Financial Statements and Shareholder Relations

FINANCIAL STATEMENTS CO COMMUNITY INVOLVEMENT INV AND SHAREHOLDER AN RELATIONS
52 54 56 57 58 59
Vietnam Accounting Standard International Financial Reporting Standard
161
SUBSIDIARIES
34
B BAO VIET NEW FOUNDATION N

One Bao Viet One New Foundation: The strategy to develop Bao Viet into the leading financial-insurance institution in Vietnam is on the basis of a new solid foundation and unified brand. This will help the company to meet the changing and expanding financial demands of customers and enable it to gradually integrate into the regional and world economy. In 2010, Bao Viet started to implement this strategy.
Bao Viet General Insurance Corporation Bao Viet Life Corporation Bao Viet Fund Management Company Bao Viet Commercial Joint Stock Bank Bao Viet Securities Joint Stock Company Bao Viet Investment Joint Stock Company
Ten Highlights in 2010 Community Involvement 30A Program Investor Relations Human Resources Development and Efficient Working Environment Estabishment
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2010 MESSAGE
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Board of Directors of Bao Viet Holdings One Bao Viet - One New Foundation Bao Viet 2011-2015 Strategy Core Values of Bao Viet Organizational Structure Bao Viet Development Milestones Shareholders Strategic Partners Bao Viet Holdings Supervisory Board Governance Report
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Chairmans Message Report of The Chief Executive Officer Key Performance Indicators
20 21 22 23
46
48
12
24 26 28
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CHAIRMANS MESSAGE
Ladies and Gentlemen, In 2010, Vietnams economy and, in particular, the financialbanking sector faced many difficulties following the global financial crisis. The year was also challenging for Bao Viet due to high inflation, a trade deficit, exchange rate fluctuations and volatile investment environment. Many of our customers also experienced business constraints in this operating environment. Under the honourable leadership of the Party and the effective management of the Government - together with the efforts of the business community - inflation was restrained, economic growth was comparatively high with countries in the region, the macroeconomy was stabilized, and social welfare was maintained. Against the backdrop of a challenging economy, Bao Viets Board of Directors (BOD) carefully monitored market movements, implemented the policies of the Party and the Government, and steered the business to meet its 2010 targets, completing tasks entrusted by the General Shareholders. As a result, Bao Viet strongly overcame the obstacles to fulfill its business plan, meeting growth, revenue and profit targets. The company began to implement its One Bao Viet - One New Foundation strategy to take the business to new heights. In 2010, the total revenue of Bao Viet Holdings was VND1,259 billion, recording a growth of 36.4% which was 8.8% higher than the plan enstrusted by shareholders. Total profit before tax was VND887 billion. The return on charter capital for the year 2010 was 13.6% on charter capital of VND6.267 billion and 12.5% on the new charter capital after the right issue in early 2011. With this result, Bao Viet Holdings will pay its 2010 dividend at 12% on charter capital, higher than the initial plan of 11% that was approved at the 2010 Annual General Meeting of Shareholders. With the support and strategic and technical expertise of HSBC, Bao Viets sole foreign strategic partner, the company has continued to invest in projects that will deliver long-term growth and development, according to international standards. These projects include the establishment of a modern and transparent corporate governance system; investments in companywide technology projects to enable and drive business transformation and growth; the gradual move to a centralized management business model offering a one-stop shop; enhanced investment in people management and brand development; and the promotion of crosssubsidiary cooperation. Bao Viet is aiming to harness the sum of its strengths to provide customers with comprehensive financial-insurance products and services. The strong fluctuation in the financial, monetary and securities markets in recent years has resulted in many risks, especially credit risk, and market risk related to interest rates, inflation and exchange rates. In this context, the BOD has established a Risk Management Block, Investment Block, and Asset Liability Management Committee (ALCO). The operation of these new governance mechanisms helps Holdings to consistently administer and manage our investments through the company, enhancing risk management and improving investment efficiency. Bao Viet has also improved its financial capacity, completing a private placement to increase the ownership of its strategic partner HSBC to 18% as part of the rights issue to existing shareholders, increasing charter capital to VND6,804 billion, owners equity reached over VND10,680 billion by early 2011. This provides important financial capacity for the future development of Bao Viet. Bao Viet has also finalized a five year business development strategy (2011-2015), with the mission: To ensure the peace of mind, prosperity, and long term benefits for our customers, investors, employees, and community, and the objective: To become Vietnams leading financialinsurance group, with solid financial strength, strategically integrating into regional and international markets, focused on three pillars: insurance, banking and investment. To achieve this mission and objective, Bao Viet will complete the foundation phase of its development in 2011. Against this solid foundation and under a unified brand, Bao Viet will continue to change and develop, providing diversified financial-insurance services and products to customers. In the process, we will ensure Bao Viet continues to improve customer service quality and competitiveness, and deliver strong revenue and profit growth, to meet the expectation of shareholders, customers and employees. 2010 was an important milestone for Bao Viet as it celebrated its 45 years of establishment, receiving the Second-Rank Independence Medal from the State. Bao Viet is proud to be an insurance company with the longest history in the industry, a pioneer in business innovation and diversification. Bao Viets success since 1965 has resulted from the hard work and creativity of our employees across the generations. We are grateful for this contribution and also appreciate the valuable support from our investors, customers and partners. Bao Viet is committed to developing our business with care and effort, ensuring that the trust that shareholders and customers place in us is well earned. On behalf of the BOD of Bao Viet Holdings, I would like to wish our shareholders, customers and partners a happy, peaceful and properous year in 2011. Thank you very much. Chairman
The mission of Bao Viet is To ensure the peace of mind, prosperity, and long term benefits for our customers, investors, employees and community.
Le Quang Binh
04
ANNUAL REPORT 2010 BAO VIET HOLDINGS
05
2010 MESSAGE
REPORT OF THE CHIEF EXECUTIVE OFFICER

Dear Shareholders, Customers and Partners, The detailed business results are explained as follows. The economy in Vietnam grew by 6.7% in 2010 which compared well with the average growth of the world economy and the macro economy was stable. Even so, the financial, banking and investment markets still contained many risks and irregularities, particularly following the global financial crisis.
General Insurance
Revenue from non-life insurance reached VND4,574 billion (+14.7% compared to 2009), accounting for 53% of Bao Viets total revenue from insurance activities. Non-life insurance profits attributable to the parent company, Bao Viet Holdings, was VND198 billion (+32%), accounting for 15.7% of the revenue at Holdings.
In this challenging environment, Bao Viets Board of Management and our employees worked tirelessly to fullfil our business plan, under the close and effective direction of the Board of Directors (BOD).
Business performance in 2010 was positive and Bao Viet Holdings met its targets. The total consolidated revenue of Holdings was VND12,863 billion (+21.8% compared to 2009); including revenues from insurance activities that reached VND8,551 billion (+12%) and revenues from financial activities that reached VND3,079 billion (+28%). The consolidated profit before tax (PBT) of Bao Viet was VND1,255 billion, from which profit after tax (PAT) amounted to VND953 billion (+6.8%).
Life Insurance
Total revenues in the life insurance business reached VND4,046 billion (+9.2% compared to 2009), accounting for 47% of the total consolidated revenue of the group. Life insurance profit transferred to the parent company was VND402 billion (+23%), accounting for 32% of the revenue at Holdings.
Revenue from the core insurance businesses amounted to 66% of the total consolidated revenue. This ratio decreased from 72% in 2009 due to the improved contribution from our banking and financial businesses.
In addition to efforts to fullfil the business plan, the key task in 2010 was to implement the strategy to build One Bao Viet One New Foundation and a new unified Bao Viet brand.
The total revenue of the parent company, Bao Viet Holdings, was VND1,259 billion, 108.8% of plan. Total PAT was VND852 billion.
Holdings revenue from financial investments was VND521 billion (+34%), accounting for 41% of the total revenue of Holdings. This strong growth was due to the additional investment capital after the private placement to HSBC.
Significant changes were implemented in the organizational model of Bao Viet Life in 2010 to improve its competitiveness. This included a restructure of the life business to a centralized management model, improvements in training and the professionalism of the distribution network; improvements in customer service quality, and the development of information technology systems to support business activities.
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07
In 2010, the non-life insurance market grew by approximately 23% and this increased competition significantly. The new non-life insurance strategy of growth and efficiency for general insurance resulted in an industrytopping profit in Vietnam in 2010 (VND73 billion). Bao Viet has maintained its position as the market leader with 24.6% market share.
Investment
VND Billion
The total consolidated financial assets under management of Bao Viet at the end of 2010 were VND39,333 billion (+34% compared to 2009). Total financial assets under management by Bao Viet Fund Management Company was VND19,966 billion (+13.6%). The financial portfolio of Bao Viet was dominated by bonds, accounting for 50%. The proportion of investments in term deposits accounted for 40%, the proportion of investment in equities was below 10% of the total investment portfolio. In response to the volatile financial market in 2010, Bao Viet focused on improving our investment governance. This included the establishment of the Asset Liability Management Committee, and enforcing improved investment procedures at Holdings and the subsidiaries.
44,768
Total Consolidated Assets
Real Estate and Property Development and Management

Bao Viet is managing its property porfolio and developing new projects for customers. In 2010, the Bao Viet Commercial Building in 233 Dong Khoi, Ho Chi Minh City opened, contributing to the revenue of Bao Viet Holdings. Some other key property projects of Bao Viet include the building in 7 Ly Thuong Kiet Street and Bao Viet SCIC Financial Tower in Tran Duy Hung Road - Hanoi.
The IT development plan is important to create the necessary technological infrastructure to transform the business model towards centralized management and a one-stop shop. This will help to enhance the professionalism of tools and faciliate improvements in customer service quality. After finishing Phase II of the Technical Support and Capability Transfer Agreement (TSCTA) between Bao Viet and HSBC Insurance (Asia-Pacific) Holdings Limited, Phase III is being carried out in a number of areas: actuary, information technology, finance, marketing and communications, risk management, human resources, insurance, and banking. This will help to improve and enhance management quality in key areas.
33%
VND Billion
12,863
Total Consolidated Revenues
VND Billion
Banking
After two years in operation, the banking business of Bao Viet has made huge progress in growing and servicing its young network. The bank's network has been expanded to 26 transaction offices. The development of Bao Viets banking business has helped to transform the company into a comprehensive financial group. The company is now able to provide customers a diversified package of financial services in the fields of insurance, banking and investment. Bao Viets banking business is growing. Revenue from banking activities has contributed 7.4% to the total consolidated revenues of the group in 2010 (+ 3.4%). Profit from banking also contributed 7% to the PAT of the parent company.
1,255
Consollidated Profit before Tax
In addition to efforts to fullfil the business plan, the key task in 2010 was to imlement the strategy to build One Bao Viet One New Foundation and a new unified Bao Viet brand.
Investment in Human Resources

In the implementation of Bao Viets human resources development strategy, the company has organized many training courses outlined in the companys learning map. Bao Viet Holdings is also implementing projects on salary and remuneration policy reform and performance appraisals in subsidiaries. Great attention is paid to the recruitment of new employees, with a focus on skills, expertise and professionalism.
12 billion
VND Billion
Improvements in Corporate Governance

Bao Viet Holdings continues to develop and improve the governance structure of Holdings and the subsidiaries, according to international standards. The Audit Committee was strengthened to improve its effectiveness in supporting Bao Viets BOD in risk control. As previously mentioned, the Asset Liability Management Committee was established to promote efficiency in balance sheet management, investment and liquidity in the group. Bao Viet prepared and published financial statements according to both Vietnam Accounting Standards (VAS) and IFRS in order to strengthen openess and transparency.
1,259
Total Revenues of Holdings
36%
VND Billion
Profit after Tax of Holdings
852
VND Billion
In addition, the introduction of HSBC experts in embedded leadership roles across Bao Viet has been an important factor in improving standards, quality and excellence at Bao Viet. A new governance model, the improving quality of our workforce, and a performance-based remuneration and assessment policy are all essential elements to the future success of Bao Viet.
Securities and Brokerage

The securities business had a difficult year in 2010 due to volatility and instability in the market. The company has focused on strengthening its organizational structure and improving the quality of customer service. It is also enhancing its information technology infrastructure and improving risk management to meet sustainable growth targets in the future.
45 billion
Innovation in Management Information Technology
and
Brand Development
To begin the process of building a unified brand, that joins up the collective value of the group, Bao Viet Holdings launched a new brand identity in January 2010.
6,804
Charter Capital of Holdings
18.7%
Bao Viet has invested around USD25 million in information technology projects. In 2010, Bao Viet introduced professional software in life insurance, securities, banking, and accounting, delivering a consistent IT infrastructure within the group. Currently, a number of key projects in the areas of non-life insurance, fund management and technology infrastructure are still being expeditiously implemented.
Bao Viet will continue to intensively and extensively carry out the brand development strategy to better serve our customers, and improve our competitiveness, transparency and trust among shareholders, employees and community.
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21.8%
ONE BAO VIET ONE NEW FOUNDATION
Improved Financial Capacity

