ANNUAL REPORT 2009 · Email: [email protected] ANNUAL REPORT 2009 4 5. CHAIRMAN’S MESSAGE BAOVIET HOLDINGS BAOVIET’S SUBSIDIARIES KEY EVENTS 2009 CORPORATE SOCIAL

ANNUAL REPORT

2009

Head office: No. 8 Le Thai To, Hoan Kiem District, Ha Noi

Tel: (84.4) 3928 9898 / 3928 9999

Fax: (84.4) 3928 9609 / 3928 9610

Email: [email protected]

ANNUAL REPORT 2009

4 5

CHAIRMAN’S MESSAGE

BAOVIET HOLDINGS

BAOVIET’S SUBSIDIARIES

KEY EVENTS 2009

CORPORATE SOCIAL RESPONSIBILITY

AWARD AND TITLE HIGHLIGHTS

CONTENTS

CHIEF EXECUTIVE OFFICER’S REPORT

Organisation Structure

BaoViet’s Developments

The Board of Directors

Strategic Partners

BaoViet Brand

FINANCIAL STATEMENTS

SEPARATE FINANCIAL STATEMENTS

Independent auditors' report

Separate balance sheet

Separate income statement

Separate cash flow statement

CONSOLIDATED FINANCIAL STATEMENTS

Independent auditor's report

Consolidated balance sheet

Consolidated income statement

Consolidated cash flow statement

Notes to the consolidated financial statements

4

6

11

20

34

36

38

40

49

99

PRELIMINARY RESTATEMENT OF

PRIMARY CONSOLIDATED FINANCIAL STATEMENTS

CHAIRMAN'S MESSAGE

Overall, Bao Viet contributed more than VND 1,000

billion to the state budget through taxes and dividends,

and created nearly 7,000 jobs and recruited 30,000

agents nationwide. The Group also played an

important part in maintaining social stability by

proactively participating in social welfare activities and

assisting poor districts across the country in

supporting Government's policies.

Turning to 2010, the world economic forecast has

shown positive movements (although the recovery is

still weak), posing new issues that may impact

Vietnam's economic development in general and Bao

Viet in particular. In 2010 and in conjunction with its

45th Anniversary, Bao Viet's employees are expected

to successfully implement the business plan for 2010

and pave the way to accomplish Bao Viet's

Development Strategy 2010 - 2015, in line with

shareholders' expectations. As such, the Board of

Directors has proposed a number of solutions for

implementation in 2010:

First, to conduct regular monitoring of the economic

environment and take necessary steps and measures

to ensure proper directions and decisions are made.

Second, to further assess and fine-tune the corporate

management system to be in line with international

best practice.

Third, to focus on research and development, and

intensify investments in financial products, distribution

channel expansion and service quality to meet

customers' increasing demands.

Fourth, to implement the IT system centralization with

modern infrastructure so that it could operate various

specialized software, create a centralized customer

database system, facilitate cross-selling and develop

competitive advantages in each subsidiary's systems.

Fifth, to invest in the capabilities and resources of

senior managements and considers the investment as

part of the strategic solutions in its international

integration process.

Ladies and Gentlemen,

In line with the state enterprise reform and

development policy, Bao Viet was one of the first state-

owned corporations in Vietnam to undergo

equitization, following which the organization became

Bao Viet Holdings under the Decision 310/2005/QĐ-

TTg issued by the Prime Minister of Vietnam on th

November 28 , 2005.

After two years of successful equitisation, Bao Viet has

gained considerable recognition as the leading

financial–insurance group in Vietnam, based on its

core foundations which include international best

practice management, centralization of information

technology, investment in human resources, a new

corporate brand identity and the gradual increase of

capital in accordance with planned roadmap.

The year 2009 was a challenging year in view of the

financial crisis globally. Despite that, Bao Viet

Holdings' Board of Directors have developed solutions

and strategies to overcome these challenges, ensuring

stability in its business operations and allowing Bao

Viet to successfully achieved the year's target as

presented at the General Shareholders' Meeting.

At the end of 2009, Bao Viet exceeded its business

targets with total revenues of approximately VND 930

billion and profit after tax of VND 808 billion, an

increase of 45.03% and 59.33% respectively in 2008.

Its total consolidated revenues and profit after tax were

estimated at VND 10,567 billion and VND 1,011 billion

respectively. All Bao Viet's subsidiaries also exceeded

their respective targets. With these achievements, the

Board of Directors estimated the dividend payment to

shareholders in 2009 to be 11%, exceeding the plan by

37.5%.

In 2009, Bao Viet Holdings was successfully listed on

the Ho Chi Minh City Stock Exchange (HOSE) and

completed the private placement procedures for

HSBC Insurance (Asia-Pacific) Holdings Limited, Bao

Viet's strategic shareholder, to make an additional

capital investment of VND 1,878 billion in Bao Viet in

early 2010.

Such investment demonstrates HSBC's long-term

commitment in Bao Viet and at the same time,

improves Bao Viet's financial capabilities to meet the

capital demands of its subsidiaries to expand their

business operations. Le Quang Binh

Sixth, to continue strengthening Bao Viet's current

roles and responsibilities as the representative of the

General Shareholders' Meeting in terms of managing

its corporate operations and intensify its supervisory

role via the internal audit.

Seventh, to further improve the corporate financial

capabilities by increasing the capital charter in 2010.

With our corporate slogan “Your Trust, Our

Commitment”, Bao Viet is confident in building its

organization on a model of “One Bao Viet - One New

Foundation” through its three business pillars:

insurance, banking, and investment, thus taking a step

forward to become the leading financial-insurance

group in Vietnam and one of 10 most powerful

financial-insurance groups in South East Asia.

Chairman of The Board of Directors of Baoviet Holdings - Mr. Le Quang Binh

On behalf of Bao Viet Holdings' Board of Directors, I

would like to extend our sincerest thanks and wishes of

good health to all our shareholders, partners, and

colleagues who have been with us throughout our

journey.

Thank you very much!

CHAIRMAN OF THE BOARD OF DIRECTORS

ANNUAL REPORT 2009 ANNUAL REPORT 20094 5

ANNUAL REPORT 2009 ANNUAL REPORT 20096

PERFORMANCE REPORT FOR 2010 AND BUSINESS PLAN 2010

7

Chief Executive Officer of BaoViet Holdings - Mdm. Nguyen Thi Phuc Lam

We commit to bringing customer satisfaction with diverse financial products and services; bringing benefits to

shareholders and growth to subsidaries


HIGHLIGHTS FOR BUSINESS PERFORMANCE IN

2009.

Despite the global economic recession in 2009,

Vietnam has gained considerable success in terms of

its economic growth and stability. Vietnam was one of

the few countries that have enjoyed a relatively high

economic growth rate of 5.32%. Inflation was kept

below 7% and at the same time, Vietnam gained a

more stable social welfare and an improved business

environment. The country's credibility indicator was

also maintained at 2008 level.

At Bao Viet, the main focus for 2009 has been on its

reform efforts, overcoming challenges and exploring

business opportunities. Bao Viet has achieved good

business targets, making significant improvements in

its financial capabilities, business competitiveness,

and customer service quality.

Business performances in various areas

In 2009, many achievements have been made in Bao

Viet's core businesses such as insurance, investment,

securities, and banking. Following are the summary of

these achievements:

Non-life insurance

Despite the fierce competition and the economic

challenges in 2009, Bao Viet Insurance has

successfully maintained its No. 1 position in the non-

life insurance market with a total revenue of VND 3,683

billion, more than 10% growth from 2008. Its total profit

before tax was VND 219 billion, an increase of 21.39%

from 2008.

Life insurance

The total premiums collected were VND 3,704 billion,

an 8.89% growth from 2008. With better and more

professionally trained staff, improved customer

service and development of new products, Bao Viet

has succeeded in boosting its new business premiums

to reach VND 730 billion in 2009, a 46% increase from

2008, higher than the industry's average growth rate.

This achievement was largely due to the successful

development of bundled products. Premiums from this

product category accounted for 30% of the total new

business premiums in 2009. Bao Viet Life's profit

before tax reached VND 456 billion, a growth of 358%

compared to 2008, exceeding the 2009 plan by 40.3%.

Investment

The total consolidated net value of Bao Viet's capital

investment in 2009 was VND 29,206 billion, an

increase of 36% compared to 2008. Bao Viet's

investment business was launched through the Bao

Viet Fund Management Company with a total capital

investment of VND 17,569 billion. Bao Viet Fund's total

revenue and profit before tax were VND 67 billion and

VND 39 billion, a 31.62% and 61.61% growth from

2008.

Banking

After a year of operation, Bao Viet Bank has increased

its total assets, total mobilization and its outstanding

balance to VND 7,269 billion, VND 3,514 billion and

VND 2.389 billion respectively. The Bank's networks

have been expanded to 2 branches and 8 transaction

offices. The bank has introduced new banking

services in Hanoi and Ho Chi Minh City, with joined up

bancassurance services with Bao Viet Life and Bao

Viet Insurance. The Bank is also developing financial

and investment tie-ups with Bao Viet Securities and

Bao Viet Fund, hence making a significant progress in

its effort to build a solid foundation for its future

development.

Securities services and investment consultant

With the recovery of the stock market in 2009, Bao Viet

Securities ended the year with total revenue of VND

293 billion, 35.8% growth from 2008 and profit before

tax of VND 174 billion. The company is also focusing on

completing the management model for its auditing,

compliance and risk management and at the same

time, implementing and

promoting its investment banking functions. After 10

years of operations, Bao Viet Securities has received

numerous prestigious awards, locally and abroad,

hence maintaining its good reputation and market

position in Vietnam.

Investment and real estate services

Founded in 2008, Bao Viet Invest focuses on real

estate investment and management services. The

company has started to provide its services to other

corporate subsidiaries. Some major projects under its

management include the Bao Viet Building located at

CMS Securities software


CEO OF BAOVIET HOLDINGS

Nguyen Thi Phuc Lam

amounted to VND 1,157 billion and VND 848

billion, or 24.47% and 5.01% growth

respectively in 2009. The ratio of profit over the

charter capital (VND 6,267 billion) is 13.5%.

The solutions for 2010

In order to achieve the above business targets set forth

by the Board of Directors, the Board of Management

will focus on the implementation of the following

solutions:

The focus for 2010 is the implementation of the

IT software centralization project in the life

insurance and non-life insurance businesses,

securities, finance and human resources by

building the desired information technology

infrastructure. The implementation of the

international IT software will result in a change

to Bao Viet's management and customer

service business procedures, thus aligning it

with the international best practice model. This

improvement will also be integrated in Bao

Viet's management reform and customer

service enhancement procedures in 2010.

Bao Viet is gradually adopting the international

best practice of a corporate management

model. In 2010, various procedures such as

risk management, compliance, investment

management and ALCO initiatives will be

implemented. Preparation of the financial

report in IFRS standards to increase

transparency for local and international

investors will also be implemented.

In 2010, Bao Viet will invest extensively in the

human resources development. The core focus

is to further invest in training, in accordance to

the learning roadmap to enhance staff

capabilities; to continue with the technical

transfer project with HSBC; to improve the

compensation structure for the purpose of

compensating staff in proportion to their work

performances.

Cross-selling of products amongst corporate

subsidiaries will be the focus for 2010.

Research are to be conducted on Bao Viet's full

financial service package; joint promotion

programs to be conducted; maximizing the

wide customer base for cross-selling purposes,

providing additional sales for banking, life and

non-life insurance products. In addition, the

Group will also commence operation at No.233

Dong Khoi Street in Ho Chi Minh City and

provide services based on the financial

supermarket model.

Completed the learning roadmap for training programmes to enhance staff capabilities. A new salary structure was also designed to gradually compensate employees according to their work performance.

On-going deployment of the Technical Services and Capability Transfer Agreement (TSCTA) project with the strategic partner HSBC. HSBC experts were appointed to management positions within the Group and subsidiaries, in functional areas such as actuarial services and operations (Bao Viet Life), channel and product development (Bao Viet Insurance), IT, Finance, Human Resources and Risk Management (Bao Viet Holdings).

Strengthening Bao Viet's financial capabilities by increasing its charter capital with an additional investment capital of VND 1,878 billion via the private placement by HSBC in the beginning of 2010. Bao Viet will acquire greater financial resources to further increase its subsidiaries' charter capitals and boosts their technology transfer and investment in information technology.

Positive business performances and vigorous efforts in reforming, developing, and enhancing customer service in 2009 will create a solid foundation for the Group in achieving its business growth in 2010 and the period 2010 – 2015.

2010 BUSINESS PLAN

In 2010, based on economic analysis and forecasts, Bao Viet will maintain its growth targets in all its businesses. At the same time, the Group will continue to invest in its infrastructure development, with an emphasis on informat ion technology and competitiveness in core areas such as insurance, banking and securities to ensure sustainable profit growth. Hence, Bao Viet Holdings has set out key business targets and solutions for 2010 as follows:

2010 business targets

Consolidated business targets

Bao Viet Holdings has set the target for the Group's consolidated revenue and profit before tax, profit after tax to VND 11,720 billion, VND 1,395 billion, and VND 1,104 billion; a 10.91%, 11.59%, and 9.17% growth respectively from 2009.

Bao Viet Group's business target

The Group's total revenue and profit after tax

No.233 Dong Khoi Street, HCMC and Bao Viet Head Office located at Thai Nguyen City, which is planned to be ready in early 2010.

Detailed corporate performances

In 2009, total consolidated corporate revenue was VND 10,567 billion. Revenues from insurance reached VND 7,640 billion, an 8.16% growth from 2008 and from other financial activities at VND 2,393 billion. The total consolidated profit before and after tax reached VND 1,250 billion and VND 1,011 billion respectively. Bao Viet Holdings' total consolidated assets amounted to VND 33,715 billion, a 33.17% increase from the beginning of the year.

Bao Viet Group's revenue was VND 930 billion, equivalent to 45.08% above the targeted plan approved in the General Shareholders' Meeting. The profit after tax of the Group amounted to VND 808 billion, exceeding the planned target by 59.36% with the ratio of after-tax profit over charter capital equaled to 14.1% (charter capital reached VND 5,730 billion), equivalent to 159.36% of the planned target for the year.

The above achievements clearly demonstrated that the Group has met all its targets as agreed during the General Shareholders' Meeting. With such good performance, the estimated dividend to be proposed to the General Shareholders' Meeting is 11%.

Implementation of central solutions in 2009

In 2009, besides achieving its financial targets and plans, Bao Viet Holdings, together with its subsidiaries, has coordinated and implemented many significant changes to improve its competitiveness, including:

Further reforming of the management model via applying new processes in finance, investment, risk management and asset-liabilities management (ALCO); strategy development; building workforce and strengthened its internal audit; completed the 2009 quarterly financial report formats based on the IFRS standards.

Created a new platform to transform its customer service and management by implementing the IT software based on international standard within its businesses – in life insurance (Talisman), non-life insurance (InsureJ), securities (Core Securities), finance (Sun Account) and human resources (Ufida). In addition to the software implementation, centralization of the business models was also carried out in Bao Viet Life and Bao Viet Bank.

The brand reform in 2010 will generate a new, more positive image, reflecting a dynamic character and renewed corporate culture that will help Bao Viet in enhancing its customer service. The new Bao Viet brand applications will also create stronger brand recognition and provide added value to society, customers, shareholders, and the Bao Viet staff.

With the additional capital investment through the private placement by HSBC, the Group's charter capital will increase from

billion and its capital increase to VND 10,300 billion. Bao Viet Holdings intends to use this financial resource to increase the charter capitals of its core subsidiaries including Bao Viet Insurance, Bao Viet Bank and Bao Viet Securities. Bao Viet Holdings will also continue with its information technology development project.

The above report reflects on Bao Viet Holdings' 2009 business performance and 2010 business plan based on the economic forecast and government policies, as well as the potential business opportunities and challenges.

The year 2010 also marks many significant celebrations, including the Thang Long 1,000 Years, the 65 years of the Financial Industry and Bao Viet's 45 years anniversary. The positive economic recovery trend will also create a good start for 2010 with an optimistic atmosphere of success and prosperity. Backed with its 45-year tradition, Bao Viet will continue to grow and succeed through its motto: “HARMONY, REFORM, DEVELOPMENT” and building the organization based on the “ONE BAO VIET - ONE NEW FOUNDATION” model, thus taking solid steps towards becoming the leading financial–insurance group in Vietnam. With its high competitive capabilities, Bao Viet will gradually place itself into the regional and world map, thus fulfilling the demands of our shareholders, customers, leaders and employees.

On behalf of the Board of Management, I would like to send wishes of good health and happiness to our distinguished shareholders.

VND 5,730 to VND 6,267



2009

10

2008

million VND

Operation NetworkNumbers of agentsTotal consolidated assets

More than

VND 33,700 billions

More than

30,000

C provinces

across the country

ities and

11

GENERAL SHAREHOLDERS’ MEETING

BOARD OF DIRECTORS

CHIEF EXECUTIVE OFFICER

Audit Committee

BAOVIET HOLDINGS

BaoViet Insurance Corporation

BaoViet Life Corporation

BaoViet Fund Management Company

BaoViet - Au Lac Limited Company

BaoViet Join- Stock Invest Company

Associated Companies

Inspection Committee

SUBSIDIARIES AND ASSOCIATED COMPANIES

Strategy and Investment Committee

Remuneration and NominationCommittee

ALCO Committee

Operation

Block

Human Resources

Block

IT Block

Real Estate

Management Block

Financial Management

Block

Strategy

Development Block

Risk Management

Block

Investment

Block

Internal

Division

Audit

BaoViet Securities Company

BaoViet Joint-Stock Commercial Bank

ORGANISATION STRUCTURE

Contents

BAOVIET GROUP

Total revenues

Profit before tax

Owner's equity

BAOVIET INSURANCE CORPORATION

Revenue from insurance activitiesRevenue from financing activities

Profit before tax

Owner's equity

Total assets

BAOVIET LIFE CORPORATION

Revenue from insurance activities

Revenue from finance activities

Profit before tax

Owner's equity

Total assets

BAOVIET FUND MANAGEMENT COMPANY

Total revenues

Profit before tax

Owner's equity

BAOVIET SECURITIES COMPANY

Income from securities trading and investment

Profit before tax

Owner's equity

Total assets

BAOVIET JOINT STOCK COMMERCIAL BANK

Total revenues

Profit before tax

Owner's equity

Total assets

KEY FIGURES

Total assets

Total assets

867,379

553,402

8,224,949

9,851,446

3,661,796

306,213

180,610

1,014,714

4,062,106

3,401,885

1,523,792

127,241

1,516,892

15,191,878

50,915

23,979

51,253

83,744

213,724

(451,708)

1,067,564

1,438,512

929,630

888,799

8,455,471

10,369,779

3,987,319

296,151

219,245

1,020,532

4,636,302

3,704,401

1,614,670

455,642

1,546,678

17,150,081

67,212

38,751

85,925

100,880

292,205

174,469

1,241,100

1,775,995

354,754

76,496

1,563,108

7,269,755


Vision – “To become Vietnam's leading Financial – Insurance Group with solid financial strength,

step by step integrating into the region and world market, focusing on three pillars: insurance,

banking and investment”.

12

1

9

6

5

Established Vietnam

Insurance Company

(15/01/1965)

1

9

8

9

T r a n s f o r m e d i n t o

Vietnam Insurance

Corporation

1

9

9

6

The first company

providing life insurance

products in Vietnam

2

0

0

4

Separated 2 independent

financial units: BaoViet

Insurance & BaoViet Life

2

0

0

5

Established Bao Viet

Fund Management

Limited Company

1

9

9

9

Established Bao Viet

Securities Company,

the first securities

company in Vietnam

Mission – “To ensure the well-being, prosperity, and long-term benefits for customers, investors, employees and the community”.

13

2

0

0

7

2

0

0

8

Established BaoViet Bank

2

0

0

9

Established BaoViet Invest

and Bao Viet - Au Lac

2

0

0

9

BaoViet Holdings’ stock

was offcially

listed on Ho Chi Minh

City Stock Exchange

(code: BVH)

Completed equitization

p r o c e s s . B a o V i e t

Holdings was officially

established

BAOVIET'S DEVELOPMENTS


THE BOARD OF DIRECTORS

From left to right Mr. Tran Trong Phuc – Member

Mr. Tran Huu Tien – Member

Mr. Le Quang Binh – Chairman

From left to right Mdm. Nguyen Thi Phuc Lam – Member, Chief Executive Officer

Mr. Nguyen Quoc Huy – Member

Mr. Nguyen Duc Tuan – Member

Mr. David Fried - Member

Insurance

HSBC INSURANCE (ASIA PACIFIC)

HOLDINGS LIMITED

HSBC Insurance (Asia – Pacific) headquartered in Hong Kong is a wholly-owned subsidiary of

Hong Kong & Shanghai Banking Corporation Limited. HSBC Insurance (Asia – Pacific) is a financial

institution providing customers assurance, trust, and convenience in insurance service.

Holdings Limited

Holdings Limited

Mr. David Fried

Group General Manager, Group Head of Insurance


The State Capital Investment Corporation (SCIC) was

incorporated under Decisions No.151/2005/QÑ-TTg

of the Prime Minister of Vietnam dated 20 June 2005

and became officially operational on 1 August 2006

with two major functions - representing the state

capital interests in enterprises and invest in key

sectors and industries with a view of strengthening the

state sectors whilst respecting market regulations.

As at 31

organizations under SCIC's portfolios possess

business advantages and growth potentials attractive

to investors especially those in financial services,

December 2009, SCIC's portfolios were made

up of 634 enterprises with total book value of VND

11,101 billion and total charter capital of VND 43,630

billion (25% charter capital on average), with market

value estimated at VND30,000 billion. Many

banking, information technology, civil engineering,

tourism, sea products, plastic, pharmaceuticals and

others.

SCIC's strategic goal is to be the enterprises' dynamic

shareholder and the government's strategic investor.

SCIC's long-term direction is to grow into an important

state-owned investment-finance corporation. It aims

to effectively manage, restructure and boost the state

capital utilization efficiency in these enterprises.

In September 2009, Bao Viet Holdings' General

Shareholders' Meeting approved the transfer of all the

204,000,000 shares at Bao Viet Holdings from Vietnam

Shipbuilding Industry Corporation (Vinashin) to SCIC.

In October 2009, Bao Viet Holdings and SCIC signed

agreement on strategic cooperation.

BaoViet Holdings and SCIC signed Agreement on Strategic Cooperation

It is now 2 years since we made our initial investment in

Bao Viet Holdings. Since then, and despite the

turbulence in world markets, I am pleased to report that

Bao Viet has remained focused on building a long term

profitable financial services group, committed to

offering high quality products and services to

individuals and companies all around Vietnam.

Undoubtedly, the 2009 highlight for us was receiving

approval from the Ministry of Finance for HSBC to

proceed with a second stage of investment.

This new agreement was signed on 22 October in which

HSBC agreed to increase its shareholding to 18% for a

consideration of VND1.88 trillion. The fact that HSBC

became eligible for this increase in Bao Viet is testament

to the way our two organizations and our respective

teams have worked shoulder-to-shoulder in making

progress to bring Bao Viet up to world class standards. I

am proud of this achievement and the way that Bao Viet

have embraced the need for change. I am very pleased

to report that this transaction was completed in January

2010.

The decision to increase our stake in Vietnam's leading

insurance and financial services group is reflective of

our confidence in Bao Viet's leadership and the long-

term growth prospects of both Bao Viet and Vietnam.

With an insurance penetration of around 1.4 per cent of

GDP, the potential for growth in Vietnam remains

significant. We remain committed to investing in

Vietnam's development and see the country as a key

emerging market within the Asia-Pacific region.

2009 was also a notable year for Bao Viet. With the

opening of Bao Viet Bank early in the year, and the

successful listing of Bao Viet Holdings on the Ho Chi

Minh City Stock Exchange in June, Bao Viet is now a

well-diversified group, and the leading financial

services company in Vietnam. There is of course more

to do, for both HSBC and Bao Viet. Since December

2007 we have had a comprehensive Technical Services

and Capability Transfer Agreement (TSCTA) in place

that is upgrading Bao Viet to international best practice.

I am also delighted to report that, in October 2009 and in

the presence of HRH Prince Andrew, we signed a

continuation agreement to renew and enhance our

TSCTA for a further phase.

Under the terms of the TSCTA, HSBC has a team of 15 internationally-skilled executives working in Bao Viet in key roles supporting Human Resources, Finance, General Insurance, Corporate Governance, Operations, Actuarial Services, Marketing, IT and Bancassurance. I am pleased that a number of these executives have been appointed as Bao Viet Executives, including the Chief Information Officer and, until September 2009, the Branch Director of Bao Viet Life in Ho Chi Minh City . We have found this to be a particularly effective way of working and will be increasing the number of these 'embedded' positions in the coming year. This includes the appointment of executives in specialist areas such as Risk Management and Marketing/PR/Investor Relations.

We have accomplished a great deal together during 2009. I am struck by the degree of change that has already occurred within Bao Viet, and I am delighted that we have played such major role in Bao Viet's development. 2010 will be another year of high activity and will include the rollout of a 5 year Strategic Plan.

With the progress that has been achieved and the many initiatives that are in the pipeline we have every reason to look forward to the future with much confidence.

STATE CAPITAL INVESTMENT CORPORATION


Throughout its 45-year journey, Bao Viet has made

numerous business achievements, contributing to the

nation's economic development. The year 2007

marked an important milestone in the history of Bao

Viet's development with the successful transformation

of the organization from the 100% state-owned

corporation into a joint stock company. Established as

a Financial-Insurance Group and now fully equitized,

Bao Viet Holdings implemented new organization

structure and corporate management model.

Bao Viet's constant growth and its operation in new

business environment have posed new demands for

changes in business management. Embracing the

corporate development strategy adopted by the

General Shareholders' Meeting, Bao Viet researched

and deployed the corporate management model in

international standards. The company is also acutely

aware that corporate brand development will bring

about added values, a solid foundation, a prominent

market position as well as brand differentiation.

For the past 45 years, the Bao Viet brand has been

highly regarded and recognized both locally and

overseas. Bao Viet's brand has also been instrumental

in shaping the company's strong corporate values and

up to its growth today. However, as Bao Viet expanded

its business into other financial sectors, the need to

develop a new brand strategy and brand logo become

necessary, and to ensure consistency in all its

communications using the corporate brand. Hence,

the desire for Bao Viet new brand development is to

create a differentiated, yet prominent brand

architecture that enables Bao Viet to compete and

grow as a Group as the organization expands its

market in Vietnam and overseas. The new brand

identity reflects a more dynamic and friendlier Bao Viet

yet demonstrating professionalism and quality in

operation and service.

The main features in Bao Viet's new brand identity are

the logo architecture and its corporate slogan. The

new logo inherits the existing logo's blue and yellow

colours which symbolizes an ensured future and

wealthier life for customers. The yellow color in the new

logo has been modified into golden to demonstrate

affluence and prosperity. In addition, there is a golden

triangle marked on the top of the letter “V” in the new

logo and a three-dimensional globe with connecting

lines on its surface. They symbolize Bao Viet's

strategic vision and future, which represents an

aspiration to expand its reach to the region and the

world and become the leading financial – insurance

group in Vietnam.

In Hanoi on January 19th, 2010, Bao Viet Holdings hosted the New Brand Identity Inauguration Ceremony.

This is a significant event in Bao Viet's 45-year development history as the result of Bao Viet brand building in

the new phase of development.

19

Together with the new logo, Bao Viet has also crafted a

new corporate slogan “Your Trust, Our Commitment”

which is the common tagline for Bao Viet Holdings and

its subsidiaries. The rationale behind this conformity is

in line with its vision to build ONE BAO VIET, providing

high quality and customer-oriented products and

services in insurance, banking, investment, etc.,

based on international best practice to our valued

customers; develop customer relationship; emphasize

training and development to best serve customer;

innovate operations and build standards to ensure

perfect customer service.

