VOTING NOTE VOTING ISSUES OF THE ANNUAL MEETING OF FINANCIAL YEAR 2016 VIETNAM BLUE-CHIP FUND (VFMVF4)

Transcription

1 VOTING NOTE VOTING ISSUES OF THE ANNUAL MEETING OF FINANCIAL YEAR 2016 VIETNAM BLUE-CHIP FUND (VFMVF4) Pursuant to: - Law on Securities dated 29 July 2006 by the National Assembly and Law No. 62/2010/QH12 dated 24 November 2010 by the National Assembly amending, supplementing a number of articles of Law on securities; - Circular No. 212/2012/TT-BTC dated 05 December 2012 by the Ministry of Finance guiding the establishment, organization and operation of the fund management company; - Circular No. 183/2011/TT-BTC dated 16 December 2011 by the Ministry of Finance guiding the establishment and management of the open-ended Funds; - Circular No. 15/2016/TT-BTC dated 20 January 2016 by the Ministry of Finance amending and supplementing some articles of Circular No. 183/2011/TT-BTC dated 16 December 2011 guiding the the establishment and management of open-ended Funds. Circular takes effect from the date of 15 March 2016; - The Charter of Organization and Operation of Vietnam Blue-Chip Fund approved by the Annual General Meeting of Financial Year 2015 on 31 March 2016; - Rule of voting by written consent of the Annual General Meeting of Financial Year I- Fund information: - Fund name: VIETNAM BLUE-CHIP FUND - License of Establishment and Issue: No 06/GCN-UBCK granted by the SSC dated 16 December Address: Unit , 17th Floor, Melinh Point Tower, 02 Ngo Duc Ke, Ben Nghe Ward, District 1, Ho Chi Minh City, Viet Nam - Tel.: (84.8) Record date: 27 February Exercise: 01 fund unit 01 voting right. II- Purpose: For approval of voting issues of the Annual Meeting Of Financial Year 2016 Vietnam Blue-Chip Fund (VFMVF4). III- Investor information: 1. For Individual investor: Name of Investor: ID/Passport No.: Dated At Securities Trading Code (STC) (*) : issued by Vietnam Securities Depository (VSD). Address: Total number of fund units owned: 2. For Institutional investor: Name of Investor: Business registration No.: Dated At Page 1/9

2 Securities Trading Code (STC) (*) : issued by Vietnam Securities Depository (VSD). Address: Legal Representative: ID/Passport No.: Dated At Total number of fund units owned: (*) For foreign investors only. IV- Time for voting: Investors shall fill in blanks and tick ( ) on an appropriate box for approval of voting issues of the Annual General Meeting of Financial Year 2016 of Vietnam Blue-Chip Fund (VFMVF4). Voting note should be sent to VietFund Management (VFM) before 17:30pm, 30 March 2017 by 1 in 3 mailing methods mentioned below. 1. Mail: Investor Relation Department Vietnam Investment Fund Management Joint Stock Company (VFM) # , 17 th Floor, Me Linh Point Tower, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, Vietnam 2. Please fill in all information, sign, seal (for institutional investors), scan and send to address: ir@vfm.com.vn 3. Fax: Please fill in all information, sign, seal (for institutional investors) and fax to (84-8) V- Voting section: I/We am/are investor of Vietnam Blue-Chip Fund (VFMVF4) certify my/our voting below is correct and does not change in any case. Please refer to the content of voting in Section VI Voting content. 1. Voting on Fund s performance in Voting on Fund s Audited Financial Statements in Voting on 2016 Dividend distribution 4. Voting on Fund s operation plan in Voting on Fund s Auditor selection in Voting on Operation budget for BOR in Voting on Fund s Charter amendments Page 2/9

3 CHAIRMAN OF BOR ON BEHALF OF VIETFUND MANAGEMENT DANG THAI NGUYEN TRAN THANH TAN CEO INVESTOR (1) (Sign for individual investors/ Sign & seal for institutional investors) Name of Investor: Title: Date: 1 Note: The signature of the investor must be the signature of the fund unit owner or of the authorized person registered with the Fund Management Company or its authorized representative in accordance with law. Page 3/9