The successful private placement to strategic shareholder HSBC and the wider share issue to existing shareholders have contributed to an increase in the charter capital of Bao Viet Holdings from VND5,730 billion to VND6,804 billion. Owners equity has grown from VND8,436 billion to VND10,510 billion. Financial resource obtained after the two issuances is equivalent to VND2,523 billion and is used to increase charter capital for non-life insurance being from VND1,000 billion to VND1,500 billion and will be used to improve financial capacity in core business areas and investments in IT development.
also focusing on macro-economic stabilization and inflation control policies; with a strong start to the economic restructuring and growth model transformation processes. This will create favorable conditions for enterprises to develop business and grow the market. There are also many market risks in 2011, especially high inflation, fluctuation in exchange rates and interest rates. Many businesses will have difficulties due to the pressure of rising input costs, high interest rates and exchange rate fluctuations. The stock market is forecast to be flat. The insurance market is forecast to grow about 12-15% in the field of life insurance and 22-25% in non-life insurance. On the basis of the 2011 economic analysis and forecast, Bao Viet will ensure we grow our business to meet business targets while continuing to invest in building a solid foundation for future development. We also must remain focused on improving competitiveness in the core areas of insurance, banking, securities, sustainably developing in these areas. The business targets and key solutions in 2011 of Bao Viet Holdings follow.
VND Billion
Estimated Total Consolidated Revenues 2011
14,800
15%
VND Billion
Improve the Efficiency of Investment Management: Continue to build the portfolio structure of Holdings. Complete the internal legal framework on investment management and improve the professionalism and efficiency of investment activities. Bao Viet will also strengthen risk management in investment activities.
Estimated Consollidated Profit before Tax 2011
1,445
15%
VND Billion
Strengthen the Cooperation among Subsidiaries: The subsidiaries of the group will develop and harness a unified customer base, thus improving the efficiency in business cooperation and investment among them.
Improvements Strengthening Subsidiaries
in Service Quality, Coordination among
With the advantage of a financial-insurance group, the subsidiaries of Bao Viet are continuing to research new products, develop distribution networks, and enhance coordination and cooperation to provide comprehensive financial capability and to improve customer service.
Estimated Total PAT 2011
903
2011 Business Targets

Bao Viet will continue to build a firm foundation in 2011. Bao Viet Holdings has targeted total consolidated revenue of VND14,800 billion (+15% compared with 2010). Consolidated PAT of Bao Viet is planned to be VND1,138 billion (+16.8%). Total revenue plan of Bao Viet Holdings is targeted to be VND1,300 billion (+3%). Total PAT is planned to be VND903 billion, about 106% of 2010. To reach the above targets of Bao Viets BOD, the Board of Management will carry out the solutions defined in the strategy for One Bao Viet-One New Foundation. The solutions for 2011 follow. Finalization of the Governance Structure: Consolidate the organizational structure of Holdings and the Subsidiaries towards specialization and promoting autonomy; improve the efficiency of Bao Viets BOD Supporting Committee; improve the quality of Risk Management, Asset Liability Management Committee, Investment, Strategy Committees to establish a governance mechanism throughout the company.
6%
Modernization of the IT system: Bao Viet promotes the consolidation of a centralized and modern IT system by bringing into operation international software in life, non-life, finance, investment, and by developing customer database applications that bring into full play the strength and coordination among subsidiaries under the financial supermarket model.
Enhance Customer Service Quality: Bao Viet aims to continuously improve, standardize and professionalize customer service down to each agency and branch. We will pilot call centers in a number of member companies with a view to improving customer service quality.
Efforts in 2010 to improve corporate governance, enhance IT innovation and improve customer service have established a firm foundation for development and competitiveness. This will enable Bao Viet to successfully roll out its 2011 business plan and five-year development strategy.
Bao Viet Holdings and its subsidiaries are committed to working together to successfully implement the 2011-2015 strategic solutions. We will work tirelessly to maintain our position as the leading financial-insurance group in Vietnam.
On behalf of the Board of Management, once again I would like to wish all shareholders, customers and employees good health and happiness.
2011 BUSINESS PLAN

2011 is the first year that the Party and Government implement the 2011-2015 socio-economic development strategy. This is also the first year that Bao Viet implements its 2011-2015 Strategic Plan. The economic environment in 2011 is promising, particularly related to the rapid development of science, technology and the intensive and extensive integration of Vietnam into the world economy. The Party and the Government are
Human Resources Development: The focus on creating a professional and effective working environment will help employees to increase their productivity and creativity. Bao Viet will conduct a range of training courses to develop our people, and apply market-oriented salary and remuneration policy, developing a performance-based working culture.
Chief Executive Officer
Brand Development: The group will continue to build a strong and unified brand, strengthen internal and external communications capability, and conduct marketing activities to enhance the image and prestige of Bao Viet.
Nguyen Thi Phuc Lam
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REPORT IP NM 2010 THNG OF THE CHIEF EXECUTIVE OFFICER
Developing New Products and Multi-convenience Financial Services: focus on researching and developing multi-convenience, integrated financial products across subsidiaries for the benefit of our customers.
KEY PERFORMANCE INDICATORS

CONSOLIDATED PERFORMANCE
12,863 10,560
1,255 1,243
BVHs closing price as at December 31, 2009 was VND30,600; VNIndex on December 31, 2009 was 494.8 BVHs closing price as at December 31, 2010 was VND64,500. BVHs price increased 110% whereas the market decreased from 494.8 to 484.6 at year end.
2009
2010
2009
2010
Total Consolidated Revenues
Consolidated Profit before Tax
Unit: VND billion
2% 7%
1%
9% 24%
2% 887
922
1,259
882
67%
36% 45% 7% 2009 2010 2009 2010
BAOVIET HOLDINGS
Items Total Revenues Profit Before Tax 2009 922 882 2010 1,259 887 Growth 337 6
VND billion
% 36% 1%
Total Revenues
Profit before Tax
4,995
Bao Viet Holdings Bao Viet Insurance Bao Viet Life Bao Viet Bank Bao Viet Securities Others Insurance Finance Banking Others
4,295 311 219
BAO VIET INSURANCE CORPORATION

Items 2009 4,295 219 2010 4,995 311 Growth 700 92
VND billion
% 16% 42%
Total Consolidated Revenues by Subsidiaries
Total Consolidated Revenues by Businesses
2009
2010
2009
2010 Total Revenues Profit Before Tax
44,768 39,333 33,715 29,387
Total Revenues
Profit before Tax
6,124 5,324
456
600
BAO VIET LIFE CORPORATION

2010 2010 2010 2010 Items Total Revenues 2009 5,324 456 2010 6,124 600 Growth 800 144
VND billion
% 15% 32%
2009
2009
2009
2009
Total Consolidated Assets
Total Consolidated Invested Assets under management
Unit: VND billion
Total Revenues
Profit before Tax
Profit Before Tax
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One Bao Viet One New Foundation
ONE BAO VIET - ONE NEW FOUNDATION
BOARD OF DIRECTORS OF BAO VIET HOLDINGS
Mr. Tran Huu Tien

Member of the BOD
Mr. David Fried

Member of the BOD
Mr. Le Quang Binh

Chairman of the BOD
Mdm. Nguyen Thi Phuc Lam

Member of the BOD
Mr. Tran Trong Phuc

Member of the BOD
Mr. Nguyen Duc Tuan

Member of the BOD
Mr. Nguyen Quoc Huy

Member of the BOD
1999 - 2006: Deputy Director of Corporate Finance Department 2006 - present: Director of Corporate Finance Department
2008 - 2010: General Manager Regional Head of Insurance Asia Pacific Present: Group General Manager, Group Head of Insurance of HSBC Holdings plc; Chairman and Chief Executive Officer of HSBC Insurance (Asia-Pacific) Holdings Limited
2003 - 2006: Director of Insurance Department Ministry of Finance 2006 - 2007: Chairman of Vietnam Insurance Corporation 2007 - present: Chairman of Bao Viet Holdings
2003 - 2006: Deputy CEO of Vietnam Insurance Corporation and CEO of Bao Viet Life Company, Member of Vietnam Insurance Corporation BOD. 2006 - 2007: CEO, Member of BOD of Vietnam Insurance Corporation 2007 - present: CEO, Member of BOD of Bao Viet Holdings
7/2004 - 12/2004: Deputy CEO of Vietnam Insurance Corporation and CEO of Bao Viet Vietnam Company 2005 - 2007: CEO of Bao Viet Vietnam Company 2008 - present: CEO of Bao Viet Insurance Corporation, Member of Bao Viet Holdings BOD
2004 - 2006: Deputy CEO of Bao Viet Life Vietnam Company 2006 - 2007: CEO of Bao Viet Life Vietnam Company 2008 - present: CEO of Bao Viet Life Corporation, Member of Bao Viet Holdings BOD
2006 - 2011: Member of the BOD, Head of Supervisory Board of State Capital Investment Corporation (SCIC) 2011 - present: Deputy CEO of State Capital Investment Corporation (SCIC)
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INFORMATION TECHNOLOGY
Develop software and IT infrastructure on a national scale Develop unified customer database
ONE BA VIETONE NEW FOUNDATION BAO

The key task in 2010 was to implement the strategy One Bao Viet One New Foundation through improvements in corporate governance, investment in information technology and human resources, brand development, improving financial capacity and business cooperation.
BRANDING
Unify the brand identity Develop brand on the basis of the core values Support organisational change
HUMAN RESOURCES DEVELOPMENT

Performance management and suitable salary-reward system Training according to the companywide learning map Develop performance-based culture
GOVERNANCE MODEL
Ensure the benefit of shareholders, employees and community Unified and effective governance system Transparent infomation disclosure
COOPERATION
Develop the financial supermarket model Provide customers with comprehensive package of products
BLOCK HEADS AND EXECUTIVES OF BAO VIET HOLDINGS
Mr. Alan Royal, Chief Information Technology Officer: The successful deployment of information technology systems will help Bao Viet change to a centralized management model, helping improve professionalism and effectiveness.
Mr. Phan Tien Nguyen, Chief Human Resources Officer: The introduction of a performance evaluation system in 2010 has contributed to the development of a working culture in which the evaluation for remuneration is on a performance basis.
Mr. Adrian Abbott, Chief Risk Officer: The establishment of the Risk Management Council and Asset Liability Management Committee across the group has created a consistent governance system that helps to improve the financial management of Bao Viet to international standards.
Mr. Duong Duc Chuyen, Chief Investment, Strategy Officer: In 2010, Bao Viet finalized its development strategy and defined the targets, tasks and solutions for 2011-2015. Bao Viet also completed the investment governance mechanism in Holdings and the Subsidiaries.
Mr. Le Hai Phong, Chief Financial & Real Estate Management Officer: 2010 is a significant milestone because Bao Viet has prepared a set of financial statements for the full accounting year according to the international accounting standard, IFRS, as well as Vietnamese standard, VAS.
Mr. Nguyen Thanh Hai, Chief Account: The successful implementation of the Sun Account software system at the Holdings and continuingly at the subsidiaries in 2010 will contribute to improve quality and progress of preparing financial reports as well as information management according to both IFRS and VAS
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BAO VIET 2011-2015 STRATEGY
CORE VALUES OF BAO VIET
MISSION
To ensure the peace of mind, prosperity, and long term benefits for our customers, investors, employees, and community
VISION
To become Vietnams leading financialinsurance group, with solid financial strength, strategically integrating into regional and international markets, focused on three pillars: insurance, banking and investment
STRATEGIC DEVELOPMENT PHASES
COLLECTIVE STRENGTH ADVANCED BUSINESS MODEL NEW FOUNDATION
2012 - 2013
One-stop financial supermarket, centralized management and on-demand service.
2013 - 2015
Create revenue strong and growth in business efficiency, attain international standards for competitiveness, become the leading brand for service quality.
2011 - 2012
Integrated ment in information human resource modern processes, new technology platform, investdevelopment, management financial
unified brand, strengthened capacity, products and services delivering convenience and added values to customers.
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ANNUAL REPORT 2010
1 2 3 4 5
QUALITY
High quality in all activities and services
APPROACHABLE
Friendly and professional; caring to colleagues and customers
TEAMWORK
Cooperation between colleagues within Bao Viet; creating a strong relationship with customers and partners based on mutual trust and understanding
DYNAMIC
Always looking forward; continuous development; creating opportunities and an environment to encourage new standards, ideas and initiatives
RESPONSIBLE
Transparent and honest; responsible to community
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BAO VIET HOLDINGS
ORGANIZATIONAL STRUCTURE
BAO VIET DEVELOPMENT MILESTONES
On 15 October 2010, Bao Viet proudly celebrated its 45 years anniversary as the longest running company in the insurance industry, and also a pioneer in financial services business diversification.
Launch of new brand identity

ANNUAL GENERAL MEETING OF SHAREHOLDERS
Supervisory Board
BOARD OF DIRECTORS
Audit Committee Risk Management Committee
Listing of Bao Viet Holdings shares (BVH) on HOSE
Straegy and Investment Committee y ban Th lao v B nhim Remuneration and Appointment Committee
ALCO Commettee
CHIEF EXECUTIVE OFFICER
Establishment of Bao Viet Commercial Bank (BVB)
BAO VIET HOLDINGS
SUBSIDIARIES AND ASSOCIATED COMPANIES
Operations Block
Bao Viet Insurance Corporation
Successful IPO and establishment of Bao Viet FinanceInsurance Group. On 15 October 2007, Bao Viet Holdings (Parent Company) was granted its business license
Human Resources Block
Bao Viet Life Corporation
Establishment of Bao Viet Fund Management Company (BVF)
Internal Audit Division
Information Technology Block
Bao Viet Fund Management Company
Real Estate Management Block
Establishment of BVSC the first securities company in Vietnam

Bao Viet Securities Company
Financial Management Block
Bao Viet Commercial Joint-Stock Bank
The first and only company providing life insurance products in Viet Nam
Bao Viet Investment Joint Stock Company
Strategy Development Block
Risk Management Block
Transfer into Viet Nam Insurance Cooperation

