2,750,517)

TOTAL LIABILITIES

(12,981,370)

NET INTEREST

SENSITIVITY GAP

14,488,971

N/A

Up to 1 year

1 – 5 years

Non-interest

bearing

Total

31 December 2021

US$

ASSETS

Other receivables

1,686,695

Balances due from

brokers

1,232,092

Cash and cash

equivalents

9,853,132

TOTAL ASSETS

9,853,132

2,918,787

12,771,919

LIABILITIES

Balances due to

brokers

(4,209,904)

Accounts payable and

accruals

(3,996,271)

TOTAL LIABILITIES

(8,206,175)

NET INTEREST

SENSITIVITY GAP

9,853,132

N/A

A change of 100 basis points in interest rates would have increased or decreased the net assets

attributable to the Ordinary Shareholders by US$144,890 (31 December 2021: US$98,531). This

analysis assumes that all other variables, in particular foreign currency rates, remain constant.

The Company invests substantially all of its assets in its subsidiaries together with which it is managed

as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments:

Disclosures are met by providing disclosures on the interest risk of the underlying investments held

by the subsidiaries.

Vietnam Enterprise Investments Limited - Annual Report 2022

The table below summarises the subsidiaries’ exposure to interest rate risk. Included in the table are

the subsidiaries’ assets and liabilities categorised by maturity date. The net interest sensitivity gap

represents the net carrying amounts of all interest sensitive financial instruments.

Up to 1 year

1 – 5 years

Non-interest

bearing

Total

31 December 2022

US$

ASSETS

Other receivables

1,190,577

Balances due from

brokers

4,637,370

Cash and cash

equivalents

8,419,685

TOTAL ASSETS

8,419,685

5,827,947

14,247,632

LIABILITIES

Balances due to

brokers

(7,387,092)

TOTAL LIABILITIES

(7,387,092)

NET INTEREST

SENSITIVITY GAP

8,419,685

N/A

Up to 1 year

1 – 5 years

Non-interest

bearing

Total

31 December 2021

US$

ASSETS

Other receivables

1,417,772

Balances due from

brokers

3,730,792

Cash and cash

equivalents

4,698,609

TOTAL ASSETS

4,698,609

5,148,564

9,847,173

TOTAL LIABILITIES

NET INTEREST

SENSITIVITY GAP

4,698,609

N/A

A change of 100 basis points in interest rates would have increased or decreased the net assets

attributable to the Company by US$84,197 (31 December 2021: US$46,986). This analysis assumes

that all other variables, in particular foreign currency rates, remain constant.

Foreign currency risk

Foreign currency risk is the risk that changes in foreign exchange rates will affect the Company and

its subsidiaries’ income or the value of its holding of financial instruments. The Company and its

subsidiaries ensure that the net exposure to this risk is kept to an acceptable level by buying or selling

foreign currencies at spot rates where necessary to address short-term imbalances.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

The table below summarises the exposure of the Company to currency risks as at 31 December 2022

and 2021. Included in the table are the assets and liabilities categorised by their base currency.

31 December 2021 (Denominated in VND)

US$

ASSETS

Financial assets at fair value through profit or loss

691,582,819

Other receivables

666,012

Balances due from brokers

1,883,932

Cash and cash equivalents

12,081,117

TOTAL ASSETS

706,213,880

LIABILITIES

Balances due to brokers

10,230,853

NET CURRENCY POSITION

695,983,027

31 December 2021 (Denominated in VND)

US$

ASSETS

Financial assets at fair value through profit or loss

1,137,326,975

Other receivables

1,686,695

Balances due from brokers

1,232,092

Cash and cash equivalents

9,771,199

TOTAL ASSETS

1,150,016,961

LIABILITIES

Balances due to brokers

4,209,904

NET CURRENCY POSITION

1,145,807,057

As at 31 December 2022, had the US$ strengthened or weakened by 3% (31 December 2021: 1%)

against the VND with all other variables held constant, the net assets attributable to the Ordinary

Shareholders would have been decreased or increased by the amounts shown below. This analysis

was performed on the same basis as in 2021.