From left to right Mr. Le Quang Binh - Chairman Of The Board Of Directors Of Bao Viet Holdings

Mr. Nguyen Huu Chi – Vice Minister, Ministry of Finance

Mdm. Nguyen Thi Phuc Lam – Chief Executive Officer of Bao Viet Holdings

Mr. David Fried – Group General Manager, Group Head of Insurance,

HSBC Insurance (Asia Pacific) Holdings Limited

Celebrated the new Bao Viet brand identity.

The development of the new brand identity based on

Bao Viet brand's legacy further confirms the brand

position and generates customer trust in the new

development stage.

With the new logo architecture and brand strategy,

Bao Viet is confident that Bao Viet brand will continue

to grow, enhancing lives through personalized

services and continuous value addition for its

customers. Bao Viet brand continue to implement

strict brand management in its quest to create a strong

and recognizable brand in the market, hence

contributing to the development and expansion of Bao

Viet's operations.

BAO VIET BRAND


BAO VIET INSURANCE CORPORATION

Viet Nam Insurance Company (Bao Viet) was

established and commenced business since 1965,

and its focus was to develop the non-life insurance

business. In 1989, Bao Viet became Viet Nam

Insurance Corporation and in 2004, Bao Viet

separated its non-life insurance business and

established an independent cost accounting

enterprise – Bao Viet Viet Nam. In November 2007,

Bao Viet Viet Nam became Bao Viet Insurance

Corporation (Bao Viet Insurance) and operated as a

limited company which Bao Viet Holdings owned

100% of its chartered capital. Bao Viet Insurance's

business lines include the non-life insurance, re-

insurance, loss adjustment, financial investment and

other business permissable by laws and regulations.

With a 45-year history in the building and development

of the non-life insurance business, Bao Viet Insurance

has become a prestigious brand name in the minds of

the Vietnamese locally and organization abroad. Bao

Viet Insurance maintains its position as the leading

company that has the highest premium revenues in the

Vietnam non-life insurance market. Bao Viet has a

distribution network of 66 branches and around 400

customer service centres, with a total of more than

2,800 staffs and 11,000 agents across the country.

Despite the competitive environment in the non-life

insurance market, Bao Viet Insurance's business

results exceeded its business target in 2009 with total

revenues reached VND 4,295 bilion (an increase of

8.13% compared to 2008). Its gross written premium

hit over VND 3,683 billion with a growth rate of 10%.

Bao Viet Insurance succeeded in maintaining the

leading position in the non-life insurance market,

controlling approximately 28% of the market share.

Profit before tax (PBT) reached VND 219 billion, an

increase of 21.39% in comparison with that of 2008.

Bao Viet Insurance constantly improves its service

quality, focusing on areas such as the insurance claim

management, distribution channels in terms of

manpower expansion and enhancement of the sales

force job skills. In addition, Bao Viet Insurance also

focuses on the development of its Bancassurance

businesses with bank partners, hence increased its

individuals and corporate customers compared to that

of 2008; strengthened its risk management in the area

of exploitation and compensation acitivities;

developed new healthcare and medical insurance

products; implemented Bao Viet Care software for the

medical and high liability accidents insurance.

The year 2010 can be considered as an important

transitional year for Bao Viet's implementation and

development strategy. Bao Viet Insurance strives to

improve its management capability by focusing on the

“Centralized Management; On-the-spot Service”. To

maintain its leading position, Bao Viet Insurance will

continue to develop new products and services as well

as new distribution channels (E-commerce and

Telesalses). The company will also manages its risks

and continue to invest in the IT infrastructure,

improving the underwriting of insurance claims of car

insurance, medical insurance and international travel

insurance. It will also focus more on research and

development of new insurance products, launching

export credit insurance and involves in the government

agricultural insurance project. Besides, Bao Viet

Insurance will also concentrate on developing the

bancassurance distribution channel by enhancing and

expanding its cooperation with banks and intensify

cross-selling activities within Bao Viet's subsidiaries;

investing in the IT development: applying Bao Viet

Care software to manage the medical insurance

products, planning to issue online application form,

deploying functional software - Insure J and the

accounting software – Sun Account.

Members of Bao Viet Insurance's Board of Management

From left to right Mr. Nguyen Kim Phu – Deputy Chief Executive Officer

Mr. Tran Trong Phuc – Chief Executive Officer

Mr. Bui Gia Anh – Deputy Chief Executive Officer

Mr. Nguyen Xuan Thuy – Deputy Chief Executive Officer

ANNUAL REPORT 200922

2009 2008

THOÂNG ÑIEÄP CUÛA CHUÛ TÒCH

HOÄI ÑOÀNG QUAÛN TRÒ

31/12/2009 31/12/2008Contents

ASSETS

2,252,540,829,378 1,702,069,136,845I Current assets & short-term investments104,458,309,835 77,844,982,0501 Cash703,864,000,000 345,420,466,6672 Short-term investments

1,409,444,890,826 1,248,793,585,5293 Account receivables34,773,628,717 30,010,102,5994 Other short-term assets

2,383,761,925,272 2,360,037,755,532II Non-current assets & long-term investments

546,281,514,191 411,070,110,6251 Fixed Assets

804,894,967,165 643,155,702,976 Costs

(258,613,452,974) (232,085,592,351) Accumulated depreciation

1,795,585,009,882 1,896,873,548,5632 Long-term investments

6,473,956,546 9,084,198,7523 Long-term prepaid expenses

35,421,444,653 43,009,897,5924 Other long-term assets

4,636,302,754,650 4,062,106,892,377III Total assets

LIABILITIES & OWNER'S EQUITY

3,615,770,040,705 3,047,392,845,609IV Liabilities

950,841,058,541 904,861,875,1461 Short-term liabilities

7,987,725,906 4,199,189,2302 Long-term payables

- -3 Other liabilities

2,656,941,256,258 2,138,331,781,2334 Reserves

1,020,532,713,945 1,014,714,046,768V Owner's equity

1,000,000,000,000 1,000,000,000,0001 Capital

20,532,713,945 14,714,046,7682 Other capital fund

3 Other capitals

4,636,302,754,650 4,062,106,892,377VI Total liabilities & owner's equity

BALANCE SHEETUnit: VND

Unit: VNDINCOME STATEMENT

Items

4,294,530,291,067 3,971,797,768,7261 Total revenue

3,987,319,219,075 3,661,797,365,212Insurance Operating Revenue

296,151,307,473 306,213,080,945Financial Income

11,059,764,519 3,787,322,569Other Income

(1,030,842,352,310) (1,091,965,640,582)2 Reinsurance expenses & revenue deduction

3,263,687,938,757 2,879,832,128,144Net Revenue

3,044,443,182,595 2,699,221,947,2173 Total Expense

2,240,573,650,601 1,916,979,094,236Insurance operating expense

50,239,328,328 141,842,045,519Financial expense

748,323,085,281 639,919,691,840Administrative expense

5,307,118,385 481,115,622Other expense

219,244,756,162 180,610,180,9274 Profit before tax

53,018,678,357 49,345,528,5865 Corporate income tax

166,226,077,805 131,264,652,3416 Net profit after tax

SUMMARY

OF BAO VIET INSURANCE

FINANCIAL REPORT

(this report was audited by Ernst & Young Viet Nam Co., Ltd)

Bao Viet Insurance's Head Office

35 Hai Ba Trung, Ha Noi

- -


BAO VIET LIFE CORPORATION

In 1996, Bao Viet was the first corporation to start a

business in life insurance in Viet Nam. In 2004, Bao Viet

Life was separated from Vietnam Insurance

Corporation and became an independent cost

accounting enterprise. In Nov 2007, Bao Viet Life

became a limited company - Bao Viet Life Corporation

which Bao Viet Holdings owned 100% of its chartered

capital.

Bao Viet Life businesses includes Life insurance

(whole life, pure endowment, term life, endowment,

annuity, healthcare, personal accident riders and other

types of life insurance); receive or cede reinsurance in

life, healthcare insurance and personal accident; Fund

management and investment activities in some areas

(government bonds, corporate bonds, stocks, real

estates, private equities and lending as permitted by

law).

After more than 13 years, Bao Viet Life has robustly

developed the organization with 60 branches and

more than 200 customer-service offices, with more

than 1,800 staffs and 18,500 agents across the

country. In 1996, Bao Viet Life generated only VND 1

billion premium revenues with 1,300 policies sold.

However, in 2009, its total premium revenue reached

VND 3,704 billion (an 8.89% growth from 2008) with

1,5 million policies in-force. Bao Viet is currently the

second leading corporation with 32% market share in

terms of premium revenues collected.

The year 2009 was a highly sucessful year for Bao Viet

Life in terms of achieving its business targets. It also

marks a considerable shift in its corporate

management, business direction and Business

Operation and Management model. Bao Viet Life has

re-structured the branches' organizational model to be

more focused, efficient and relevant, in-line with its

Members of Bao Viet Life's Board of Management

From left to right Mr. Nguyen Thanh Quang – Deputy Chief Executive Officer

Mr. Dang Ngoc Thanh – Deputy Chief Executive Officer

Mr. Nguyen Duc Tuan – Chief Executive Officer

Mdm. Nguyen Thi Lam Hong – Deputy Chief Executive Officer

Mr. Nguyen Quang Tam – Deputy Chief Executive Officer

customer-oriented policy; at the same time, improved

its human resource capabilities and agency

development through quality activities in terms of the

development, management and training of agents,

which are crucial factors in increasing revenues and

business effectiveness. Bao Viet Life has coorperated

with its strategic partner – HSBC to carry out projects

in IT implementation, new product development and

actuarial project to name a few. New products such as

Universal Life products, An Phat Hung Gia and An Phat

Tron Doi, were developed in early 2009 and brought

satisfactory results. The two Medical riders were

approved by MOF and planned to be implemented in

2010.

With the effective strategic implementations in 2009,

Bao Viet Life has seen remarkable increase in its

business performance. Its total revenues hit more

than VND 5,323 billion, an increase of 8.02%

compared with 2008, in which new business

premiums accounted for an estimated amount of VND

730 billion, an increase of 46% over the previous year.

Revenues from the investment acitivities were VND

1,614 billion, a a growth of 5.96% from 2008. Profit

before tax reached VND 456 billion, an increase of

358% in comparison with 2008

In 2010, with the potential growth in life insurance

market and possible joined-up opportunities, Bao Viet

Life will continue to focus on improving the quality of its

customer service, its distribution channels via the

agency networks by enhancing its training activities

and perfecting its agency policies; implementing and

completing its centralized management model;

improving finanical and accounting activities and

mobilizing its resources to implement the IT softwares

in supporting the business acitivies.


31/12/2009 31/12/2008




SUMMARY FINANCIAL REPORT

OF BAO VIET LIFE

BALANCE SHEETUnit: VND

Unit: VND

Contents

ASSETS

1,200,994,662,126 1,015,750,810,335I Current assets & short-term investments

204,450,624,359 248,440,040,4301 Cash

199,300,000,000 901,249,0002 Short-term investments

786,648,681,245 704,717,428,5593 Account receivables

10,286,029,983 13,992,264,2744 Inventories

309,326,539 47,699,828,0725 Other short-term assets

15,949,086,093,132 14,176,127,426,230II Non-current assets & long-term investments

551,587,362,491 462,675,018,2561 Fixed Assets

777,660,159,321 664,544,468,240 Costs

(226,072,796,830) (201,869,449,984)Accumulated depreciation

15,377,320,111,741 13,693,681,286,1222 Long-term investments


17,150,080,755,258 15,191,878,236,565III Total assets


769,764,756,004 351,179,532,4691 Short-term liabilities

1,500,000,000,000 1,500,000,000,0001 Contributed Capital

27,433,166,152 9,290,686,470 2 Statutory reserve fund

17,150,080,755,258 15,191,878,236,565VI Total liabilities & owner's equity

15,603,402,773,712 13,674,985,253,870IV Liabilities

24,706,763,638 21,643,959,3202 Other liabilities

14,808,931,254,030 13,302,161,762,0813 Reserves

1,546,677,981,546 1,516,892,982,695V Owner's equity

19,244,815,394 7,602,296,2253 Other capitals

INCOME STATEMENT

Items 2009 2008

5,323,825,278,523 4,928,467,637,2701 Total revenue

3,704,400,789,223 3,401,885,444,355Insurance Operating Revenue

1,614,669,789,883 1,523,791,915,071Financial Income

4,754,699,417 2,790,277,844Other Income

4,868,183,542,460 4.801,226,068,0042 Total Expenses

4,001,087,536,607 2,894,411,483,345Expenses for insurance activities

325,093,882,630 1,410,861,531,211Expenses for financing activities

541,836,833,785 495,815,219,022Administration expenses

165,289,438 137,834,426Other expenses

455,642,102,967 127,241,569,2663 Profit before tax

88,236,088,293 -4 Corporate income tax

125,969,153,573362,849,593,6445 Profit after tax




31/12/2009

31/12/2009

31/12/2008

31/12/2008


OF BAO VIET FUND


Unit: VND

Unit: VND

BALANCE SHEET

Items

Items

I. Current Assets

1. Cash and cash equivalents

2. Short-term investments

3. Receivables

4. Other current assets

II. Fixed assets and long-term investments

1. Fixed assets

- Tangible fixed assets

- Leased fixed assets

- Intangible fixed assets

2. Investments in securities and long term investment

3. Construction in progress

4. Other long-term assets

III. TOTAL ASSETS

IV. Total liabilities

1. Current liabilities

2. Non-current liabilities

V. Owners' Equity

1. Capital

- Chartered Capital

- Undistributed Profit

2. Fund

VI. TOTAL LIABILITIES AND OWNERS' EQUITY

INCOME STATEMENT

- -2. Deductions

1. Revenues from operating activities 56,533,849,791 41,798,265,255

3. Net revenues from operating activities 56,533,849,791 41,798,265,255

4. Expense from operating activities (62,393,042) (40,399,449)

5. Gross operating profits 56,471,456,749 41,757,865,806

6. Revenues from financial activities 10,479,555,255 9,117,377,829

7. Expenses from financial acitivities (2,798,824,000) (3,374,670,600)

8. General and administration expenses (31,162,150,466) (23,555,621,124)

9. Net operating profit 38,587,685,538 23,944,951,911

10. Other income 198,940,445 78,750,000

11. Other expenses (35,217,075) (44,726,275)

12. Other profit 163,723,370 34,023,725

13. Profit before tax 38,751,408,908 23,978,975,636

14. Enterprise income tax expense (2,536,698,346) (1,850,914,671)

15. Net profit after tax 36,214,710,562 22,128,060,965

28

Mr. Bui Tuan Trung

Chief Executive Officer of Bao Viet Fund

Bao Viet Fund is the third company that is wholly-

owned by Bao Viet Holdings. With 15 years of

experience in the investment sector, with the

capability to manage high-valued and long-term

capital and an excellent workforce, Bao Viet Fund has

established itself as a leading professional investment

firm in Vietnam. Its total asset under management is at

VND 16,270 bilion. Bao Viet Fund is one of the two

largest fund management companies in Vietnam in

terms of total asset under management. In addition to

Bao Viet Group's customers, non Bao Viet's

customers are increasingly allocating their assests to

be managed by Bao Viet Fund.

Bao Viet Fund's business lines include discretionary

portfolio management, customer-directed portfolio

management, fund management designed for

institutional and individual investors, and setting up,

mobilizing and managing members or public funds.

Investors investing in these funds can do so by buying

and holding funds' unit.

In 2009, the business performance of Bao Viet Fund

gained sastisfactory results. The total assest under

management reached VND 16,270 billion, an increase

of 12.2% compared to 2008. Its revenues was VND 67

billion (a growth of 31.63% compared to the previous

year), in which revenues from business activities hit

VND 56.5 billion and revenues from the investment

activities reached VND 10.5 billion. Profit before tax

was VND 38.75 billion, a 61.61% growth of from 2008.

Investment portfolio: The rate of returns on

subsidiaries' mandate portfolio reached an average of

15%, investment portfolio structure met the

requirements, and revenues and profit had an average

growth rate of 30%. Such results derived from radical

improvements in every business operations: fixed

revenues investment has an average interest rate of

0.5% to 1%, higher than that of the market; Equity

investment: Average growth NAV of share list in 2009

was 10% higher than the market. Besides, Bao Viet

Fund has successfully coordinated with Bao Viet Life

to launch the Universal Life products and the real

earnings yield was higher than the desired number

announced to customers.

BAO VIET FUND MANAGEMENT COMPANY

In the coming year, Bao Viet Fund will focus on the

research and development acitivites for new products

as a result of the corporation between Bao Viet Fund

and other Bao Viet's subsidiaries (cooperation with

Bao Viet Life to develop unit-linked products to

diversify financial products and services for the

customers); establishing functional funds that meet

the market's requirements as well as investors' needs;

expanding its business to other countries in the region

in accordance with Bao Viet Holding's direction. Also,

Bao Viet Fund contiunes its effort in completing and

improving its HR capablities through effective training

programmes and utilizes foreign experts' experiences;

investing in modern IT systems such as profesional

fund management software to apply specialized

model and improve the quality of control and forecast

to bring about effective investment decision and tight

risk management. Bao Viet Fund is also planning to

implement a risk management project and establish an

international standard system of assessment criteria

for business perfomance .

77,670,248,196

3,295,622,084

64,346,749,000

9,899,240,195

128,636,917

6,073,953,505

2,489,140,921

1,685,310,011

803,830,910

3,000,000,000

584,812,584

83,744,201,701

32,490,859,130

32,486,233,680

4,625,450

51,253,342,571

50,000,000,000

50,000,000,000

1,253,342,571

83,744,201,701

98,846,829,887

5,948,360,103

66,158,383,980

26,639,994,156

100,091,648

2,033,217,711

1,690,771,416

1,367,427,932

323,343,484

342,446,295

100,880,047,598

14,954,859,632

14,950,234,182

4,625,450

85,925,187,966

84,049,308,367

50,000,000,000

34,049,308,367

1,875,879,599

100,880,047,598

ANNUAL REPORT 2009ANNUAL REPORT 200930

Mr. Nhu Dinh Hoa

Chief Executive Officer of Bao Viet Securities

31


HOÄI ÑOÀNG QUAÛN TRÒBAO VIET SECURITIES COMPANY


OF BAO VIET SECURITIES COMPANY

maintains the top 3 securities companies' position in

the market through effective acquisition of foreign

investments via its efficient IT system and customer

service. BVSC's 2010 strategies are: to increase its

market share, to expand its operational network: to

deliver the best customer service, actively research

and apply new products in transaction acitivites, to

improve the quality and range of services, cooperate

with banks to provide financial leverage services; to

expand the on-the-spot transactional activities and

cooperate with other Bao Viet companies to develop a

financial supermarket. With investment banking,

BVSC continues to search and conduct high value

contracts; increasing those advisory activities in

specialized areas such as restructuring corporate

finance and merger and acquisition. BVSC also sets a

target to become the No.1 company in bond and share

underwriting, thus enhancing its financial and

operational capabilities in order to meet big

underwriting contracts; to develop the IT infrastructure

and utility services by speeding up the Core Securities

project, which is planned to run in the end of 3rd

quarter of 2010.


Unit: VND

BALANCE SHEET

Contents 31/12/2009 31/12/2008

1,268,338,449,109 1,088,952,824,123I Current assets

439,222,301,959 319,512,450,0201 Cash769,577,652,378 648,066,355,0252 Investments in securities and short term investment

853,157,482,042 858,483,118,641Self-trading securities

(120,164,829,664) (300,416,763,616)Provision for impairment of self-trading securities

36,585,000,000 90,000,000,000Short-term investment56,500,501,323 102,023,748,5033 Account receivables

3,037,993,449 19,350,270,5754 Other current assets

507,656,860,022 349,559,304,966II Non-current assets & long-term investments

13,856,092,554 14,176,436,5091 Fixed Assets

12,733,744,538 12,966,040,845 Tangible fixed assets- - Leased fixed assets

1,122,348,016 1,210,395,664 Intangible fixed assets

479,936,000,000 325,096,800,0002 Long-term investments in securities and other long-term investments

- -4 Long-term investments


1,775,995,309,131 1,438,512,129,089III Total assets

534,895,128,740 370,947,402,534IV Liabilities

534,826,875,739 370,901,700,0771. Current liabilities 68,253,001 45,702,4572. Non-current liabilities

1,241,100,180,391 1,067,564,726,555V Owner's equity

722,339,370,000 451,500,000,0001 Initial capital

610,253,166,720 881,092,536,7202 Additional capital

(91,340,856,329) (265,027,810,165)3 Undistributed earnings

(151,500,000) -4 Treasury shares

1,775,995,309,131 1,438,512,129,089VI TOTAL LIABILITIES & OWNER'S EQUITY

3 Construction in progress 70,600,000 -

31/12/2009 31/12/2008

INCOME STATEMENT

Items

162,841,344,937238,788,546,3001 Revenue from securities trading

--2 Deductions

162,841,344,937238,788,546,3003 Net revenues

50,882,874,15053,416,602,7764 Investment income

213,724,219,087292,205,149,0765 Income from securities trading and investment

589,469,888,89453,144,117,8206 Operating expenses

(375,745,669,807)239,061,031,2567 Gross profit from securities trading

75,972,548,83665,157,617,0478 General administrative expenses

(451,718,218,643)173,903,414,2099 Net profit from securities trading

9,674,185 565,987,10910 Other profit

(451,708,544,458)174,469,401,31811 Profit before tax

(477,663,365,611) -12 Taxable Profit (Profit before tax – income

from self-trading securities)

692,712,423 -13 Corporate income tax

(452,401,256,881)174,469,401,31814 Profit after tax

(12,480) 3,67715 Basic earnings per share

Unit: VND

Established in 1999, Bao Viet Securities Company

(BVSC) is the first securities company in Vietnam with

an initial chartered capital of VND 49 billion. So far,

BVSC's chartered capital is over VND 722 billion.

BVSC's business lines include securities brokerage

and investment consultancy; corporate consultancy

(equitization and corporate ownership transformation

advisory; corporate finance advisory; securities

issuance advisory; listing advisory; Corporate

governance advisory); underwriting and issuing

agents; restructuring, merger and acquisition; share

custody, utility services; Principal investment,

research and analysis.

In 2009, BVSC made radical improvements in its

business. In brokerage – transaction business:

building customer-oriented activities such as

segmenting customers into different groups,

searching for potential customers, providing bidding

consultancy for enterprises, continuing research and

development for other utility serivices. BVSC has

implemented internal training courses in technical

analysis and enterprise analysis to enhance staff'

knowledge for consultant activities. Besides, BVSC

also focused on the activities by the listed and unlisted

securities brokerage, co-ordinating with other Bao

Viet's subsidiaries to build and raise the position of

BVSC in the stock market. In the IT development, after

signing an agreement to deploy the Core Securities

software, BVSC has actively coordinated with its

partner to develop, evaluate, and test the software

solutions to provide utility services to customers, to

meet the business requirements and to effectively

support the risk management activities.

BVSC's business performance met its target with total

revenues of VND 292 billion, which was equal to

150.2% of plan (a 36.72% growth from 2008), in which

the revenues from brokerage business was VND 91,8

billion and those from principal investment hit VND

160.4 billion. Profit before tax rose nearly VND 174,5

billion, equivalent to 120.3% of plan. Its total asset was

about VND 1,776 billion, an increase of 23.46% in

comparison with 2008.

BVSC sets a target to become one of five companies to

have the highest brokerage market share and


Mr. Phan Dao Vu

Chief Executive Officer of Bao Viet Bank

33



31/12/2009

Bao Viet Joint Stock Commercial Bank (BAOVIET

BANK) was established in December 2008 with its

chartered capital was VND 1,500 billion and

commenced business in January 2009. BAOVIET

BANK has applied the modern centralized corporate

management in the Head Office based on the

advanced Core Banking software, which brings direct

and constant connection to branches/transaction

offices, providing standard banking products and

services in terms of time and delivery quality. All

branches are selling spots, providing customers with

best quality products and service by applying the IT

international standard in banking management.

BAOVIET BANK provides a full range of banking

services, which include: deposit products: current

accounts, savings and time deposits; payments: trade

financing, domestic and overseas remittances,

securities trading payments; commercial financing:

current capital financing, medium and long-term

financing; guarantees: contract performance

guarantees, tender guarantees; other banking

services permissible by the State Bank regulations. In

2009, BAOVIET BANK has opened 2 branches, 8

transaction offices in Hanoi and Ho Chi Minh City,

emphasizing on the cooperation with other Bao Viet's

subsidiaries to take advantage of Bao Viet brand name

and its distribution network. BAO VIET BANK has a

total of 2,733 individual and corporate customers.

In 2009, BAOVIET BANK focused on the individual and

corporate financing loans and mobilized capital from

businesses on key areas in Hanoi and Ho Chi Minh City

with the competitive interest rate and promotion

campaigns; intensified cooperation with Bao Viet

Holdings and other subsidiaries; developed and

diversified corporate banking products as well as

Bancassurance; explored new distribution channel

such as Internet and mobile banking.

After a year of operation, BAO VIET BANK's business

performance exceeded expectation with total

mobilized deposits loan from enterprise and individual

reached VND 3,514 billion, completed 163.29% of

plan; profit before tax reached VND 76,5 billion,

BAO VIET JOINT STOCK COMMERCIAL BANK

equivalent to 170% of plan. Total asset of BAO VIET

BANK has grown to VND 7,270 billion this year.

In 2010, Bao Viet Bank continues to strengthen its

organizational capabilities by applying the centralized

management model more effectively; develops the

mobilized deposits activities, especially from

individuals and enterprises, which is considered the

core business to improve banking services; explore

business opportunities in the inter-bank market to

increase its revenue; improving the features of bank

card to provide more diversified product packages to

various customers; develop Bancassurance;

establish partnership with other corporate to issue

“co-brand” credit card and work as an agent for credit

payment. Together with other distribution channels,

Bao Vỉet Bank also focuses on developing and

standardizing its retail banking services, aiming to

become “The leading retail bank with a wide range of

products and quality services in 2015”.


OF BAO VIET BANK

Unit: VND

Unit: VND


BALANCE SHEET

Contents

ASSETS

32,183,579,905 I Cash and cash equipvalents

195,829,359,746 II Balances with State Bank of Vietnam3,643,677,486,369III Due from banks3,083,948,244,969 Placements with other banks

562,576,960,000 Loans and advances(2,847,718,600) Provision for loans to other banks

2,250,149,842,704IV Loans and advances to customers2,255,568,630,293 Loans and advances to customers

(5,418,787,589) Provision for credit losses

949,066,441,037V Investment Securities949,066,441,037 Available-for-sale securities47,587,936,017VI Fixed assets

24,201,875,337 Property and equipment

27,256,803,713 Cost(3,054,928,376)Accumulated depreciation

23,386,060,680Intangible assets and land use rights

28,868,042,468 Cost(5,481,981,788)Accumulated amortization

151,260,583,764VII Other assets17,350,725,132Account receivables

124,729,171,908 Accrued interest income9,180,686,724Other assets

7,269,755,229,542TOTAL ASSETS


5,706,647,217,040 VIII LIABILITIES

420,798,732,663Borrowing from the Government and SBV

1,709,021,432,606 Due to banks

1,709,021,432,606 Deposits from other banks

3,514,340,257,846 Due to customers62,486,793,925Other liabilities

38,934,842,065Accrued interest expense

23,021,228,948Other payables

530,722,912Provision for contingent liabilities and commitments

1,563,108,012,502IX OWNER'S EQUITY

1,500,000,000,000Capital

1,500,000,000,000Chartered capital

9,150,661,813Reserves

53,957,350,689Retained earnings/ Accumulated losses

7,269,755,229,542TOTAL LIABILITES, OWNER'S EQUITY AND MINORITY INTEREST

INCOME STATEMENT

ItemsFor the period from the date ofestablishment to 31/12/2009

351,806,966,712Interest and similar income

(188,107,295,381)Interest and similar expenses

163,699,671,331NET INTEREST INCOME

2,789,620,472Fees and commission income

(1,292,449,919)Fees and commission expenses

1,497,170,553Net fees and commission income

114,949,978Net gain/loss from dealing in foreign currencies

(29,487,706) Net gain/loss from securities trading

71,662,046Other operating income

(32,372,198)Other operating expense

39,289,848Net other operating income

165,321,594,004TOTAL OPERATING INCOME

(80,029,804,294)OPERATING EXPENSES

(32,968,069,187)Personnel expenses

(8,536,910,164)Depreciation and amortization charges

(38,524,824,943)Other operating expense

85,291,789,710Profit before provision for credit losses

(8,797,229,101)Provision for credit losses

76,494,560,609PROFIT BEFORE TAX

(13,386,548,107)Current enterprise income tax

(13,386,548,107)Enterprise income tax

63,108,012,502Profit after tax


Bao Viet Holdings’ Chairman - Mr. Le Quang Binh opened the first trading session of Bao Viet Holdings’

stock (BVH) on HOSE - June 25th, 2009.

