IET S Holdings CONG HOA XA HOI CHỦ NGHĨA VIET NAM Độc lập - Tự do - Hanh phúc Hanoi, dated 16th May 2017 SUBMISSION
Re: The selection of the independent auditing agency for the Financial Reports in the years of 2018, 2019, 2020 for Baoviet Holdings Respectfully submit to: The 2017 Annual General Shareholders’ Meeting of
Baoviet Holdings In pursuant with:
- The Enterprises Law No 68/2014/QH13 dated 26'" November 2014 of the Socialist Repulic of Vietnam;
- The Tendering Law No 43/2013/QH13 dated 26" November 2013 of the Socialist Republic of Vietnam;
- The current Charter of Baoviet Holdings
The contract for the provision of auditing services, revision of the financial reports between Baoviet Holdings (BVH) and Ernst & Young Vietnam Ltd (EY Vietnam) shall end after EY completes the auditing and revision of the 2017 financial reports of Baoviet Holdings Upon the obligation to implement as stipluted by the Charter of Baoviet Holdings, the Supervisory Board of BVH (SB) would like to respectfully submit to the 2017 Annual General Shareholders’ Meeting (AGM) of BVH the selection of the independent auditing agency for the financial reports in the years of 2018, 2019, 2020 for BVH as follows:
1 The references and benefits of hiring an independent auditing agency to implement the long term auditing of financial reports:
The signing of the long-term auditing contract is not illegal against any regulations stipulated by neither the law of Vietnam or any accouting, auditing standards of Vietnam Simultaneously, such signing is competible with the standards and trends of big coorporations worldwide On the process of assessing the signing of the long term auditing contracts, BVH considers and
foresees the fundamental benefits of such activities as follows:
- First, to ensure the completion and disclosure of the audited financial reports in due time at the best quality: The signing of long term contract for auditing financial reports shall help the auditing agencies construct a long term plan to ensure the consistent staff with deep knowledge in the field of auditing, who can provide better understandings in the systematic organisation, corporate governance of the audited companies Such doing
Trang 2shall help to improve the work efficiency between the auditing officers and
the staff of the audited companies, fostering the completion of the audited reports, revised reports of the financial reports in order to ensure the quality and deadlines for disclosure of the audited and revised financial reports for listed companies
- Second, such consistent auditing fees to ensure the level of reasonability: The signing of the long term auditing contract shall help BVH to maintain the consistency in the auditing expenses, throughout the years, the auditing fees applied to BVH has changed but insignificantly (the maximum
amplitude of changes is 5% p.a) within the context of increasing labour expenses
- Third, to provide a promoting, free and less time-consuming services, the
expenses in selecting an auditing agency every year: Signing the long term contract for auditing financial reports shall not only improve the efficiency, reduce the time on the operation, auditing and revision of the financial
reports, but also offer to BVH a better, free services from the auditing
agency as well as the organisation of training sections, conferences in order to keep updated with the most recent legal documents on the regimes,
accounting policies, taxation, exchange of knowledge, consultancy on the implementation of financial solutions; from which contributes significantly to the the improvement of the knowledge, experience, management skills as well as the corporate governance in the business activities Besides, such
signing activity also helps to reduce the time and effort of the SB, BOD,
BOM, Finance-Accounting Division and other related departments to the work of selecting an auditing agency annually
2 Regarding the guidelines, methods of selecting an independent auditing agency
According to the types of business and the audting demand of BVH and its Subsidiaries, the SB would like to respectfully propose to the AGM on the criteria, format for selection of the independent auditing agency as follows:
a/ Guidelines for selecting the auditing agency:
- An international reputable auditing agency legally operating in Vietnam, approved by the State Security Commission of Vietnam (SSC) to implement the
auditing activities for issued organisations, listed organisations and the stock;
- An auditing agency with an Actuary professional group and a highly experienced auditing staff with outstanding experience in auditing financial reports in the field of insurance, fund management, stock exchange, banking as stipulated by the International standards, Vietnam Accounting Standards (VAS)
Trang 3- Having no conflict in the benefits upon the implementation of auditing financial reports for BVH (The auditing of financial reports must be implmented independently from the consultancy on drafting the financial reports and the internal audit activities);
- Offering a reasonable price for auditing, relevant to the content, scope and progress of auditing financial reports upon the request of BVH;
- Provision of attractive, free services for BVH b/ Methods of selecting the auditing agency:
The above guidelines shall be considered as high requirements on the techniques and specification of auditing financial reports in the field of finance-
insurance According to the regulations stipulated in Article 21 of the 2013
Tendering Law (The limited tendering shall be applicable in case of such high requirements on techniques or specialised specifications of the tendering contract which only a few contractors can meet), SB shall propose the methods of selecting the tenderees as the limited tendering contract
3 Proposal on selecting the independent auditing agencies to be on the short list:
According to the above guidelines, SB would like to respectfully propose the short list (for limited tendering) including 04 International reputable auditing agencies with outstanding reputation, capability and experiences, legally operating in Vietnam as well as being approved by the SSC to implement the auditing activities for issued organisations, listed organisations and the stock trading organisations in 2017 as follows: - Deloitte Vietnam; - Ernst & Young Vietnam; - KPMG Vietnam; - Price Waterhouse Cooper Vietnam 4 Proposal of the SB According to the proposals above, SB would like to respectfully submit to the 2017 AGM:
- To approve the directions on the selection and signing of the long term auditing contract with 01 auditing agency for auditing, revising financial reports
of BVh in the 3 fiscal years of 2018, 2019, 2020
- To approve the short lists of indenpendent auditing agencies as mentioned in the Section 3 so that SB can use as a guideline to select, propose an independent auditing agency for auditing and revising financial reports of BVH
in the fiscal years of 2018, 2019, 2020
Trang 4for auditing financial reports of BVH in the fiscal years of 2018, 2019, 2020
according to the proposal of the SB
- To assign the SB to participate, chair the implementation of tasks as the
tenderer as stipulated by the Tendering Law
- To assign the CEO of BVH to sign the contract on the service provision in auditing financial reports with the selected independent auditing agency in order to implement the auditing and revision of financial reports of BVH in the fiscal years of 2018, 2019, 2020
Respecfully submit./
ON BEHALF OF THE SUPERVISORY BOARD
Achieves: HEAD OF SUPERVISORY BOARD
- As above;
- BOD; (Signed and sealed)
- CEO;
- For filing: Admin, SB