Denominated in VND

US$

2022

20,271,350

2021

11,344,624

The Company invests substantially all of its assets in its subsidiaries together with which it is managed

as an integrated structure. The Directors decided that the objectives of IFRS 7 Financial Instruments:

Disclosures are met by providing disclosures on the currency risk of the underlying investments held

by the subsidiaries.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

The table below summarises the exposure of the subsidiaries to currency risks as at 31 December

2022 and 2021. Included in the table are the assets and liabilities categorised by their base currency.

31 December 2022 (Denominated in VND)

US$

ASSETS

Financial assets at fair value through profit or loss

920,080,847

Other receivables

1,190,577

Balances due from brokers

4,637,370

Cash and cash equivalents

8,419,502

TOTAL ASSETS

934,328,296

LIABILITIES

7,387,092

NET CURRENCY POSITION

926,941,204

31 December 2021 (Denominated in VND)

US$

ASSETS

Financial assets at fair value through profit or loss

1,455,238,030

Other receivables

1,417,772

Balances due from brokers

3,730,792

Cash and cash equivalents

4,698,609

TOTAL ASSETS

1,465,085,203

LIABILITIES

NET CURRENCY POSITION

1,465,085,203

As at 31 December 2022, had the US$ strengthened or weakened by 3% (31 December 2021: 1%)

against VND with all other variables held constant, the net assets attributable to the Company would

have been decreased or increased by the amounts shown below. This analysis was performed on the

same basis as in 2021.

Denominated in VND

US$

2022

26,998,287

2021

14,505,794

(d) Fair values of financial assets and liabilities

(i) Valuation model

The fair values of financial instruments that are traded in active markets are based on quoted prices

or broker price quotations. For all other financial instruments, the Company determines fair values

using other valuation techniques.

For financial instruments that trade infrequently and have little price transparency, fair value is less

objective, and requires varying degrees of judgment depending on liquidity, uncertainty of market

factors, pricing assumptions and other risks affecting the specific instrument.

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

The Company measures fair values using the following fair value hierarchy that reflects the

significance of the inputs used in making the measurements.

• Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical

instruments.

• 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 category includes instruments

valued using: quoted market prices in active markets for similar instruments; quoted prices for

identical or similar instruments in markets that are not considered active; or other valuation

techniques in which all significant inputs are directly or indirectly observable from market data.

• Level 3: Inputs that are unobservable. This category 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. This category includes instruments that

are valued based on quoted prices for similar instruments but for which significant unobservable

adjustments or assumptions are required to reflect differences between the instruments.

The Company makes its investments through wholly owned subsidiaries and joint ventures,

which in turn own interests in various listed and unlisted equity securities. The net asset value

of the subsidiaries and joint ventures is used for the measurement of fair value. The fair value of

the Company’s underlying investments, however, is measured in accordance with the valuation

methodology which is in consistent with that for directly held investments.

(ii) Fair value hierarchy – Financial instruments measured at fair value

The table below analyses the Company’s financial assets 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.

As at 31 December 2022

Level 1

Level 2

Level 3

Total

US$

Financial assets at fair value

through profit or loss

• Listed equity investments

642,802,331

• Unlisted investments

48,780,488

• Investments in subsidiaries and

joint ventures

926,941,387

642,802,331

926,941,387

48,780,488

1,618,524,206

As at 31 December 2021

Level 1

Level 2

Level 3

Total

US$

Financial assets at fair value

through profit or loss

• Listed equity investments

1,137,326,975

• Investments in subsidiaries and

joint ventures

1,465,085,203

1,137,326,975

- 1,465,085,203

2,602,412,178

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

The following table shows a reconciliation from the opening balances to the closing balances for fair

value measurements of the Company in three levels of the fair value hierarchy.