35

Permanent Deputy Prime Minister Nguyen Sinh Hung visited Bao Viet Holdings on October 15th, 2009

KEY EVENTS 2009

ESTABLISHMENT OF NEW BUSINESSES

The official opening of Bao Viet Bank

The establishment of the Bao Viet Invest

The establishment of Bao Viet – Au Lac Company Ltd

NEW PRODUCT LAUNCHES

Bao Viet Life launched 2 endowment products – “An Phat Hung Gia” and “An Phat Tron Doi”

Launched MedicalCare and EmployeeCare for individuals and corporate respectively through a joint

cooperation between Bao Viet Insurance and HSBC; joined-up with HDBank to develop bancassurance

services

Joined up effort between Bao Viet Insurance, Bao Viet Life and Techcombank in providing Priority Insurance, a

premium insurance package for Techcombank's customers

Joined up effort between Bao Viet Bank and Bao Viet Life to provide two bancassurance-integrated banking

products – “Tich Truong Phu” and “Tin Tai Nghiep”

DEVELOPMENT & COOPERATION

Signed Strategic Cooperation Agreement between Bao Viet Holdings and the State Capital Investment

Corporation (SCIC); signed a contract with Technology Resources Vietnam Limited (TRG) to develop and

launch the accounting software Sun Account

Bao Viet Insurance continued its cooperation with Lotte Insurance (Korea) in providing insurance services

Bao Viet Bank cooperates with BIDV in credit services

Conducted the private placement of 53,682,474 shares for the foreign strategic partner, HSBC Insurance to

increase its stake to 18% in Bao Viet Holdings

Signed the Technical Services and Capability Transfer Agreement (TSCTA) Phase III with HSBC Insurance

Signed contract between Bao Viet Securities and VNPT – Religare Technova Global Vietnam to implement the

Core Securities software

DISTINGUISHED GUESTS

Deputy Prime Minister Nguyen Sinh Hung attended the 2 years' anniversary of the implementation of Bao Viet

Holdings' joint stock operation model

Delegates visit from the National Assembly's Committee on Finance and Budget

Consecutive visitation of Prince Andrew and the Royal delegation from the United Kingdom

OTHER EVENTS

Listed Bao Viet Holdings' stock on Ho Chi Minh City Stock Exchange (HOSE) on 25 June 2009

Bao Viet Holdings awarded the TCVN ISO 9001:2008/ ISO 9001 : 2008 Certificate by Quacert and BVC

Bao Viet Securities celebrated its 10-year anniversary

Implementation of IFRS standards for financial reports


Bao Viet Holdings’ Chief Executive Officer - Mdm. Nguyen Thi Phuc Lam visited Pac Nam district (Bac

Kan province) to implement Government’s Resolution 30a.

Besides pursuing its business goals, Bao Viet also demonstrates great care for the community through its

corporate social responsibility activities. As a result, Bao Viet has always been praised for its social activities and

initiatives.

37

Bao Viet Holdings’ staffs participated in the “Red Blood Drop” campaign - summer 2009

As a dynamic company, Bao Viet has implemented a sustainable poverty alleviation initiative for 62 poor districts

especially in Pac Nam (Bac Kan province) and Que Phong (Nghe An province) as part of the government policy

stated in the Resolution 30a/2008/NQ-CP on December 27, 2008.

In 2009, Bao Viet Holdings has proactively coordinated the implementation of the Government Resolution 30a,

where the organization played an important role in enhancing the living standards of the local residents in

disadvantaged areas across the country. Bao Viet Holdings specifically helped to remove 410 temporary homes

in Pac Nam and 500 others in Muong Nooc and Hanh Dich (Que Phong district) so that people have homes before

the Lunar New Year.

In addition, Bao Viet's participation as part of its social responsibility activities were also reflected in its proactive

involvement in numerous community programes:

Participated in the “Bridging Hands 2009” campaigns such as the “Day for the Poor” event and supported

the “Fund for the Poor” drive endorsed by the Central Fatherland Front.

CORPORATE SOCIAL RESPONSIBILITY

Participated in the “Red Blood Drop” summer 2009 campaign. Bao Viet – Blood Donation Saving Lives event

gained tremendous support from its staff and this noble gesture was highly commended.

Participated in other social welfare programmes supporting provinces such as Tra Vinh, Dong Thap and those

in the Central Highland.

Bao Viet Holdings also pledged its support to the victims of the storm No. 9 and 11 in the central region and the

Central Highland.

Bao Viet Holdings continues their support for the 14th year by granting the Kim Dong Award, together with the

Central Youth Union, to outstanding students nationwide. This is Communist Youth Union's most distinguished

award to outstanding students across the country.

Bao Viet subsidiaries actively took part in their respective corporate social responsibility endeavours: Bao Viet

Life awarded Bao Viet Education Scholarship for the 5th consecutive years to poor children and college

students; Bao Viet Insurance joined the 9th Terry Fox Marathon to support the “Run for the Kids” campaign,

along with other charitable causes for the poor and destitute.


The Science Centre for Corporate Credibility Assessment awarded the prestigious “Most Credible

Enterprise 2009” Award to Bao Viet Holdings

Awarded the “Distinguished National Enterprise Excellence 2009” Award.

Named as one of 82 enterprises to receive the “Enterprise for Community” Award

Bao Viet Insurance's “Motor Insurance” and Bao Viet Life's “Education Plan” were awarded the “Product for

Community” Award

Ranked No.2 in Vietnam's Top 10 Merger and Acquisition transaction in 2009 between Bao Viet and HSBC

Insurance

Bao Viet Securities Company (BVSC) awarded the “Golden Globe Award 2009” and “Active Member of

Hanoi Stock Exchange” Awards

38

Bao Viet Holdings’ Chairman of Board - Mr. Le Quang Binh awarded the “2009 National Distinguished

Entrepreneur” Award by Vice President of the Socialist Republic of Vietnam.

39

Bao Viet was conferred with numerous titles and awards as a result of its excellent business performance and

contribution to the development of the Vietnamese economy, as well as its active role in corporate social

responsibility programmes and Bao Viet employees' efforts towards achieving the 2009 “Harmony - Reform

- Development” initiatives.

AWARD AND TITLE HIGHLIGHTS

Vietnam Leading Stock Brand - 2009

Honorable title: “Credited Enterprise 2009”

Awards and titles conferred on Bao Viet Holdings

Awarded the “Vietnam Top Brands 2009” Award

Awarded the "Prestigious Securities Brand 2009" and the "Top 20 Leading

Listed Companies in Vietnam" Awards

Named as one of the 58 enterprises to receive the “Vietnam Elite brands 2009”

Conferred the “The Most Famous Brand in the Insurance Business” Award

Conferred the “Top 10 Most Popular Brands in Vietnam 2008” Award

Bao Viet Brand Awards

40

42 - 44

41

45

46

47

48

Pages


Report of the Board of Directors and Audited Separate Financial Statements

31 December 2009

Bao Viet Holdings

CONTENTS

REPORT OF THE BOARD OF DIRECTORS

AUDITED SEPARATE FINANCIAL STATEMENTS

Independent auditors' report

Separate balance sheet

Separate income statement

Separate cash flow statement



2009



The Board of Directors of Bao Viet Holdings (the “Holding Company”) is pleased to present its report and the Holding

Company's separate financial statements as at and for the year ended 31 December 2009.

Bao Viet Holdings is a joint stock company pursuant to the Business License No. 0103020065, granted by Hanoi

Authority for Planning and Investment on 15 October 2007.

The Holding Company has its head office in Hanoi and two 100% owned subsidiaries operating in the insurance

industry; i.e. Bao Viet Insurance Corporation and Bao Viet Life Corporation with their head offices located

respectively at 35 Hai Ba Trung Street, Hoan Kiem District, Hanoi and 01 Dao Duy Anh Street, Dong Da District, Ha

Noi. The Holding Company also has another 100% owned subsidiary being Bao Viet Fund Management Company

(“BVF”) with its head office located at No. 8, Le Thai To, Hang Trong Ward, Hoan Kiem, Ha Noi.

The Holding Company's other subsidiaries include Bao Viet Securities Joint Stock Company (“BVSC”), Bao Viet

Commercial Joint Stock Bank (“Baoviet Bank”) with their head offices located at No. 8, Le Thai To, Hang Trong Ward,

Hoan Kiem, Ha Noi; Bao Viet Au Lac Limited Company - located at Ha Lieu, Phuong Lieu, Que Vo Town, Bac Ninh

Province; and Bao Viet Investment Joint Stock Company - located at No. 71 Ngo Sy Lien Street, Dong Da District,

Hanoi.

The Holding Company also has two dependent units under its direct supervision, i.e. Bao Viet Training Centre,

located at No. 8, Le Thai To, Hang Trong Ward, Hoan Kiem, Ha Noi, and Infrastructure Construction Projects

Management Unit, located at No. 71 Ngo Sy Lien Street, Dong Da District, Hanoi.

RESULTS

The net profit for the year ended 31 December 2009 was 807,785,178,469 VND (the net profit for the year from 16

October 2007 to 31 December 2008 was VND 678,386,879,094).

During the year 2009, Bao Viet Holdings has announced and paid dividends to the shareholders at the rate of 10% of

charter capital based on the operating profit of 2008. The total dividends were VND 573,026,605,000.

SIGNIFICANT EVENTS

Given below are the significant events that occurred during the period from 1 January 2009 to 31 December 2009.

CORPORATE INFORMATION

Bao Viet Holding succeeded in listing its 573 millions shares on Ho Chi Minh Stock Exchange on 25 June 2009;

Setting up of the Bao Viet Au Lac Limited as a subsidiary with a 60% ownership to the Holdings and the Bao

Viet Investment Joint Stock Company as a subsidiary with a 98% ownership to the Holdings (direct investment

from Bao Viet Holdings is 55% and indirect investment through subsidiaries is 43%);

Commencement of operation of Bao Viet Bank which is a subsidiary of the Group with a 52% ownership to the

Holdings;

According to the Decision 02/2009/NQ-ÑHÑCÑ dated 23 September 2009, from 23 September 2009, all the

20,400,000 Bao Viet Holdings shares held by Vinashin Group (equivalent to 3.56% shareholdings) were

transferred to the State Capital Investment Corporation (“SCIC”) under the approval of Shareholder's General

Meeting.

EVENTS SINCE THE REPORTING DATE

Per the agreement between Bao Viet Holdings and HSBC Insurance (Asia-Pacific) Holdings Limited, based on the

Resolution 1527/2009/NQ-ÑHÑCÑ dated 23 December 2009 of Bao Viet General Shareholders' Meeting, on 19

January 2010, HSBC Insurance (Asia Pacific) Holdings Limited has transferred VND 1,878,886,590,000 in order to

pay for the additional shares issued to HSBC Insurance (Asia Pacific) Holdings Limited through a private placement

that increases the shareholdings of HSBC in Bao Viet Holdings from 10 percent to 18 percent.

Apart from this, there have been no significant events occurring after the reporting date which would require

adjustments or disclosures to be made in the financial statements.

The members of the Board of Directors for the period from 1 January 2009 to 31 December 2009 and at the date of

this report are:

THE BOARD OF DIRECTORS AND BOARD OF MANAGEMENT

Name Position Date of appointment Date of resignation

Mr. Le Quang Binh Chairman 04 October 2007

Ms. Nguyen Thi Phuc Lam Member 04 October 2007

Mr. Tran Huu Tien Member 04 October 2007

Mr. Tran Trong Phuc Member 04 October 2007

Mr. Nguyen Duc Tuan Member 04 October 2007

Mr. David Lawrence Fried Member 04 October 2007

Mr. Nguyen Quoc Anh Member 04 October 2007 01 August 2009

Mr. Nguyen Quoc Huy Member 23 September 2009

The members of the Board of Management for the period from 1 January 2009 to 31 December 2009 and at the date

of this report are:

Name Position Date of appointment

Ms. Nguyen Thi Phuc Lam Chief Executive Officer 15 October 2007

Mr. Le Hai Phong Chief Financial Officer 30 June 2008

Mr. Pham Khac Dung Chief Operating Officer 30 June 2008

Mr. Luu Thanh Tam Chief Property & Estate Officer 30 June 2008

Mr. Phan Tien Nguyen Chief Human Resources Officer 30 June 2008

Mr. Duong Duc Chuyen Chief Strategy Officer 30 June 2008

Mr. Alan Royal Chief Information Officer 08 September 2008



AUDITORS

The auditors, Ernst & Young Vietnam, have expressed their willingness to accept reappointment

STATEMENT OF THE BOARD OF MANAGEMENT'S RESPONSIBILITY IN RESPECT OF THE


The Board of Management of Bao Viet Holdings is responsible for the separate financial statements of the financial

period which give a true and fair view of the state of affairs of the Holding Company as at 31 December 2009 and of its

results and cash flows for the year then ended. In preparing these separate financial statements, the management is

required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether applicable accounting standards have been followed, subject to any material departures

disclosed and explained in the separate financial statements; and

prepare the separate financial statements on the assumption that it will continue its operations on a going

concern basis unless it is inappropriate to presume that the Holding company will continue in business.

The Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with

reasonable accuracy at any time, the financial position of the Holding Company and ensuring that the accounting

records comply with the registered accounting system. It is also responsible for safeguarding the assets of the

Holding Company and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The Board of Management has confirmed to the Board of Directors that the Holding Company has complied with the

above requirements in preparing the separate financial statements.

APPROVAL OF THE SEPARATE FINANCIAL STATEMENTS

We hereby approve the accompanying separate financial statements which give a true and fair view of the financial

position of the Holding Company as at 31 December 2009 and the results of its operations for the year then ended

and cash flows for the year then ended in accordance with the accounting policies as set out in Note 4, the

Vietnamese Accounting Standards and System and comply with the relevant statutory requirements.

INDEPENDENT AUDITORS' REPORT

On behalf of the Board of Directors:

Le Quang Binh

Chairman

26 March 2010


SEPARATE BALANCE SHEET

as at 31 December 2009 Currency: VND

100 4,158,808,819,789 3,515,843,520,815A. CURRENT ASSETS

110 16,530,312,670 56,469,344,5025I. Cash and cash equivalents

111 693,051,531 683,799,0741. Cash on hand

15,837,261,139 55,785,545,428112 2. Cash at bank

3,176,729,847,461 2,892,065,521,834120 II. Short-term investments

6 3,176,729,847,461 2,892,065,521,834121 1. Short-term investments

963,931,728,224 565,626,682,480130 III. Accounts receivable

7 108,927,751,454 148,867,996,879131 1. Trade receivables

8 1,739,950,000132 -2. Advance to suppliers

9 853,895,217,468 402,851,267,562133 3. Receivable from related parties

10 1,108,759,302 12,167,468,039138 4. Other receivables

535,706,172 980,305,850140 IV. Inventory

11 535,706,172 980,305,850141 1. Inventories

1,081,225,262 701,666,149150 V. Other current assets

- 74,681,150151 1. Short-term prepaid expenses

12 1,081,225,262 626,984,999158 2. Other current assets

6,210,971,104,885 6,335,603,316,393200 B. NON-CURRENT ASSETS

447,987,553.936 290,763,020,487220 I. Fixed assets

13 186,396,038,084 143,673,759,037221 1. Tangible fixed assets

240,959,607,879 184,923,309,473222 Cost

(54,563,569,795) (41,249,550,436)223 Accumulated depreciation

14 13,947,900,474 17,409,272,148227 2. Intangible fixed assets

32,220,757,228 30,252,957,544228 Cost

(18,272,856,754) (12,843,685,396)229 Accumulated amortization

15 247,643,615,378 129,679,989,302230 3. Construction in progress

5,762,983,550,949 6,044,840,295,90616250 II. Long-term investments

4,210,481,388,414 4,119,085,388,414251 1. Investments in subsidiaries

232,862,440,000

217,862,440,000252 2. Investments in associates, joint ventures

1,461,270,934,725 1,907,657,590,686258 3. Other long-term investments

(141,631,212,190) (199,765,123,194)259 4. Provision for impairment

of long-term investments

270 10,369,779,924,674 9,851,446,837,208TOTAL ASSETS

Code ITEMS Notes 31 Dec 2009 31 Dec 2008

1. 1,711,941.14 1,673,423.29

SEPARATE BALANCE SHEET(continued)

as at 31 December 2009 Currency: VND

Currency: VND

Code ITEMS Notes 31 Dec 2009 31 Dec 2008

300 A. LIABILITIES 1,914,308,305,954 1,626,497,743,119

310 I. Current liabilities 1,893,181,100,536 1,605,270,669,387

330 II. Non-current liabilities 21,127,205,418 21,227,073,732

400 B. OWNER'S EQUITY 8,455,471,618,720 8,224,949,094,089

411 1. Contributed capital 5,730,266,050,000 5,730,266,050,000

412 2. Share Premium 1,734,745,821,197 1,734,745,821,197

416 3. Foreign exchange difference 1,668,684,274 -

420 4. Undistributed profit 969,743,897,777 742,269,566,655

431 1. Bonus and welfare fund 19,047,165,472 17,667,656,237

440 TOTAL LIABILITIES AND OWNER'S EQUITY 10,369,779,924,674 9,851,446,837,208

312 1. Trade payables 1,109,305,001 5,325,733,33517

314 2. Statutory obligations 75,503,537,980 97,478,587,22218

315 3. Payables to employees 6,197,547,272 2,355,215,37319

317 4. Payables to related parties 1,324,966,605,661 1,447,532,125,49320

336 1. Provision for severance allowance 21,127,205,418 21,227,073,73222

410 I. Owner's equity 8,436,424,453,248 8,207,281,437,85223

430 II. Other capital and funds 19,047,165,472 17,667,656,23724

485,404,104,622 52,579,007,964215. Other payables319

ITEMS 31 Dec 2009 31 Dec 2008

Foreign currency U.S. Dollar (USD)

OFF BALANCE SHEET ITEMS

SEPARATE INCOME STATEMENTfor the year ended 31 December 2009

Code ITEMS Notes

For the period

from 01 January 2009

to 31 December 2009

For the period

from 01 January 2008

to 31 December 2008(*)

For the period

from 16 October 2007

to 31 December 2008

2521 898,758,428,365 842,078,450,851 1,073,225,178,4771. Income from operating activities

57,829,782,161 (200,780,573,917) (200,793,167,000)22 262. Expenses from operating activities

956,588,210,526 641,297,876,934 872,432,011,47724 3. Gross operating profit

(98,636,185,386) (113,194,505,108) (124,625,847,888)25 274. General and administration expenses

857,952,025,140 528,103,371,826 747,806,163,58930 5. Net operating profit

30,872,179,463 25,301,186,385 26,284,342,55031 286. Other income

(25,000,000) (1,572,278) (1,572,278)32 7. Other expenses

30,847,179,463 25,299,614,107 26,282,770,27240 8. Other profit

888,799,204,603 553,402,985,933 774,088,933,86150 9. Profit before tax

(81,014,026,134) (59,240,103,354) (95,702,054,767)51 2910. Current enterprise income tax expense

807,785,178,469 494,162,882,579 678,386,879,09460 11. Net profit after tax

(*) The financial information for the period from 01 January 2008 to 31 December 2008 was presented for comparison purpose.



52

53 - 55

56 - 57

58

59 - 98

Page

SEPARATE CASH FLOW STATEMENTfor the year ended 31 December 2009 Currency: VND

Code ITEMS NotesFor the year ended

31 Dec 2009

For the period

from 16 Oct 2007

to 31 Dec 2008

I. CASH FLOWS FROM OPERATING ACTIVITIES

01 -23,874,413,1711. Cash receipts from rendering of services

(12,296,896,448)(10,415,643,334)02 2. Payments to suppliers

(39,892,626,154)(42,709,794,750)03 3. Payments to employees

(57,473,383,448)(95,987,938,444)04 4. Payments for enterprise income tax

357,895,508,5856,784,876,32205 5. Other cash receipts

(656,725,688,849)(4,406,092,455)06 6. Other cash disbursements

(408,503,086,314)(122,860,179,490)10 Net cash flows used in operating activities

(65,930,491,722) (44,494,968,150)21 1. Payments for Purchases and construction

of fixed assets and other long-term assets

338,429,47223,017,34522 2. Proceeds from disposal and liquidation

of fixed assets and other long-term assets

II. CASH FLOWS FROM INVESTING ACTIVITIES

(20,601,288,931,626)(16,328,139,904)25 3. Investments in other entities

20,302,210,390,389169,795,467,07826 4. Withdrawals of investments in other entities

648,513,281,571124,056,636,27327 5. Interest received, dividends received

and profit shares

305,278,201,656211,616,489,07020 Net cash flows from investing activities

30 III. CASH FLOWS FROM FINANCING ACTIVITIES

(4,298,059,929,476)-Share premium from equitization paid to MOF

-(128,726,605,000)Dividends paid to shareholders

(4,298,059,929,476)(128,726,605,000)40 Net cash flows used in financing activities

(4,401,284,814,134)(39,970,295,420)60 IV. NET CASH INCREASE/(DECREASE)

IN CASH AND CASH EQUIVALENTS

4,458,641,566,08356,469,344,50270 Cash and cash equivalents

at the beginning of the period

(887,407,447)31,263,58871 Net foreign exchange difference

56,469,344,50216,530,312,67080

5Cash and cash equivalents

at the end of the period

BAO VIET HOLDINGS

Report of the Board of Directors and Audited Consolidated Financial Statements

31 December 2009

CONTENTS

50 - 51REPORT OF THE BOARD OF DIRECTORS

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Independent auditor's report

Consolidated balance sheet


Consolidated cash flow statement

Notes to the consolidated financial statements

SEPARATE FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS

On behalf of the Board of Directors:

Le Quang Binh

Chairman

Hanoi, Vietnam

29 March 2010



The Board of Directors of Bao Viet Holding Company (“the Holdings”) presents its report and the consolidated

financial statements of the Holdings and its subsidiaries as at 31 December 2009 and for the year then ended.

CORPORATE INFORMATION

Bao Viet Holdings Company (“the Holdings”) is a listed joint stock company pursuant to the Business License No.

0103020065, granted by Hanoi Authority for Planning and Investment on 15 October 2007. All 573,026,605 shares of

the Holdings were listed on Ho Chi Minh Stock Exchange on 25 June 2009.

The Holdings has its head office in Hanoi and two 100% owned subsidiaries operating in the insurance industry; i.e.

Bao Viet Insurance Corporation and Bao Viet Life Corporation with their head offices located respectively at 35 Hai Ba

Trung Street, Hoan Kiem District, Hanoi and 01 Dao Duy Anh Street, Dong Da District, Hanoi. The Holdings also has

another 100% owned subsidiary being Bao Viet Fund Management Company (“BVF”) with its head office located at

No. 8, Le Thai To, Hang Trong Ward, Hoan Kiem, Hanoi.

The Holdings' other subsidiaries include Bao Viet Securities Joint Stock Company (“BVSC”), Bao Viet Commercial

Joint Stock Bank (“BaoViet Bank”) with their head offices located at No. 8, Le Thai To, Hang Trong Ward, Hoan Kiem,

Ha Noi; Bao Viet Investment Joint Stock Company - located at No. 71 Ngo Sy Lien Street, Dong Da District, Hanoi;

and Bao Viet - Au Lac Limited Company - located at Ha Lieu, Phuong Lieu, Que Vo Town, Bac Ninh Province.

The Holdings also has two dependent units under its direct supervision, i.e. Bao Viet Training Centre, located at No. 8,

Le Thai To, Hang Trong Ward, Hoan Kiem, Hanoi, and Infrastructure Construction Projects Management Unit,

located at No. 71 Ngo Sy Lien Street, Dong Da District, Hanoi.

RESULTS

The net profit that belongs to the shareholders of the Group for the year ended 31 December 2009 was VND

891,754,255,672 (the net profit that belongs to the shareholders of the Group for the first financial year from 16

October 2007 to 31 December 2008 was VND 529,480,594,292).

During the year 2009, Bao Viet Holdings has announced and paid dividends to the shareholders at the rate of 10% of

charter capital based on the operating profit of 2008. The total dividends were VND 573,026,605,000.

AUDITORS

The auditors, Ernst & Young Vietnam, have expressed their willingness to accept reappointment.

EVENTS SINCE THE REPORTING DATE

Per the agreement between Bao Viet Holdings and HSBC Insurance (Asia-Pacific) Holdings Limited, based on the

Resolution 1527/2009/NQ-ÑHÑCÑ dated 23 December 2009 of Bao Viet General Shareholders' Meeting, on 19

January 2010, HSBC Insurance (Asia Pacific) Holdings Limited has transferred VND 1,878,886,590,000 in order to

pay for the additional shares issued to HSBC Insurance (Asia Pacific) Holdings Limited through a private placement

that increases the shareholdings of HSBC in Bao Viet Holdings from 10 percent to 18 percent.

Apart from this, there have been no significant events occurring after the reporting date which would require

adjustments or disclosures to be made in the financial statements.

STATEMENT OF THE BOARD OF MANAGEMENT'S RESPOSIBILITY IN RESPECT OF THE


The Board of Management of Bao Viet Holdings is responsible for the consolidated financial statements of each

financial period which gives a true and fair view of the consolidated state of affairs of the Group as at 31 December

2009 and of the consolidated income statement and cash flows for the year then ended. In preparing these

consolidated financial statements, the management is required to:

Select suitable accounting policies and then apply them consistently;

Make judgements and estimates that are reasonable and prudent;

State whether applicable accounting standards have been followed, subject to any material departures

disclosed and explained in the consolidated financial statements; and

Prepare the consolidated financial statements on the assumption that it will continue its operations on a going

concern basis unless it is inappropriate to presume that the Group will continue in business.

The Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with

reasonable accuracy at any time, the financial position of the Group and for ensuring that the accounting records

comply with the registered accounting system. It is also responsible for safeguarding the assets of the Group and

hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board of Management has confirmed to the Board of Directors that the Holdings has complied with the above

requirements in preparing the consolidated financial statements.

APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

We hereby approve the accompanying consolidated financial statements which give a true and fair view of the

financial position of the Group as at 31 December 2009 and the consolidated results of its operations for the year and

the consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and

System and comply with the relevant statutory requirements.