Bao Viet - Au Lac Limited Company
Investment Block
Associated Company
Establishment of Viet Nam Insurance Company on 15/1/1965 to undertake non-life business
In 2010, Bao Viet Holdings established Investment and Risk Management Blocks in order to enhance the specialization and professionalism of these activities.
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23
SHAREHOLDERS
Share Issues and Change of Shareholder Structure
In 2010, Bao Viet Holdings finalized the private placement to HSBC Insurance (Asia-Pacific) Holdings Limited of 53,682,474 shares. The total amount collected from the sale of shares was VND1,878.8 billion. Following the private placement, there is no change in the shares owned by shareholders other than by HSBC. However there is a resultant change in the overall ownership structure when compared with 2009:
Before the right issue Before Issue Private Placement to HSBC After Private Placement to HSBC No No. Shareholder Number of Shares % Ownership Number of Shares Amount in VND billion % Ownership 1 1 MOF 444,300,000 77.54% 444,300,000 4,443 70.89% 2 2 HSBC 59,125,161 10.32% 53,682,474 112,807,635 1,128 18.00% 3 3 SCIC 20,400,000 3.56% 20,400,000 204 3.26% 4 Others 49,201,444 7.85% 4,096,699 53,298,143 533 7.83% SCIC 20,400,000 3.26% 1,754,400 22,154,400 221 3.26% HSBC 112,807,635 18.00% 9,701,456 122,509,091 1,225 18.00% MOF 444,300,000 70.89% 38,209,800 482,509,800 4,820 70.91% Shareholders Number of Shares % ownership Public Issue with 8.6% Ratio Number of Shares Amount in VND billion % Ownership After the right Issue
Also during 2010, Bao Viet Holdings issued additional shares to existing shareholders to increase charter capital as stipulated in Resolution 03/2010/NQ-DHCD dated 17 April 2010 of the Annual General Shareholders Meeting (AGM). As a result, 53,762,355 shares were issued, accounting for 99.75% of the total shares eligible for issuance, raising a total of VND 645.1 billion.
Other
49,201,444
8.58%
49,201,444
492
7.85%
Total
573,026,605
100.0%
626,709,079
6,267
100.0%
Total
626,709,079
100%
53,762,355
680,471,434
6,804
100%
After the additional issue the shareholder structure of Bao Viet Holdings follows
No.
Shareholder
Number of Share
% Ownership
Major shareholders (Owning more than 5% of charter capital) 1 - Ministry of Finance - HSBC 2
605,018,891 482,509,800 122,509,091
88.91% 70.91% 18.00%
Other shareholders
75,452,543
11.10%
Local shareholders 3 - Institution - Individual
510,186,840 506,684,274 3,502,566
74.97% 74.46% 0.51%
Foreign shareholder 4 - Institution - Individual
170,284,594 169,375,700 908,894
25.02% 24.89% 0.13%
(This structure is based on the closing list of shareholders attending the AGM on 21/3/2011)
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STRATEGIC PARTNERS
HSBC INSURANCE (ASIA-PACIFIC) HOLDINGS LTD STATE CAPITAL INVESTMENT CORPORATION
Statement by Mr. David Fried

HSBC Insurance (Asia-Pacific) Holdings Limited has both life and non-life manufacturing capabilities in nine markets across the Asia Pacific region including the fastest growing emerging markets of China, India, Korea, and Vietnam as well as Hong Kong, Singapore, Malaysia, Macau and Taiwan. HSBC Insurance is the largest administrator of retirement schemes in Hong Kong, capturing almost one third share of the market. In 2010, HSBC Insurances profit before tax exceeded USD1 billion; its premium income grew nearly 30% with total assets of USD31 billion and more than 2,500 staff provided professional support to the business and customers.
We are Bao Viets sole foreign strategic partner and completed our investment of an additional VND1,879bn (USD101mn) for a further 8% shareholding in January 2010. HSBC maintained its 18% stake in the group by fully subscribing to the Rights Issue in November 2010 - investing an additional VND116billion (USD6million). We have partnered with Bao Viet for over three years, working via the HSBC Technical Support and Capability Transfer Agreement (TSCTA). The agreement includes cooperation across the company in areas including corporate governance and risk management, finance, information technology, marketing and communications, bancassurance, and human resources. Our partnership was strengthened in 2010 with additional HSBC executives embedded in Bao Viet. These HSBC members of staff operate as Bao Viet executives in the roles of Deputy Chief Financial Officer; Chief Actuary; Chief Risk Officer; Group Head of Marketing, Communications and Investor Relations; and Deputy Head of Human Resources. HSBC is delighted to support Bao Viets strong and profitable performance in 2010. The groups 45th anniversary was a proud milestone that marked an unmatched legacy in Vietnams financial services industry. Bao Viets successful brand refresh, in January 2010, was an important sign that the company is continuing to evolve and prepare for the future. The companys long history of innovation and development, diversified business and extensive network across Vietnam means it will continue to be one of the leading financialinsurance groups. The HSBC team is helping to drive real and lasting improvements across the group. A key milestone in 2010 was HSBCs involvement in enabling Bao Viet to report its financial accounts and performance according to International Financial Reporting Standards (IFRS) important broader disclosure that reflects a genuine commitment by Bao Viets management team to improve the transparency and quality of financial reporting. HSBC executives are also working with Bao Viet to improve corporate governance standards. This includes the establishment of the Asset Liability Committee (ALCO) and Risk Management Committee (RMC). These meetings are held regularly and are supported by a growing audit programme. HSBC executives are also assisting Bao Viet to manage and implement technology projects worth some USD25 million, to enable and drive business transformation and growth. The adoption of advanced technology and international standards will better enable Bao Viet to support the future needs of customers, employees and agents. We will continue to work with Bao Viets management team to drive the changes and improvements that will consolidate the groups leadership position in Vietnam. We look forward to another successful year in 2011.
Mr. Lai Van Dao

CEO of SCIC
To increase cooperation and to harness the strategic strengths of each party, Bao Viet Holdings and State Capital Investment Corporation (SCIC) signed, on 22 October 2009, a Comprehensive Strategic Cooperation Agreement with the following objectives: Use the resources and strengths of the two companies to satisfy the insurance needs of all companies receiving SCIC investment with competitive pricing and highest service quality Cooperate in investment projects; invest in financial products. Cooperate in introducing, promoting and sharing experiences in corporate governance, financial management, human resources management, and other areas of expertise of Bao Viet and SCIC. According to this Agreement, SCIC committed to carry out the obligations of a strategic investor and develop its long-term interest in Bao Viet. The implementation of the agreement provides an excellent opportunity for Bao Viet to access SCICs partners in order to maximize cooperation and business development opportunities, expand its target customer database, and evolve common business strategies in areas of mutual interest.
Mr. David Fried Group General Manager and Group Head of Insurance
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BAO VIET HOLDINGS SUPERVISORY BOARD

The Supervisory Board attends the quarterly meetings of Bao Viets BOD and the monthly meetings of the CEO with the purpose of supervising the compliance of legal regulations, the charter of Bao Viet Holdings and other internal regulations on administration and management. It also supervises the implementation of the Resolutions arising from the Bao Viet Holdings 2010 AGM. Bao Viet Holdings invests in subsidiaries and joint-venture companies, undertaking financial services and other activities as stipulated by the law. After the successful equitization in 2007, the listing of Holdings shares (code BVH) on HOSE in 2009 and with the technical services support of HSBC Insurance (Asia-Pacific) Holdings Limited, Bao Viet Holdings continues to develop international standard governance machinery throughout Holdings and its subsidiaries. The operation of Bao Viets BOD and the evolution of governance are evidenced as follows:
GOVERNANCE REPORT
The BOD collected official comments of BOD members to resolve nearly 100 issues related to the Holdings business operations including corporate governance, implementation of investment projects, instruction on the implementation of BOD resolutions, AGM and BODs decisions, leading to some notable achievements:
Mr. Nguyen Trung Thuc

Head of the Supervisory Board 04/1998-09/2007: Member of the BOD, Head of the Supervisory Board of Vietnam Insurance Corporation 10/2007 - present: Head of the Supervisory Board of Bao Viet Holdings
The Supervisory Board acts as the focal point in supervising and monitoring the content, scope and progress of 2010 financial reports preparation for Bao Viet Holdings and its subsidiaries with the co-auditors as stipulated by the Law. The Board also prepares bidding invitation for auditing services and distributes these to audit companies as approved by the AGM and cooperates with subsidiaries in choosing independent auditing companies making recommendations to the BOD for approval.
Organizational structure: the BOD agreed to establish Risk Management and Investment Blocks, to appoint Block Heads to supplement the senior leadership team of Bao Viet Holdings.
GOVERNANCE MODEL
The Governance model of Holdings has a structure whereby shareholders invest in Bao Viet Holdings the parent company. The BOD of Bao Viet Holdings was nominated by the General Shareholders Meeting to be the representative body of the shareholders. The organizational structure of Holdings includes BOD, Board of Management and functional Blocks established to manage the capital in subsidiaries, conduct the business of Holdings, and coordinate business activities in subsidiaries. Bao Viet Holdings invests capital and conducts its ownership rights in subsidiaries, joint ventures. Bao Viet Holdings sends capital representatives to subsidiaries and joint ventures to serve on the Members Council/Board of Directors (where Bao Viet invests 100% capital) or to be representatives on the Members Council/Board of Directors. Bao Viet Holdings develops internal governance regulations to ensure the efficient capital management throughout Holdings and in the subsidiaries and joint venture as stipulated in the Enterprise Law, Operation Regulations and Charters of the Holdings and subsidiaries.
Mr. Christopher Alan Edwards

Member of the Supervisory Board
09/2004-05/2007: Regional Chief Finance Officer of HSBC Insurance (AsiaPacific) Holdings Limited 05/2007 - present: Regional Chief Finance Officer of HSBC Insurance (AsiaPacific) Holdings Limited, Member of the Supervisory Board of Bao Viet Holdings.
The Board supervises the auditing content, scope and progress of 2010 financial statements in accordance with the Service Agreement signed with Ernst & Young Vietnam. (E&Y)
Governance mechanism: The BOD instructed the preparation and promulgation of Investment Regulations for Bao Viet Holdings, Regulations for Asset Liability Management Committee, Investment and Asset Management of Bao Viet Holdings, Risk Management of Bao Viet Holdings and other regulations on human resources management.
The Supervisory Board also reviews and examines the Holdings semi-annual financial statements, quarterly financial statements and 2010 annual financial statements as audited by E&Y.
Investment projects: The BOD made decisions on property projects, IT development projects and promoted professionalism in capital management in these projects.
Mr. Le Van Chi

07/2007-01/2008: Deputy CEO of South East Asia Commercial Bank 01/2008 - present: CEO of South East Asia Commercial Bank
The Supervisory Board holds regular discussions with the Holdings functional blocks and with the Audit Committee to gather information about BODs governance, CEOs business execution, and business processes compliance through internal audit results.
Strategy management: the BOD commissioned the preparation and development of 2011-2015 strategies for Holdings and Subsidiaries.
Mr. Nguyen Ngoc Thuy

03/1997-09/2007: Member of the Supervisory Board, Vietnam Insurance Corporation 10/2007 - present: Officer of Internal Supervisory Division of Baoviet Life Corporation, Member of the Supervisory Board of Bao Viet Holdings.
Increased capital to enhance financial capacity: The BOD successfully carried out two capital increases during 2010 and instructed an increase in capital of the life insurance business from VND1,000 billion to VND1,500 billion.
Mr. Tran Minh Thai

6/2005 10/2007: Member of the Supervisory Board, Vietnam Insurance Corporation 11/2007 - present: Accountant of Baoviet Insuarance, Member of the Supervisory Board of Bao Viet Holdings.
In monitoring the administration and execution of the duties of the BOD, CEO and senior managers of Bao Viet Holdings, the Supervisory Board has not identified any unusual or abnormal working practices or processes during 2010. The Supervisory Board and Bao Viets BOD, CEO and senior managers maintain close cooperation and working relationships for the benefit of Holdings, shareholders and for compliance with the laws, charter and internal regulations.
OPERATION OF BAO VIETS BOD

In 2010, the membership of Bao Viet Holdings BOD comprised of seven members. In implementing the Charter of Bao Viet Holdings and Operation Regulations of the BOD, four regular meetings were held in 2010 to review and approve the resolutions under the authority of the BOD.
Provided instruction on credit rating implementation: enhanced transparency by commissioning independent and objective assessment on the management and financial capability of Bao Viet Holdings by leading enterprise credit rating companies. Strengthened the financial transparency for investors at home and abroad.
In 2010, according to the Resolution of the AGM, there was a personnel change in the Supervisory Board membership with Mr Christopher Edwards nominated by the shareholders to replace Mrs Majory Miller as a new Supervisory Board member.
Throughout 2010, the BOD has successfully performed its role in directing the implementation the Groups strategic objectives and establishing a firm foundation on which to build the 2011- 2015 development strategy.
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REMUNERATION OF THE BOARD OF DIRECTORS SUPERVISORY BOARD