Level 1

Level 2

Level 3

2022

2021

2022

2021

2022

2021

US$

Opening

balance

1,137,326,975

769,940,680

1,465,085,203

1,007,031,704

Purchases

615,471,569

584,961,158

49,586,064

Sales

(710,637,731)

(403,521,104)

Transfers

1,465,085,203

(1,465,085,203)

Net cash

flows from

subsidiaries and

joint ventures

(46,610,750)

(77,527,696)

Unrealised

(losses)/gains

recognised in

profit or loss

(399,358,482)

185,946,241

(491,533,066)

(805,576)

535,581,195

Closing balance

642,802,331

1,137,326,975

926,941,387

48,780,488 1,465,085,203

Total unrealised

(losses)/gains

for the year

included in

net changes

in fair value of

financial assets

at fair value

through profit

or loss

(399,358,482)

185,946,241

(491,533,066)

(805,576)

535,581,195

The Company invests substantially all of its assets in its subsidiaries and joint ventures together with

which it is managed as an integrated structure. The Directors decided that the objectives of IFRS 7

Financial Instruments: Disclosures are met by providing disclosures on the fair value hierarchy of the

underlying investments held by the subsidiaries and joint ventures.

The table below analyses the subsidiaries and joint ventures’ 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.

As at 31 December 2022

Level 1

Level 2

Level 3

Total

US$

Financial assets at fair value

through profit or loss

• Listed equity investments

920,080,847

As at 31 December 2021

Level 1

Level 2

Level 3

Total

US$

Financial assets at fair value

through profit or loss

• Listed equity investments

1,455,238,030

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

The following table shows a reconciliation from the opening balances to the closing balances for fair

value measurements of investments through the subsidiaries and joint ventures in three levels of the

fair value hierarchy.

Level 1

Level 2

Level 3

2022

2021

2022

2021

2022

2021

US$

Opening

balance

1,455,238,030

983,928,129

Purchases

645,324,861

569,500,379

Sales

(677,281,563)

(386,253,924)

Capital

redemption

by investee

company

(43,046,070)

Unrealised

(losses)/gains

(503,200,481)

331,109,516

Unrealised

gains

331,109,516

163,470,927

Closing balance

920,080,847

1,455,238,030

Total unrealised

(losses)/gains

included in

net changes

in fair value of

financial assets

at fair value

through profit

or loss

(503,200,481)

331,109,516

(iii) Significant unobservable inputs used in measuring fair value

The table below sets out information about significant unobservable inputs used at 31 December

2022 in measuring financial instruments categorised as Level 3 in the fair value hierarchy.

Description

Fair value

31/12/2022

Valuation technique

Significant

unobservable inputs

Sensitivity

to changes

in significant

unobservable inputs

US$

Unlisted

equity

investments

48,780,488

Discounted cash flow: The

valuation model considers

the present value of the

expected future net cash

flows derived from put

option using a number

of possible outcomes

of the negotiations and

attributing probabilities

to each. The expected net

cash flows are discounted

using the cost of debt.

• Expected future

net cash flows

derived from put

option using a

number of possible

outcomes of the

negotiations

and attributing

probabilities to

each.

• Cost of debt (“the

discount rate”)

The estimated

fair value would

increase (decrease)

if:

• the expected

cash flows were

higher (lower);

• the cost of

debt was lower

(higher).

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

(e) Classification of financial assets and financial liabilities

The following table shows the classification of financial assets and financial liabilities of the Company:

Designated at

fair value

Amortised

cost

Total carrying

amount

As at 31 December 2022

US$

ASSETS

Financial assets at fair value through

profit or loss

1,618,524,206

Other receivables

666,012

Balances due from brokers

1,883,932

Cash and cash equivalents

14,488,971

1,618,524,206

17,038,915

1,635,563,121

LIABILITIES

Balances due to brokers

10,230,853

Accounts payable and accruals

2,750,517

12,981,370

Designated at

fair value

Amortised

cost

Total carrying

amount

As at 31 December 2021

US$

ASSETS

Financial assets at fair value through

profit or loss

2,602,412,178

Other receivables

1,686,695

Balances due from brokers

1,232,092

Cash and cash equivalents

9,853,132

2,602,412,178

12,771,919

2,615,184,097

LIABILITIES

Balances due to brokers

4,209,904

Accounts payable and accruals

3,996,271

8,206,175

(f) Capital management

The Company considers the capital under management as equal to net assets attributable to the

Ordinary Shareholders. The Company has engaged the Investment Manager to allocate the net

assets in such a way to generate investment returns that are commensurate with the investment

strategies of the Company.