(1)Some items in the opening balance have been reclassified for the purpose of comparison

CONSOLIDATED BALANCE SHEETas at 31 December 2009

100 13,673,103,807,542 9,240,785,580,591 A. CURRENT ASSETS

4110 2,532,644,263,412 480,836,990,174 I. Cash and cash equivalents

111 540,937,036,319 425,836,990,174 1. Cash

112 1,991,707,227,093 55,000,000,000 2. Cash equivalents

12.1120 8,576,063,696,075 6,553,383,666,012 II. Short-term investments

121 8,939,362,811,569 7,532,933,455,546 1. Short-term investments

129 (363,299,115,494) (979,549,789,534)2. Provision for impairment of short-term investments

5130 2,427,630,124,465 2,173,634,060,603 III. Accounts receivables

131 1,273,174,332,975 1,111,198,411,133 1. Receivables from insurance activities

132 9,351,089,507 85,476,953,156 2. Trade advances

133 14,169,850,360 30,720,937,225 3. Other advances

137 1,068,732,816,372 897,681,552,360 4. Receivables from investment activities

138 100,924,531,492 70,462,532,593 5. Other receivables

139 (38,722,496,241) (21,906,325,864)6. Provision for doubtful debts

6140 107,121,526,352 24,620,153,079 IV. Inventories

141 107,121,526,352 24,620,153,079 1. Inventories

- -149 2. Provision for obsolete inventories

150 29,644,197,238 8,310,710,723 V. Other current assets

151 18,119,677,599 6,884,008,7631. Short-term prepaid expenses

155 137,942,020 137,942,020 2. Shortage of current assets waiting for resolution

-152 1,073,545,9823. VAT deductible

-154 5,322,979,2204. Receivables from State

156 3,599,500,616 131,946,400 5. Margin deposits

158 1,390,551,801 1,156,813,540 6. Others

-160 2,624,756,884,104B. LOANS AND ADVANCES TO CUSTOMERS

-161 2,633,023,390,293 71. Loans and advances to customers

-169 (8,266,506,189)2. Provision for credit loss

200 17,416,755,972,025 16,076,789,827,355 C. NON-CURRENT ASSETS

220 1,702,679,360,400 1,208,962,426,952 I. Fixed assets

221 8 569,869,121,953 449,320,961,350 1. Tangible fixed assets

222 1,100,690,387,362 913,178,189,403 Cost

223 (530,821,265,409) (463,857,228,053)Accumulated depreciation

227 9 650,130,000,618 460,102,383,374 2. Intangible fixed assets

228 707,105,030,491 494,464,745,098 Cost

229 (56,975,029,873) (34,362,361,724)Accumulated amortization

230 10 482,680,237,829 299,539,082,228 3. Construction in progress

Code ASSETS Notes 31 Dec 2009(1)

31 Dec 2008

Currency: VND

CONSOLIDATED FINANCIAL STATEMENTSINDEPENDENT AUDITOR'S REPORT

Code ASSETS Notes 31 Dec 2009 31 Dec 2008


CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2009

240 11 23,448,947,000 23,448,947,000 II. Investment Properties

241 23,448,947,000 23,448,947,000 1. Cost

242 - -2. Accumulated depreciation

250 12.2 15,630,164,051,412 14,787,789,134,320 III. Long-term investments

252 313,559,572,889 254,445,095,067 1. Investments in associates and joint-ventures

258 15,512,602,012,844 14,749,224,268,905 2. Other long-term investments

259 (195,997,534,321) (215,880,229,652)3. Provision for impairment of long-term investments

260 60,463,613,213 56,589,319,083 IV. Other long-term assets

261 13 18,120,011,138 18,692,585,177 1. Long-term prepaid expenses

262 28.3 10,654,317,835 6,857,264,826 2. Deferred tax assets

267 20,641,706,845 23,544,891,651 3. Long-term margin deposits

268 11,047,577,395 7,494,577,429 4. Other long-term assets

270 33,714,616,663,671 25,317,575,407,946 TOTAL ASSETS

Currency: VND

Code Notes 31 Dec 2009 31 Dec 2008

Currency: VND

RESOURCES

300 23,777,028,786,063 16,526,705,083,134 A. LIABILITIES

310 2,450,954,959,306 1,039,136,692,088 I. Current liabilities

311 420,948,732,6631. Short-term loans and borrowings

14.1312 960,615,920,164 633,081,394,176 2. Trade payables

14.2313 43,226,021,957 25,035,032,294 3. Advances from customers

15314 128,841,596,905 101,161,318,444 4. Statutory obligations

315 135,423,296,316 125,518,508,376 5. Payables to employees

16316 17,242,129,166 707,410,431 6. Accrued expenses

17319 744,657,262,135 153,633,028,367 7. Other payables

-18320 3,786,961,866,864 II. Amount due to customers

-18.1321 1,709,021,432,6061. Deposit from commercial banks

-18.2322 2,077,940,434,258 2. Deposit from customers

330 73,239,449,605 47,074,847,732III. Non-current liabilities

333 24,444,886,406 21,541,973,411 1. Long-term deposits, mortgage

28.3335 4,476,408,636 945,805,444 2. Deferred tax liabilities

336 44,318,154,563 24,587,068,877 3. Provision for severance allowance

Code Notes 31 Dec 2009 31 Dec 2008

Currency: VND

RESOURCES

IV. Reserves 22.4340 17,465,872,510,288 15,440,493,543,314

1. Unearned premium reserve341 2,219,898,075,597 1,852,969,674,763

2. Technical reserve342 13,149,693,155,870 12,049,168,352,666

3. Claim reserve343 1,096,611,181,704 899,888,531,738

4. Catastrophe reserve344 193,572,226,768 95,439,760,649

5. Dividend reserve345 789,360,245,400 530,846,019,579

6. Equalization reserve346 16,737,624,949 12,181,203,919

B. EQUITY400 19 8,588,671,366,438 8,301,511,202,912

I. Owners' equity410 19.1 8,538,814,868,317 8,265,011,167,953

1. Contributed chartered capital411 5,730,266,050,000 5,730,266,050,000

2. Share premium412 1,838,314,624,015 1,840,007,252,773

5. Foreign exchange difference416 18,387,227,948 16,075,608,000

6. Investment and development fund417 10,222,384,015 8,609,458,421

7. Financial reserve fund418 11,699,111,508 8,609,458,421

8. Statutory reserve419 43,521,050,471 17,067,266,899

9. Undistributed earnings420 886,495,196,261 643,474,381,906

II. Other capital, funds430 19.2 49,856,498,121 36,500,034,959

3. Treasury shares -414 (90,775,901)

4. Other capital -415 901,691,533

1. Bonus and welfare fund431 49,856,498,121 36,500,034,959

C. MINORITY INTERESTS500 29 1,348,916,511,170 489,359,121,900

TOTAL LIABILITIES AND EQUITY440 33,714,616,663,671 25,317,575,407,946

CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2009

OFF BALANCE SHEET ITEMS

115,681,301,363 141,839,077,5711. Insurance policies signed but not yet effective

4,401,672,856 4,401,672,8562. Bad debt written off

3,027,404 9,802,3393. Foreign currency

15,731,400,660,000 14,810,016,225,0004. Securities under custody (VND)

- 300,000,0005. Goods held on consignment

ITEMS 31 Dec 2009 31 Dec 2008


ITEMSFor the year ended

31December 2009

For the period from

16 October 2007 to

31 December 2008

Code Notes

Currency: VND

CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2009

(continued)


31December 2009

For the period from

16 October 2007 to

31 December 2008

Code Notes

Currency: VND


CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2009

01 21.1 8,114,161,109,2837,393,367,704,806Gross written premium

02 21.2 166,511,215,608151,666,182,986Reinsurance premium assumed

03 21.3 (1,269,741,269,847)(1,036,847,985,406)Deductions

04 (1,227,008,992,121)(979,534,348,986)Reinsurance premium ceded

05 (2,491,950,484)(1,915,407,401)Premium deduction

06 (40,240,327,242)(55,398,229,019)Premium returns

08(1,224,683,344,161)(1,467,453,204,038)

Increase in unearned premium reserve

and technical reserve

09 166,682,780,794146,828,204,959Commissions on reinsurance ceded

10 21,878,164,8905,863,915,547Other income

11 10,437,811,8911,127,872,732Income on reinsurance assumed

12 5,519,806,006308,514,166Income on reinsurance ceded

13 5,920,546,9934,427,528,649Income from other activities

145,974,808,656,5675,193,424,818,854

Total net revenue from insurance business

(14 = 01+02+03+08+09+10)

15 22.1 (4,950,625,026,365)(4,050,560,862,254)Claim and maturity payment expenses

16 22.2 (60,384,632,712)(46,246,678,770)Claim expenses for reinsurance assumed

17 505,776,580,566 386,713,469,741Deductions

18 22.33 482,761,817,670366,196,782,586Recoveries from reinsurance ceded

19 17,795,279,94913,815,213,821Subrogation recoveries

20 5,219,482,9476,701,473,334Salvages

21(4,505,233,078,511)(3,710,094,071,283)

Claim expenses on retained risks

(21 = 15+16+17)

22 116,453,892,318Claim expenses using catastrophe reserve

23 (11,690,746,063)(105,617,698,741)Increase in claim reserve

24 (100,126,163,455) (98,132,466,119)Provision for catastrophe reserve

25 (860,363,747,027) (868,965,315,020)Other insurance operating expenses

26 (812,295,263,119) (804,531,117,925)Other underwriting expenses

27 (714,761,159,822) (723,779,216,244)Commission

28 (54,457,729,341) (42,466,695,918)Risk minimization expenses

29 (43,076,373,956) (38,285,205,763) Loss adjusting fee, risk assessment and others

30 (35,541,606,643) (42,232,181,492)Other reinsurance assumed expenses

31 (12,526,877,265) (22,202,015,603)Other reinsurance ceded expenses

33(4,774,207,983,170) (5,369,561,410,731)

Total direct insurance operating expenses

(33 = 21+22+23+24+25)

34 419,216,835,684 605,247,245,836Gross insurance operating profit (34 = 14+33)

-35.1 355,479,712,399Income from banking activities

-(126,218,988,181)35.2 Expense from banking activities

-23 229,260,724,21835 Net operating income from banking activities

144,166,331,292 125,560,217,98936.1 Revenue from other activities

(50,263,018,593)(55,510,689,251)36.2 Expense from other activities

36 24 88,655,642,041 75,297,199,396Net operating income from other activities

37 (122,023,207,897) (111,761,190,276)Selling expenses

38 25 (1,453,572,088,167) (1,427,092,024,298)General and administrative expenses

38.1(1,187,481,587,361) (1,214,858,575,036)

General and administrative expenses of

insurance operation

38.2- (67,507,827,941)


banking operation

38.3(198,582,672,865) (212,233,449,262)


other operations of the Group

39.1(890,287,959,574) (721,372,519,476)

Net operating profit from insurance operation

(39.1 = 34+37+38.1)

39.2 161,752,896,277 -Net profit from bank operation (39.2=35+38.2)

39.3 (109,927,030,824) (136,936,249,866)Net profit from others operation (39.3=36+38.3)

40 26.1 2,393,475,592,072 3,167,514,035,317Income from financial activities

41 26.2 (331,877,326,646) (1,835,054,576,611)Financial expenses

42 2,061,598,265,426 1,332,459,458,706Profit from financial activities (42 = 40+41)

43 20,452,879,445 6,965,693,250Other income

(6,569,981,488) (774,475,524)44 Other expenses

45 27 13,882,897,957 6,191,217,726Net other profit (45 = 43+44)

13,057,543,886 22,325,023,67546 Share of the profit of associates and joint ventures

1,250,076,613,148 502,666,930,76547 Profit before tax

(47 = 39.1+39.2+39.3+42+45+46)

(4,556,421,030) (1,929,207,757)48 Equalisation reserve

28 (234,020,051,811) (175,180,946,343)49 Enterprise income tax for the year

1,011,500,140,307 325,556,776,66550 Profit after tax (50 = 47+48+49)

119,745,884,635 (203,923,817,627)51 Minority interest

891,754,255,672 529,480,594,29252 Net profit attributable to shareholders of

the Group (52 = 50-51)

31 1,556 92453 Earnings per share



31December 2009

For the period from

16 October 2007 to

31 December 2008

Code Notes

Currency: VND


The Holdings has one head office in Hanoi and two 100% owned subsidiaries operating in the insurance industry; i.e.

Bao Viet Insurance Corporation and Bao Viet Life Corporation with their head office located respectively at 35 Hai Ba

Trung Street, Hoan Kiem District, Hanoi and 01 Dao Duy Anh Street, Dong Da District, Hanoi. The Holdings also has

another 100% owned subsidiary being Bao Viet Fund Management Company (“BVF”) with its head office located at

No. 8, Le Thai To, Hang Trong Ward, Hoan Kiem, Hanoi.

The Holdings' other subsidiaries include Bao Viet Securities Joint Stock Company (“BVSC”), Bao Viet Commercial

Joint Stock Bank (“BaoViet Bank”) with their head offices located at No. 8, Le Thai To, Hang Trong Ward, Hoan Kiem,

Hanoi; Bao Viet - Au Lac Limited Company - located at Ha Lieu, Phuong Lieu, Que Vo Town, Bac Ninh Province; and

Bao Viet Investment Joint Stock Company - located at No. 71 Ngo Sy Lien Street, Dong Da District, Hanoi.

The Holdings also has two dependent units under its direct supervision, i.e. Bao Viet Training Centre, located at No.

8, Le Thai To, Hang Trong Ward, Hoan Kiem, Hanoi, and Infrastructure Construction Projects Management Unit,

located at No. 71 Ngo Sy Lien Street, Dong Da District, Hanoi.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAs at and for the year ended 31 December 2009

1.CORPORATE INFORMATION

Bao Viet Holdings (herein referred to as “the Holdings”) is a joint stock company pursuant to Business License No.

0103020065 approved by Hanoi Authority for Planning and Investment dated 15 October 2007. The Holdings was

listed on Ho Chi Minh Stock Exchange on 25 June 2009. The following summarizes some key information about the

newly transformed entity:

58

(*) Cash from shareholders of Bao Viet Commercial Joint Stock Bank other than Bao Viet Holdings.

CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 December 2009

I. CASH FLOWS FROM OPERATING ACTIVITIES

40,819,354,749,95422,500,820,998,47101 1. Premium received and interest income received

(40,197,291,912,050)(20,334,051,434,103)02 2. Payment to suppliers

(584,434,573,287) (598,405,193,505)03 3. Payment to employees

(1,564,008,993)04 4. Interest payment

(242,228,369,694)(195,956,053,210)05 5. Enterprise income tax paid

1,630,536,965,961546,958,763,62806 6. Other cash inflows from operating activities

(1,915,451,376,492)(1,222,643,083,457)07 7. Other cash outflows from operating activities

(491,078,524,601)696,723,997,82410 Net cash inflows from operating activities

II. CASH FLOWS FROM INVESTING ACTIVITIES

(124,107,687,539)(315,189,853,739)21 1. Purchase of fixed assets

2,323,098,5137,458,226,91522 2. Proceeds from disposals of fixed assets

(11,510,473,837,264)(7,296,464,781,636)23 3. Loans to other entities and payments for

purchase of debt instruments of other entities

21,269,751,067,7041,287,210,525,57924 4. Repayments from borrowers and proceeds

from sales of debt instruments of other entities

(15,154,345,927,579)(2,703,482,862,334)25 5. Payments for investments in other entities

4,324,118,237,3123,662,607,719,33326 6. Proceeds from sales of investments in other entities

1,266,913,794,532497,054,068,93927 7. Interest received, coupon and distributed profits

(1,584,294,826,227)(517,900,000,000)28 8. Cash transfer under trusted investment arrangement

370,064,471,998495,101,000,00029 9. Cash receipt from trusted investment arrangement

(1,140,051,608,550)(4,883,605,956,943)20 Net cash outflows from investing activities

III. CASH FLOWS FROM FINANCING ACTIVITIES

1,242,306,484,691 720,000,000,000(*)31 1. Cash receipts from issuing shares

5,576,221,000-32 2. Payments to shareholders, repurchasing shares

from minority shareholders

198,400,000,0005,646,136,030,31833 3. Cash receipts from short and long term loans

(163,507,200,000)-34 4. Payments for original loans

(59,154,530,000)-35 5. Payments for financial loans

(112,961,264,280) (128,728,400,000)36 6. Dividends paid out

(4,298,059,929,476)-37 7. Refund to investors and share premium paid to MOF

(3,187,400,218,065)6,237,407,630,31830 Net cash inflows (outflows) from financing activities

(4,818,530,351,216) 2,050,525,671,19940 Net cash inflows during the period

4 5,300,970,354,094 480,836,990,17450 Cash and cash equivalents at the beginning of the period

(1,603,012,704)1,281,602,03951 Impact of exchange rate fluctuation

60 4 2,532,644,263,412 480,836,990,174Cash and cash equivalents at the end of the period

444,300,000 shares, equivalent to 77.54% shareholdings;Shareholding by the State:

79,525,161 shares, equivalent to 13.87% shareholdings;Shareholding by strategic investors:

49,201,444 shares, equivalent to 8.59% shareholdings;Shareholding by other investors:

Bao Viet HoldingsRegistered Company name:

No. 8, Le Thai To Street, Hoan Kiem, HanoiAddress:

Nguyen Thi Phuc Lam - Chief Executive OfficerLegal representative:

Total charter capital of Corporation: VND 5,730,266,050,000, equivalent to 573,026,605 shares. In which:

Charter capital: VND 5,730,266,050,000

Operating activities: Equity investments, financial services and other related services;

Founding shareholders: Ministry of Finance (444,300,000 shares, equivalent to 77.54%

shareholdings)

HSBC Insurance (Asia Pacific) Holdings Limited (59,125,161 shares,

equivalent to 10.31% shareholdings)

SCIC (20,400,000 shares, equivalent to 3.56% shareholdings).

According to the Decision 02/2009/NQ-ÑHÑCÑ dated 23

September 2009, from 23 September 2009, all the Bao Viet Holdings

shares held by Vinashin Group (equivalent to 3.56% shareholdings)

were transferred to the State Capital Investment Corporation

(“SCIC”) under the approval of Shareholder's General Meeting.

Other investors (49,201,444 shares, equivalent to 8.59%

shareholdings)



All unrealized foreign exchange gains are taken to

the income statement.

All foreign exchange losses will be charged to the

income statement. However, if the charging of all

foreign exchange losses results in net loss before

tax for the company, part of the exchange losses

can be deferred and allocated to the income

statement within the subsequent five years. In any

case, the total foreign exchange loss to be charged

to current year's income must be at least equivalent

to the foreign exchange losses arising from the

translation of the current portion of the long-term

liabilities, while the remaining portion of the foreign

exchange losses can be deferred in the balance

sheet and allocated to the income statement within

the subsequent five years.

All unrealised foreign exchange differences are

taken to the “Foreign exchange differences reserve”

account in the equity section of the balance sheet

and will be reversed on the following year.

Translation of short-

t e r m m o n e t a r y

assets and liabilities

d e n o m i n a t e d i n

foreign currencies

Translation of long-

t e r m m o n e t a r y

l i a b i l i t i e s

denom ina ted i n

foreign currencies at

year end

All unrealised foreign

exchange differences

are taken to the

income statement.

All unrealised foreign

exchange differences

are taken to the

income statement.

2. BASIS FOR THE PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENT

2.1 Accounting standards and system

The consolidated financial statements of the Group, which are expressed in Vietnam dong (“VND”), are prepared in

accordance with the Vietnamese Accounting System and the Vietnamese Accounting Standards issued by the

Ministry of Finance as per:

Decision No. 149/2001/QÑ-BTC dated 31 December 2001 on the Issuance and Promulgation of Four

Vietnamese Standards on Accounting (Series 1);

Decision No. 165/2002/QÑ-BTC dated 31 December 2002 on the Issuance and Promulgation of Six


Decision No. 234/2003/QÑ-BTC dated 30 December 2003 on the Issuance and Promulgation of Six


Decision No. 12/2005/QÑ-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese

Standards on Accounting (Series 4); and

Decision No. 100/2005/QÑ-BTC dated 28 December 2005 on the Issuance and Promulgation of Four

Vietnamese Standards on Accounting (Series 5).

The accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement

and related notes, including their utilisation are not designed for those who are not informed about Vietnam's

accounting principles, procedures and practices and furthermore are not intended to present the financial position

and results of operations and cash flows in accordance with accounting principles and practices generally accepted

in countries other than Vietnam.

Accounting Standard(s) and guidance issued but not yet effective

Circular 210/2009/TT-BTC providing guidance for the adoption in Vietnam of the International Financial

Reporting Standards on presentation and disclosures of financial instruments

On 6 November 2009, the Ministry of Finance issued Circular 210/2009/TT-BTC providing guidance for the adoption

in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial

instruments. The adoption of the circular will require further disclosures and have impact on the presentation of

certain financial instruments in the financial statements. The circular will become effective for financial years

beginning on or after 31 December 2011. The Group management is currently assessing the impact of adopting the

circular on the future financial statements of the Group.

2.2 Registered accounting documentation system

The registered accounting documentation system is the general journal voucher system.

2.3 Accounting currency

The Holdings maintains its accounting records in Vietnam dong.

2.4 Fiscal year

These consolidated financial statements have been prepared for the period from 1 January 2009 to 31 December

2009.

The Group's fiscal year starts on 1 January and ends on 31 December except for the first financial year that was from

16 October 2007 to 31 December 2008.

2.5 Basis for the presentation of the consolidated financial statement

The consolidated financial statements comprise the accounts of Bao Viet Holdings, the parent company, and its

subsidiaries as at 31 December 2009.

The subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains

control, and continues to be consolidated until the date that such control ceases. Control exists when the Group has

the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits

from its activities.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using

consistent accounting policies. Adjustments have been made to bring into line any dissimilar accounting policies that

may exist.

All inter-company balances and transactions, including unrealized profits arising from intra-group transactions, have

been eliminated in full. Unrealized losses are eliminated unless the transactions provide evidence of impairment of

the asset transferred.

Minority interests represent the portion of profit or loss and net assets of the subsidiaries not held by the Group and

are presented separately in the income statement and within equity in the consolidated balance sheet, separately

from parent's shareholders equity.

3. ACCOUNTING POLICIES

3.1 Changes in accounting policies and disclosures

For the year ended 31 December 2009, the Group has adopted the Circular 201/2009/TT-BTC issued on 15 October

2009 by the Ministry of Finance (the “Circular 201”) providing guidance for the treatment of foreign exchange

differences. The Circular 201 differs from the accounting policy adopted in prior years under VAS 10, Effects of

Changes in Foreign Exchange Rates (the “VAS 10”) relating to the recognition of unrealised foreign exchange

differences as follows:

TransactionAccounting treatment

under VAS 10Accounting treatment under Circular 201

The Circular 201 is applied from 2009 on prospective basis in the absence of specific requirement for retrospective

application in the circular. The impacts of this change in accounting policy on the current year financial statements

are presented in Note 33.

3.2 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand, cash at banks, demand deposits and short-term, highly liquid

investments with an original maturity of three months or less which are readily convertible into known amounts of

cash and that are subject to an insignificant risk of change in value.



3.6 Depreciation and amortisation

Depreciation and amortisation of fixed tangible and intangible assets is calculated on a straight-line basis over the

estimated useful lives of these assets, which are as follows:

3.7 Financial investments

Investment in subsidiaries

The consolidated financial statements comprise the accounts of Bao Viet Holdings the parent company of the Group

which carries out general management function and investment activities of the whole Group and its subsidiaries.

The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using


may exist.




Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control,

and continue to be consolidated until the date that such control ceases. Control exists when the Group has the

power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from

its activities.

Minority interests represent interests in the Group's subsidiaries that have been consolidated, not held by the Group.

A listing of the Group's subsidiaries is shown in Note 12.2.1.

Investment in associates

Investments in associates over which the Group has significant influence and which is neither a subsidiary nor a joint

venture (typically those that the Group owns from 20% to 50% of voting rights) are accounted for under the equity

method of accounting.

Under the equity method, the investment is initially recorded at cost and the carrying value is increased or decreased

to recognize the Group's share of the profits or losses in the associate after the date of acquisition. Distributions

actually received from an associate reduce the carrying amount of the investment. Adjustments to the carrying value

are recognized for changes in the Group's proportionate interest in the associate arising from changes in the

associate's equity that have not been included in the consolidated income statement.

The reporting dates of the associates and the Group are identical and the associates' accounting policies conform to

those used by the Group for transactions and events in similar circumstances.

A listing of the Group's subsidiaries is shown in Note 12.2.2.

62

30%

50%

70%

100%

3.4 Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation.

The cost of a tangible fixed asset comprises of its purchase price and any directly attributable costs of bringing the

tangible fixed asset to working condition for its intended use.

Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and

expenditures for maintenance and repairs are charged to the consolidated income statement as incurred.

When tangible fixed assets are sold or retired, their costs and accumulated depreciation are removed from the

consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income

statement.

3.5 Intangible fixed assets

Intangible fixed assets are stated at cost less accumulated amortisation.

The cost of an intangible fixed asset comprises of its purchase price and any directly attributable costs of preparing

the intangible fixed asset for its intended use.

Expenditures for additions, improvements are added to the carrying amount of the assets and other expenditures are

charged to the consolidated income statement as incurred.

When tangible fixed assets are sold or retired, their costs and accumulated amortisation are removed from the

consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income

statement.

Land use rights are recognised as intangible fixed assets based on accounting policies of the Holdings. According to

which, land use rights are recognised based on the revalue amount as determined by the independent valuer for the

land areas which the Company was granted with the land use rights certificates, or was in the process of obtaining

the land use right certificates, as at 31 December 2005 for the equitization purpose of the parent company.

Land use rights amortization policy is followed the guidance stipulated Decision 206/2003/QÑ-BTC issued by the

Minister of Finance on 12 December 2003.

3.3 Receivables

Receivables are presented in the consolidated financial statements at the carrying amounts due from customers

and other debtors, along with the allowance for doubtful debts.

The allowance for doubtful debts represents the estimated loss due to non-payment arising on receivables that

were outstanding at the balance sheet date. Increases and decreases to the allowance balance are recorded as

general and administrative expense in the consolidated income statement.

The Group uses the allowance ratio as stipulated in Circular 228/2009/TT-BTC dated 7 December 2009 by

Ministry of Finance, as follows:

Receivables aging

From six months to one less than one year

From one to less than one year

From two to less than three years

Over three years

Allowance ratio

Buildings

Machinery

Vehicles

Office equipment

Other fixed assets

Software

6 - 25 years

3 - 7 years

6 - 8 years

3 - 6 years

4 years

3 years



1 0%

2 5%

3 20%

4 50%

5 100%

Investment in joint control entity

Under the equity method, the Group's interest in the jointly controlled entity is carried in the consolidated balance

sheet at cost plus post joint venture changes in the Group's share of net assets of the jointly controlled entity. The

consolidated income statement reflects the share of the post-acquisition results of operation of the jointly controlled

entity.

The share of profit/(loss) of the jointly controlled entity is presented on face of the consolidated income statement and

its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition

movements are adjusted against the carrying amount of the investment. Dividends receivable from jointly controlled

entities reduce the carrying amount of the investment.

The financial statements of the jointly controlled entities are prepared for the same reporting period as the Group.

Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

The Group's significant joint controlled entity is shown in Note 12.2.2.

Investment in Bao Viet Securities Investment Fund (“BVF1”)

The Group has invested, directly and indirectly via its 100% owned subsidiaries, in Bao Viet Securities Investment

Fund (“BVF1”). The Group's effective shareholding in BVF1 as at 31 December 2009 was 91.58%. BVF1 was fully

consolidated into the Group's consolidated financial statements as at 31 December 2009 and for the year then

ended. Adjustments have been made to bring into line any dissimilar accounting policies that may exist.

Investments in securities and other investments

Investments in securities and other investments are stated at their acquisition cost. Short-term investments

comprise holdings of listed shares and other liquid securities, which are readily realisable and are intended to be held

for not more than one year.

Long-term investments include listed and over-the-counter shares, government bonds, corporate bonds, loans and

trusted loans, and term deposits at banks, which are intended to be held for more than one year.