In 2010, total actual paid remuneration for Board of Directors members was VND816.67 million (equivalent to 63.90% of the budget approved by Annual General Shareholders Meeting, and 0.096% of profit after corporate income tax of Bao Viet Holdings). There are currently six part-time Bao Viet Holdings Board of Directors members. Total actual paid remuneration for Supervisory Board members was VND275 million (equivalent to 80.86% of the budget approved by Annual General Shareholders Meeting, and 0.032% of profit after corporate income tax of Bao Viet Holdings). At the present Bao Viet Holdings, Supervisory Board comprises four part-time members.
In 2010, the mechanism and operation of audit activities was finalized with the establishment of two main divisions - Life Operations Auditing and Non-Life Operations Auditing staffed by more than 22 auditors. During the year, the Internal Audit Division conducted many audits in accordance with the standards established in the HSBC Technical Support and Capability Transfer Agreement. In the coming year, audit responsibilities will include investment activities. The objective of the Committee is to gradually extend internal audit oversight across all activities to ensure effective risk management within Bao Viet.
In 2010, the Committee researched, prepared and implemented management processes and, policies for senior managers in Bao Viet Holdings; reviewed and evaluated the proposals of Holdings and subsidiaries and provided consultation on the appointment, remuneration of senior managers/leaders in Holdings and three subsidiaries.
Investment-Strategy Committee
The Investment-Strategy Committee of Bao Viet Holdings is chaired by Madam Nguyen Thi Phuc Lam - CEO of Bao Viet Holdings, and was established by the BOD on 10 June 2008 to provide consultation and advice to the BOD of Bao Viet Holdings in preparing business strategy, investment strategy and investment research and evaluation. Since its establishment, the Investment-Strategy Committee has participated in the preparation of 2011-2015 strategy; contributed ideas to the regulations on investment implementation and management; reviewed the projects and enterprises that Bao Viet invests in; taken part in Asset Liability Management Committee, Risk Management Committee. The Investment-Strategy Committee has contributed to the improvement of business efficiency and enhanced risk management in Bao Viet; supported the sustainable growth goal of Bao Viet, ensuring the rights of shareholders, investors, customers, partners, and employees as well as contributing to the state budget. Mr. Danny Lui Deputy Chief Financial Officer
In 2010, Bao Viet Holdings reported its full year financial accounts according to International Financial Reporting Standards (IFRS). This is an important initiative to support analysis and research, providing investors and partners with Bao Viets business results according to internationally recognized standards. The IFRS financial statement is reviewed and appraised periodically dusing Asset Liability Management Committee meetings.
STAKEHOLDER TRANSACTIONS
There were no significant changes (of over 10,000 shares) in the stakes of members from Board of Directors/Members Council, Board of Management, Supervisory Board and their relatives during 2010. No contracts have been signed, and no transactions have been made with the companies of the above stakeholders. Every stakeholder change or relevant transaction, under the State Securities Commission regulations, has been made public.
Risk Management Committee

The Chairman of the Risk Management Committee (RMC) is Mr Adrian Abbott, Chief Risk Officer of Bao Viet Holdings and senior risk management expert of HSBC. The Risk Management Committee of Bao Viet Holdings was established to continue reform the governance model and organizational structure to international standards and practice. The Risk Management Block of the Holdings was established and recruited additional staff to improve professionalism and operations. In 2010, RMCs of the subsidiaries were set up with a view to building up a consistent risk management system across the group. The RMC organized two meetings on the direction and operating plan for Risk during the year. Risk and Investment Analysis Reports, a Market Risk Framework, Credit Risk Limits and Risk Management Table were developed and approved by the RMC. Using the Risk evaluation and analysis, Holdings and subsidiary leaders allocated specific risk management activities for the specialized divisions of each company. RMC successfully fulfilled the basic 2010 targets including the improvement of risk management capacity and technique across the group and the preparation and implementation of risk management policies and processes that will drive attainment of an international standard corporate governance model.
Mr. Nguyen Quoc Huy Chairman of the Audit Committee

In 2010, the Audit Committee was strengthened by the recruitment and training of high quality human resources and increasing specialization in audit activities. The auditing is performed under the processes transferred by HSBC to help the BOD in risk management. Over the past two years, Internal Audit has carried out nearly 20 audits, provided information required to complete the management responsibilities of Bao Viet Holdings and delivered many recommendations for implementation of control measures for insurance business activities and financial management.
REPORTS OF COMMITTEES
To improve the governance efficiency of the company in accordance with international standards, the BOD established functional committees to supervise strategy, auditing, financial management, risk management, senior human resources management, and investment. The operation of these committees is as follows:
Asset Liability Management Committee

The Asset Liability Management Committee (ALCO) is chaired by Madam Nguyen Thi Phuc Lam, CEO of Bao Viet Holdings. ALCO of the Holdings has responsibility to manage the risks threatening the balance of assets and liabilities on the asset sheet of the whole group. ALCO of subsidiaries were established in 2010 to create a financial risk management network across the entire Bao Viet group. ALCO has organized quarterly meeetings in 2010. In these meetings, the committee evaluated the key performance indicators (KPI) of the subsidiaries, the risks related to the changes in asset and liability mix, changes in liquidity, cash flow, and the investment results of the Holdings and subsidiaries. Through financial analysis and evaluation on the basis of both Vietnamese accounting standards (VAS) and international standards (IFRS), ALCO has given effective recommendations on corporate finance governance to the Board of Management and Board of Directors.
Audit Committee
The Chairman of the Audit Committee is Mr Nguyen Quoc Huy, Deputy CEO of the State Capital Investment Corporation (SCIC), and former Deputy CEO of Deloitte-VACO Vietnam. The Audit Committee coordinates and reviews the reasonableness and objectiveness of financial statements based on the audit reports of internationally renowned auditing companies. The main function of the Audit Committee is to give consultation to and support the BOD in maintaining and strengthening the internal control and ensuring compliance in the Holdings and Subsidiaries.
Remuneration-Appointment Committee
The Chairman of this Committee is Mr Nguyen Huu Tien, member of the BOD of Bao Viet Holdings, Head of Corporate Finance Department Ministry of Finance. The main task of this Committee is to prepare the senior human resources development strategy for Bao Viet Holdings and to build up the governance model and human resources strategies.
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Business operation risks that are managed by the RMC of Holdings and the subsidiaries include:
Classification
Risk Management Basis
Credit risk
Risks that customers or partners of Bao Viet cannot or do not want to conduct the commitment signed with Bao Viet Holdings or subsidiaries. Credit risk is under various forms including lending non refundable capital, loan certificates; bonds unpaid amount that is put as debt; government bonds the refunding as committed not to be carried out or ceased; acquisition of enterprises the invalid debt payment. Insurance risk during reinsurance process reinsurance company does not/cannot fulfil the commitment; Cross-border transaction money transfer can be freely implemented and can be banned or temporarily ceased; The holding of the pledged assets - property values drops after the decrease of credit rating.
Insurance risk
Insurance risk relates to uncertainties such as incidents, number and duration of the incidents under the insurance liability approved by insurance company.
Liquidity risk
Liquidity risk relates to the fact that Holdings and subsidiaries cannot carry out the committed debt obligations when the debt is due or can only carry out this obligation at very high cost. This is resulted from many factors, ranging from too many people withdrawing money from the bank to being unable to sell the financial tools at the right time in the market. In general, liquidity risk is managed by using necessary liquidity parameters.
Market risk
Risks related to assets or liabilities can be altered by changes in interest rates or prices. Market risk factors are interest rate risk, credit spread, exchange rate risk and owners equity risk. These risks will be controlled by market risk calculation tools such as: sensitivity limits, value risk limits, stress testing (testing method to check the stability of the system).
Operational risk
Distribution channel risk
Distribution channel is critical in the business of the group; the externally reflected factors are recruitment, maintenance, execution, productivity specialization; remuneration change must be controlled under competitive condition and be consistent with business objectives
Reputation risk
The reputation of Holdings and the subsidiaries is the key factor determining success. Any financial service organization can survive or fail because of its reputation and the trust that such organization brings to clients. Maintaining the trust of customers is the prerequisite goal of the managers and can be achieved through strong financial management and the successful risk control of the managers. However, reputation can be seriously damaged by the failure to comply with relevant laws or by inappropriate behavior or comments in the mass media. It is necessary to set up a strong internal control system within the Holdings and subsidiaries to fully assess the potential impact on reputation, to minimize the risks that may undermine the reputation ranging from inability in operational and financial management to wrong decision in business operation, business strategy.
Residual value risk
Residual value risk is the risk that has bad financial impact due to the change in value of fixed assets at the end of the term.
Strategic risk
Strategic risk is the risk that a company will not be able to recognize and appropriately respond to opportunities and/or challenges arising from market conditions change, some changes may occur in a few years as changes in economic political conditions, and requirements of customers, geographic trends, the development of legislation environment or the acts of competitors. Risks can be minimized by carefully considering the potential opportunities and challenges during the strategy planning.
SUBSIDIARIES
Sustainability risk of the company
Sustainability risk of the company relates to sensitive environmental and/or social issues or being against the sustainable development requirements of the company. In fact, the adverse effects on the environment and society are higher than the economic benefits that it brings. Those risks may arise from the Holdings' services such as asset management, corporate finance, but in general, mostly arise from the lending operation which establishes direct links to the bad affect.
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ANNUAL REPORT 2010
SUBSIDIARIES
Operational risk is the risk of loss from errors, illegal acts, and careless mistakes, errors in processes or external objective causes. Risks hide within each business and involves many aspects. The risks related to credit, market, liquidity, insurance, pension funds, value recovery, strategies, reputation of the business are not operational risk. The purpose of operational risk management is to minimize the loss at acceptable levels, ensure consistency between risk and profit, cost and efficiency.
BAO VIET GENERAL INSURANCE CORPORATION
In 2010, Bao Viet Insurance has exceeded business plans, achieved profitability and growth targets, and invested in the development of its IT system, new products and services.
Mr. TRAN TRONG PHUC Chief Executive Officer
Bao Viet Insurance has also focused efforts during 2010 on establishing a new business and operation foundation by: Investing in the development and modernization of IT software including new systems for policy administration (InsureJ), accounting (Sun Accounts) and e-mail (Lotus Notes). These initiatives will actively support business administration and management; as well as transforming the business model to provide a specialized, centrally managed and one-stop service capability. Focusing on the development of human resources, organizational structure and human resource administration in cooperation with the common direction of Bao Viet Holdings. Developing the bancassurance distribution channel, exploring new distribution channels including e-commerce in cooperation with HSBC, and establishing a call center to enhance customer service quality and convenience. Promote the strengths in motor vehicle insurance, health and personal accident insurance, business disruption insurance, hull insurance, protection and indemnity insurance, hospital expense insurance, etc.
Bao Viet Insurance Corporation (Bao Viet Insurance) is a subsidiary where 100% charter capital is held by Bao Viet Holdings. With more than 45 years of experience in non-life insurance business, Bao Viet Insurance maintains the number one position in the Vietnamese insurance market in terms of reputation, service quality, and market share. Bao Viet Insurance has a nationwide operations network, with 66 branches, over 300 customer centers, in excess of 3,000 employees and 10,000 agents. Business lines of Bao Viet Insurance include non-life insurance, assumed and ceded reinsurance, damage certification, financial investments and other legally registered businesses.
2010 Business Results

In 2010, despite the difficult economic and insurance market, Bao Viet Insurance has successfully achieved revenue and profit targets. Total revenue reached VND4,995 billion, an increase of 16.3% over 2009. Insurance revenues increased nearly 15% over the previous year to VND4,574 billion. Profit before tax is up by over 41% compared with 2009 to VND311 billion. Additionally, Bao Viet Insurance has successfully implemented risk appraisal processes and managed claims to derive profits from insurance business with a combined ratio of 94.2%. Bao Viet Insurance is the number one player in the non-life insurance market with 24.7% market share of primary insurance premium.
2011 Business Plan

Bao Viet Insurance is positioned for success in 2011 by driving three important priorities: INNOVATION the application of advanced IT systems and management models, QUALITY market leader in the delivery of quality products, services and customer satisfaction, EFFICIENCY high productivity, accuracy and profitability. Specific business targets include: Total revenue of over VND5,792 billion Growth rate of 16% Primary premium revenue growth of over 16% Profit after tax growth of over 25.4%
Bao Viet Insurance also aims to maintain its position as the leading non-life insurer in the Vietnam market for the period of 2011-2015, and strives for an average annual growth rate of 16% in terms of primary premium revenue during this period. Key financial indicators
BAO VIET INSURANCE Total revenue 2009 4,295 3,987 296 219 1,013 4,636 16.41% 53.90% 97.59% 2010 4,995 4,574 415 311 1,540 5,721 15.55% 49.30% 94.17% Growth 700 587 119 92 527 1,085 -
VND Billion
(%) 16% 15% 40% 42% 52% 23% -
4,995 4,295 VND Billion VND Billion 219 311
Revenue from insurance businesses Revenue from financial activities Profit before tax Owner equity
4,574
Insurance Revenue
311
Profit Before Tax
2009 2010
Unit: VND Billion
2009
2010
Total asset Return on equity (ROE)
15%
42%
Total Revenues
Profit before Tax
Loss ratio Combined ratio
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FINANCIAL INFORMATION CITED FROM THE FINANCIAL STATEMENTS AUDITED BY E&Y OF BAO VIET GENERAL INSURANCE CORPORATION
BALANCE SHEET AS AT 31 DECEMBER 2010
ASSET CURRENT ASSETS Cash Short-term investments Account receivables Inventories Other short-term assets NON-CURRENT ASSETS Fixed assets Long-term investments Other long-term assets TOTAL ASSETS RESOURCES LIABILITIES Short-term liabilities Reserves Other long-term payables OWNERSEQUITY Owners equity Contributed capital Retained earnings and other funds TOTAL LIABILITIES AND OWNERS EQUITY 4,180,621,301,772 1,050,913,328,325 3,117,944,873,780 11,763,099,667 1,540,037,430,709 1,540,037,430,709 1,500,000,000,000 40,037,430,709 5,720,658,732,481 3,623,201,852,257 958,272,870,093 2,656,941,256,258 7,987,725,906 1,013,100,902,393 1,013,100,902,393 1,000,000,000,000 13,100,902,393 4,636,302,754,650 As at 31 December 2010 VND 3,202,446,387,782 86,398,758,384 1,585,700,800,000 1,479,084,928,228 9,602,608,708 41,659,292,462 2,518,212,344,699 626,633,290,454 1,870,147,088,339 21,431,965,906 5,720,658,732,481 As at 31 December 2009 VND 2,252,540,829,378 104,458,309,835 703,864,000,000 1,409,444,890,826 9,160,988,407 25,612,640,310 2,383,761,925,272 569,493,784,283 1,795,585,009,882 18,683,131,107 4,636,302,754,650
INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2010