4 VI- Voting content: Voting content 1: Fund s performance in 2016 In 2016, Vietnam Blue-chips investment Funds ( VFMVF4 ) has returned 16.4% YoY. This result mostly come from VFMVF4 s appropriate asst allocation into the industries that benefited from the economic policies and favourable macroeconomics factors such as Materials, Capital Goods and Food, Beverages & Tobacco as well as from the limited exposure in the struggling, slow-growing industries such as Banking and Oil & Gas. Specifically, in 2016, VFMVF4 has taken the advantage of a rally market that have its price exceed its intrinsic value to capture the profits from outperforming investments. Consequently, the Fund has increased its cash weighting from 14.6% as of the end of 2016 to 28.1% as of the end of The Fund s equity portfolio concentrated in Large-cap companies, which accounted for 54.6% of the Fund s NAV while Mid-cap stocks accounted for 17.3% NAV. Voting content 2: Fund s Audited Financial Statements in 2016 Please see the content of the Fund's 2016 audited financial statements posted on the VFM's website at Voting content 3: 2016 Dividend distribution VFMVF4 s realized profit was VND5.4bn in 2016, equivalent to VND194 per fund certificate. However, according to the current tax statutory, cash dividend is not superior to fund certificate liquidation. For retail investors, dividend tax is 5%. It is 20% for foreign institutional investors. When investors liquidate fund certificate, tax rate applies at 0.1% on total transaction value. Therefore, VFMVF4 will not distribute cash dividend in Voting content 4: Fund s operation plan in 2017 In 2017, VFMVF4 would continue to allocate into sectors that have strong support from macroeconomics factors such as Food & Beverages, Retailing and Materials. The cash weighting of VFMVF4 has of the end of 2016 is 28.1%, which is expected to reduce to 3-5% in VF4 s portfolio will consist of good-fundamental companies, transparent corporate governance and higher growth than industry average. Besides, VFMVF4 will capture the profits from some companies that have market price exceed its potential in order to optimize the asset allocation of VFMVF4. We maintain our optimistic point of view on the stock market in 2017 and believe that our portfolio companies would achieve favourable business results along market trends. Vietnam stock market valuation is still rather low compared to other markets regionally, with average P/E of 14x. With the average projected profit growth of 19% for the portfolio companies in 2017 and the Government s acceleration in restructuring the financial system, we believe that VF4 will receive favourable investment rsults in Voting content 5: Fund s Auditor selection in 2017 VFM has received the 2017 audit proposals from the top 03 audit firms in Vietnam as follows: Fund 31 Dec 2016 (bil VND) Audit Fee for 2016 (mil VND) Audit fee for 2017 (mil VND) KPMG PwC E&Y VF % change % Note: (1) The above fees exclude VAT. (2) According to Circular 155/2015/TT-BTC dated 6 Oct 2015, starting from 2016 the fund s half year financial statements must be reviewed by auditors. Page 4/9

5 Based on the above proposals, VFM suggest investors authorize the Board of Representatives to select the audit firm among PwC, KPMG and E&Y to audit the fund s 2017 financial statements. The selection of the audit firm will base on the followings: - Continuity of the audit firm. - Reasonable fee. - Professional. - Capability to meet fund s requirements.. Propose: Authorize the BOR to select one of the three audit firms proposed to audit the Fund in Voting content 6: Operation budget for BOR in Board of representatives activities cost in 2016 compared to approved budget: No. Name of cost Actual 2016 Budget 2016 % increase/decrease I Remuneration 205,500, ,000,000-3,1% II Transportation 47,094,700 54,175, % 1 Air tickets 35,524,000 42,241, % 2 Hotel 11,570,700 11,934, % 3 Taxi % III Others (meeting rooms, 5,687,375 meals,..) 11,058, % TOTAL 258,282, ,234, % Note: The actual cost in 2016 was decreased 6.8% compared to the approved budget of 2016 thanks to: Number of BoR members decreased since Annual Meeting 2016 (organized in March 2016). Organizing costs decreased (hotel fee, airtickets, meeting room rents) compared to approved budget. Number of face to face meetings and places changed compared to approved budget. 2. Proposal of BOR budget in 2017: No. Name of cost Budget 2017 Actual 2016 % increase/decrease I Remuneration 195,000, ,500, % II Transportation 34,025,000 47,094, % 1 Air tickets 22,005,000 35,524, % 2 Hotel 10,820,000 11,570, % 3 Taxi 1,200, III Others (meeting rooms, meals,..) 13,000,000 5,687, % TOTAL 242,025, ,282, % Note: Proposed budget decreases 6.3% compared to actual costs in 2016 and is based on the followings: BoR member structure include one Chairman, 3 members and 1 secretary. BoR remunerations will be paid for 13 months with the following details: - Chairman: 5 million VND / month - Member: 3 million VND / month - Secretary: 1 million VND / month Face to face meetings areone, others are via teleconference. In case the number of BoR members changes, the budget will be renewed based on the reality. Voting content 7: Fund s Charter amendments Page 5/9