Allowance for devaluation of short and long-term investments in securities and other investments

Allowance for the diminution in value of securities investment is created representing the excess of the acquisition

cost over the market value at the reporting date.

The Group has followed the provisions set out in Decision 493/2005/QÑ-NHNN dated 22 April 2005 of the State Bank

of Vietnam for allowance for loan impairment and the related amendments stipulated in Decision 18/2007/ QÑ-NHNN

dated 25 April 2007 of the State Bank of Vietnam.

Allowance for diminution in value of other investments is considered in accordance with Circular 228/2009/TT-BTC

dated 7 December 2009 by Ministry of Finance and other relevant regulatory requirements.

3.8 Payables and accruals

Payables and accruals are recognised for amount to be paid in the future for goods and services received, whether or

not billed to the Group.

3.9 Loans and advances to customers

Loans and advances to customers are presented at the principal amounts outstanding at the end of financial year.

3.10 Provision for credit losses

Loans and advances to customers are classified and provided for in accordance with the Law on Credit Institutions

effective from 1 October 1998; Law on Amendment and Supplementation to a number of articles of the Law on Credit

Institutions effective from 1 October 2004; Decision 1627/2001/QÑ-NHNN dated 31 December 2001 by the

Governor of the State Bank of Vietnam on lending statutory; Decision 127/2005/QÑ-NHNN dated 3 February 2005

amending and supplementing Decision 1627/2001/QÑ-NHNN; Decision 493/2005/QÑ-NHNN dated 22 April 2005

and Decision 18/2007/QÑ-NHNN dated 25 April 2007 by the State Bank of Vietnam on loan classification and

provision. Accordingly, loans are classified into Current, Special Mention, Substandard, Doubtful and Loss on the

basis of payment arrears status and other qualitative factors.

Net loans and advances exposure for each borrower is calculated by subtracting from the loan balance the

discounted value of collateral. Decision 493/2005/QÑ-NHNN and Decision 18/2007/QÑ-NHNN stipulated specific

discount rates for certain accepted collaterals.

Specific provision is created on the net loans and advances exposure of each borrower using a fixed provision rates

as follows:

Group Name

Current

Special Mention

Substandard

Doubtful

Loss

Specific provision rate

Loans in Substandard, Doubtful or Loss group are considered as non-performing loans.

In accordance with Decision 493/2005/QÑ-NHNN, a general provision is made for credit losses which are yet to be

identified during the loan classification and provision process and for the Bank's potential financial difficulties due to

deterioration in loan quality. As such, the Bank is required to fully create and maintain a general provision at 0.75% of

total loans and advances to customers; guarantees; irrevocable lending commitments and acceptance for payment

which are classified from groups 1 to 4 within 5 years commencing from May 2005.

The provisions are recorded in the income statement as an expense and will be used to write off any credit losses

incurred. According to Decision 493/2005/QÑ-NHNN, at the discretion of the Bank's Bad Debt Resolution

Committee, the Bank can write off the loans that are classified in Group 5 and of which the borrower are bankrupted

or liquidated (for corporate) or are deceased or missing (for individuals).

Details on the loan classification and related provision as at 31 December 2009 are presented in Note 7.1 and Note

7.2.

3.11 Provision for off-balance-sheet commitments

According to Article 6 and 7 of Decision 493/2005/QÑ-NHNN and Decision 18/2007/QÑ-NHNN by SBV, credit

institutions must classify and make provision for guarantees, payment acceptances, and non-cancellable loan

commitments with specific effective date (generally called off-balance-sheet commitments) into groups, namely

Current, Special Mention, Substandard, Doubtful and Loss based on the overdue status and other qualitative factors.

Specific and general provision for off-balance-sheet commitments is calculated similarly to the provision for loans

and advances to customers as described in Note 7.2.



= x

For the insurance policies with period cover is more than one year, unearned premium reserve is calculated

based on the daily method, following the formula:

66

Technical reserves for traditional products which include mathematical reserve, unearned premium reserves,

outstanding claim reserves, dividend reserves and balancing reserves are established in accordance with the

provisions and instructions stated in Circular 156/2007/TT-BTC dated 20 December 2007 as amended by Circular

86/2009/TT-BTC dated 28 April 2009 issued by the Ministry of Finance (“MOF”).

The Group estimates mathematical reserves and unearned premium reserves by applying actuarial approach with

specific formulae and factors for each type of in-force insurance policies as registered and approved by the MOF.

These reserves are estimated in accordance with the assumptions and methodology as described in Circular

156/2007/TT-BTC dated 20 December 2007 as amended by Circular 86/2009/TT-BTC dated 28 April 2009.

3.12 Provision for severance allowance

Post employment benefits

Post employment benefits are paid to retired employees of the Group by the Social Insurance Agency of Vietnam. The

Group is required to contribute to these post employment benefits by paying social insurance premiums to the Social

Insurance Agency of Vietnam at the rate of 15% of employee basic salaries on a monthly basis. The Group has no

further obligation concerning post employment benefits for its employees other than this.

Voluntary resignation and retrenchment benefits

The severance pay to employee is accrued at the end of each reporting period for all employees who have more than

12 months in service up to 31 December 2008 at the rate of one-half of the average monthly salary for each year of

service up to 31 December 2008 in accordance with the Labour Code, the Law on Social Insurance and related

implementing guidance. Commencing 1 January 2009, the average monthly salary used in this calculation will be

revised at the end of each reporting period following the average monthly salary of the 6-month period up to the

reporting date. Any changes to the accrued amount will be taken to the consolidated income statement.

Unemployment insurance fund

According to the Insurance Law No. 71/2006/QH11 issued on 29 June 2006, employee and employer are required to

contribute 1% each of employee basic salaries to the unemployment insurance fund, with effect from 01 January

2009. Further, the Government will also contribute 1% of the basic salary of each employee to this fund.

3.13 Reserves

Technical reserves are established in accordance with provisions and instructions of Circular 156/2007/TT-BTC

dated 20 December 2007 issued by the Ministry of Finance providing guidelines for implementation of Decree

46/2007/NÑ-CP of the Government dated 27 March 2007 on financial regime applicable to insurers and insurance

brokers. The Group's technical reserves include:

Technical reserves for universal life products which include the greater of unearned premium reserve method or the

cash-flow reserve method that covers all future expenses arising, compensation reserve, reserve for the universal life

fund component and an additional solvency reserve are established in accordance with the provisions and

instructions stated in MOF's Decision 96/2007/QÑ-BTC dated 23 November 2007 as amended by Circular

86/2009/TT-BTC dated 28 April 2009.

The Group estimates these universal life reserves in accordance with actuarial principles and methods which are

widely recognised in international practice. Furthermore the methodology and actuarial principles used to estimate

these universal life reserves have been registered and approved by the MOF.

Details on the reserve calculation method are as follows:

3.13.1 Life insurance reserves

Technical Reserve: is the difference between present value of total insurance payable in the future and the

actuarially adjusted present value of insurance premiums receivable in the future. Mathematical reserve is calculated

for all products with specific actuarial formulas and factors for each type of products as registered and approved by

the Ministry of Finance;

Unearned premium reserve: is the provision for unearned revenue out of already-paid premium as at the balance

sheet date, and is calculated for all outstanding policies as at the reporting date;

Claim Reserve: is the provision for claims submitted but still in the course of settlement as at the balance sheet date;

Dividend Reserve: is the provision for accumulated unpaid dividends for participating policies, which is established

on the variances of actual rate of return announced for participating policies and the respective nominal interest rate;

and

Equalisation Reserve: is the general provision for insurance payable in the event of significant variances in mortality

rate or nominal interest rate, which is established as 1% of profit before tax.

3.13.2 General insurance reserves

Unearned premium reserve

Unearned premium reserve is established as a percentage of total retained premium or in accordance with a

coefficient of the insurance contracts' terms as such:

For cargo insurance, unearned premium reserve is made at 25% of the retained premium;

For other insurance lines, unearned premium reserve is calculated based on the 1/8 method. This method

assumes that premiums for all insurance contracts issued in a quarter are allocated equally between each

month within the quarter. In other word, all insurance contracts of a particular quarter are assumed to be

effective at that mid quarter. Unearned premium reserve is calculated based on the following formula:

Dividend reserve

Equalisation reserve

Life insurance services General insurance services

Mathematical reserve Unearned premium reserve

Unearned premium reserve Claim reserve

Claim reserve Catastrophe reserve

Unearned premium reserve Retained premiums Unearned premium rate

=Unearned premium reserve -------------------------------------------------------Retained premiums x Remaining day of insurance policy

Number of coverage days



Claims reserve

Claim reserve includes the reserve for outstanding claims and for claims incurred but not reported.

Outstanding claim reserve is established based on the estimated claim payments for each claim for which the

insurer is liable, which is either notified to the insurer or requested for payment but is still unresolved at the end

of the fiscal year, in accordance to the Circular 156/TT-BTC; and

Reserve for incurred but not reported claims for which the insurer is liable (IBNR).

Circular 156 has formulated a formula to calculate IBNR which requires statistical information for past three years in

order to calculate the IBNR provision. However the Corporation has not maintained statistical data for the required

period of three years to support the calculation of IBNR reserve by using the formula in the Circular 156 due to the fact

that current Management Information System does not capture such data as summary of unreported claims at the

end of previous three years, and the average delay in making claims of current year and previous year.

To resolve the above issue, the Group has written to Ministry of Finance (the insurance regulator) to seek permission

to modify the formula in the Circular 156 to suit the Group's circumstances. Following that, the Ministry of Finance

has approved the Group to use the statistic data of this year only for the purpose of calculation of IBNR for the current

year under the official letter No.1393/BTC-QLBH dated 06 February 2009 and the official letter No.727/BTC-QLBH

dated 18 January 2010, for which reserve for incurred but not reported claims for is established based on the

following formula: Although Circular 156/2007/TT-BTC has formulated a formula to calculate IBNR on the annual

financial statements, there is no guidance available for establishing IBNR when preparing the financial statements.

As such for the purpose of reporting of the management has calculated IBNR by multiplying the IBNR amount as at

31 December 2008 with the premium revenue growth for the period which Management believe would give a best

estimate of the IBNR amount as at 31 December 2009.

Catastrophe reserve

Catastrophe reserve is accrued annually until such reserve reaches 100% of the retained premiums of the current

fiscal year and is made based on retained premiums and based on Bao Viet Insurance Corporation's management's

experience of historical data.

On 28 December 2005, the Ministry of Finance issued Decision 100/2005/QÑ-BTC governing the publication of four

new accounting standards, one of which is Vietnamese Accounting Standard (“VAS”) 19 - Insurance Contract.

Following the issuance of this Standard, starting from January 2006, the provision of catastrophe reserve is no longer

required since it represents “possible claims under contracts that are not in existence at the reporting date”.

However, since the Ministry of Finance has not issued detailed guidance for the implementation of VAS 19 and in

accordance with the provision set out in Decree 46/2007/ND-CP issued by the Government of Vietnam on 27 March

2007 regarding financial regulations for insurance enterprises, the Group is still providing for the catastrophe reserve

from 3.5% of total retained premium according to official letter No.1393/BTC-QLBH dated 06 February 2009.

3.14 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Gross written premium

General insurance

Gross written premiums are recognized in accordance with Circular 156/2007/TT-BTC issued by the Ministry of Finance on 20 December 2007 (“Circular 156”). Specifically, gross written premium is recognized as revenue at the point of time when the following conditions are met: (1) the insurance contract has been entered into by the insurer and the insured; and (2) the premium has been paid by the insured or there is agreement between the Group and the insured for delayed payment of insurance premium.

Life insurance

Premiums are established in accordance with provisions and instructions of Circular 156/2007/TT-BTC dated 20 December 2007 as amended by Circular 86/2009/TT-BTC dated 28 April 2009 issued by the Ministry of Finance providing guidelines on financial regime applicable to insurers and insurance brokers. Premiums from life insurance contracts are recognised as revenue when payable by the policyholder. For single premium business, revenue is recognised on the date from which the policy is effective. Premiums due after the reporting period but received before the end of the financial year are shown as "premiums in advance" and included in the “Other payable” in the balance sheet.

Total premium received from Universal Life policy holders are recorded as revenue, Policy holders account value is calculated actuarially and recognized through technical reserve in the balance sheet.

Interest income from banking activities

Interest income is recognized in the consolidated income statement on an accrual basis. The recognition of interest income is suspended when loans become impaired, which occurs when a loan is classified from either group 2 to group 5 according to criteria set in Decision 493/2005/QÑ-NHNN dated 22 April 2005 and Decision 18/2007/QÑ-NHNN dated 25 April 2007 by the State Bank of Vietnam. Accrued interest income of impaired loans is recorded off-balance sheet until actually received.

Fees from rendering of services

Fees from rendering of services comprise fund management fees, placement fees, incentive fees, brokerage, underwriting activities, which are recognized when services are performed and the revenue can be reliably measured.

Gains from securities trading

Gains from securities are the excess of selling prices over the weighted average cost of securities sold.

Interests

Revenue is recognised as interests accrue (taking into account the effective yield on the asset) unless recoverability is in doubt.

Revenue from bond is recognized on an accrual basis. Interest revenue also includes the amount of amortization of any discount, premium or other difference between the initial carrying amount of a bond and its amount at maturity and allocated using straight-line method. When unpaid bond coupon interest has accrued before the acquisition of a bond, the subsequent receipt of coupon interest is allocated between pre-acquisition and post-acquisition period. Only post-acquisition bond coupon interest is recognized as revenue. Pre-acquisition bond coupon interest is deducted from the cost of the bond.

Dividends

Income is recognised when the Group's entitlement as an investor to receive the dividend is established.



3.15 Expense recognition

Claim and maturity payments

For general insurance, claim expense is recognized at the point of time when the claim documents are completed and

approved by authorized persons. In case that the final claim amount has not been finalized but the Group is certain

that the loss is within its insured liabilities and has paid an advance to the customer as per their request, such advance

would also be recognized as claim expense. Any claim that is not yet approved by authorized persons is considered

an outstanding claim and included in claim reserve.

Claim and maturity payment expenses are recognised when the liability to the policyholder under the policy has been

determined.

Commission

For general insurance, commission expense is recognized when incurred.

For life insurance, commission expenses are calculated as the percentages of premium revenue and are recognized

in the current year income statement. Commission is calculated for all products with specific percentages for each

type of products, and in accordance with Circular 155/2007/TT-BTC dated 20 December 2007 issued by the Ministry

of Finance providing guidelines for implementation of Decree 45/2007/NÑ-CP dated 27 March 2007 on Law on

Insurance and Circular 86/2009/TT-BTC issued on 28 April 2007 by the Ministry of Finance to provide guidance and

amendment to Circular 155/2007/TT-BTC.

Interest expense from banking activities

Interest expense is recognized in the consolidated income statement on an accrual basis.

Leased assets

Rentals paid under operating leases are charged to the income statement on a straight-line basis over the term of the

lease.

3.16 Recognition of reinsurance activities of general insurance

(l) Reinsurance ceded

Reinsurance premiums ceded under treaty reinsurance agreements are recognized when gross written premiums

within the scope of the treaty agreements are recognized.

Reinsurance premiums ceded are recognized when the facultative reinsurance agreement has been entered into by

the Group and when gross written premiums within the scope of the facultative agreements are recognized.

Reinsurance recoveries are recognized when there is evidence of liability from the part of the reinsurer.

Reinsurance commission is recognized when there is a corresponding reinsurance premium ceded.

(ll) Reinsurance assumed

Reinsurance assumed under treaty arrangement:

Incomes and expenses relating to reinsurance assumed under treaty arrangements are recognized when the

statement of account is received from the cedants. As at the reporting date, income and expenses relating to

reinsurance assumed under treaty arrangements for which the cedants have not sent their statement of accounts

have been estimated based on statistical data and based on the cedants' own estimate.

Reinsurance assumed under facultative arrangement:

Reinsurance premium assumed is recognized when the facultative reinsurance agreement has been entered into by

the Group and a statement of account (for each facultative reinsurance agreement) has been received from the

cedants;

Claim expenses for reinsurance assumed are recognized when there is evidence of liability of the Group and when a

statement of account has been sent to the Group;

Reinsurance commission is recognized when the reinsurance premium is recorded and when a statement of account

has been sent to the Group.

3.17 Advances on surrender value

Policyholders who have fulfilled their premium payment obligations for at least two (2) years are entitled to an

advance on surrender value, with the advance amount at a maximum of 80% of surrender value and accumulated un-

withdrawn dividend of the respective policy. Advances on surrender value are carried at cost.

3.18 Taxation

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be

recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those

that are enacted or substantively enacted as at the balance sheet date.

Current income tax is charged or credited to the income statement, except when it relates to items recognised

directly to equity, in which case the deferred current income tax is also dealt with in equity.

Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to set off

current tax assets against current tax liabilities and when the Group intends to settle its current tax assets and

liabilities on a net basis.

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the

tax base of assets and liabilities and their carrying amount for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

Where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at

the time of the related transaction affects neither the accounting profit nor taxable profit or loss; and

In respect of taxable temporarily differences associated with investments in subsidiaries and associates, and

interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is

probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carried forward unused tax credit

and unused tax losses, to the extent that it is probable that taxable profit will be available against which

deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilised,

except :

Where the deferred tax asset in respect of deductible temporary difference which arises from the initial

recognition of an asset or liability which at the time of the related transaction, affects neither the

accounting profit nor taxable profit or loss; and


73

All unrealised foreign exchange differences arising from the translation of short-term monetary assets and liabilities

denominated in foreign currencies as at the balance sheet date are taken to the “Foreign exchange differences reserve” account

in the equity section of the balance sheet and reversed in the following year.

4. CASH AND CASH EQUIVALENTS

As at 31 Dec 2009, cash equivalents included short term deposits that have maturity date less than 3 month of BV Bank (VND 1,635,499,700,000)

This opening balance has been reclassified for presentation purpose.

8,928,848,933 3,386,446,400

100,924,521,492 70,462,532.593

293,214,114,444 269,858,055,340

2,466,352,620,706 2,195,540,386,467

511,835,722,629 424,328,543,291

(38,722,496,241) (21,906,325,864)

22,988,904,912 4,521,190,000

11,067,001,000 -

2,427,630,124,465 2,173,634,060,603

2,874,246,605 1,840,870,928

5,021,488,048 2,681,665,388

208,516,086,800 188,463,803,776

4,286,403,001 2,600,977,237

14,169,850,360 30,720,937,225

318,134,288,531 291,868,957,155

9,351,089,507 4,203,950,000

74,315,180,815 54,445,230,884

- 4,842,647,407

873,267,024,099 751,936,401,980

- 76,430,355,749

1,122,133,839 10,889,273,885

6,335,705,691 2,058,547,229

1,068,732,816,372 897,681,552,360

14,169,850,360 30,720,937,225

9,351,089,507 85,476,953,156

43,079,323,530

381,733,105,284

1,024,561,360

55,000,000,000

480,836,990,174

68,973,179,827

471,869,527,792

94,328,700

1,991,707,227,093

2,532,644,263,412

1,273,174,332,975 1,111,198,411,133

72

In respect of deductible temporarily differences associated with investments in subsidiaries, associates, and

interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the

temporary differences will reverse in the foreseeable future and taxable profit will be available against which the

temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax

asset to be utilised. Previously unrecognised deferred income tax assets are re assessed at each balance sheet date

and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax

assets to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when

the asset realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet

date.

Deferred tax is charged or credited to the income statement, except when it relates to items recognised directly to

equity, in which case the deferred tax is also dealt with in the equity account.

Deferred tax assets and liabilities are offset when there is a legally enforceable right for the Group to set off current tax

assets against current tax liabilities and when they relate to income taxes levied on the same taxable entity by the

same taxation authority.

3.19 Compulsory reserve fund

The compulsory reserve fund is established in order to supplement the Group's charter capital and ensure solvency.

Appropriations to the compulsory reserve fund are made annually at 5% of after-tax profits until it reaches 10% of

charter capital.

Exclusively applied for the securities companies, investment and development reserve fund is appropriated at the

rate of 5% of the Company's annual net profit and is limited to 100% of contributed charter capital in accordance with

Decision No. 27/2007/QÑ- BTC dated 24 April 2007 issued by Ministry of Finance. This fund is set aside for use in the

Company's expansion of its operation or increase in charter capital.

3.20 Off-balance sheet items

In accordance with the Vietnamese Accounting System for insurance company, insurance policies that have been

signed but for which no obligations have arisen on the part of the insurers are not recorded in the balance sheet until

the premium is collected or the policies become effective.

3.21 Use of estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions

that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. These estimates and

assumptions also affect the income and expenses and the resultant provisions. Such estimates are necessarily

based on assumptions about several factors involving varying degrees of judgment and uncertainty and actual

results may differ resulting in future changes in such provisions.

3.22 Foreign currency transactions

The Group adopted the Circular 201 in relation to foreign currency transactions from the year 2009.

Transactions in currencies other than the Group's reporting currency of VND are recorded at the accounting

exchange rates applicable within the Group for the year 2009. At the end of the year, monetary assets and liabilities

denominated in foreign currencies are translated at exchange rates quoted by State Bank of Vietnam at the balance

sheet date (1USD=17,941VND). All realised foreign exchange differences and the unrealised foreign exchange

differences of long term liabilities and assets are taken to the income statement.

31 Dec 2009 31 Dec 2008

Cash on hand

Cash at banks

Cash in transit(4)

Cash equivalents

Total cash and cash equivalents

(4)

5. ACCOUNTS RECEIVABLES

31 Dec 2009 31 Dec 2008

(Reclassified)

Receivables from insurance activities

Gross written premium receivables

Reinsurance assumed receivables

Reinsurance ceded receivables

Other receivables from insurance activities

Receivables from co-insurers

Trade advances

Advances to suppliers

Advances for claim

Advanced for purchase of shares

Other advances

Receivables from investment activities

Dividend receivables

Bank deposit interest

Bond coupon receivable

Receivable from reverse repo contracts

Receivables from securities trading

Automatic loans

Loans to projects

Advances on surrender value

Other receivables from investment activities

Other receivables

Total receivables

Provision for doubtful debts

Net receivables

(5)

Currency: VND

Currency: VND



(5)


9. INTANGIBLE FIXED ASSETS5.4 -13.5

3

For the period from 1 January 2009 to 31 December 2009

interest rate (% per annum)

Commercial loans in VND

Commercial loans in foreign currency

7574

(6)

6. INVENTORIES Currency: VND

31 Dec 2009 31 Dec 2008

--Provision for obsolete inventories24,620,153,079107,121,526,352Net realisable value of inventories

10,450,082,51810,177,565,405Pre-printed certificates

13,654,763,5519,488,302,527Materials and stationery

515,307,010574,125,330Tools/ Equipment

-86,881,533,090(6) Work in progress

24,620,153,079107,121,526,352Total inventories

This relates to the construction work in progress of BVI.

Currency: VND7. LOANS AND ADVANCES TO CUSTOMERS

2,070,446,430,293

1,224,593,789,651

471,228,961,441

374,623,679,201

562,576,960,000

2,633,023,390,293

31 Dec 2009 31 Dec 2008

Commercial loans

In which:

Short-term loans

Medium-term loans

Long-term loans

Loans and advances to credit institutions

Currency: VND7.1 Analysis of commercial loans by quality

2,069,588,097,293

858,333,000

2,070,446,430,293

31 Dec 2009 31 Dec 2008

Current

Special mention

Substandard

Doubtful

Loss

Specific provision General provision Total

Balance as at 1 January 2009

13,750,000 8,252,756,189 8,266,506,189Provision expense in the period for credit losses

530,722,912 530,722,912Provision expense for off balance sheet commitments

13,750,000 8,783,479,101 8,797,229,101Balance as at 31 December 2009

7.2 Provision for credit losses and off balance sheet commitments

Changes in the provision for credit losses and off balance sheet commitment for the year ended 31 December 2009 are summarized

belowCurrency: VND

8. TANGIBLE FIXED ASSETS

Building Machinery VehicleOffice

equipmentOthers Total

Cost

508,798,234,894 22,581,335,208 121,665,426,250 259,085,260,455 913,178,189,4031,047,923,59601 Jan 2009

67,160,755,570 12,952,197,574 33,649,853,841 92,418,996,057 206,181,803,042Additions

In which

33,989,412,538 10,642,255,236 20,414,430,441 92,025,396 157,071,495,204Newly purchased

33,171,343,032 2,309,942,338 13,235,423,400 393,599,068 49,110,307,838Newly constructed

(85,026,600)(1,850,661,251) (5,518,038,631) (11,215,878,601) (18,669,605,083)Disposals

574,108,338,213 35,448,506,182 149,797,241,460 340,288,377,911 1,100,690,387,3621,047,923,59631 Dec 2009

Accumulated

depreciation:

157,192,208,239 10,851,028,862 81,987,987,051 212,930,480,604 463,857,228,053895,523,29701 Jan 2009

28,327,817,162 5,404,368,145 15,831,415,465 34,199,760,325 83,851,972,48288,611,385Increase for the period

(85,026,600)(1,079,684,981) (5,429,030,158) (10,294,193,387) (16,887,935,126)Disposal

184,440,340,420 16,170,370,407 92,390,372,358 236,836,047,542 530,821,265,409984,134,68231 Dec 2009

Net book value:

351,606,035,655 11,730,306,346 39,677,439,199 46,154,779,851 449,320,961,350152,400,29901 Jan 2009

389,667,997,793 19,278,135,775 57,406,869,102 103,452,330,369 569,869,121,95363,788,91431 Dec 2009

Currency: VND

Land use rights SoftwareOther intangible

fixed assetsTotal

Cost:

451,193,542,389 25,336,000,953 17,935,201,756 494,464,745,09801 Jan 2009

172,605,242,264 44,743,043,129 217,348,285,393Purchases during the period

(4,636,100,000) (71,900,000) (4,708,000,000)Disposals

619,162,684,653 70,079,044,082 17,863,301,756 707,105,030,49131 Dec 2009

Accumulated amortisation:

2,375,231,050 21,061,874,422 10,925,256,252 34,362,361,72401 Jan 2009

4,729,824,179 12,114,691,198 5,829,725,002 22,674,240,379Amortisation

(61,572,230) (61,572,230)Disposal

7,105,055,229 33,176,565,620 16,693,409,024 56,975,029,87331 Dec 2009

Net book value

448,818,311,339 4,274,126,531 7,009,945,504 460,102,383,37401 Jan 2009

612,057,629,424 36,902,478,462 1,169,892,732 650,130,000,61831 Dec 2009

10. CONSTRUCTION IN PROGRESS

482,680,237,829 299,539,082,228

31 Dec 2009 31 Dec 2008

52,547,596,674 6,307,367,000Purchase of fixed assets

429,277,918,123 292,464,903,346Capital constructions in progress

854,723,032 766,811,882Major assets overhaul

Currency: VND

Currency: VND



Currency: VND

31 Dec 2009 31 Dec 2008

Currency: VND

Note 31 Dec 2009 31 Dec 2008

Currency: VND

31 Dec 2009 31 Dec 2008

76

11. INVESTMENT PROPERTIES

This is the investment in Quang Minh housing project at Dong Dia, Cua Cuong, Ma Vang areas in Gia Tan, Quang Minh, Me Linh

District, Vinh Phuc. These projects are still in progress to the date of preparation of these financial statements.

12. INVESTMENTS

12.1 Short-term investments

429,277,918,123 292,464,903,346

VND 3 - 5 6.7 - 8.5 306,427,500,544

2 - 5 7.7 - 9.1 172,222,707,461

478,650,208,005

6,652,102,000,000 4,816,172,650,667

The above short-term deposits have less-than-one-year maturity and interest rates range from 6.7% to 20.5% per annum for

VND and 2.1% to 3.9% per annum for USD. The Group's bonds are government bonds and corporate bonds which have

remaining maturity of less than one year.