ITEMS Total revenue Insurance Operating Revenue Financial Revenue Other Incomes Reinsurance expenses & revenue deduction Current year VND 4,994,672,287,391 4,574,030,982,006 414,940,531,260 5,700,774,125 (1,143,631,627,698) 3,851,040,659,693 (3,540,065,256,909) (2,430,546,218,527) (182,895,430,534) (926,244,164,763) (379,443,085) 310,975,402,784 Corporate income tax (71,479,938,884) 239,495,463,900 Previous year VND 4,294,530,291,067 3,987,319,219,075 296,151,307,473 11,059,764,519 (1,030,842,352,310) 3,263,687,938,757 (3,044,443,182,595) (2,240,573,650,601) (50,239,328,328) (748,323,085,281) (5,307,118,385) 219,244,756,162 (53,018,678,357) 166,226,077,805 -
MEMBERS OF BAO VIET INSURANCES BOARD OF MANAGEMENT

From left to right Mr. Ta Van Can - Deputy Chief Executive Officer Mr. Nguyen Xuan Thuy - Deputy Chief Executive Officer Mr. Tran Trong Phuc - Chief Executive Officer Mr. Nguyen Kim Phu - Deputy Chief Executive Officer Mr. Nguyen Quang Phi - Deputy Chief Executive Officer
Net Revenue Total Expense Insurance Operating expense Financial expense Administrative expense Other expense
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BAO VIET LIFE CORPORATION

2010 has also witnessed a high degree of change and transformation across the entire Bao Viet Life operation with five key foundational initiatives being executed during the year. Enhanced centralization: centralized management for aspects related to the Central Operations Center and finance accounting has been running smoothly in the centre allowing branches focus to business development. IT system deployment: an international standard policy administration system supporting the centralized management model became operational in February 2011. Improved service quality: establishment of telemarketing and customer care departments and provision of frequent training to promote the service quality culture Continue organizational restructuring: consolidate the business development resources, establish and deliver staff planning and training policies, develop appropriate salary and reward policies Focus on business development by specializing the functions of agent development and training, expanding market opportunities and enhancing agent skills and knowledge training Progress in creating a new foundation have contributed to improved competitive capacity through specialization and enhanced productivity. This strengthened competitive capacity will drive significant change in revenue and earnings growth for subsequent development stages.
2010 has been a year for Bao Viet Life to invest in high and sustainable growth, with successes made in terms of revenue and profit growth, customer service quality enhancement; transforming the business model, and developing distribution capabilities.
Mr. NGUYEN DUC TUAN Chief Executive Officer
Bao Viet Life Corporation (Bao Viet Life) is a subsidiary in which 100% charter capital is invested by Bao Viet Holdings. It was the first life insurer in the market and has now been operating for 15 years. Bao Viet Life is a leading life insurer securing a 29.2% of market share in premium revenue. Business lines of Bao Viet Life include life insurance, assumed and ceded reinsurance for life insurance, health insurance and personal accident insurance, fund management, and investment. Bao Viet Life manages 60 branches and over 500 customer centers throughout 63 cities and provinces in Vietnam. It has nearly 2,000 employees and 20,000 agents, serving more than 1.5 million customers.

Bao Viet Lifes 2010 annual results have been positive with total revenues of VND6,124 billion, an increase of 15% compared with 2009, exceeding target by 10%. Premium revenue has risen 9.2% in comparison with 2009 to VND4,046 billion, exceeding target by 2.5%. Profit before tax grew 32% over prior year to VND600 billion. Business growth can be attributed to customer care programs, new products development, and the improved quality of the nationwide distribution system.
2011 Business Plan

The year 2011 marks the 15 year anniversary of Bao Viet Life, also a milestone for the Vietnam life insurance business. Bao Viet Life has set out 2011 targets including 30% market share, nearly VND4,400 billion total revenue, and 8.5% growth of which new underwriting revenue is targeted to grow by 25%. Bao Viet Life will focus on Key financial indicators
VND Billion
increasing the professionalism and productivity within the corporation through product development, completion of the specialized business model transformation process, human resources development and investment, and enhancing agent quality and capability.
BAO VIET LIFE Total revenue New underwriting revenue
2009 5,324 730 3,704 1,615 456 1,527 17,150 23.76% 139.50% 18,000
2010 6,124 760 4,046 2,069 600 1,581 20,594 30.04% 149.30% 19,999
Growth
(%)
800 30 342 455 144 54 3444 1,999
15% 4% 9% 28% 32% 4% 20% 11%
6,124 5,324
Revenue from insurance businesses Revenue from financial activities Profit before tax
456 600 VND Billion VND Billion
20,594
Total Assets
2010
600
Profit before Tax
Owner equity Total asset Return on equity Regulatory solvency ratio
2009
2010
Unit: VND Billion
2009
20%
Profit before Tax
32%
Number of agents
Total Revenues
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FINANCIAL INFORMATION CITED FROM THE FINANCIAL STATEMENTS AUDITED BY E&Y OF BAO VIET LIFE CORPORATION
ASSET CURRENT ASSETS Cash and cash equivalent Current receivables Inventory Other current assets NON-CURRENT ASSETS Fixed assets Long-term investments Other long-term assets TOTAL ASSETS RESOURCES LIABILITIES Current liabilities Non-current liabilities Reserves OWNERS EQUITY Capital Contributed capital Retained earnings and other funds TOTAL LIABILITIES AND OWNERS EQUITY 19,013,237,040,387 3,223,082,409,255 55,137,225,716 15,735,017,405,416 1,581,012,644,669 1,580,677,438,315 1,500,000,000,000 81,012,644,669 20,593,914,478,702 15,622,647,589,106 769,764,756,044 43,951,579,032 14,808,931,254,030 1,527,433,166,152 1,527,433,166,152 1,500,000,000,000 27,433,166,152 17,150,080,755,258
As at 31 December 2010 As at 31 December 2009
VND 1,262,599,237,885 242,980,700,033 1,006,087,352,129 12,917,679,613 613,506,110 19,331,315,240,817 601,102,745,129 18,671,595,612,623 58,616,883,065 20,593,914,478,702
VND 1,200,994,662,126 403,750,624,359 786,648,681,245 10,286,029,983 309,326,539 15,949,086,093,132 551,587,362,491 15,377,320,111,741 20,178,618,900 17,150,080,755,258

ITEMS Total revenue Insurance Operating Revenue Financial Revenue Current year VND 6,115,269,908,663 4,037,442,495,252 2,070,769,668,653 7,057,744,758 (3,540,065,256,909) (4,062,051,307,848) (905,537,696,869) (548,046,962,593) (90,760,988) 599,543,180,365 Corporate income tax (118,549,558,777) 474,998,189,784 Previous year VND 5,323,825,645,427 3,704,401,156,127 1,614,669,789,883 4,754,699,417 (3,044,443,182,595) (4,001,087,536,607) (325,093,882,630) (541,836,833,785) (165,289,438) 455,642,102,967 (88,236,088,293) 362,849,593,644 -
MEMBERS OF BAO VIET LIFES BOARD OF MANAGEMENT
Other Incomes Total Expense Insurance Operating expense Financial expense
From left to right Dr. Nguyen Thanh Quang - Deputy Chief Executive Officer Mr. Nguyen Duc Tuan - Chief Executive Officer Ms. Nguyen Thi Lam Hong - Deputy Chief Executive Officer Mr. Nguyen Quang Tam - Deputy Chief Executive Officer
Administrative expense Other expense
40
41

2010 proved to be a challenging year for investment and the stock markets in general. Over the course of the year, the assets managed by BVF have been relatively flat at approximately VND20,261 billion. Of which almost 90% is managed on behalf of Bao Viet Life Company and 8% is managed on behalf of Bao Viet Insurance (general insurance business). The total revenue reached VND56 billion, equivalent to 83% of that in 2009. BVF return on charter capital reached 42% during the period. Performance (measured as rate of return for each specific client) has exceeded all customer requirements and the portfolio compositions have been in-line with expectations.
BAO VIET FUND MANAGEMENT COMPANY

FINANCIAL INFORMATION CITED FROM THE FINANCIAL STATEMENTS AUDITED BY E&Y OF BAO VIET FUND MANAGEMENT COMPANY
ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments Short-term receivables Other current assets As at 31 December 2010 VND 86,925,900,559 12,029,966,055 46,770,461,000 24,834,282,553 3,291,190,951 780,740,123 780,740,123 87,706,640,682 As at 31 December 2009 VND 99,189,276,182 5,948,360,103 66,158,383,980 26,639,994,156 442,537,943 1,690,771,416 1,690,771,416 100,880,047,598
Mr. BUI TUAN TRUNG Chief Executive Officer
In order to achieve the goals set by our customers in early 2010, continued development of BVF in each and every business line was paramount to our success. In particular, for investment requirements: The average interest of 2010 deposit portfolio was higher than that of the market The Portfolios were constantly balanced to best meet clients liquidity requirements Credit limits agreed with customers were strictly followed The composition of equities and bonds were actively managed to enhance the investment returns Repo activities were carried out to take advantage of market anomalies and further enhance the return of client portfolios (where applicable).
FIXED ASSETS AND LONG-TERM INVESTMENTS Fixed assets TOTAL ASSETS RESOURCES
Bao Viet Fund Management Company is striving towards its goal of international best practice in terms ng TRN TRNG PHC Tng Gim c of fund management and general investment capabilities.
LIABILITIES Current liabilities Non-current liabilities OWNERS EQUITY Capital Chartered capital Undistributed retained earnings TOTAL LIABILITIES AND OWNERS EQUITY
17,331,184,962 17,120,153,829 211,031,133 70,375,455,720 70,375,455,720 50,000,000,000 20,375,455,720 87,706,640,682
16,830,739,231 14,950,234,182 1,880,505,049 84,049,308,367 84,049,308,367 50,000,000,000 34,049,308,367 100,880,047,598

Over the course of 2010, BVF worked closely with assigned HSBC executives to strengthen the organisational and operating structure of the business. In particular focus was given to the organizational structure within BVF and specifically the creation and alignment of a new operating model to enhance BVFs day-to-day efficiency.
Current year VND 45,771,288,984 (84,325,650) 45,686,963,334 Previous year VND 56,533,849,791 (62,393,042) 56,471,456,749 10,479,555,255 2,798,824,000 (31,162,150,466) 198,940,445 (35,217,075) 38,751,408,908 36,214,710,562
ITEMS Revenues from operating activities Expenses from operating activities
Bao Viet Fund Management Company (BVF) is a wholly owned subsidiary of Bao Viet Holdings. Although established as a separate subsidiary in its own right in late 2005, Bao Viet has over 15 years of experience in investment and capital markets. The current financial assets under management of BVF has increased steadily giving the company the enviable position of being one of the top two fund management companies in Vietnam by asset size. BVFs assets under management cover a wide spectrum of services for clients including the management of funds and specific mandated accounts.
2011 Business Plan

Over the course of 2011, BVF plans to further capitalise on the progress made in 2010 and set about more granular development in the area of risk, customer service, product development and IT systems with the objective of international best practise. In addition, BVF will focus on developing a much closer working relationship and support the joining-up of all of Bao Viet Holdings subsidiary businesses to create a better service standard to its customers.
Financial income Financial expenses General and administration expenses
9,888,136,221 (32,776,957,880) 301,964,328 (26,927,681) 23,073,178,322 20,759,969,610
Other income
Other expenses
42
43
BAO VIET COMMERCIAL JOINT STOCK BANK