6 1. Amendment to Point a, Clause 2- Article 17 - Fund certificate transactions: to match with regulation Article 17 - Fund certificate transactions Distribution principles a. Subscription orders - Minimum required subscription amount is 1,000,000 (one million) Vietnam dong. - Investors/ authorized person transfer the subscription amount to the Vietnam dong account of VFMVF4 at Custodian Bank. Where orders of subscription of fund certificates and payment for such orders are performed by individuals or organizations (domestic) other than domestic investors, order forms and written confirmation of such payment must clearly include name, account number and payment value of the interested domestic investor Supplement to Point b Clause 1- Article 40- Operations of the supervisory bank: to match with regulation. Article 40- Operations of the supervisory bank 1. The scope of supervision limits only within the fund management company's activities relating to the fund for which the bank carries out the supervision function. In the operation of supervisory activities, custodian bank shall: a. b. To inspect, supervise investment activities and transactions of fund s assets, including assets that are not centrally registered at Vietnam Securities Depository; to inspect, supervise asset transactions between fund, fund management company and affiliated persons. In case of detecting violations of provisions of law, custodian bank shall report immediately to the State Securities Commission and notify the fund management company within twenty four (24) hours, upon the detection of such case, meanwhile request corrections or to conduct remedy activities within the time limit. If the ownership of the assets is registered, the registration must be undersigned by the fund, unless it must be undersigned by the supervisory bank, the secondary depository institution, or the fund management company as prescribed by relevant laws. The originals of legal documents certifying the fund s ownership of assets shall be adequately deposited at the supervisory bank, except for the securities have been registered and centrally deposited. To the extent of the book-entry securities, or incomplete assignment of ownership of such securities, the original sale and purchase contract and payment transactions must be deposited at the supervisory bank. To the extent that registration for ownership of assets is not allowed, or ownership of such assets has not been completed by the deadline stipulated in issuance agreements, the assignment contract, investment contract or economic contracts of the equivalent value, the supervisory bank shall be responsible for expressly certifying the asset depository and registration status in periodic reports of the fund management company and supervisory bank, and concurrently send a written notification to the board for representations of the fund. In respect of assets of which registration of ownership is not required, the supervisory bank shall be responsible for checking with investment receivers, issuers and shareholder register management organizations, or others of the same sort, volume and value of the fund s assets on a monthly basis, and ensuring compliance of asset depository with subparagraph e paragraph 1 of this Article. Page 6/9

7 In respect of bank deposits, the supervisory bank shall have rights and responsibilities for requesting the fund management company to provide adequate information about the fund s deposit agreements and deposit accounts. The supervisory bank shall be responsible for checking deposit account balances, value of deposit agreements with banks receiving the fund s deposits on a monthly basis. 3. Amendment, supplement to Clause 1- Article 56 - Principles of Valuation Method of the Net Asset Value: to update for suitable. ARTICLE 56. Principles of Valuation Method of the Net Asset Value 1. Date of valuation The trading frequency is daily, the Fund s NAV is valuated on working day of week and each month. The valuation day is working day of week (for daily term) and the first day of next month (for monthly term). For monthly term, the valuation date is always on the first day of the next month regardless it falls in a holiday. In case the fund management company changes the valuation date, the company shall get the approval from the Board of Representative before execution. 4. Supplement to Point 8 and Point 9 Clause 2- Article 56 - Principles of Valuation Method of the Net Asset Value: supplement principles of valuation method for Shares listed on Ho Chi Minh City Stock Exchange or Hanoi Stock Exchange and Upcom Shares when moving from the upcom to the listed. 8. Shares listed on Ho Chi Minh City Stock Exchange or Hanoi Stock Exchange - Closed price (or quote price) on the transaction system at the Stock Exchanges on date having latest transaction prior to valuation date - In case of no transaction in more than two (02) weeks until valuation date, it shall be prioritized prices as the following order: + Closed price (or quote price) on the transaction system at the Stock Exchanges on date having latest transaction within 12 months prior to valuation date; + Purchase price; + Book value; Price determined by the method which was approved by the fund representative board During the time of Shares change stock exchange procedures, closed price on date having latest transaction prior to valuation date will be used. Page 7/9