8,939,362,811,569 7,532,933,455,546

77

12.1.3 Listed shares

Besides investments in term deposits and bonds, the Group has invested in shares listed in Hanoi Stock Exchange and Ho Chi

Minh Stock Exchange. The Group currently does not have any investment in overseas stock markets.

12.2 Long-term investments

15,512,602,012,844 14,749,224,268,905

Bao Viet Holdings’ Investment

4,116,291,148,720 4,024,895,148,720

1,500,000,000,000 1,500,000,000,000 100%

1,000,000,000,000 1,000,000,000,000 100%

1,500,000,000,000 780,000,000,000 52%

50,000,000,000 50,000,000,000 100%

722,339,370,000 432,811,930,000 59.92%

100,000,000,000 55,000,000,000 55%

60,660,000,000 36,396,000,000

1,500,000,000,000

1,000,000,000,000

780,000,000,000

50,000,000,000

694,895,148,720

55,000,000,000

4,116,291,148,720

36,396,000,00060%

Details of the capital constructions in progress at 31 December 2009 are as follows:

31 Dec 2009 31 Dec 2008

21,899,868,122 20,714,521,272Buildings under construction at branches of

Bao Viet Insurance Corporation

2,482,812,425Buildings under construction at Bao Viet Bank

157,251,622,198 142,070,392,772Buildings under construction at branches of

Bao Viet Life Insurance Corporation

240,936,057,481 125,419,242,099Buildings under construction for the Holdings

6,707,557,897 4,260,747,203Software under development at the Holdings

Currency: VND

Currency: VND

Note 31 Dec 2009 31 Dec 2008

6,652,102,000,00012.1.1 4,816,172,650,667Term deposits at bank

12.1.2 478,650,208,005 750,727,460,239Bonds

12.1.3 1,808,610,603,564 1,963,927,317,440Listed shares

2,106,027,200Other short-term investments

(363,299,115,494) (979,549,789,534)Provision for impairment of short-term investments

8,576,063,696,075 6,553,383,666,012Net value of short - term investments

12.1.1 Term deposits at banks

6,598,279,000,000 4,703,190,715,667Term deposits in VND

53,823,000,000 112,981,935,000Term deposits in USD

12.1.2 Bonds

Type of bonds Currency Term (years) Rate (%) Cost

VND

as at 31 December 2009

Corporate bonds

Government bonds VND

313,559,572,889 254,445,095,06712.2.2Investments in associates

Other long-term investments

12.2.3 789,000,000,000 1,809,949,147,314Term deposits at banks

12.2.4 12,218,952,105,078 9,371,633,450,206Bonds

12.2.5 42,662,403,128 137,388,978,325Loans and trusted loans

12.2.6 903,945,810,246 924,787,656,168Advances from surrender value

820,000,000,000Equity investments in BV Bank and BV Invest

12.2.7 1,558,041,694,392 1,685,465,036,892Other long-term investments

15,826,161,585,733 15,003,669,363,972Total long-term investments

(195,997,534,321) (215,880,229,652)Provision for long-term investments

15,630,164,051,412 14,787,789,134,320Net value of long-term investments

12.2.1 Investments in subsidiaries

As at and for the year ended 31 December 2009, the Group had the following subsidiaries:

1,500,000,000,000 1,500,000,000,000Bao Viet Life Insurance 1,000,000,000,000 1,000,000,000,000Bao Viet Insurance

50,000,000,000 50,000,000,000Bao Viet Fund Management Company

694,895,148,720 694,895,148,720Bao Viet Securities Joint Stock Company

780,000,000,000 780,000,000,000Bao Viet Commercial Joint Stock Bank

55,000,000,000Bao Viet Investment Joint Stock Company

36,396,000,000Bao Viet - Au Lac Limited Company

Chartered capitalCommitted

contribution capital% Contributed capital

Bao Viet Life

Bao Viet Insurance

BaoViet Bank

Bao Viet Fund Management Company

Bao Viet Securities Joint Stock Company

Bao Viet Investment Joint Stock Company

Bao Viet - Au Lac Limited Company

Investments in subsidiaries with the percentage of the Holdings as at 31 December 2009:

Investee

Currency: VND



As at 31 December 2009 BVF1's financial statements were consolidated into the Holding's consolidated financial statements.

Adjustments have been made to bring into line any dissimilar accounting policies that may exist with the Group's accounting

policies.

Bao Viet - Au Lac Limited Company (“BV Au Lac”), with its head office located in Bac Ninh, is one of the Holdings' subsidiaries

operating mainly in vocational driving training. It was established in 18 February 2009 under the license No. 2300373648 granted

by Bac Ninh Authority for Planning and Investment. The Group contributed 60% of its charter capital (VND 60,066,000,000). As

at 31 December 2009, the company's financial statements were consolidated into Bao Viet Group's consolidated financial

statements.

Bao Viet Commercial Joint Stock Bank (“Bao Viet Bank”) was incorporated in Vietnam on 11 December 2008 under the Business

License No. 328/GP-NHNN provided by the Governor of the State Bank of Vietnam and the business license No. 0103034012

provided by Ha Noi Investment and Planning Services on 24 December 2008, with its Head Office located in 8 Le Thai To, Hang

Trong Commune, Hoan Kiem District, Hanoi. Bao Viet Group contributed 52% of Bao Viet Bank's charter capital of VND

1,500,000,000,000. As at 31 December 2009 Bao Viet Bank's financial statements were consolidated into the Holding's

consolidated financial statements.

Bao Viet Investment JSC (“BV Invest”), with its headquarter in Hanoi and main operation in real estate sector which includes

investment, construction, project management, machinery and equipment, is 98.00% owned subsidiary of Bao Viet Holding,

established on 9 January 2009 in accordance with Business Licence No 0103034168 issued on 9 January 2009 by Department

of Investment and Planning of Hanoi. The charter capital of BV Invest is VND 100,000,000,000. As at 31 December 2009, the

company's financial statements were consolidated in Bao Viet Group's consolidated financial statements.

915,849,777,435 91.58%

Bao Viet Insurance and Bao Viet Life Insurance are two 100% owned subsidiaries of the Group. These subsidiaries operate in the

general insurance and life insurance industry. As at 31 December 2009, the financial statements of these subsidiaries were fully

consolidated into the Group's consolidated financial statements.

Bao Viet Fund Management Company (“BVF”) is a 100% owned subsidiary of Bao Viet Holding, established in accordance with

Resolution No. 911/2005/QÑ/HÑQT-BV on 22 August 2005 by the Group's Board of Management and operating in accordance

with Business Licence No. 0104000256 issued on 22 August 2005 by Department of Investment and Planning of Hanoi and

modify business registration No. 10/UBCK-GPÑCQLQ issued on 14 December 2007 by State Securities Commission. The

charter capital of BVF was VND 50,000,000,000. As at 31 December 2009, the financial statements of BVF were fully

consolidated into the Group's consolidated financial statements.

BVSC was incorporated in Vietnam with its Head Office located in Hanoi and operates in securities trading, brokerage, portfolio

management, underwriting, and consulting and securities placement. As at 31 December 2009, the financial statements of

BVSC was fully consolidated into the Holdings' consolidated financial statements.

Bao Viet Securities Investment Fund (“BVF1”) was established as a closed-end member investment fund in Vietnam in

accordance with Licence No. 02/UBCK-TLQTV issued by the State Securities Commission on 19 July 2006. The Fund was

licensed to operate for a period of five years. At the beginning, BVF1 had a charter capital amounting to VND 500,000,000,000,

equivalent to 50,000,000 units with a par value of VND 10,000 per unit. BVF1 increased its chartered capital to VND

1,000,000,000,000 on 4 March 2008, as approved in Official Letter No. 98/TB-UBCK issued by the State Securities Commission,

which is equivalent to 100,000,000 units with a par value of VND 10,000 per unit. The Fund is managed by Bao Viet Fund Management Company (“BVF”), a subsidiary of the Holdings. Hong Kong and Shanghai

Banking Corporation (“HSBC”), Vietnam Limited was appointed as the supervisory bank of the Fund.

At 31 December 2009, indirect and direct holding of Bao Viet Group in BVF1 is as follows:

Contributed capital % of charter capital

9.42%94,190,239,694Direct investment of the Holdings

82.16%821,659,537,741Indirect investment of subsidiaries

60.12%601,214,295,907Bao Viet Life Insurance

22.04%220,445,241,834Bao Viet Insurance

At 31 December 2009, indirect and direct investments of Bao Viet Holdings in Bao Viet Invest are as follows:

100,000,000,000 100%

Contributed capital % of charter capital

55%55,000,000,000Direct investment of the Holdings

45%45,000,000,000Indirect investment by subsidiaries

20%20,000,000,000Bao Viet Life Insurance20%20,000,000,000Bao Viet Insurance5%5,000,000,000BVSC, in which:

3%2,995,500,000BV Holdings indirect interest

2%2,004,500,000Minority indirect interest

12.2.2 Investments in associates and joint ventures

The Group's investments in associates and joint ventures include:

Note 31 Dec 2009 31 Dec 2008

7,400,000,000 7,400,000,000Baoviet Tourism Hotel JSC12.2.2a 186,892,261,619 186,640,010,026Vietnam International Assurance Company (“VIA”)

54,000,000,000 39,000,000,000International Investment & Construction 12.1.2b 19,797,937,689 21,405,085,041Joint Stock Company (“VIGEBA”)

12.1.2c 45,469,373,581 -Long Viet Investment and Construction Co. Ltdand Quang Minh Project

313,559,572,889 254,445,095,067Bao Viet-SCIC Investment Limited Company(“BV-SCIC”)

Details of the investments in associates and joint ventures as at 31 December 2009 are presented as below:

277,862,440,000

Invested company Charter capital Committed

contribution capital % Contributed capital

Capital to be

contributed

Associates

10,500,000,000 35%30,000,000,000 7,400,000,000 3,100,000,000Baoviet Tourism Hotel JSC

54,000,000,000 30%180,000,000,000 54,000,000,000VIGEBA

Jointly controlled entities

153,000,000,000 51%300,000,000,000 153,000,000,000Vietnam International AssuranceJoint Venture Company(Control right: 50%)

4,462,440,000 45%9,916,540,000 4,462,440,000Long Viet Investment andConstruction Co. Ltd

35%14,000,000,00040,000,000,000 14,000,000,000Capital contribution toQuang Minh Project

50%65,000,000,000 45,000,000,000 45,000,000,000Bao Viet-SCIC Investment Co. Ltd

12.2.2.a. Investment in Vietnam International Assurance Company (“VIA”)

The Group accounted for its investment in VIA in the consolidated financial statements using the equity method. Details of the

movements of the investments during the period are presented as below:

186,640,010,026 73,005,937,584Opening balance

118,129,464,000Increase capital

(13,935,661,901) (23,515,704,964)Dividend received

3,629,917,600 1,311,504,752Foreign exchange translation assets

10,557,995,894 17,738,808,654Distributed profit received by the Group

186,892,261,619 186,640,010,026Closing balance

31 Dec 2009 31 Dec 2008


31 Dec 2009 31 Dec 2008

Currency: VND


31 Dec 2009 31 Dec 2008

31 Dec 2009 31 Dec 2008

31 Dec 2009 31 Dec 2008

80

These deposits as at 31 December 2009 have terms ranging from 1 to 10 years and interest rates from 6,7% to 20,5% per annum

for deposits in VND.

12.2.4 Bonds

VND

VND

8.1 - 15

7 - 16

4,432,292,624,462

7,786,659,480,616

12,218,952,105,078

5,439,367,200

37,223,035,928

789,000,000,000 1,801,500,000,000

8,449,147,314

789,000,000,000 1,809,949,147,314

81

12.2.6 Advances from surrender values

Advances from surrender values are carried at cost.

Policyholders who have fulfilled their premium payment obligations for at least 24 months are entitled to an advance on the

surrender value, with the advance amount at a maximum of 80% of the surrender value and accumulated un-withdrawn dividend

for the relevant policy.

12.2.7 Other long-term investments

These are equity investments in other companies which the Group has neither control right nor significant influence on. Hence,

these are not investment in joint-ventures or associates.

Breakdown of the investment by source is as follows:

18,692,585,177

18,546,776,391

(19,119,350,430)

18,120,011,138

22,086,489,607

20,909,154,254

(24,303,058,684)

18,692,585,177

1,685,465,036,8921,558,041,694,392

12.2.2.b. Investment in Long Viet Investment and Construction Company Ltd (“Long Viet”) and Quang Minh Project

21,405,085,041 20,290,955,772Opening balance(3,637,321,762) (2,160,581,000)Dividend received2,030,174,410 3,274,710,269Share of retained earnings for the period

19,797,937,689 21,405,085,041Closing balance

12.2.2.c. Investment in Bao Viet-SCIC Investment Limited Company

469,373,581

45,000,000,000

45,469,373,581

Opening balance

Increase capitalShare of retained earnings for the period

Closing balance

12.2.3 Term deposits at banks

Term deposits in VND

Term deposits in USD

31 Dec 2009 31 Dec 2008

Type of bonds Currency

5 - 15

5 - 15

Term

(years)

Interest rate

(%)

Value as at

VND

31 Dec 2009

Corporate bonds

Government bonds

12.2.5Loans and trusted loans

As at 31 December 2009, details of the loan portfolio of the Group are as follows:

Loans

Name of the CorporationTerm

(Years)Interest rate

(%)Value

VND

12.36 3,333,340,000Vietnam Development Bank - Binh Duong 3.5

2 9.6 2,106,027,200Proshipser & Greenline

Trusted loans

Name of the Corporation Currency Trusted bank Term Value in VND

USD

Rate (%)

7.40 37,223,035,928Orien Hanel Company BIDV - Bac Thang Long 6 years

42,662,403,128Total loans and trusted loan

Currency: VND

Currency: VND

Currency: VND

732,808,860,000638,504,280,000The Holdings

79,895,559,767103,460,559,767Bao Viet General Insurance

320,356,617,000226,072,777,000Bao Viet Life Insurance

382,373,126,125400,058,558,625Bao Viet Security Joint Stock Company

148,049,769,000125,466,565,000Bao Viet Security Investment Fund

21,981,105,00024,510,621,000Bao Viet Fund Management Company

39,968,333,000Bao Viet Invest

13. LONG-TERM PREPAID EXPENSES

Beginning balance

Increase

Charged as expenses

Ending balance

14. ACCOUNTS PAYABLE

14.1 Trade payables

31 Dec 2009 31 Dec 2008

Insurance activities

Bao Viet Life

Claims payables

Commissions payables

Premium returns payables

Dividends payable - life insurance

Bao Viet General Insurance

Commissions payable - general insurance

Payables relating to written insurance policies

Reinsurance assumed payables

Reinsurance ceded payables

Financial activities

Currency: VND

Currency: VND

Currency: VND


64,406,563,491

22,268,764,005

154,341,722

884,592,000

472,236,477,811

66,445,111,838

32,513,354,742

373,278,011,231

536,643,041,302

78,294,863,262

30,909,622,212

41,098,865,76445,118,047,019

1,205,393,917

1,061,800,114

527,528,538,481

36,265,822,959

51,424,540,911

44,132,188,818

395,705,985,793

605,823,401,743


31 Dec 2009 31 Dec 2008

Prepaid interest from bonds

Prepaid interest from deposits

Interest accrued to customer deposits

Other payables from financial activities

Payable to suppliers and service providers

Payable to suppliers

Payables to securities issuing organisations

Payables to lender in repo contracts

Custodian fees payable to HSBC, Ho Chi Minh City

Branch relating to supervisory activity over BVF1

Others

14.2 Advances from customers

31 Dec 2009 31 Dec 2008

43,226,021,957 25,035,032,294

3,973,208,500Advances from customers for securities trading

39,252,813,457 25,035,032,294Premium in advance

15. STATUTORY OBLIGATIONS

101,161,318,444 559,479,347,424 531,799,068,963 128,841,596,905

31 Dec 2008 Increase Paid 31 Dec 2009

Taxes

17,218,234,928 217,657,322.212 216,832,806,420 18,042,750,720Value added tax on local sales

58,758,433,893 227,108,847,519 192,697,194,229 93,170,087,183Enterprise Income Tax (“EIT”)

14,797,863,821 39,519,115,177 50,377,493,600 3,939,485,398Personal Income Tax (“PIT”)

57,603,005 1,783,384,305 1,831,169,669 9,817,641Land lease tax

10,329,182,797 73,410,678,211 70,060,405,045 13,679,455,963Other taxes

16. ACCRUED EXPENSES

31 Dec 2009 31 Dec 2008

17,242,129,166 707,410,431

17,242,129,166 707,410,431Other accrued expenses

14.1 Trade payables (continued)

Currency: VND

Currency: VND

Currency: VND

Currency: VND

17. OTHER PAYABLES

31 Dec 2009 31 Dec 2008

(6)

744,657,262,135 153,633,028,367

22,729,580 22,729,580Surplus assets awaiting resolution

5,733,287,034 3,742,992,327Social Security, Health Insurance, Trade Union Fees

4,136,236,870Dividend, principal & interest payables

8,085,122,877Deferred revenue

73,500,000Payables to Representatives of BVF1

449,895,267,217Payables to MOF

106,072,353,436 54,969,797,822Payable to HSBC for TSCTA

174,848,501,991 90,687,771,768Others

18. AMOUNT DUE TO CUSTOMERS

31 Dec 2009 31 Dec 2008

1,709,021,432,606

2,077,940,434,258

3,786,961,866,864

Deposits from commercial banks

Deposits from customers

18.1 Deposits from commercial banks

31 Dec 2009 31 Dec 2008

1,709,021,432,606

Term deposits

1,655,198,432,606In VND

53,823,000,000In gold and foreign currencies

18.2 Deposits from customers

31 Dec 2009 31 Dec 2008

2,077,940,434,258

Demand deposits

362,572,397,652Demand deposits in VND

2,482,959,406Demand deposits in foreign currencies

232,324Demand savings deposits in VND

239,329,531Demand savings deposits in foreign currencies

Term deposits

1,265,467,327,953Term deposits in VND

235,524,744,555Term savings deposits in VND

48,874,345,273Term deposits in foreign currencies

125,753,338,546Term savings deposits in foreign currencies

Margin deposits

9,604,677,526Margin deposits in VND

27,421,081,492Margin deposits in foreign currencies

Currency: VND

Currency: VND

Currency: VND

Currency: VND


42,639,832,841

15,677,934,724

8,900,502,913

67,218,270,478

9,373,960,114

67,024,194

19,779,098,088

29,220,082,396

633,081,394,176

48,737,767,142

13,622,315,414

22,107,099,657

34,430,572,452

118,897,754,665

29,436,471,962

7,364,535,134

174,367,077,046

79,430,173

24,647,249,441

235,894,763,756

960,615,920,164


For term savings deposits, if customers withdraw before maturity, the applicable interest rate will be that for demand deposits.

19. OWNERS' EQUITY

19.1 Changes in owners' equity

19.2 Bonus and welfare fund

31 Dec 2009 31 Dec 2008

36,500,034,959 184,131,474,586

35,048,205,891 27,166,079,478

(21,691,742,729) (174,797,519,105)

49,856,498,121 36,500,034,959

85

20.COMMITMENT UNDER OPERATING LEASES

The minimum lease payment under non-cancellable leases of offices as follows:

21. REVENUE

21.1 Gross written premium

18.2 Deposits from customers (continued)

31 Dec 2009

interest rate

per annum

31 Dec 2008

interest rate

per annum

3.6%

3.6%

0.6%

0.6%

7.5%- 10.49%

7.5%- 10.49%

4.3%

4.3%

Demand deposits in VND

Demand savings deposits in VND

Demand deposits in foreign currencies

Demand savings deposits in foreign currencies

Term deposits in VND

Term savings deposits in VND

Term deposits in foreign currencies

Term savings deposits in foreign currencies

Contributed

chartered capital

Share

premium reserve

Treasury

sharesOther capital

Foreign exchange

difference

Investment and

development fund

Financial

reserve fund

Statutory

reserves

Undistributed

earningsTotal

5,730,266,050,000 1,840,007,252,773 901,691,533 16,075,608,000 17,067,266,899 643,474,381,906 8,265,011,167,9538,609,458,421 8,609,458,421 01 Jan 2009

891,754,255,672 891,754,255,672 Profit for the period

26,453,783,572 (31,156,362,253)1,612,925,594 3,089,653,087 Profit appropriation

to other reserves

(573,026,605,000) (573,026,605,000)Dividend paid

to shareholders

(8,213,369,257) (8,213,369,257)Tax on dividends

(BVF1)

(35,048,205,891) (35,048,205,891)Profit appropriation

to bonus and welfare

(1,655,222,225) (1,655,222,225)Payment to BOD

and

Supervisory Board

(90,775,901) (90,775,901)Buy

treasury shares

(1,692,628,758) (901,691,533) 2,311,619,948 366,323,309 83,622,966Other increase/

(decrease)

5,730,266,050,000 1,838,314,624,015 18,387,227,948 10,222,384,015 11,699,111,508 43,521,050,471 886,495,196,261 8,538,814,868,317 (90,775,901)31 Dec 2009

Currency: VND

Balance at the beginning of the period

Increased during the period

Utilized during the period

Balance at the end of the period

Currency: VND

Currency: VND

31 Dec 2009 31 Dec 2008

69,831,611,273 19,106,517,241

147,660,558,069

11,035,983,931

38,976,097,354

228,528,153,273 72,538,332,212

14,455,717,617

Total lease payments under non-cancellable

operating lease contracts which fall due:

Within one year

From one to five years

Above five years

3,704,401,156,127 4,153,482.331,734

For the year ended

31 December 2009

For the period from

16 October 2007 to

31 December 2008

Life Insurance

3,422,012,102,374 4,000,749,760,439Endowment insurance

142,381,198,666Universal life

2,350,738,591 2,998,241,226Term insurance

10,370,712,071 54,092,300,143Whole Life insurance

44,584,427,836 14,139,633,100Life annuity

81,772,853,771 80,992,389,774Rider

929,122,818 510,007,052Bancassurance

6,005,633,096 12,681,953,897Premium returned

3,710,406,789,223 4,166,164,285,631Total life insurance premium

General Insurance

268,817,818,616 315,322,334,955Cargo Insurance

493,828,426,844 467,056,621,053Hull- P&I Insurance

1,280,716,534 1,638,897,274Oil & Gas Insurance

209,152,701,150 328,265,040,951Aviation Insurance

292,439,471,825 333,030,478,420Engineering Insurance

289,678,053,640 333,610,098,523Fire & Special Risk Insurance

77,382,803,115 63,494,226,635General Indemnity Insurance

1,691,144,952 2,164,597,064Agriculture Insurance

1,141,252,840,591 1,169,952,667,621Automobile Insurance

907,436,938,316 933,461,861,156Health & Personal Accident Insurance

3,682,960,915,583 3,947,996,823,652Total general insurance premium

7,393,367,704,806 8,114,161,109,283Total gross premium

Currency: VND

Currency: VND



22. DIRECT EXPENSE OF INSURANCE ACTIVITIES

22.1 Claim and maturity payment expenses

86

21.2 Reinsurance premium assumed

For the year ended

31 December 2009

For the period from

16 October 2007 to

31 December 2008

151,666,182,986 166,511,215,608

11,516,394,816 30,175,734,323Cargo Insurance





46,246,484,130 40,166,899,738Fire & Other Insurance

21.3 Deductions

For the year ended

31 December 2009

For the period from

16 October 2007 to

31 December 2008

979,534,348,986 1,227,008,992,121Reinsurance premium ceded

76,721,126,322 157,948,206,102Cargo Insurance


(1,409,820,503) 1,374,173,893Oil & Gas Insurance




25,747,635,643 6,632,232,289Human Insurance

1,915,407,401 2,491,950,484Premium deduction

1,915,407,401 2,491,950,484General insurance activities

55,398,229,019 40,240,327,242Premium returns

6,005,633,096 12,681,953,897Life insurance activities

49,392,595,923 27,558,373,345General insurance activities

1,036,847,985,406 1,269,741,269,847Total deductions

Currency: VND

Currency: VND

For the year ended

31 December 2009

For the period from

16 October 2007 to

31 December 2008

2,424,858,927,410 3,033,056,737,959

1,625,701,934,844 1,917,568,288,406

4,050,560,862,254 4,950,625,026,365

Life Insurance

1,895,897,507,201 2,115,453,819,834Maturity payments

474,487,748,506 863,794,289,725Surrender value payments

54,473,671,703 53,808,628,400Claim expenses

General Insurance

133,927,217,887 161,855,484,094Cargo Insurance


242,795,847 9,100,000Oil & Gas Insurance

113,083,558 2,341,723,827Aviation Insurance


159,315,273,022 269,748,437,502Fire & Special Risk Insurance

1,956,066,928 1,439,686,068General Indemnity Insurance

603,796,494,981 693,893,531,039Automobile Insurance

428,940,001,864 454,744,095,937Health & Personal Accident Insurance

285,074,800 369,399,453Agriculture Insurance

22.2 Claim expenses for reinsurance assumed

For the year ended

31 December 2009

For the period from

16 October 2007 to

31 December 2008

46,246,678,770 60,384,632,712

6,298,835,423 3,888,707,260Cargo Insurance



1,648,424,215 771,725,413Aviation Insurance



Responsibility Insurance

22.3 Recoveries from reinsurance ceded

For the year ended

31 December 2009

For the period from

16 October 2007 to

31 December 2008

366,196,782,586 482,761,817,670

37,429,513,061 66,879,836,784Cargo Insurance


6,120,499,548 160,080,716Oil & Gas Insurance

764,236,373 1,024,556,186Aviation Insurance



Health care Insurance

Currency: VND

Currency: VND

Currency: VND



22.4 Reserves

22.4.1 Reserves movement

89

UPR

reserve

Claims

reserve

Catastrophe

reserve

Technical

reserve

Dividend

Reserve

Equalisation

reserveTotal

Life Insurance

704,949,340,217 5,016,845,700 12,049,168,352,666 530,846,019,579 12,181,203,919 13,302,161,762,081Balance at 01 Jan 2009

140,549,917,494 2,624,124,400 1,100,524,803,204 258,514,225,821 4,556,421,030 1,506,769,491,949Provision charged

to expense

845,499,257,711 7,640,970,100 13,149,693,155,870 789,360,245,400 16,737,624,949 14,808,931,254,030Balance at 31 Dec 2009

General Insurance

1,148,020,334,546 894,871,686,038 95,439,760,649 2,138,331,781,233 Balance at 01 Jan 2009

226,378,483,340 102,993,574,341 98,132,466,119 427,504,523,800Provision charged

to expense

91,104,951,225 91,104,951,225Other disposal

1,374,398,817,886 1,088,970,211,604 193,572,226,768 2,656,941,256,258Balance at 31 Dec 2009

1,852,969,674,763 899,888,531,738 95,439,760,649 12,049,168,352,666 530,846,019,579 12,181,203,919 15,440,493,543,314 Total balance

at 01 Jan 2009

2,219,898,075,597 1,096,611,181,704 193,572,226,768 13,149,693,155,870 789,360,245,400 16,737,624,949 17,465,872,510,288 Total balance

at 31 Dec 2009

23. NET OPERATING INCOME FROM BANKING ACTIVITIES

348,653,888,973

6,825,823,426

112,178,568,479

14,040,419,702

For the year ended

31 December 2009

For the period

from 16 October 2007 to

31 December 2008

Interest and similar income

206,083,468,641Interest income from deposits

94,225,028,212Interest income from lending

48,332,027,190Interest from debt securities investment

13,364,930Other income from credit activities

Other banking operating income

2,789,620,472Fee income from banking activities

4,036,202,954Net gain/(loss) from FX trading

355,479,712,399Total revenue from banking activities

Interest and similar expense

108,394,933,939Interest expense on deposits

3,676,414,055Interest expense on borrowings

Interest expense on issued securities

Interest expense on financial lease

107,220,485Other expense on credit activities

Other banking operating expense

5,243,190,601Expense on banking operations

8,797,229,101Loan loss provision expense

126,218,988,181Total expense from banking activities

229,260,724,218Net banking operation income

Currency: VND

Currency: VND

24. NET OPERATING INCOME FROM OTHER ACTIVITIES

For the year ended

31 December 2009

For the period


31 December 2008

125,560,217,989144,166,331,292

55,510,689,251 50,263,018,593

Operating income from other activities

87,067,481,78391,806,996,273Brokerage service

13,230,378,2012,305,985,042Underwriting and issuance agency

17,398,872,2346,677,103,761Investment advisory service

2,754,394,9812,533,336,169Custody service

5,109,090,7903,709,429,446Portfolio investment management

16,003,400,199Real estate management service

17,788,076,627Training services

3,342,003.775Others

Operating expenses from other activities

42,180,561,87926,733,548,719Brokerage service expense

2,704,315,19199,434,682Underwriting and issuance agency

5,643,012,432 3,161,618,360Investment advisory service

4,866,974,216 2,216,523,163Custody service

17,174,828,650Real estate management service

992,890,552Others

88,655,642,041 75,297,199,396Net operating income from other activities

Portfolio investment management

25. GENERAL AND ADMINISTRATIVE EXPENSES

For the year ended

31 December 2009

For the period


31 December 2008

1,187,481,587,361 1,214,858,575,036

Insurance operation

452,971,660,097 440,438,330,364Salaries and other staff costs

68,231,108,682 84,826,988,168Materials and office supplies

67,261,604,448 78,673,269,811Depreciation expenses

1,528,189,590 1,671,682,569Taxes and fees expenses

299,281,711,491 268,402,303,298Expenses for external service

19,344,876,192 499,276,275Provision expenses

278,862,436,861 340,346,724,551Other expenses

Banking operation

32,968,069,187Salaries and other staff costs

924,431,393Materials and office supplies

8,536,910,164Depreciation expenses

Currency: VND

Currency: VND



26. FINANCIAL ACTIVITIES

26. 1Income from financial activities

91

28. ENTERPRISE INCOME TAX

Except for the case of Bao Viet Securities Company and Bao Viet Fund Management Company, the Group has the obligation to

pay Enterprise Income Tax (“EIT”) at the rate of 25% of taxable profits.