In 2010, Bao Viet Bank has made impressive gains in terms of business scale growth and profit. In summary this translates to total asset of VND13,718 billion, an increase of 88.69% against 2009; profit before tax of VND176.6 billion, up 131% against 2009; network expansion with 26 transaction offices, up 135% against 2009. Despite the financial market turbulence and tough competition, in the second year of operation, BVB has continued to consolidate the organizational structure, invest in IT systems, develop its network, strengthen product development and grow the operation scale, security. The key aim remains both business efficiency and security. The bank has succeeded in fulfilling its business and organizational structure development. It is encouraging that with a debt balance of VND5,615 billion, Bao Viet Bank currently has no bad debts. Solutions to enhance and develop the foundations built in 2010:
FINANCIAL INFORMATION CITED FROM THE FINANCIAL STATEMENTS AUDITED BY E&Y OF BAO VIET COMMERCIAL JOINT STOCK BANK
31 December 2010 VND ASSETS Cash on hand, gold and gemstones Balances with State Bank of Vietnam (the SBV) Due from the banks Trading securities Loans and advances to customers Investment securities Fixed assets Other assets TOTAL ASSETS LIABILITIES Borrowings from the Ministry of Finance and the SBV Deposits and borrowings from other banks Customer deposits and other amounts due to customers Other liabilities TOTAL LIABILITIES OWNERS EQUITY Capital and reserves Capital Reserves 1,593,235,333,373 3,019,960,785,943 7,291,211,679,405 165,592,643,276 12,070,000,441,997 1,647,870,678,499 1,528,365,919,714 1,500,000,000,000 28,365,919,714 13,717,871,120,496 420,798,732,663 1,709,021,432,606 3,514,340,257,846 62,486,793,925 5,706,647,217,040 1,563,108,012,502 1,509,150,661,813 1,500,000,000,000 9,150,661,813 7,269,755,229,542 122,623,520,804 238,513,449,731 4,355,565,558,413 674,416,600,000 5,581,744,627,368 2,288,627,529,102 80,699,211,213 375,680,623,865 13,717,871,120,496 32,183,579,905 195,829,359,746 3,643,677,486,369 2,250,149,842,704 949,066,441,037 47,587,936,017 151,260,583,764 7,269,755,229,542 S31 December VND
Mr. PHAN DAO VU Chief Executive Officer
Bao Viet Bank continued to make progress in consolidating the organisational structure, investing in IT systems, developing its network, strengthening its product development and growing its operational scale, targeting business efficiency and security.
Bao Viet Commercial Joint Stock Bank (BVB) is currently 52% owned by Bao Viet Holdings. Established in December 2008 with official operations commencing in January 2009, BVB applies the advanced centralized corporate governance model based on the modern IT system and core banking, which directly and constantly connects all branches/transaction offices. This ensures a high quality and timely provision of banking products and services to our customers.
Complete the organizational structure: during 2010, BVB has completed the modern banking management model where functions like revenue generation, risk management and operations are specialised; BVB has also applied centralized management; carried out direct business management by section (Corporate banking and Retail banking) Develop new products: during 2010 BVB has developed 16 new products, focused on retail products and bancassurance. BVB has become one of the banks with the biggest number of bancassurance products on the market. Develope the modern network and distribution: provide 15 outlets more in major markets, develop internet banking .
TOTAL LIABILITIES AND OWNERS EQUITY

ITEMS Interest and similar income Current year VND 920,720,951,902 (632,649,507,831) 288,071,444,071 15,833,714,048 (5,546,370,401) 10,287,343,647 13,111,279,638 43,993,322,604 702,397,011 522,998,343 356,688,785,314 (149,837,064,141) 206,851,721,173 Provision for credit losses PROFIT BEFORE TAX Basic earnings per share (30,159,694,493) 176,692,026,680 132,519,020,010 884 Previous year VND 351,806,966,712 (188,107,295,381) 163,699,671,331 2,789,620,472 (1,292,449,919) 1,497,170,553 114,949,978 (29,487,706) 39,289,848 165,321,594,004 (80,029,804,294) 85,291,789,710 (8,797,229,101) 76,494,560,609 63,108,012,502 421
2011 Business Plan

In 2011, BVB aims to maintain the strong growth demonstrated in 2010 in terms of business efficiency and scale with the total asset growth of 81% and 13% growth of profit before and after tax. This will include expanding and developing the network. So In order to achieve these targets, the bank shall begin implementing key solutions to overcome outstanding issues and enhance inherent strengths, including boosting capital mobilization, developing credit and monetary trading, creating a breakthrough in card trading and ebanking, establishing a proper strategy and regime to promote bancassurance revenue growth, strengthening marketing and communications to raise customers awareness of BVB in the market.
Interest and similar expenses Net interest and similar income Fees and commission income Fees and commission expenses Net gain/(loss) from fees and commission income Net gain/(loss) from foreign currencies trading Net gain/(loss) from securities trading Net gain/(loss) from securities investment Net other operating income TOTAL OPERATING INCOME OPERATING EXPENSE
VND Billion
13,718
Total Assets
growth
88%
44
45
BAO VIET SECURITIES JOINT STOCK COMPANY

BVSC business lines include securities brokerage services, securities investment advisory and investment banking, underwriting, enterprise ownership, form conversion advisory, issue advisory, listing advisory, corporate finance advisory, merger and acquisition advisory, corporate governance advisory, and other financial advisory services.
FINANCIAL INFORMATION CITED FROM THE FINANCIAL STATEMENTS AUDITED BY E&Y OF BAO VIET SECURITIES JOINT STOCK COMPANY
ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments Current accounts receivable Other current assets NON-CURRENT ASSETS Fixed assets Long-term investments Other long-term assets TOTAL ASSETS LIABILITIES 31 December 2010 VND 1,103,765,229,069 290,875,831,010 634,281,294,280 175,208,255,555 3,399,848,224 514,255,891,337 14,772,009,454 486,997,610,397 12,486,271,486 1,618,021,120,406 471,985,576,730 471,924,668,999 60,907,731 1,146,035,543,677 722,339,370,000 610,253,166,720 (186,556,993,043) 1,618,021,120,406 31 December 2009 VND 1,268,338,449,109 475,807,301,959 732,992,652,378 56,500,501,323 3,037,993,449 507,656,860,022 13,926,692,554 479,936,000,000 13,794,167,468 1,775,995,309,131 537,151,954,844 537,083,701,843 68,253,001 1,238,843,354,287 722,339,370,000 610,253,166,720 (93,749,182,433) 1,775,995,309,131

2010 has recorded a key milestone for BVSC. Being the first securities company incorporated in Vietnam, with over 10 years of development and experience, BVSC has attempted to actively contribute to the market development and play a pioneering role.
Mr. NHU DINH HOA Chief Executive Officer
2010 was the year for Bao Viet Securities to focus on strengthening the organizational structure, applying IT to meet customers demands for online trading and investment analysis; boost business development in the fields that generate stable revenue growth and enhance investment risk management.
In 2010, despite facing difficulties caused by unstable markets, the company Board of Management and employees have made encouraging successes. The revenue from underwriting and issue agent has exceeded the plan by 32%. Revenue generated from deposit and others also have exceeded the 2010 plan by 2% and 99%, respectively. Key policies that have been implemented: Focus on strengthening areas that generate sustainable revenue growth such as brokerage, investment advisory and investment banking services; Consolidate and stablize the organizational structure and enhance investment in human resources development; Provide new products and services including the BVS@Trade online trading and BVS@45 analysis to serve investors Invest in IT development
Current liabilities Non-current liabilities OWNERS EQUITY Contributed charter capital Share premium Undistributed earnings and other funds TOTAL LIABILITIES AND OWERS EQUITY
2011 Business Plan

In 2011, BVSC aims to maintain the strong growth demonstrated in 2010 in terms of business efficiency and scale with the total asset growth of 81% and 13% growth of profit before and after tax. This will include expanding and developing the network. So In order to achieve these targets, the bank shall begin implementing key solutions to overcome outstanding issues and enhance inherent strengths, including boosting capital mobilization, developing credit and monetary trading, creating a breakthrough in card trading and ebanking, establishing a proper strategy and regime to promote bancassurance revenue growth, strengthening marketing and communications to raise customers awareness of BVB in the market.

ITEMS Revenues Operating expense General and administrative expense Other income Other expense Current year VND 238,908,803,628 (258,366,846,148) (72,490,788,705) Previous year VND 292,205,149,076 (53,144,117,820) (65,157,617,047) 656,880,561 (90,893,452) 174,469,401,318 174,469,401,318 3,677
16,015,015
(798,494,400) (92,731,310,610) (92,731,310,610)
Established in 1999, Bao Viet Securities Joint Stock Company (BVSC) is the first securities joint stock company incorporated in Vietnam with the initial charter capital of VND49 billion. Today, the company charter capital has reached over VND722 billion, 59.92% of which is contributed by Bao Viet Holdings.
Basic earnings per share
(1,284)
46
47
BAOVIET INVESTMENT JOINT STOCK COMPANY

FINANCIAL INFORMATION CITED FROM THE FINANCIAL STATEMENTS AUDITED BY E&Y OF BAOVIET INVEST
ASSETS CURRENT ASSETS 31 December 2010 VND 156,654,801,656 8,520,657,930 55,355,283,664 92,758,996,462 19,863,600 42,230,918,915 1,349,793,789 912,792,126 39,968,333,000 TOTAL ASSETS RESOURCES 198,885,720,571 31 December 2009 VND 133,898,744,922 32,021,578,798 14,615,981,944 86,881,533,090 379,651,090 41,680,262,866 1,420,887,804 291,042,062 39,968,333,000 175,579,007,788
Under Baoviet Holdings strategy to develop multiple investment and financial services, Baoviet Invest Joint Stock Company (BVINVEST) was established in January 2009 and has been operating in property investment, trading, and supporting services with VND100 billion charter capital. The performance of BVINVEST in 2010 has been encouraging. Total revenue has reached VND98 billion, four times larger than that of 2009. Profit before tax has been VND3.3 billion, growing by 71% against 2009. In addition to investing in property projects and property trading, the company has carried out construction equipment and machines trading, import and export, and
Cash and cash equivalents Current account receivables Inventories Other current assets NON-CURRENT ASSETS Fixed assets Other long-term assets
Mr. BUI THANH NGUYEN Chief Executive Officer
completed 2010 revenue objectives despite market movements. In terms of building management, BVINVEST has absorbed and applied the advanced management techniques and
LIABILITIES Current liabilities OWNERS EQUITY Contributed chartered capital Undistributed earnings and other funds TOTAL LIABILITIES AND OWNERS EQUITY
95,226,805,182 95,226,805,182 103,658,915,389 100,000,000,000 3,658,915,389 198,885,720,571
74,150,904,412 74,150,904,412 101,428,103,376 100,000,000,000 1,428,103,376 175,579,007,788
After two years of operation, BVINVEST has improved the efficiency of Holdings property management and usage, progressively proving its prestige as a professional real estate developer and service provider.
methods to upgrade the building management quality for Baovie buildings including No. 8 Le Thai To, No. 71 Ngo Si Lien - Hanoi and No. 233 Dong Khoi Ho Chi Minh City to international standards. Looking ahead to 2011, with an aim to become one of the leading property investors in Vietnam, BVINVEST has set out the following development objectives: 200% revenue growth rates, equivalent to VND203 billion and VND27 billion profit before tax, eight times larger than that of 2010.
ITEMS

Current year VND 95,961,009,629 (87,940,083,864) 1,934,716,208 (18,600,372) Selling expenses General and administrative expenses Other income Other expenses (653,324,459) (6,024,117,298) 3,259,599,844 2,444,699,882 Earning per share 244 (5,962,386,347) 18,000,000 30,000,000 (12,000,000) 1,731,034,395 1,428,103,376 143 Previous year VND 19,701,041,029 (17,174,828,650) 5,213,919,053 (34,710,690) -
In order to achieve the above objectives, the company will implement key solutions including consolidating the organizational structure, enhancing the professionalism within the company, improving building management capacity, and focusing on the execution of real estate investment and construction projects.
Revenues from sale of goods and rendering of services Costs of goods sold and services rendered
48
49
COMMUNITY INVOLVEMENT AND SHAREHOLDER RELATIONS

COMMUNITY INVOLVEMENT AND SHAREHOLDER RELATIONS
TEN HIGHLIGHTS IN 2010
19/1/2010
Bao Viet launches a new brand identity Bao Viet 45th anniversary
1965 2010
1 2 3
6 7 8
11/6/2010
Bao Viet Insurance increases its charter capital to VND1,500 billion
20/10/2010
Bao Viet Bank connects with Banknet to serve customers
19/6/2010
Bao Viet brand wins Top 20 famous Vietnamese brand award Bao Viet Securities launches BVS@Trade online trading
26/11/2010
17/9/2010
Bao Viet Life Chief Executive Officer receives 2010 Thanh Giong Cup
2010
Bao Viet invests VND15.5 billion in community activities in 2010
4 5
52
ANNUAL REPORT 2010
9 10
15/10/2010
Bao Viet granted the Second rank Independence Medal
2010
Bao Viet Training Center conducts training for over 3,270 participants under the learning map
53
BAO VIET HOLDINGS
COMMUNITY INVOLVEMENT
Besides pursuing its business goals, Bao Viet also demonstrates great care for the community through its corporate social responsibility activities. We also unite with the nation to resolve social issues, contributing to the common economic growth and maintaining social stability. Bao Viet community activities focus on four major areas: youth projects, care for the aged, disaster recovery, and poverty alleviation.
Bao Viet joins the 2009 Hands in Hands and donates VND25 billion to the poor
Bao Viet presents Kim Dong prizes for the school year of 2009 - 2010
Bao Viet Holdings activities on the occasion of Invalids Martyrs Day 27 July 2010
2010 highlights:
Bao Viet Senior Management attend the opening ceremony of a kindergarten in Nam Duong commune
Bao Viet sponsors Mobile Library project to improve literacy among students in Da Nang
TP ON BO
VIT
Bao Viet joins hands to recover flood impacts in the Central area
54
55
30A PROGRAM IS THE KEY SOCIAL SECURITY PROGRAM OF BAO VIET HOLDINGS
Under the 30a Program of the Government, in 2010, on the basis of the project "Boarding school construction, school equipment installation within the areas of the communal secondary schools and medical centers by the Peoples Committee of Pac Nam rural district, Bac Kan province, Bao Viet has committed to donate VND5,448 billion for construction and purchasing items related to facilities including boarding house, medical center, kitchen, table, chair, etc. In Que Phong rural district, Nghe An province, Bao Viet has committed to donate VND4 billion to construct Muong Noc commune Medical center, boarding houses for secondary schools in communes including Tien Phong, Nam Giai, Nam Nhoong, Cam Muon, Quang Phong, Tri Le and Hanh Dich. To maintain the poverty alleviation commitment under the 30a Program in 2011, Bao Viet shall actively join the social security program, committing to support the poor communes all over the country. Investments in the development projects in 2011 shall be focused on health care and education with the estimated budget of VND15 billion. Our strong community and social commitments will definitely enhance the proud tradition of Bao Viet, and establish sustainable value as a leverage for future development.
INVESTOR RELATIONS
In 2010, Bao Viet has strengthened its investor relations and communications capability. Together with the input of HSBC experts, we are enhancing our ability to meet requests for information from shareholders. In addition to daily services related to shareholder certificate management, we also improved shareholder service quality in the following ways in 2010: Publishing information promptly and comprehensively, including audited quarterly financial statements to the media, announcing IFRS financial statements. Promptly advising updates and changes to Bao Viets business operations to ensure openness, transparency and professionalism. Upgrading and investing in the corporate website to better meet shareholders information requirements.
Dr. HOANG VIET HA