8 9. Shares of public companies registered for trading on UpCom system - Closed price (or other name depending on internal regulations of the Stock Exchange) on date having latest transaction prior to valuation date; - In case of no transaction in more than two (02) weeks until the date prior to the valuation date, closed price (or other name depending on internal regulations of the Stock Exchange) on date having latest transaction within 12 months prior to valuation date will be used; or + Purchase price (cost price); or + Book value; or + Price determined by the method which was approved by the Fund Representative Board. During the time of UPCOM Shares exchange procedures for listing, closed price on date having latest transaction prior to valuation date on Upcom will be used. 5. Supplement to Article 61 - Dividend policy: to match with law ARTICLE 61. Dividend policy 1. The annual profit distribution is based on proposals of the BOR and approved by the General Meeting of investors. 2. Profits may be distributed in cash or by fund units. Distributed profits shall be deducted from remaining profit of fund. Fund management company shall only receive profit when fund already completes or is financially capable of fullfilling tax duties and other financial duties in accordance with regulations of laws; The amount paid to a fund unit is decided by the fund representative board. 3. Fund Management Company must deduct all taxes, fees, services fee regulated by laws when paying dividend. 4. VFMVF4 s dividend shall be in cash or fund units. Only investors identity being on fund s investor list, at the ex-dividend date, shall have right to receive dividend, regardless of who holds VFMVF4 unit after ex-dividend date. 5. After receiving dividend, Fund Management Company have to public the following information: - Dividend distribution in cash or in fund unit. - Total profit during the reporting time and total accumulated profit since inception, detailing each of profit s categories. - Total distributed dividend amount, total new issued fund units (if dividend distribution would be in fund units). - Net asset value per fund unit before and after dividend distribution. - Other effects on VFMVF4 s net asset value 6. Amendment to Article 63: Fees paid by the fund: update foe suitable. ARTICLE 63. Fees paid by the fund 1. Management fee Depository and supervision fee - Depository and supervision fee shalll be paid to the Custodian and Supervsing Bank for providing the custodian and supervising services for the Fund. This fee is calculated at every valuation cycle based on the NAV of day prior to the valuation day and payable every month. The monthly fee is the total fee calculated (accrued) of valuation cycles in a month. Type of Fee The application period Fee (NAV/year) Minimum fee (VND/month) Page 8/9

9 Supervision fee Before 1 April 2016 Maximum of 0.04% 16,800,000 Depository fee From 1 April % 23,000,000 Before 1 April 2016 Maximum of 10,500, % From 1 April % 22,000, Fund administration fee - The fund adminstration fee is the fee VFMVF4 pay for the fund admintration service provider. - The fund adminstration fee is paid monthly as follows: The application period Fee (NAV/year) Minimum fee (VND/month) Before 1 April 2016 Maximum of 0.04% 10,500,000 From 1 April % 5,000, Other fee related to Fund s asset trading Type of Fee The application period Fee Securities transaction fee Before 1 April 2016 From 1 April 2016 Maximum of 160,000 VND/trade and maximum of 0.06% NAV/year 100,000 VND/trade 7. Amendment, supplement to Clause 1 Article 71 - Registration of the Charter: update charter ARTICLE 71. Registration of the Charter 1. VFMVF4 Charter is amended and supplemented at the forth time including 16 Chapters, 72 Articles and 3 Appendixes according to Resolution of the Annual Financial General Meeting of Investors 2016 passed by absentee voting, dated on 04/04/2017 and takes effect from 04/04/ END--- Page 9/9