BVSC and BVF are subject to enterprise income tax at the rate of 20%. These companies are exempted from EIT for two years

from the first profit making year and enjoy a reduction of 50% in the next 3 years. From 2008, BVF has the obligation to pay the tax

at the rate of 10%. Moreover, for the 4th quarter of 2008 and the whole year 2009, BVF is entitled to further deduction of 30% of

EIT as stipulated in Circular 03/2009/TT-BTC dated 13 January 2009.

The Group's tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations on

many types of transactions is susceptible to varying interpretations, amounts reported in the consolidated financial statements

could be changed at a later date upon final determination by the tax authorities.

28.1 Enterprise Income Tax Expense

28.2 Current Enterprise Income Tax

The current tax payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income

statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes

items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted

by the balance sheet date.

For the year ended

31 December 2009

For the period


31 December 2008

198,582,672,865 212,233,449,262

1,453,572,088,167 1,427,092,024,298

67,507,827,941

13,865,930,257Taxes and fees expenses

179,000,000Expenses for external service

11,033,486,940 Other expenses

Other operations of the group

90,151,037,799 91,994,071,970 Salaries and other staff costs

8,294,082,609 9,689,382,998 Materials and office supplies

30,727,698,249 21,152,156,314 Depreciation expenses

200,492,030 1,230,136,198 Taxes and fees expenses

44,853,516,909 87,173,802,562 Expenses for external service

90,628,629 Provision expenses

24,355,845,269 903,270,591 Other expenses

25. GENERAL AND ADMINISTRATIVE EXPENSES (continued)

For the year ended

31 December 2009

For the period


31 December 2008

2,393,475,592,072 3,167,514,035,317

798,608,237,220 1,357,990,051,993 Interest income

1,009,383,409,804 1,135,794,096,702 Gains from investments in bonds, bills and treasury bills

134,587,760,205 10,068,365,014 Loan interest

115,183,397,972 356,293,084,403 Dividend earned

37,962,027,832 92,872,700,054 Gains from foreign exchange rate difference

296,360,210,695 155,417,841,089 Gain from securities trading

1,390,548,344 59,077,896,062 Other financial income

26.2 Expenses from financial activities

For the year ended

31 December 2009

For the period


31 December 2008

331,877,326,646 1,835,054,576,611

258,514,225,821 73,650,700,479 Dividend reserves

47,113,399,541 79,591,106,081 Exchange rate difference

(1,683,798,326)Deposit interest expense

81,675,392,628Loan interest expense

90,993,378,238 543,500,375,314Other financial expenses

(636,133,369,371) 1,138,312,394,737Financial (reversal) provision expense

491,398,098,115Loss from securities trading

27. NET OTHER PROFIT

For the year ended

31 December 2009

For the period


31 December 2008

20,452,879,445 6,965,693,250

6,569,981,488 774,475,524

Other income

8,191,844,310 2,655,218,491Proceeds on disposal of assets

(1,290,671,376)Collection of bad debts

7,177,654,108Tax deduction returned according to

the Circular 03/2009-TT/BTC

5,083,381,027 5,601,146,135Other income

Other expenses

102,046,181 149,509,400 Expenses on disposal of assets

6,467,935,307 624,966,124Others

13,882,897,957 6,191,217,726Net other profit

For the year ended

31 December 2009

For the period


31 December 2008

234,286,501,628

(266,449,817)

234,020,051,811

147,692,181,049

27,488,765,294

175,180,946,343

Current Enterprise Income Tax

Deferred Enterprise Income Tax

Enterprise Income Tax Expense

Currency: VND

Currency: VND

Currency: VND

Currency: VND

Currency: VND



31 Dec 2009 31 Dec 2008

92 93

28.3 Deferred Enterprise Income Tax

The following are the major deferred tax assets and liabilities recognised by the Group, and the movements thereon, during the

current and prior reporting periods.

1,348,916,511,170 489,359,121,900

28.2 Current Enterprise Income Tax (Continued)

For the year ended

31 December 2009

For the period


31 December 2008

502,666,930,765 1,250,076,613,148Profit before tax

9,067,376,729 16,764,412,148 Adjustments to increase taxable profit

9,017,376,729 16,764,412,148 Expenses disallowed for tax purpose

50,000,000 Administrative violation penalty charges

(417,104,855,170)(142,942,648,620)Adjustments to decrease taxable profit

(356,293,084,403)(115,183,397,972)Dividend received from shares, not taxable

(53,481,797,077)(9,853,616,104)Interest from Government bonds, not taxable

(6,615,521,953)(17,905,634,544)Unrealized gain on foreign exchange revaluation

(714,451,737)Change in provision for doubtful debts

(261,232,282,656)246,448,564,463 Non-taxable arising from consolidation adjustments

710,415,796,371 Non taxable loss

-(378,221,351,467)Non taxable profit of BVSC, BVF1

(loss transferred from previous year)

(257,951,023,476) 41,146,035,274 Total adjustment on profit before tax

(4,556,421,030) (1,929,207,757)Equalization reserve

987,569,168,642 541,883,758,282 Estimated current taxable income

869,652,559,502 521,873,869,945 Tax rate 25% (2008: 28%)

79,364,908,893Tax rate 17.5% (25%*70%)

15,007,416,253 Tax rate 10%

38,551,700,247 5,002,472,084 Tax rate 7%

234,000,617,951 147,975,598,256 Estimated Enterprise Income Tax

285,883,677CIT payable according to tax authorities' minutes

234,286,501,628 147,975,598,256 Estimated Current Enterprise Income Tax for the period

(7,177,654,108)Enterprise Income Tax exempted according

to the Circular 03.2009-TT/BTC (30%)

(881,262,096)Enterprise income tax of previous period

597,844,889 EIT on investments in fund certificate of BVF1

227,108,847,520 147,692,181,049 Estimated Enterprise Income Tax

58,758,433,893 120,050,000,798 EIT payable at beginning of the period

3,940,500 Adjustment for beginning balance

(192,697,194,230) (208,987,688,454)Current Enterprise Income Tax paid during the period

93,170,087,183 58,758,433,893 Estimated enterprise Income Tax payable as

at 31 December 2009

Currency: VND

Balance sheet Income statement

31 December 2009 31 December 2008From 1 January 2009

to 31 December 2009

From 16 October 2007

to 31 December 2008

Deferred tax assets

6,857,264,82610,654,317,835 3,797,053,009 (26,542,959,850)Deductible temporary differences

Deferred tax liabilities

(4,476,408,636) (945,805,444) (3,530,603,192) (945,805,444)Taxable temporary differences

(266,449,817) (27,488,765,294)Net deferred income tax credit

(charge) to Income statement

Currency: VND

29. MINORITY INTERESTS

1,117,941,662,565 263,642,762,565Contributed chartered capital

244,601,145,182 351,443,416,424Share premium

(60,724,099) -Treasury shares

- 598,308,467Other capital

- -Foreign exchange difference

7,255,195,708 5,712,720,677Investment and development fund

8,618,328,778 5,712,720,677Financial reserve fund

- -Statutory reserve

(29,439,096,964) (137,750,806,910)Undistributed earnings

30. RELATED PARTIES TRANSACTION

During the normal course of operations, the Group engages in transactions with entities to which it is related through equity

participation.As set out below, the Group and the related entities with which it trades, are linked either through the

investor/investee relationship, or share a common investor and thus are a part of the same corporate group.

Related parties include:

Related parties Relationship Shareholding (%)

77.54Ministry of Finance

3.56SCIC (since 23 September 2009) Share Holder

51VIA Joint Venture

45Long Viet Investment and Construction Co.Ltd Associate

3.56Vinashin (before 23 September 2009) Share Holder

10.31HSBC Insurance (Asia Pacific) Holdings Limited Share Holder

Currency: VND



31. EARNING PER SHARE

Basic earnings per share (“EPS”) amounts is calculated by dividing net profit after tax for the period attributable to ordinary

shareholders of the Group by the weighted average number of ordinary share outstanding during the period.

The following reflects the income and share data used in the basic earnings per share computation.

32. SEGMENT INFORMATION

The primary segment reporting format is determined to be business segments as the Group's risks and rates of return are

affected predominantly by differences in the products and services produced. The operating businesses are organized and

managed separately according to the nature of the products and services provided, with each segment representing a strategic

business unit that offers different products and serves different markets. Management monitors the operating results of its

business units separately for the purpose of making decisions about resource allocation and performance assessment.

95

For management purposes, the Group is organised into business units based on their products and services, and has

five reportable Business segments as follows:

The life insurance segment offers a wide range of Whole Life, Pure Endownment, Term Life, Endowment,

Annuity, Universal life& Unit Linked, Bancassurance, Healthcare and personal accident riders, other types of (7)life insurance, reinsurance assumed and ceded in life, healthcare insurance and personal accident.

Non-life insurance services include health and personal accident insurance, property insurance, cargo

insurance, hull - P&I insurance, general indemnity insurance, aviation insurance, automobile insurance, fire &

special risk insurance, agriculture insurance and others; assuming and ceding reinsurance for all types of non-

life insurance

The non-life insurance segment comprises both general insurance and healthcare. General insurance products

offered include motor, household, commercial and business interruption insurance. Non-life healthcare

contracts provide medical cover to policyholders.

Financial services such as fund management, investment portfolio management, security brokerage and

trading, investment consulting, etc. The investment management segment also provides investment

management services to policyholders through the investment management services in Bao Viet Fund

Management Company (BVF). The security brokerage,e and securities underwriting and issuance agency,

securities trading, custody, investment and financial consulting services are provided byby Bao Viet Security

Joint Stock Company (BVSC).

Banking services: Including the provision of various banking services such as handling individual customer

deposit, deposit and current account for corporate and institutional customers and providing consumer loan,

overdraft, credit card facilities and fund transfer facilities though Bao Viet Commercial Joint Stock Bank.

Real Estate operation and other activities: includes the provision of rental and related services at the Bao Viet

Building 8 Le Thai To Hoan Kiem Ha Noi and 71 Ngo Sy Lien, Dong Da, Ha Noi and other places.... . In addition,

the Group is in the progress of developing other real estate projects such as Bao Viet Life Building in Hanoi,

project in HoChiMinh city and other real estate projects around the countries.

Transfer prices between business segments are set on an arm's length basis in a manner similar to transactions with

third parties. Segment revenue, segment expense and segment result include transfers between business segments.

Those transfers are eliminated in preparation of consolidated financial statements.

Geographical segments

This financial statement does not include information on geographical segments of Bao Viet Group that is

engaged in providing products or services within the same economic environment and that is subject to similar

risks and returns.

Business segments

The following tables present revenue and profit information regarding the Group's business segments for the

year ended 31 December 2009 and for the period from 16 October 2007 to 31 December 2008, respectively:

(7) Currently, the Group has not yet provided life reinsurance services

Significant related party transactions during the period are given below:

Related parties TransactionsFor the year ended

31 December 2009

Ministry of Finance444,300,000,000Dividend payable to share holder

22,946,708,217Investment interest from dividend payable

57,302,660,500HSBC Insurance (Asia Pacific) Holdings Limited Dividend paid to share holder

20,400,000,000Vinashin Dividend paid to share holder

13,935,661,901VIA Dividend received from joint venture

3,637,321,762Long Viet Investment and Construction Co. Ltd Dividend received from joint venture

Remuneration of members of Board of Management and CEO

1,615,086,0881,464,320,998

1,464,320,998 1,615,086,088

Salaries

Board of Management and CEO

For the year ended 31 December 2009For the period from

16 October 2007 to

31 December 2008

For the period

from 1 January 2009 to

31 December 2009

For the period from

16 October 2007 to

31 December 2008

891,754,255,672 529,480,594,292 Net profit after tax attributable to

ordinary equity holders for basic earnings

573,026,605 573,026,605 Weighted average number of ordinary shares

(excluding treasury shares) for basic earnings per share

1,556 924EPS

Currency: VND

Currency: VND

Currency: VND



32. SEGMENT INFORMATION (continued)

For the year ended 31 December 2009

For the period from 16 Oct 2007 to 31 Dec 2008

97

The following tables present segment assets of the Group's operating segments as at 31 December 2009

Currency: Million VND

3,710,407 3,682,961 7,393,368

151,666 151,666

(6,006) (1,030,842) (1,036,848)

(1,241,075) (226,378) (1,467,453)

146,828 146,828

5,864 5,864

2,463,326 2,730,099 5,193,425

(2,424,859) (1,625,702) (4,050,561)

(46,247) (46,247)

386,713 386,713

(2,624) (102,994) (105,618)

(98,132) (98,132)

(332,530) (527,834) (860,364)

(2,760,013) (2,014,196) (4,774,209)

(296,687) 715,903 419,216

156,485 72,776 229,261

3,540 149,717 20,410 (85,011) 88,656

(122,023) (122,023)

(419,814) (748,323) (194,956) (80,030) (20,417) 9,968 (1,453,572)

1,289,576 245,912 1,357,547 5,174 (836,611) 2,061,598

1,050 5,753 7,025 39 16 13,883

13,058 13,058

455,642 219,245 1,319,333 76,494 5,183 (825,820) 1,250,077

For the year ended 31 December 2009 Life insuranceservices

General insuranceservices

Financial services

Bankingservices

Real -estateoperations andother activities

Adjustmentsand eliminations

Total


Reinsurance premium assumed

Deductions

(Increase)/decrease in unearned premium reserve


Commissions on reinsurance ceded

Other income from insurance activities

Total operating revenues

Claim and maturity payment expenses

Claim expenses for reinsurance assumed

Deductions

Claim expenses using catastrophe reserve

(Increase)/ decrease in claim reserve

Provision for catastrophe reserve

Other operating expenses

Total direct expenses for insurance activity

Gross operating profit

Net profit from banking activities

Net profit from other activities

Selling expenses

General administration expenses

Finance profit

Other income

Profit of associates and joint venture

Profit before tax

(984,521)

4,166,164

(12,682)

(3,033,057)

(2,846)

(332,796)

(3,368,699)

(199,738)

(406,195)

192,921

(111,761)

4,920

905,694

75,297

(241,039)

190,354

26,327

329,769

28,805

22,325

(86,495)

(28,805)

(108,820)

166,511

(1,224,683)

8,114,161

(1,269,741)

166,683

21,878

(4,950,625)

(60,385)

505,777

116,454

(11,691)

(100,126)

(868,965)

(5,369,561)

605,247

(1,427,092)

22,325

502,667

(111,761)

75,297

6,191

1,332,459

166,511

(240,162)

3,947,997

(1,257,059)

166,683

21,878

(1,917,568)

(60,385)

505,777

116,454

(8,845)

(100,126)

(536,169)

(2,000,862)

804,985

(808,664)

205,887

3,750

205,817

For the period from 16 Oct 2007 to 31 Dec 2008Life insurance

services General insurance

servicesFinancial services

Bankingservices



Total


Reinsurance premium assumed

Deductions

(Increase)/decrease in unearned premium reserve


Commissions on reinsurance ceded

Other income

3,168,961 5,974,809 2,805,848 Total net revenue from insurance business

Claim and maturity payment expenses

Claim expenses for reinsurance assumed

Deductions

Claim expenses using catastrophe reserve

(Increase)/ decrease in claim reserve

Provision for catastrophe reserve

Other insurance operating expenses

Total direct insurance operating expenses

Gross insurance operating profit

Profit from other activities

Selling expenses

General administration expenses

Profit from finance activities

Profit from other activities

Profit of associates and joint venture

Profit before tax

The following tables present segment assets of the Group's operating segments as at 31 December 2008.

As at 31 Dec 2009Life insurance



Bankingservices



Total

ASSETS

204,451 104,458 379,849 1,891,961 33,737 (81,812) 2,532,644Cash and cash equivalents

- 947,582 - - - - 947,582Receivables from reinsurance

21,099 303,371 - - - - 324,470Receivables from insurance

765,550 171,600 1,064,688 128,946 16,523 (991,729) 1,155,578Other receivables

15,576,620 2,499,449 10,856,161 2,369,066 39,968 (7,111,588) 24,229,676Investment

348,860 175,511 448,211 31,467 48,500 - 1,052,549Tangible fixed assets

202,727 393,983 15,394 23,386 14,640 - 650,130Intangible fixed assets

- - - 2,809,879 - (185,122) 2,624,757Customer loans

30,774 40,349 18,776 15,050 88,474 3,808 197,231Other assets

17,150,081 4,636,303 12,783,079 7,269,755 241,842 (8,366,443) 33,714,617TOTAL ASSETS

LIABILITIES

769,765 950,841 2,103,486 483,286 76,662 (1,933,085) 2,450,955Short-term liabilities

- - - 5,223,362 - (1,436,400) 3,786,962Customer deposits

24,707 7,988 21,200 - - 19,345 73,240Long-term liabilities

14,808,931 2,656,941 - - - - 17,465,872Insurance technical reserves

15,603,403 3,615,770 2,124,686 5,706,648 76,662 (3,350,140) 23,777,029TOTAL LIABILITIES

OWNERS' EQUITY

1,527,433 1,013,101 10,635,213 1,563,108 165,179 (6,365,219) 8,538,815Capital

19,245 7,432 23,180 - - - 49,857Other capital, funds

1,546,678 1,020,533 10,658,393 1,563,108 165,179 (6,365,219) 8,588,672TOTAL OWNERS' EQUITY

- - - - - 1,348,916 1,348,916MINORITY INTERESTS

17,150,081 4,636,303 12,783,079 7,269,756 241,841 (8,366,443) 33,714,617TOTAL LIABILITIES AND

As at 31 Dec 2009Life insurance



Bankingservices



Total

ASSETS

248,440 77,845 143,300 11,252- -Cash and cash equivalents

- -- 806,382 - -Receivables from reinsurance

- -696,758 276,862 22,539 -Receivables from insurance

- -7,960 165,550 677,550 (510,687)Other receivables

- -13,694,583 2,242,294 10,635,100 (5,207,355)Investment

- -302,054 158,801 149,103 -Tangible fixed assets

- -160,621 280,058 158,325 -Intangible fixed assets

- -- - - - -Customer loans

- -81,463 54,315 32,032 (47,569)Other assets

15,191,879 4,062,107 11,817,949 (5,754,359)- -TOTAL ASSETS

LIABILITIES

- -351,180 904,862 1,683,500 (1,900,405)Short-term liabilities

- -21,644 4,199 21,232 -Long-term liabilities

- -13,302,162 2,138,332 - -Insurance technical reserves

13,674.986 3,047,393 1,704,732 (1,900,405)- -TOTAL LIABILITIES

OWNERS' EQUITY

- -1,509,291 1,007,777 10,091,257 (4,343,313)Capital

- -7,602 6,937 21,960 -Other capital, funds

1,516,893 1,014,714 10,113,217 (4,343,313)- -TOTAL OWNERS' EQUITY

- - - 489,359- -MINORITY INTERESTS

15,191,879 4,062,107 11,817,949 (5,754,359)- -TOTAL LIABILITIES AND





480,837

806,382

996,159

340,373

21,364,622

609,958

599,004

120,241

25,317,576

1,039,137

47,075

15,440,494

16,526,706

8,265,012

36,499

8,301,511

489,359

25,317,576


34. CONTINGENT LIABILITIES

Outstanding dispute, litigations

As at 31 December 2009, the Group has on-going disputes or litigations with its customers for claims lodged by the customers which the Group either does not accept or only partially accepts. The total outstanding claims lodged by the customers relating to these on-going disputes or litigations were VND 7,095,749,000. The final outcome of these disputes or litigation can only be finalized upon the issuance of the verdict by a court of law. Accordingly, the Group has not created any provision in respect of these claims in the financial statements.

Foreign contractor withholding tax and value added tax

The Group has not provided for the potential foreign contractor withholding taxes from the offshore payments of reinsurance premiums ceded to overseas reinsurers for the period from 1 Jan 2005 to 31 December 2008. Since there is no final resolution from the governing tax authority on whether reinsurance ceded to overseas reinsurers for this period would be subject to foreign contractor withholding tax, the Group has not created any provision in its financial statements for this potential tax obligation. The potential tax risks relating to these issues are USD 3,334,138 (equivalent to VND 59,817,766,719) for foreign contractor withholding tax.

For the year ended 31 December 2009, the corporation only accounted for the FCT on reinsurance premiums ceded to overseas reinsurers from countries without Double Tax Treaty with Vietnam or from countries with Double Tax Treaty with Vietnam but the reinsurers have not submitted adequate supporting documents. The FCT amount that the Group has not withheld is estimated at VND 8,883,137,824.

35. COMPARATIVE INFORMATION

The comparative financial information are reclassified as necessary to confirm to current year presentation.

33. EFFECTS OF CIRCULAR 201 TO THE FINANCIAL STATEMENTS

As mentioned in Note 3.1, in 2009 the Group adopted the guidance on foreign currency transactions provided by Circular 201 which is different from VAS 10.

Had the Group continued to follow VAS 10 for the year 2009, the financial position and financial operating result of the Group would have been as follows:

-13,536,338,083,952 13,536,338,083,952

-13,954,560,318,452 13,954,560,318,452

-6,237,916,826,170 6,237,916,826,170

-73,239,449,605 73,239,449,605

(2,311,619,948)16,075,608,000 18,387,227,948

(2,311,619,948)40,273,647,780 37,962,027,832

-47,113,399,541 47,113,399,541

-47,113,399,541 47,113,399,541

-- -

2,311,619,948(6,839,751,761) (9,151,371,709)

41,560 1,556

99

100

101

101

102

103

104

105

Page

FINANCIAL STATEMENTS - IFRS

VAS 10 Circular 201 Difference

Consolidated balance sheetCurrent monetary assets

Non-current monetary assets

Current monetary liabilities

Non-current monetary liabilities

Foreign exchange difference reserve


Foreign exchange gains

Foreign exchange loss

In which

Amount chargedto the consolidated income statements

Amount deferredin the consolidated balance sheet

Net foreign exchange gain/(loss) chargedto the consolidated income statement

Earnings per share

BAO VIET HOLDINGS

Preliminary restatement of primary consolidated financial statements

31 December 2009

CONTENTS

Special purpose review report


Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Selected notes to the primary consolidated financial statements

Currency: VND

98

ANNUAL REPORT 2009ANNUAL REPORT 2009100 101

CONSOLIDATED INCOME STATEMENTfor the year ended 31 December 2009

1,086,462,175,797

269,116,670,572

1,355,578,846,369

2009

VND

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2009

7,336,054,068,386Gross written premiums

151,666,182,986Reinsurance premium assumed

(979,534,348,986)Less: Premium ceded to reinsurers, deduction and return

6,508,185,902,386Net written premiums

(1,467,453,204,038)Change in unearned premium reserves

5,040,732,698,348Net earned premiums

146,828,204,959Commission income on reinsurance ceded

Other income

1,127,872,732Income on reinsurance assumed

308,514,166Income on reinsurance ceded

4,427,528,649Income from other activities

5,193,424,818,854Total revenue from insurance business

355,479,712,399Interest income of banking operations

2,618,062,695,499Investment income

13,057,543,886Share of profits of associates and joint ventures

164,619,210,737Other income

8,344,643,981,375Total income

(4,050,560,862,254)Claims and maturity payment expenses

(46,246,678,770)Claims expenses for reinsurance assumed

366,196,782,586Less: Recoveries from reinsurance ceded

13,815,213,821Subrogation recoveries

6,701,473,334Salvages

(150,187,569,249)Increase in claim reserve

(3,860,281,640,532)Net claims and benefits incurred

(812,295,263,119)Commission and underwriting expenses of insurance operations

(35,541,606,643)Other reinsurance assumed expenses

(12,526,877,265)Expenses of reinsurance ceded

(126,218,988,181) Interest expenses of banking operations

(122,023,207,897)Selling expenses

(1,506,284,663,787)General and administrative expenses

(484,468,384,194)Financial expenses

(62,080,670,738)Other expenses

(7,021,721,302,356)Total commission and expenses

1,322,922,679,019Profit before tax for the year

(236,460,503,222)Enterprise income tax for the year

1,086,462,175,797Profit after tax for the year

Net Profit attributable to:

958,610,678,216Shareholders of the Group

127,851,497,581 Minority interests

2009

VND

Profit after tax for the year

Other comprehensive income for the year

Available-for-sale investments:

Net movement in the fair value reserve

Total comprehensive income for the year



CONSOLIDATED STATEMENT OF FINANCIAL POSITION at 31 December 2009

873,384,210,750

23,448,947,000

477,971,962,067

313,559,572,889

9,087,752,582,986

11,613,403,839,346

2,704,247,963,009

765,373,585,900

1,663,666,295,665

2,654,601,948,902

1,030,002,323

903,945,810,246

87,118,494,281

513,940,344,104

413,912,474,104

2,532,644,263,412

34,630,002,296,984

18,157,148,006,470

3,786,961,866,864

420,948,732,663

29,603,706,539

93,170,087,183

80,873,752,349

1,963,455,411,911

24,532,161,563,979

5,730,266,050,000

1,838,314,624,015

530,295,560,629

554,210,008,693

18,387,227,948

10,222,384,015

11,699,111,508

43,521,050,471

8,736,916,017,279

1,360,924,715,726

10,097,840,733,005

34,630,002,296,984

2009

VND

103

Assets

Property, plant and equipment

Investment properties

Intangible assets

Investments in associates and joint ventures

Fixed maturity investments

Available-for-sale

Loans and receivables

Equity investments

Available-for-sale

Fair value through income statement

Account receivables

Loans and advances to customers

Loans and trusted loans

Policy loans

Deferred tax assets

Unearned premium on reinsurance ceded

Other assets and prepayments

Cash and cash equivalents

Total assets

Liabilities

Insurance contract liabilities

Amount due to customers

Due to banks and other financial institutions

Advances from customers

Income tax payable

Deferred tax liabilities

Other liabilities

Total liabilities

Shareholders' equity

Contributed legal capital

Share premium

Retained profits

Other comprehensive income

Foreign exchange differences

Investment and development fund

Finance reserve fund

Statutory reserve

Owner's equity

Minority interests

Total equity

Total equity and liabilities

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2009

2009

VND

5,730,266,050,000 1,840,007,252,773 186,362,585,273 285,093,338,121 16,075,608,000 8,609,458,421 8,609,458,421 17,067,266,899 8,092,091,017,908Balance at

1 January 2009

958,610,678,216 958,610,678,216Profit for the year

(581,239,974,257) (581,239,974,257)Dividends paid

to shareholders

(1,655,222,225) (1,655,222,225)

Payment to Board

of Directors and

Supervisory Board

(90,775,901) (90,775,901)Buy treasury shares

269,116,670,572 269,116,670,572

Movement in value

of Available

for-sale investments

(1,692,628,758) (535,368,224) (1,318,297,652) (3,546,294,634)Other increase/

(decrease)

5,730,266,050,000 1,838,314,624,015 530,295,560,629 554,210.008.693 18,387,227,948 10,222,384,015 11,699,111,508 43,521,050,471 8,736,916,017,279Balance at

31 December 2009

(31,156,362,253) 3,629,917,600 1,612,925,594 3,089,653,087 26,453,783,572 3,629,917,600Profit appropriation

to other reserves

Changes in owners' equity

Investment

and

development

fund

Other

comprehensive

income

Foreign

exchange

differences

Finance

reserve

fund

Contributed

legal capital

Share

premium

Retained

profits

Statutory

reservesTotal



CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2009

22,500,820,998,471

(20,334,051,434,103)

(598,405,193,505)

(195,956,053,210)

546,958,763,628

(1,222,643,083,457)

696,723,997,824

(315,189,853,739)

7,458,226,915

(7,296,464,781,636)

1,287,210,525,579

(2,703,482,862,334)

3,662,607,719,333

497,054,068,939

(517,900,000,000)

495,101,000,000

(4,883,605,956,943)

720,000,000,000

5,646,136,030,318

(128,728,400,000)

6,237,407,630,318

2,050,525,671,199

480,836,990,174

1,281,602,039

2,532,644,263,412

2009

VND

105

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS

as at and for the year ended 31 December 2009

1. CORPORATE INFORMATION

Bao Viet Holdings (the “Company”) is a joint stock Company pursuant to Business License No. 0103020065

approved by the Hanoi Authority for Planning and Investment dated 15 October 2007. The Company was listed on

the Ho Chi Minh Stock Exchange on 25 June 2009 and the principal activity of the Company is investment holding.