BAO VIET HOLDINGS SPOKESPERSON
Mr. NHAN CHIEM

DEPUTY CHIEF OPERATING OFFICER
Mr. NGUYEN VAN DU Vice Chairman of Bac Kan Province Peoples Committee
Despite making certain socioeconomic improvements, Bac Kan is still among the most disadvantaged provinces in the nation. Out of the 122 communes in province, 64 have the proportion of poor households of over 25%. Two rural districts, Ba Be and Pac Nam, with the proportion of poor households of over 50% have taken part in the Rapid and Sustainable Poverty Alleviation Program under the Resolution No. 30a/2008/NQ-CP dated 28 December 2008 by the Government. In accordance with the Resolution No. 30a by the Government, Bao Viet Holdings since 2009 has extended a sincere care, efficient and realistic support to the ethnic people in Pac Nam rural district. In 2009, Bao Viet Holdings contributed VND2,050 million to rebuild 410 temporary houses (VND5 million per house), visited and donated VND183 million to landslide and flood victims in Nhan Mon and Cong Bang communes. In 2010, VND5,448 million was donated to construct a medical center, boarding schools, and purchase tables, chairs, beds for students. For 2011, Bao Viet Holdings has committed to donate VND10 billion to this rural district for national standard medical centers construction. Thanks to the priceless donation from Bao Viet Holdings, and the local governments efficient use for the right purpose, Pac Nam rural district peoples physical and mental lives have been gradually and considerably improved. The proportion of poor households of 56.15% in 2008 has reduced to 43.32% in 2010. Bac Kan Province Peoples Committee would like to express our thanks to the kind attention and support from Bao Viet Holdings shareholders, Board of Directors, Senior Management, and employees as well as HSBC executives for the past time, and hope to receive your further assistance in the future.
The publishing of the audited VAS and IFRS quarterly financial statements, together with the frequent meetings and open discussions with investors are among Bao Viets efforts to make our information open and transparent in accordance with the advanced global corporate governance standards.
The website for Bao Viet Holdings www.baoviet.com.vn - has been upgraded to make it more userfriendly and introduce a quicker, more convenient and easier way to access information. Investors can find useful information related to business performance, events, financial information, and share price.
New look of Bao Viet website
Contact details: Public Relations Division Bao Viet Holding No. 8 Le Thai To, Hanoi
Bao Viet employees actively participated in community development programs in Pac Nam, Bac Kan province to support and encourage poor school children in their studying
56
ANNUAL REPORT 2010
w w w.b aovie t.co m .vn

BAO VIET HOLDINGS
57
HUMAN RESOURCES DEVELOPMENT AND EFFICIENT WORKING ENVIRONMENT ESTABLISHMENT

Being a financial services provider, Bao Viet understands that human resources is our most crucial resource and asset. By 2010, the total number of Bao Viet Holdings employees was 5,520. During the technology transfer process with HSBC, many HSBC executives have participated in and been directly in charge of embedded Bao Viet Holdings leadership roles, and experienced the ongoing innovation and development together with Bao Viet people. Bao Viet is implementing the human resources development strategy based on clearly defining functions and duties, managing staff performance, training and developing people, and offering good benefits. At the same time, we are developing a dynamic and performance oriented enterprise culture. These initiatives are being carried out step by step in Bao Viet Holdings and the subsidiaries.
Dr. PHI TRONG THAO PHI TRONG THAO H O O

Director of Bao Viet Training Center
Revised reward system aimed at the performance based salary, a competitive salary system in comparison with the market, internal equality, and salary differences for people with different performance. Build up and apply the regulations and standards to establish and execute the Job Descriptions, develop the job grade system to evaluate and rate employees capacity Develop learning map system to systematically and methodically improve employees in order to meet business requirements, create a continuous learning and sharing culture within the enterprise to strengthen the resources competitive capacity. These positive changes have been contributing to the implementation of Bao Viet business strategy and group operations, creating the best working environment, enhancing the personal performance and development of all Bao Viet employees.
In 2010, Bao Viet Training Center conducted training for over 3,272 participants under the learning map. Our 2011 plan includes conducting 80 training courses, completing the learning map, and preparing necessary conditions for online training.
FINANCIAL STATEMENTS
58
ANNUAL REPORT 2010
FINANCIAL STATEMENTS
Performance management system to monitor and appraise the objectives implementation and apply the performance based salary. This is regarded as an efficient tool to create the performance oriented working culture.
Training and personal development are among the priorities reflected in Bao Viets strategy for human resources development.
Bao Viet Holdings

Report of the Board of Directors and Audited Separate Financial Statements CONTENTS
Pages REPORT OF THE BOARD OF DIRECTORS AUDITED SEPARATE FINANCIAL STATEMENTS Independent auditors report Separate balance sheet Separate income statement Separate cash flow statement Notes to the separate financial statements 66 67 - 68 69 70 71 - 96 62 - 65
ANNUAL REPORT
REPORT OF THE BOARD OF DIRECTORS

The Board of Directors of Bao Viet Holdings is pleased to present its report and Bao Viet Holdings separate financial statements as at and for the year ended 31 December 2010.

Dependently accounted units Bao Viet Training Centre Infrastructure Construction Project Management Unit Address 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 71 Ngo Sy Lien, Dong Da District, Hanoi
CORPORATE INFORMATION
Bao Viet Holdings (herein referred to as the Holdings) was previously a state-owned company that was equitized and became a joint stock company pursuant to Business License approved by Hanoi Authority for Planning and Investment on 15 October 2007. The Business License was subsequently modified the first time on 29 October 2009, the second time on 18 January 2010 and the third time on 10 May 2010. Below is a summary of information extracted from the third modified Business License dated 10 May 2010: Business License Number: Registered company name: Head Offices address: Operating activities: Charter capital: Number of registered shares: Legal representative: 0100111761 Bao Viet Holdings 8 Le Thai To Street, Hoan Kiem District, Hanoi Equity investments in subsidiaries and associates; financial services and other related services under Vietnamese Laws; real estate businesses; VND 6,267,090,790,000 626,709,079 Ms. Nguyen Thi Phuc Lam - Chief Executive Officer
RESULTS AND DIVIDENDS

The net profits of the Holdings for the year ended 31 December 2010 were VND 852,068,230,108 (for the year ended 31 December 2009: VND 807,785,178,469). In April 2010, Bao Viet Holdings declared and approved to pay out dividends to its shareholders at the rate of 11% for the year 2009. The total dividend amount of VND 630,329,265,500 has been completely paid out during 2010.
SIGNIFICANT EVENTS
Below are the significant events during the year ended 31 December 2010: On 18 January 2010, the Holdings issued 53,682,474 additional shares for an amount of VND 1,878,886,590,000 to HSBC Insurance (Asia Pacific) Holdings Limited (HSBC Insurance) through a private placement, which increased the shareholding of HSBC in Bao Viet Holdings from 10.31% to 18%. This share issuance to HSBC Insurance was made pursuant to the agreement between Bao Viet Holdings and HSBC Insurance and in accordance with Resolution 1527/2009/NQ-DHDCD dated 23 December 2009 of Bao Viet General Shareholders Meeting. These additionally issued shares were listed on 21 April 2010 pursuant to the approval granted by the Ho Chi Minh Stock Exchange. At the 2010 Annual General Meeting on 17 April 2010, the shareholders approved the plan to increase the Holdings charter capital to VND 6,800 billion to enable Bao Viet Holdings to pursue its strategy of increasing investment in core business sectors and continually enhancing its information system and processes in accordance with the strategy agreed at the equitization. The increase in charter capital was effected in January 2011. On 11 June 2010, Bao Viet Holdings increased its investment in Bao Viet Insurance Corporation from VND 1,000 billion to VND 1,500 billion.
The Holdings has listed its entire outstanding stocks of 626,709,079 shares, including the issuance of 53,682,474 shares through a private placement on 18 January 2010 to its strategic partner, HSBC Insurance (Asia Pacific) Holdings Limited, on the Ho Chi Minh Stock Exchange (HOSE). The listing of the additional 53,682,474 shares was approved by the HOSE on 21 April 2010. Subsidiaries and dependently accounted units of the Holdings are as follow: % directly owned 100% 100% 100%
Subsidiaries Bao Viet Insurance Corporation (Bao Viet Insurance) Bao Viet Life Corporation (Bao Viet Life) Bao Viet Fund Management Company (BVF) Bao Viet Securities Joint Stock Company (BVSC) Bao Viet Commercial Joint Stock Bank (Baoviet Bank) Bao Viet Investment Joint Stock Company (BVInvest) Bao Viet Au Lac Limited Company (BV - Au Lac)
Address 35 Hai Ba Trung Street, Hoan Kiem District, Hanoi 1 Dao Duy Anh Street, Dong Da District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 71 Ngo Sy Lien, Dong Da District, Hanoi Ha Lieu, Phuong Lieu, Que Vo District, Bac Ninh Province
Principal activities General insurance products, reinsurance, loss adjustment Life insurance products, reinsurance Management of investment funds and investment portfolios Securities trading, brokerage, portfolio management, underwriting, consulting and securities placement Banking services Real estate investment and consulting, provision of machinery and equipment Vocational driving training
THE BOARD OF DIRECTORS AND SUPERVISORY BOARD

The members of the Board of Directors for the period from 1 January 2010 to the date of this report are: Name Mr. Le Quang Binh Position Chairman Member Member Member Member Member Member Date of appointment 04 October 2007 04 October 2007 04 October 2007 04 October 2007 04 October 2007 04 October 2007 23 September 2009
59.92%
Ms. Nguyen Thi Phuc Lam Mr. Tran Huu Tien
52% 55% 60%
Mr. Tran Trong Phuc Mr. Nguyen Duc Tuan Mr. David Lawrence Fried Mr. Nguyen Quoc Huy
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The members of the Supervisory Board for the period from 1 January 2010 to the date of this report are: Name Mr. Nguyen Trung Thuc Mr. Tran Minh Thai Mr. Nguyen Ngoc Thuy Mr. Le Van Chi Mr. Christopher Edwards Ms. Marjory Miller Position Chairman Member Member Member Member Member Date of appointment 04 October 2007 04 October 2007 04 October 2007 04 October 2007 17 April 2010 04 October 2007 17 April 2010 Date of resignation
REPORT OF THE BOARD OF DIRECTORS STATEMENT OF THE BOARD OF MANAGEMENTS RESPONSIBILITY IN RESPECT OF THE SEPARATE FINANCIAL STATEMENTS
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 Holdings as at 31 December 2010 and of its results and cash flows for the year then ended. In preparing these separate financial statements, management is required to: select suitable accounting policies and then apply them consistently; make judgments 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 Holdings 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 Holdings and ensuring that the accounting records comply with the registered accounting system. It is also responsible for safeguarding the assets of the Holdings 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 separate financial statements.
THE BOARD OF MANAGEMENT

The members of the Board of Management for the period from 1 January 2010 to the date of this report are: Name Ms. Nguyen Thi Phuc Lam Mr. Le Hai Phong Position Chief Executive Officer Chief Financial Officer Chief Property & Estate Officer Mr. Luu Thanh Tam Mr. Phan Tien Nguyen Mr. Duong Duc Chuyen Chief Property & Estate Officer Chief Human Resources Officer Chief Strategy Officer Chief Investment Officer Mr. Alan Royal Mr. Adrian Abbott Mr. Pham Khac Dung Chief Information Officer Chief Risk Officer Chief Operating Officer Date of appointment 15 October 2007 30 June 2008 1 February 2011 30 June 2008 30 June 2008 30 June 2008 22 April 2010 08 September 2008 22 April 2010 30 June 2008 15 November 2010 1 February 2011 Date of resignation
APPROVAL OF THE SEPARATE FINANCIAL STATEMENTS

We hereby approve the accompanying separate financial statements which give a true and fair view of the separate financial position of the Holdings as at 31 December 2010 and the results of its operations and separate cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with the relevant statutory requirements.
On behalf of the Board of Directors:
EVENTS SINCE THE REPORTING DATE