Vietnam Enterprise Investments Limited - Annual Report 2022

15. Notes to the Financial Statements (Continued)

For the year ended 31 December 2022

B. Uncertainty

Although the Company and its subsidiaries and joint ventures are incorporated in the Cayman

Islands and the British Virgin Islands, respectively, where tax is exempt, their activities are primarily

focused in Vietnam. In accordance with the prevailing tax regulations in Vietnam, if an entity was

treated as having a permanent establishment, or as otherwise being engaged in a trade or business

in Vietnam, income attributable to or effectively connected with such permanent establishment

or trade or business may be subject to tax in Vietnam. As at the date of this report the following

information is uncertain:

• Whether the Company and its subsidiaries and joint ventures are considered as having

permanent establishments in Vietnam;

•

The amount of tax that may be payable, if the income is subject to tax; and

•

Whether tax liabilities (if any) will be applied retrospectively.

The implementation and enforcement of tax regulations in Vietnam can vary depending on numerous

factors, including the identity of the tax authority involved. The administration of laws and regulations

by government agencies may be subject to considerable discretion, and in many areas, the legal

framework is vague, contradictory and subject to different and inconsistent interpretation. The

Directors believe that it is unlikely that the Company and its subsidiaries and joint ventures will be

exposed to tax liabilities in Vietnam, and as a result, provision for tax liabilities have not been made

in the financial statements.

The Offshore Persons Exemption is provided under Section 20AC of the Inland Revenue Ordinance

(“IRO”) and applies to exempt non-fund and non-resident persons from Hong Kong Profits Tax

(“HKPT”) subject to satisfying certain conditions. Effective from 1 April 2019, the New Funds

Exemption under Section 20AN of the IRO provides that funds within the meaning of Section 20AM,

resident and non-resident, will be exempt from HKPT subject to certain conditions. The Directors

believe that they have implemented steps to enable the Company to satisfy all the conditions to be

exempted from HKPT for the year ended 31 December 2022.

If the Company does not meet the exemption criteria under the Funds Exemption, the Company is

exposed to Hong Kong Profits Tax at a rate of 16.5% in respect of any profits which arise in or are

derived from Hong Kong and which are not capital profits or exempt profits if it is treated as carrying

on a trade or business in Hong Kong either on its own account or through any person as an agent.

14. SUBSEQUENT EVENTS

From 1 January to 25 April 2023, the Company repurchased 1,021,413 Ordinary Shares for a total

consideration of US$6,997,807.

15. APPROVAL OF THE FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the Board of Directors on 25

April 2023.

Vietnam Enterprise Investments Limited - Annual Report 2022

16. Corporate Information

Company Secretary

Maples Secretaries (Cayman) Limited

PO Box 309

Ugland House

Grand Cayman KY1-1102

Cayman Islands

Investment Manager

Dragon Capital Management (HK) Limited

Unit 2406, 24/F

9 Queen’s Road

Central

Hong Kong

Vietnam Custodian

Standard Chartered Bank (Vietnam) Ltd.