The registered address of the Company is No.8, Le Thai To Street, Hoan Kiem, Hanoi, Vietnam. The Company and its

subsidiaries (together forming the “Group”) provide a wide range of financial products and services to individual and

corporate customers in Vietnam. The principal activities of the subsidiaries are stated in note 2.2.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of the consolidated primary financial statements

The consolidated primary financial statements comprise the income statement, statement of comprehensive

income, statement of financial position, statement of changes in equity and statement of cash flows of Bao Viet

Holdings, the parent company, and its subsidiaries for the year ended 31 December 2009.

These consolidated primary financial statements have been prepared to comply with the requirements of the

Subscription Agreement between HSBC Insurance (Asia -Pacific) Holdings Limited (“HSBC”) and Bao Viet Holdings

and in accordance with the accounting policies stated below. The accounting policies apply the recognition and

measurement principles of the International Financial Reporting Standards (“IFRS”) to restate the Group's

Vietnamese Accounting System (“VAS”) records for the year ended 31 December 2009 (“Restated”).

In order to restate the VAS records, the principles contained in IFRS 1, 'First-time Adoption of International Financial

Reporting Standards' have been applied. The general principle that should be applied on first-time adoption of IFRS

is that standards in force at the first reporting date (which for the Group would be 31 December 2010) should be

applied retrospectively. There is uncertainty about which standards will be effective as at 31 December 2010, and

therefore in preparing the restated primary consolidated financial statements as at 31 December 2009 the

recognition and measurement principles contained in the IFRS in force as at 31 December 2009 have been applied.

If the first time IFRS financial statements for the Group are prepared as at 31 December 2010 as planned, the

restatements for the year to 31 December 2009 may change if there are updates and changes in IFRS that are in force

as at 31 December 2010 for the first time.

In addition, IFRS 1 contains a number of exemptions which companies are permitted to apply. The Group has elected

to apply the exemption related to insurance contracts, which restricts the changes in accounting policies required for

insurance contracts and exempts the Group from retrospective application for insurance contracts when restating.

2.2 Basis of consolidation

The subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains

control, and continues to be consolidated until the date that such control ceases. Control exists when the Group has

the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits

from its activities.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using


may exist.




CASH FLOWS FROM OPERATING ACTIVITIES

Premium received and interest income received

Payment to suppliers

Payment to employees

Enterprise income tax paid

Other cash inflows from operating activities

Other cash outflows from operating activities

Net cash flows from operating activities

CASH FLOWS FROM INVESTMENT ACTIVITIES

Purchase of fixed assets

Proceeds from disposals of fixed asset

Loans to other entities and payments for purchased of debt instruments of other entities

Repayments from borrowers and proceeds from sales of debt instruments of other entities

Payments for investments in other entities

Proceeds from sales of investments in other entities

Interest received, coupon and distributed profits

Cash transfer under trusted investment arrangement

Cash receipt from trusted investment arrangement

Net cash outflows from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Cash receipts from issuing shares

Cash receipts from short and long term loans

Dividends paid to minority interests

Net cash inflows from financing activities

Net cash inflows during the year

Cash and cash equivalent at the beginning of the year

Impact of exchange rate fluctuation

Cash and cash equivalent at the end of the year



2.2 Basis of consolidation (continued)

Minority interests represent the portion of profit or loss and net assets of the subsidiaries not held by the Group and are presented separately in the income statement and within equity in the consolidated balance sheet, separately from parent's shareholders equity.

The principal activities and other particulars of the subsidiaries as at 31 December 2009 were as follows:

Name of company

Proportion of ownership

interest Percentage held

directly by company

Principal activities

100%Bao Viet Life Corporation Life insurance and reinsurance

100%Bao Viet Insurance General insurance and reinsurance

100%Bao Viet Fund Management Company Fund management and investment

59.92%Bao Viet Securities Joint Stock CompanySecurities trading, brokerage, portfolio management,

underwriting, consulting and securities placement

52%Bao Viet Commercial Joint Stock Bank Banking

55%Bao Viet Investment Joint Stock Company Real estate investment and construction

60%Bao Viet Au Lac Limited Company Vocational driving training services

2.3 Investment in associates

The Group's investment in associates are accounted for using the equity method. An associate is an entity in which the Group has significant influence.

Under the equity method, investments in associates are carried in the statement of financial position at cost plus post acquisition changes in the Group's share of net assets of associates. Goodwill relating to an associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.

The income statement reflects the share of the results of operations of associates. Where there has been a change recognised directly in the equity of an associate, the Group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and an associate are eliminated to the extent of the interest in an associate.

The share of profit of associates is shown on the face of the consolidated income statement. This is the profit attributable to equity holders of an associate and therefore is profit after tax and non-controlling interests in the subsidiaries of an associate.

The financial statements of associates are prepared for the same reporting period as the parent company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group's investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in an associate is impaired. If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of an associate and its carrying value and recognises the amount in the income statement.

Upon loss of significant influence over an associate, the Group measures and recognises any retaining investment at its fair value. Any difference between the carrying amount of an associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal are recognised in profit or loss.

2.4 Foreign currency translation

The Group's consolidated primary financial statements are presented in Vietnamese Dong, which is also the parent company's functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. All differences are taken to the income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

2.5 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(l) Premiums

Gross recurring premiums on life insurance business are recognised as revenue when payable by the policyholder. For universal life business, revenue is recognised on the date on which the policy is effective.

Premiums for direct and facultative business in general insurance are accounted for in the period in which the amount is determined, which is generally the period in which the risk commences. Premiums include any adjustments arising in the accounting period for premiums receivable in respect of business written in prior accounting periods. The effects of cancellations of premium renewals and of premiums from new business and premium adjustments which are not accounted for in the period in which the risk commences, are not material.

Unearned premiums are those proportions of premiums written in a year that relate to periods of risk after the balance sheet date. Unearned premiums are calculated on a daily pro rata basis. The proportion attributable to subsequent periods is deferred as a provision for unearned premiums.

Premiums received, commission and claims paid or payable on reinsurance treaty inward business are accounted for when notified by the ceding company or agent concerned.

(ll) Interest income from banking activities

Interest income is recognised in the consolidated income statement on an accrual basis, using effective interest rate method.

(lll) Fees from rendering of services

Fees from rendering of services comprise fund management fees, placement fees, incentive fees, brokerage, underwriting activities, which are recognized when services are performed and the revenue can be reliably measured.

(lV) Gains from securities trading

Gains from securities are the excess of selling prices over the weighted average cost of securities sold.

(V) Dividends

Income is recognised when the Group's entitlement as an investor to receive the dividend is established.

2.6 Taxes

(l) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the reporting date.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.



(ll) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.7 Financial instruments initial recognition and subsequent measurement

(l). Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. The Group determines the classification of its financial assets at initial recognition.

All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e. the date that the Group commits to purchase or sell the asset.

The Group's financial assets include cash and short-term deposits, trade and other receivables, loan and other receivables, quoted and unquoted financial instruments, and derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

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

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognised in finance income or finance cost in the income statement.

When the Group is unable to trade these financial assets due to inactive markets and management's intent to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. The reclassification to loans and receivables, available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the income statement. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement in finance costs.

(c) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold it to maturity.

After initial measurement held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement in finance costs. The Group did not have any held-to-maturity investments for the year ended 31 December 2009.

(d) Available-for-sale financial investments

Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-for sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is recognised in the income statement in finance costs and removed from the available-for-sale reserve. The Group evaluated its available-for-sale financial assets to determine whether the ability and intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and managements intent significantly changes to do so in the foreseeable future, the Group may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial asset meets the definition of loans and receivables and has the intent and ability to hold these assets for the foreseeable future or maturity. The reclassification to held to maturity is permitted only when the entity has the ability and intent to hold until the financial asset accordingly.



For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortised cost and the expected cash flows is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired then the amount recorded in equity is reclassified to the income statement.

Derecognition

A financial asset is derecognised when the rights to receive cash flows from the asset have expired.

Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred 'loss event') and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

(a) Financial assets carried at amortised cost

For financial assets carried at amortised cost the Group first assesses individually whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the income statement. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in the income statement.

(b) Available-for-sale financial investments

For available-for-sale financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.

In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. 'Significant' is to be evaluated against the original cost of the investment and 'prolonged' against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the income statement is removed from other comprehensive income and recognised in the income statement. Impairment losses on equity investments are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income.

In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the income statement.

Future interest income continues to be accrued based on the reduced carrying amount of the asset and is accrued using the rate

of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is

recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be

objectively related to an event occurring after the impairment loss was recognised in the income statement, the impairment loss

is reversed through the income statement.

(ll). Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss or loans and

borrowings. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable

transaction costs.

The Group's financial liabilities include trade and other payables, bank overdraft, loans and borrowings and derivative financial

instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities

designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category

includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge

relationships as defined by IAS 39. Separated embedded derivatives are also classified as held for trading unless they are

designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the income statement.

(b) Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective

interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as

through the effective interest rate method (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral

part of the EIR. The EIR amortisation is included in finance cost in the income statement.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing

financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability

are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the

recognition of a new liability, and the difference in the respective carrying amounts is recognised in the income statement.

(lll). Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position

if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a

net basis, or to realise the assets and settle the liabilities simultaneously.



(lV). Fair value of financial instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by

reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short

positions), without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation

techniques. Such techniques may include using recent arm's length market transactions; reference to the current fair

value of another instrument that is substantially the same; discounted cash flow analysis or other valuation models.

2.9 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at

inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the

arrangement conveys a right to use the asset.

Group as a lessee

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the

leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower,

2.8 Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment

losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-

term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment

are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives

and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying

amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and

maintenance costs are recognised in the income statement as incurred.

The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the

respective asset if the recognition criteria for a provision are met.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Buildings 6 - 25 years

Machinery 3 - 7 years

Vehicles 6 - 8 years

Office equipment 3 - 6 years

Other fixed assets 4 years

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal

or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition

of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is

included in the income statement when the asset is derecognised.

The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year end, and

adjusted prospectively, if appropriate.

112

Group as a lessee (continued)

At the present value of the minimum lease payments. Lease payments are apportioned between finance charges

and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are recognised in the income statement.

Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the

Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated

useful life of the asset and the lease term.

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the

lease term.

Group as a lessor

Leases where the Group does not transfer substantially all the risks and benefits of ownership of the asset are

classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying

amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rents

are recognised as revenue in the period in which they are earned.

2.10 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,

intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure

is reflected in the income statement in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever

there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method

for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected

useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for

by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense

category consistent with the function of the intangible asset.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either

individually or at the cash generating unit level. The assessment of indefinite life is reviewed annually to determine

whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made

on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net

disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset

is derecognised.

2.11 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any

indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's

recoverable amount.



An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs to sell

and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are

largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU

exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In

assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the time value of money and the risks specific to the asset. In

determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated

by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

Impairment losses of continuing operations are recognised in the consolidated income statement in those expense

categories consistent with the function of the impaired asset, except for property previously revalued where the

revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other

comprehensive income up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication

that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists,

the Group estimates the asset's or cash-generating unit's recoverable amount. A previously recognised impairment

loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable

amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the

asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined,

net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised

in the income statement unless the asset is carried at a revalued amount, in which case the reversal is treated as a

revaluation increase.

The following criteria are also applied in assessing impairment of specific assets:

Intangible assets

Intangible assets with indefinite useful lives are tested for impairment annually as at 31 December either individually

or at the cash generating unit level, as appropriate and when circumstances indicate that the carrying value may be

impaired.

2.12 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand, cash at banks, demand deposits and short-term, highly liquid

investments with an original maturity of three months or less which are readily convertible into known amounts of

cash and that are subject to an insignificant risk of change in value

2.13 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a

reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to

be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but

only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income

statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted

using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is

used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.14 Reinsurance

The Group cedes insurance risk in the normal course of business for all of its businesses. Reinsurance assets

represent balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated in

2.14 Reinsurance (continued)

anner consistent with the outstanding claims provision or settled claims associated with the reinsurer's

policies and are in accordance with the related reinsurance contract.

Reinsurance assets are reviewed for impairment at each reporting date or more frequently when an indication of

impairment arises during the reporting year. Impairment occurs when there is objective evidence as a result of an

event that occurred after initial recognition of the reinsurance asset that the Group may not receive all outstanding

amounts due under the terms of the contract and the event has a reliably measurable impact on the amounts that

the Group will receive from the reinsurer. The impairment loss is recorded in the income statement.

Gains or losses on buying reinsurance are recognised in the income statement immediately at the date of

purchase and are not amortised. Ceded reinsurance arrangements do not relieve the Group from its obligations to

policyholders. Premiums and claims are presented on a gross basis for ceded reinsurance. Reinsurance assets

are derecognised when the contractual rights are extinguished or expire.

2.15 Insurance receivables

Insurance receivables are recognised when due and measured on initial recognition at the fair value of the

consideration received or receivable. Subsequent to initial recognition, insurance receivables are measured at

amortised cost, using the effective interest rate method. The carrying value of insurance receivables is reviewed

for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable, with

the impairment loss recorded in the income statement.

Insurance receivables are derecognised when the derecognition criteria for financial assets have been met.

2.16 Insurance contract liabilities

(a) Life insurance reserves

Insurance contract liabilities for traditional products which include mathematical reserve, unearned premium

reserves, outstanding claim reserves and dividend reserves are established in accordance with the provisions and

instructions issued by the Ministry of Finance (“MOF”) in Vietnam.

Technical Reserve is the difference between present value of total insurance payable in the future and the

actuarially adjusted present value of insurance premiums receivable in the future. Mathematical reserve is

calculated for all products with specific actuarial formulae and factors for each type of products as registered and

approved by the MOF. Technical reserves for universal life products include the greater of unearned premium

reserve method or the cash-flow reserve method that covers all future expenses arising, compensation reserve,

reserve for the universal life fund component and an additional solvency reserve. The Group estimates these

universal life reserves in accordance with actuarial principles and methods which are widely recognised in

international practice.

Unearned premium reserve is the provision for unearned revenue out of already-paid premium as at the balance

sheet date, and is calculated for all outstanding policies as at the reporting date.

Claim Reserve is the provision for claims submitted but still in the course of settlement as at the balance sheet

date.

Dividend Reserve is the provision for accumulated unpaid dividends for participating policies, which is established

on the variances of actual rate of return announced for participating policies and the respective nominal interest

rate.

a m



(b) General insurance reserves

Unearned premium reserve is established as a percentage of total retained premium or in accordance with a

coefficient of the insurance contracts' terms for different business lines.

Claim reserve includes the reserve for outstanding claims and for claims incurred but not reported. Outstanding

claim reserve is established based on the estimated claim payments for each claim for which the insurer is liable,

which is either notified to the insurer or requested for payment but is still unresolved at the end of the fiscal year.

Provision is also made for the estimated cost of servicing claims notified but not settled at the end of the reporting

period and to meet expenses on claims incurred but not reported at the end of the reporting period.

(c) Liability adequacy test

At each reporting date the Group performs a liability adequacy test to determine whether its recognised insurance

liabilities are adequate. This calculation uses current estimates of future contractual cash flows arising under the

insurance contracts, including claims handling costs. If these estimates show that the carrying amount of the

insurance liability is inadequate, the deficiency is recognised in the income statement by setting up a provision for

liability adequacy.

Further accounting policies applicable to these primary financial statements are summarised in note 5 (column

“Restated”) on the selected notes to the consolidated financial statements.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the

next financial year. Estimates and judgements are continually evaluated and based on historical experience and

other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(l). Provision for outstanding claims under general insurance

Full provision is made for the estimated cost of claims notified but not settled at the end of the reporting period and

for the incurred but not reported for by that date. Provision is also made for the estimated cost of servicing claims

notified but not settled at the end of the reporting period and to meet expenses on claims incurred but not reported

at the end of the reporting period.

(ll). Estimates liabilities under life insurance

The Group makes estimates of future deaths, and investment returns for life insurance contracts. These estimates

form the assumptions used to calculate the liabilities arising from these contracts. Estimates are made in order to

establish life insurance contract liabilities, which are consistent with the requirements issued by the Ministry of

Finance of Vietnam (“MOF”).

The Group estimates these universal life reserves in accordance with actuarial principles and methods which are

widely recognised in international practice. Furthermore the methodology and actuarial principles used to

estimate these universal life reserves have been registered and approved by the MOF.

(lll). Impairment of financial assets

Judgment is required in determining whether or not a decline in fair value of an available-for-sale financial

investment and loans and receivables below its original cost or amortised costs is of such a nature as to constitute

impairment, and thus whether an impairment loss needs to be recognised.

(lll). Impairment of financial assets (continued)

When fair values of certain financial assets are determined by using valuation techniques which refer to observable market data

because independent prices are not available, management will consider the following when applying a valuation model:

The likelihood and expected timing of future cash flows on the instrument. These cash flows are usually governed by the

terms of the instrument, although management judgment may be required when the ability of the counterparty to service

the instrument in accordance with the contractual terms is in doubt;

An appropriate discount rate for the instrument. Management determines this rate based on its assessment of the

appropriate spread of the rate for the instrument over the risk-free rate; and

Judgement to determine what model to use to calculate fair value in areas where the choice of valuation model is

particularly subjective, for example, when valuing complex derivative models.

When valuing instruments by reference to comparable instruments, management takes into account the maturity, structure and

rating of the instrument with which the position held is being compared. When valuing instruments on a model basis using the fair

value of underlying components, management also considers the need for adjustments to take account of factors such as bid-

offer spread, credit profile and model uncertainty. These adjustments are based on defined policies which are applied

consistently across the Group.

4. RECONCILIATION OF GAAP DIFFERENCES FOR NET PROFIT AND EQUITY

The material GAAP differences between VAS and the Restated amounts in preparing the primary consolidated financial

statements of the Group are as follows:

(l). Consolidated net profit attributable to shareholders of the Group 2009

VND

891,754,255,672

9,846,720,068

39,743,632,916

4,380,159,817

(35,048,205,891)

22,405,692,895

(20,992,377,447)

1,775,713,893

(2,827,865,992)

(44,569,870,509)

98,132,466,119

4,556,421,030

(2,440,451,410)

(8,105,612,945)

958,610,678,216

Prepared in accordance with VAS

Net investment income:

Fixed maturity investments valuation

Equity investment valuation

Inventories written back to income statement

Bonus and welfare fund written off

Reversal on loan and receivables provision

Impairment of account receivable and loans and receivables

Decrease of prepayment expense amortisation

Tangible assets impairment

Insurance reserves adjustment

Removal of catastrophe reserve

Removal of equalisation reserve

Deferred tax

Minority interests

Prepared in accordance with these accounting policies



Investments in securities and

other investments are stated at

their acquisition cost. Short

term investments comprise

holdings of listed shares and

other liquid securities, which are

readily realisable and are

intended to be held for not more

than one year.

Long term investments include

listed and over-the-counter

shares, government bonds,

loans and trusted loans, and

term deposits at banks, which

are intended to be held for more

than one year.

Allowance for devaluation in

value of all shares is created

representing the excess of the

acquisition cost over the market

value at the reporting date.

(ll). Consolidated equity of the Group 2009

VND

Fixed maturity investments valuation

Equity investment valuation

Impairment adjustment on loans and receivables

Inventories written off

Bonus and welfare fund reclassification

Impairment of account receivable

Intangible assets impairment

Tangible assets impairment

Insurance reserves adjustment

Removal of catastrophe reserve

Removal of equalisation reserve

Deferred tax

Prepared in accordance with these accounting policies

9,937,587,877,608

619,187,134,657

(159,637,020,547)

(19,154,259,412)

(20,239,993,262)

(49,856,498,121)

(32,723,890,616)

(61,433,525,431)

(12,668,016,516)

(313,597,759,806)

193,572,226,768

16,737,624,949

66,832,734

10,097,840,733,005

Prepared in accordance with VAS

3. NARRATIVE DESCRIPTION OF MATERIAL MEASUREMENT AND INCOME RECOGNITION DIFFERENCES

BETWEEN VAS AND THE ACCOUNTING POLICIES USED TO PREPARE THESE PRIMARY CONSOLIDATED


ITEM VAS Restated

Financial

assets

Financial assets designated at fair value through profit or loss is

financial assets which on initial recognition are designated by the

Group for measurement at fair value through profit or loss.

Investments intended to be held on a continuing basis are classified

as available-for-sale (“AFS”) securities, and are initially measured at

fair value plus direct and incremental transaction costs. At each

balance sheet date the fair value is re-measured, with any resultant

gain or loss being recognised in other comprehensive income and

accumulated separately in equity in the fair value reserve until the

investments are either sold or become impaired. When AFS

investments are sold, cumulative gains or losses previously

recognised in equity are recognised in the income statement.

Loans and receivables are non-derivative financial assets with fixed

determinable payments that are not quoted in an active market.

These investments are initially recognised at cost, being the fair value

of the consideration paid for the acquisition of the investment. All

transaction costs directly attributable to the acquisition are also

included in the cost of the investment. After initial measurement,

loans and receivables are measured at amortised cost, using the

effective interest rate method. Gains and losses are recognised in the

income statement when the investments are derecognised or

impaired, as well as through the amortisation process.

(l)

(ll)

(lll)

An investment in an associate is stated initially at cost and is thereafter

adjusted for the post-acquisition change in the Group's share of the assets of

the investee. This carrying value is reduced where there is objective evidence

of impairment.

Receivables are carried at cost less any accumulated impairment losses

Fixed asset is carried at its cost less accumulated depreciation and any

accumulated impairment losses.

Intangible assets are carried at cost less any accumulated amortisation and

any accumulated impairment losses. Where the useful life of an intangible

asset is assessed as indefinite, IAS 38 requires that the asset should not be

amortised.

IFRS 4 does not permit provisions for claims on contracts that are not in

existence at the end of the reporting period (such as equalisation and

catastrophe provisions).

Impairment

Investment in an associate

is not subject to impairment

testing under VAS 7.

Receivables are presented

at the carrying amount due

from customers and other

debtors, along with the

allowance for doubtful

debts. The allowance for

doubtful debts represents

the estimated loss due to

non-payment arising on

receivables that were

outstanding at the balance

sheet date, is calculated

based on different ratio

relating to the aging of the

receivables.

Fixed asset is carried at its

cost less accumulated

depreciation. Revaluation or

write down for impairment is

not allowed, unless a

s p e c i f i c a p p r o v a l i s

received from the Ministry

of Finance.

Intangible assets are stated

at cost less accumulated

amortisation. Revaluation or

write down for impairment is

not allowed.

Equalisation reserve is

accrued based on net after

tax profit of Bao Viet Life

Corporation

A l l o w a n c e f o r t h e

diminution in value of all

s h a r e s i s c r e a t e d

representing the excess of

the acquisition cost over the

ma rke t va l ue a t t he

reporting date.

Impairment is recognised on financial assets that are carried at amortised

cost and on AFS financial assets whose fair value changes are recognised in

other comprehensive incomePast impairment losses on AFS debt instruments (monetary assets) are

reversed through income when fair value increase.For AFS equity instruments (non-monetary assets), past impairment losses

are reversed through equity.

ITEM VAS Restated

Associate

Receivables

Property,

plant and

equipment

Intangible

assets

Life

insurance

reserves




ITEM VAS Restated

UPR liability is presented net of

related reinsurance asset

IFRS 4 does not allow offset of reinsurance assets against related

insurance liabilities, or of income or expense from reinsurance

contracts against the expense or income from the related insurance

contracts. Therefore, the UPR assets and liability are presented

gross on the balance sheet and the income statement impact is

similarly presented gross.

Presentation

Income tax VAS 17 does not address

temporary differences and the

deferred tax recognition in

r e s p e c t o f b u s i n e s s

combinations, goodwill, assets

carried at fair value and

government grants.

Deferred tax assets and liabilities arise from deductible and taxable

temporary differences respectively, being the differences between

the carrying amounts of assets and liabilities for financial reporting

purposes and their tax bases. Deferred tax assets also arise from

unused tax losses and unused tax credits, if any. The amount of

deferred tax recognised is measured based on the expected

manner of realisation or settlement of the carrying amount of assets

and liabilities, using tax rates enacted or substantively enacted at

the balance sheet date.

General

insurance

reserves

Catastrophe reserve is accrued based on retained premiums and

management judgement. Full provision is made for the estimated

cost of claims notified but not settled at the balance sheet date and

for the estimated cost of claims incurred but not reported by that

date.

The reserve for incurred but not

reported claims in Bao Viet

Insurance is calculated based

on a specific formula agreed by

the Ministry of Finance.

Documents

ANNUAL REPORT 2009 · Email: [email protected] ANNUAL REPORT 2009 4 5. CHAIRMAN’S MESSAGE BAOVIET HOLDINGS BAOVIET’S SUBSIDIARIES KEY EVENTS 2009 CORPORATE SOCIAL