Floor Vinaconex Tower

34 Lang Ha

Dong Da

Hanoi

Vietnam

Registrar

Computershare Investor Services

(Cayman) Limited

Windward 1

Regatta Office Park

West Bay Road

Grand Cayman KY1-1103

Cayman Islands

Corporate Broker

Jefferies International Limited

100 Bishopsgate

London EC2N 4JL

United Kingdom

Registered Office

Vietnam Enterprise Investments Limited

c/o Maples Corporate Services Limited

PO Box 309

Ugland House

Grand Cayman KY1-1104

Cayman Islands

Administrator and Offshore Custodian

Standard Chartered Bank

Standard Chartered @ Changi

No 7, Changi Business Park Crescent

Level 03

Singapore 486028

Legal Adviser to the Company

Stephenson Harwood LLP

1 Finsbury Circus

London EC2M 7SH

United Kingdom

Auditors

KPMG Limited

Floor Sun Wah Tower

115 Nguyen Hue

District 1

Ho Chi Minh City

Vietnam

Depositary

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS13 8AE

United Kingdom

Vietnam Enterprise Investments Limited - Annual Report 2022

17. Investor Information

Enquiries

For institutional investors based in Europe: dcme@dragoncapital.com

Other enquiries globally: veil@dragoncapital.com / info@dragoncapital.com

Dragon Capital Management (HK) Limited

Unit 2406, 24/F

9 Queen’s Road

Central

Hong Kong

Tel: +852 3979 8100

Fax: +852 3979 8199

Dragon Capital Vietfund Management

Joint Stock Company

1501 Me Linh Point

2 Ngo Duc Ke

District 1, Ho Chi Minh City

Vietnam

Tel: +84 28 3823 9355

Fax: +84 28 3823 9366

Dragon Capital Markets (Europe) Limited

Cambridge House

Henry Street

Bath BA1 1BT

United Kingdom

Tel: +44 1225 618 150

Fax: +44 1225 618 151

Vietnam Enterprise Investments Limited - Annual Report 2022

18. Glossary

Term

Definition

ACB

Asia Commercial Bank

ACGA

Asian Corporate Governance Association

AGM

Annual General Meeting

BCM

Becamex IDC

BID

BIDV

CVaR

Climate Value-at-Risk

DTR

Disclosure Guidance and Transparency Rule

DXG

Dat Xanh Group

E&S

environmental and social

ECLs

expected credit losses

EPS

earnings per share

ESG

environmental, social and governance

FCA

Financial Conduct Authority

FEC

FE Credit

FPT

FPT Corporation

FRC

Financial Reporting Council

FVTPL

fair value through profit or loss

GHG

Greenhouse Gas

HKPT

Hong Kong Profits Tax

HNX

Hanoi Stock Exchange

HOSE

Ho Chi Minh Stock Exchange

HPG

Hoa Phat Group

IESBA

International Ethics Standards Board for Accountants

IFC

International Finance Corporation

IFRS

International Financial Reporting Standards

IIGCC

Institutional Investors Group on Climate Change

Intensel

Intensel Limited

IPCC

Intergovernmental Panel on Climate Change

IRO

Inland Revenue Ordinance

ISPONRE

Institute of Strategy Policy on Natural Resources and Environment

KDH

Khang Dien House

KPI

key performance indicators

KPMG

KPMG Limited

MWG

Mobile World Group

NAV

Net Asset Value

NDC

Nationally Determined Contribution

NFI

net fee income

NII

net interest income

NIM

net interest margin

NPAT-MI

net profit after minority interest

NPL

non-performing loans

PBR

price-to-book ratio

PER

price-to-EPS ratio

PNJ

Phu Nhuan Jewelry

Vietnam Enterprise Investments Limited - Annual Report 2022

Term

Definition

PRI

Principles for Responsible Investment

RCP

Representative Concentration Pathways

SaaS

Software-as-a-Service

SAB

Sabeco

SOCBs

State-owned commercial banks

SSC

State Securities Commission

SSP

Shared Socioeconomic Pathways

The 2022 AGM

Annual General Meeting of the Company held on 14 July 2022

The Act

The Modern Slavery Act 2015

The Administrator

Standard Chartered Bank

The AIC Code

AIC Code of Corporate Governance

The Articles

Restated and Amended Memorandum and Articles of Association

The Custodian

Standard Chartered Bank

The Group

Dragon Capital group

The Project

As a pipeline project of Company A

The UK Code

UK Corporate Governance Code

UPCoM

Unlisted Public Company Market

US$

United States Dollar

VCB

Vietcombank

VEIL or the Company

Vietnam Enterprise Investments Limited

VHM

Vinhomes

VIOD

The Vietnam Institute of Directors

VIR

Vietnam Investment Review

VLCA

Vietnam Listed Company Awards

VN Index

Vietnam Index

VNM

Vinamilk

VPB

Vietnam Prosperity Bank

WACI

weighted average carbon intensity

YoY

year-on-year

18. Glossary (Continued)

Vietnam Enterprise Investments Limited - Annual Report 2022