In accordance with the Annual General Meetings Resolution No. 03/2010/NQ-DHDCD dated 17 April 2010, the Holdings issued additional shares to existing shareholders to increase its charter capital in January 2011. The number of shares issued was 53,762,355, which increased the Holdings charter capital to VND 6,804,714,340,000 on 14 January 2011. These additionally issued shares were approved by the Ho Chi Minh Stock Exchange to be listed on 18 February 2011. There have been no other significant events occurring after 31 December 2010 which would require adjustments or disclosures to be made in the separate financial statements.
Mr. Le Quang Binh Chairman Hanoi, Vietnam 25 March 2011
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SEPARATE BALANCE SHEET

as at 31 December 2010
Code 100 110 111 112 120 130 131 133 135 140 150 151 158 200 220 221 222 223 227 228 229 230 250 251 252 258 259 270 A. CURRENT ASSETS I. Cash and cash equivalents 1. Cash 2. Cash equivalents II. Short-term investments III. Accounts receivable 1. Trade receivables 2. Receivables from related parties 3. Other receivables IV. Inventory V. Other current assets 1. Prepaid expense 2. Advances to employees B. NON-CURRENT ASSETS I. Fixed assets 1. Tangible fixed assets Cost Accumulated depreciation 2. Intangible fixed assets Cost Accumulated amortization 3. Construction in progress II. Long-term investments 1. Investments in subsidiaries and BFV1 2. Investments in associates and joint ventures 3. Other long-term investments 4. Provision for impairment of long-term investments TOTAL ASSETS 13 14 12 11 10 7 8 9 6 5 ITEMS Notes 31 December 2010 VND 5,808,051,586,311 851,018,126,099 667,518,126,099 183,500,000,000 3,740,108,825,556 1,206,045,137,574 240,884,671,205 963,674,281,695 1,486,184,674 124,195,000 10,755,302,082 9,731,061,326 1,024,240,756 6,961,614,519,573 541,575,089,338 456,128,626,035 534,271,735,023 (78,143,108,988) 37,256,991,136 60,846,699,942 (23,589,708,806) 48,189,472,167 6,420,039,430,235 4,710,481,388,414 252,769,440,000 1,797,126,521,875 (340,337,920,054) 12,769,666,105,884 31 December 2009 VND 4,158,808,819,789 16,530,312,670 16,530,312,670 3,176,729,847,461 963,931,728,224 108,927,751,454 854,333,957,588 670,019,182 535,706,172 1,081,225,262 1,081,225,262 6,210,971,104,885 447,987,553,936 186,396,038,084 240,959,607,879 (54,563,569,795) 13,947,900,474 32,220,757,228 (18,272,856,754) 247,643,615,378 5,762,983,550,949 4,210,481,388,414 232,862,440,000 1,461,270,934,725 (141,631,212,190) 10,369,779,924,674
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SEPARATE BALANCE SHEET (continued)

SEPARATE INCOME STATEMENT

for the year ended 31 December 2010
31 December 2010 VND 2,259,606,670,990 2,238,341,837,984 15 16 17 18 19 20 23,074,890,475 (398,325,815) 20,258,970,199 1,463,223,728,574 710,164,109,097 22,018,465,454 21,264,833,006 21 21,264,833,006 10,510,059,434,894 22 10,510,059,434,894 6,267,090,790,000 3,076,807,671,197 1,166,160,973,697 12,769,666,105,884 31 December 2009 VND 1,933,355,471,426 1,912,228,266,008 1,109,305,001 75,503,537,980 6,197,547,272 1,324,966,605,661 485,404,104,622 19,047,165,472 21,127,205,418 21,127,205,418 8,436,424,453,248 8,436,424,453,248 5,730,266,050,000 1,734,745,821,197 1,668,684,274 969,743,897,777 10,369,779,924,674 52 60 61 11. EIT reduction for 2008 12. Net profit after tax 13. Earning per share 29 27 852,068,230,108 1,366 7,177,654,108 807,785,178,469 1,410 40 50 51 8. Net other income 9. Profit before tax 10. Current enterprise income tax expense 27 33,846,394,580 887,127,316,248 (35,059,086,140) 19,613,448,183 881,621,550,495 (81,014,026,134) 21 22 24 25 30 31 32 1. Income from operating activities 2. Expenses from operating activities 3. Gross operating profit 4. General and administration expenses 5. Net operating profit 6. Other income 7. Other expenses 26 26 25 23 24 1,210,238,783,745 (198,841,308,054) 1,011,397,475,691 (158,116,554,023) 853,280,921,668 48,323,388,110 (14,476,993,530) 898,758,428,365 57,829,782,161 956,588,210,526 (94,580,108,214) 862,008,102,312 23,694,525,355 (4,081,077,172) Notes Code ITEMS Notes Current year VND Previous year VND
Code 300 310 312 314 315 317 318 323 330 336 400 410 411 412 416 420 440
ITEMS A. LIABILITIES I. Current liabilities 1. Trade payables 2. Statutory obligations 3. Payables to employees 4. Payables to related parties 5. Other payables 6. Bonus and welfare funds II. Non-current liabilities 1. Provisions for severance allowance B. OWNERS EQUITY I. Owners equity 1. Contributed capital 2. Shares premium 3. Foreign exchange difference 4. Undistributed profit TOTAL LIABILITIES AND OWNERS EQUITY
OFF-BALANCE SHEET ITEMS

ITEMS 1. Foreign currency U.S. Dollar (USD) 31 December 2010 1,743,596.40 31 December 2009 1,711,941.14
Mr. Nguyen Thanh Hai Chief Accountant 25 March 2011
Mr. Le Hai Phong Chief Financial Officer
Ms. Nguyen Thi Phuc Lam Chief Executive Officer
Mr. Nguyen Thanh Hai Chief Accountant
25 March 2011
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SEPARATE CASH FLOW STATEMENT

Code I. CASH FLOWS FROM OPERATING ACTIVITIES 01 03 05 06 07 20 1. Cash receipts from rendering of services and other revenue 2. Payments to employees 3. Payments for enterprise income tax 4. Other cash receipts 5. Other cash disbursements Net cash flows from operating activities II. CASH FLOWS FROM INVESTING ACTIVITIES 21 22 25 26 30 1. Payments for purchases and construction of fixed assets 2. Proceeds from disposal and liquidation of fixed assets 3. Investments in bonds, shares and others 4. Proceeds from sale of investments Net cash flows from investing activities III. CASH FLOWS FROM FINANCING ACTIVITIES 31 36 37 40 50 60 61 70 1. Additional capital contribution through share issues 2. Dividends paid to shareholders 3. Cash receipts from existing shareholders for the increase in charter capital Net cash flows from financing activities VI. NET CASH INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period Net foreign exchange difference Cash and cash equivalents at the end of the period 5 1,878,886,590,000 (630,329,265,500) 188,350,073,855 1,435,947,398,355 834,450,324,979 16,530,312,670 37,488,450 851,018,126,099 (128,726,605,000) (128,726,605,000) (39,970,295,420) 56,469,344,502 31,263,588 16,530,312,670 (123,303,077,063) (6,632,078,176,263) 5,523,798,386,525 (1,231,582,866,801) (65,930,491,722) 23,017,345 (3,868,730,362,126) 4,022,197,689,300 87,559,852,797 696,984,803,846 (40,474,620,973) (111,288,125,756) 91,685,400,268 (7,781,663,960) 629,125,793,425 147,931,049,444 (42,709,794,750) (95,987,938,444) 6,784,876,322 (14,821,735,789) 1,196,456,783 ITEMS Notes Current year VND Previous year VND
NOTES TO THE SEPARATE FINANCIAL STATEMENTS

as at and for the year ended 31 December 2010
1. CORPORATE INFORMATION
Bao Viet Holdings (herein referred to as the Holdings) was previously a state-owned company that was equitized and became a joint stock company pursuant to Business License approved by Hanoi Authority for Planning and Investment on 15 October 2007. The Business License was subsequently modified the first time on 29 October 2009, the second time on 18 January 2010 and the third time on 10 May 2010. Current Business License number of the Holdings is 0100111761 pursuant to the third modified Business License on 10 May 2010. Below is a summary of information extracted from the third modified Business License dated 10 May 2010:
Business License Number: Registered company name: Head Offices address: Operating activities: Charter capital: Number of registered shares: Legal representative:
0100111761 Bao Viet Holdings 8 Le Thai To Street, Hoan Kiem District, Ha Noi Equity investments in subsidiaries and associates; financial services and other related services under Vietnamese Laws; real estate businesses. VND 6,267,090,790,000 626,709,079 Ms. Nguyen Thi Phuc Lam - Chief Executive Officer
The Holdings has listed its entire outstanding stocks of 626,709,079 shares, including the issuance of 53,682,474 shares through a private placement on 18 January 2010 to its strategic partner, HSBC Insurance (Asia Pacific) Holdings Limited, on the Ho Chi Minh Stock Exchange (HOSE). The listing of the additional 53,682,474 shares was approved by the HOSE on 21 April 2010. The structure of the Holdings shareholdings as at 31 December 2010 is as follows: Shareholders Founding shareholders The Ministry of Finance HSBC Insurance (Asia Pacific) Holdings Limited State Capital Investment Corporation Other shareholders Total No. of shares 577,507,635 444,300,000 112,807,635 20,400,000 49,201,444 626,709,079 % 92.15% 70.89% 18.00% 3.26% 7.85% 100%
In accordance with the Annual General Meetings Resolution No. 03/2010/NQ-DHDCD dated 17 April 2010, the Holdings issued additional shares to existing shareholders to increase its charter capital in January 2011. The number of shares issued was 53,762,355, which increased the Holdings charter capital to VND 6,804,714,340,000 on 14 January 2011. These additionally issued shares were approved by the Ho Chi Minh Stock Exchange to be listed on 18 February 2011.
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NOTES TO THE SEPARATE FINANCIAL STATEMENTS (continued)

The Holdings has the following subsidiaries and dependently accounted units:

Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and % directly owned Decision No. 100/2005/Q-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).
Subsidiaries
Address
Principal activities
Accounting Standard and guidance issued but not yet effective

Bao Viet Insurance Corporation 35 Hai Ba Trung Street, Hoan Kiem General insurance products, reinsurance, loss 100% (Bao Viet Insurance) District, Hanoi adjustment Bao Viet Life Corporation (Bao 1 Dao Duy Anh Street, Dong Da Life insurance products, reinsurance Viet Life) District, Hanoi 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 1 January 2011.
100%
Bao Viet Fund Management 8 Le Thai To, Hang Trong Ward, Management of investment funds and invest100% Company (BVF) Hoan Kiem District, Hanoi ment portfolios Securities trading, brokerage, portfolio manBao Viet Securities Joint Stock 8 Le Thai To, Hang Trong Ward, agement, underwriting, consulting and securi- 59.92% Company (BVSC) Hoan Kiem District, Hanoi ties placement Bao Viet Commercial Joint Stock 8 Le Thai To, Hang Trong Ward, Banking services Bank (Baoviet Bank) Hoan Kiem District, Hanoi
2.2 Registered accounting documentation system

The registered accounting documentation system is the general journal voucher system.
52%
2.3 Accounting currency

The Holdings maintains its accounting records in Vietnam dong (VND).
Bao Viet Investment Joint Stock 71 Ngo Sy Lien Street, Dong Da Real estate investment and consulting, provi55% Company (BVInvest) District, Hanoi sion of machinery and equipment Bao Viet Au Lac Limited Com- Ha Lieu, Phuong Lieu, Que Vo DisVocational driving training pany (BV - Au Lac) trict, Bac Ninh Province 60%
2.4 Fiscal year

The Holdings financial year starts on 1 January and ends on 31 December.
Dependently accounted units Bao Viet Training Centre Infrastructure Construction Project Management Unit
Address 8, Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 71 Ngo Sy Lien, Dong Da District, Hanoi
3. STATEMENT ON THE COMPLIANCE WITH VIETNAMESE ACCOUNTING STANDARDS AND SYSTEMS

The Board of Management confirms that the Holdings has complied with the Vietnamese Accounting Standards and Systems in preparing the separate financial statements. The Holdings has also followed the accounting policy for the recognition of the revalued land use rights as set out in Note 4.6. The accompanying separate balance sheet, related separate income statement and separate cash flow statement and their utilisation are not designed for those who are not informed about Vietnams accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations in accordance with accounting principles and practices generally accepted in countries other than Vietnam. The separate financial statements reflect only the operations of the Holdings and its dependently accounted units for the year ended 31 December 2010. The consolidated financial statements which include the Holdings and its subsidiaries are prepared separately and independently from the separate financial statements. Users of these separate financial statements should read them together with the consolidated financial statements of the Holdings as at 31 December 2010 and for the year then ended in order to obtain full information on the consolidated financial position, results of operations and cash flows of the Holdings and its subsidiaries as a whole.
2. BASIC OF PREPARATION OF THE SEPARATE FINANCIAL STATEMENTS

2.1 Accounting standards and systems
The separate financial statements of the Holdings, which are expressed in Vietnam dong (VND), are prepared in accordance with the Vietnamese Accounting System and Vietnamese Accounting Standards issued by the Ministry of Finance as per the: Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 1); Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2); Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 3);
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as at and for the year ended 31 December 2010 Transaction Accounting treatment under VAS 10 Accounting treatment under Circular 201
4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Changes in accounting policies and disclosures
The accounting policies adopted by the Holdings in preparation of the separate financial statements are consistent with those followed in the preparation of the Holdings annual financial statements for the year ended 31 December 2009 except for the following changes in the accounting policies in relation to the following:
Translation of short-term mone- All unrealised foreign exchange dif- All unrealised foreign exchange differences are taken tary assets and liabilities denomi- ferences are taken to the separate to the Foreign exchange differences reserve account nated in foreign currencies. income statement. in the equity section of the balance sheet and will be reversed in the following year. Translation of long-term mon- All unrealised foreign exchange dif- - All unrealized foreign exchange gains are taken to etary liabilities denominated in ferences are taken to the separate the income statement. foreign currencies at year end. 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 years. In any case, the total foreign exchange loss to be charged to current years income statement 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.
Application of Circular No. 244/2009/TT-BTC

During 2010, the Holdings implemented Circular No. 244/2009/TT-BTC dated 31 Dec 2009 issued by the Ministry of Finance on amending and supplementing the enterprise accounting regime, which causes the following changes: Stock dividend and bonus shares received are not recognized as income of the Holdings and the respective increase in number of shares are only updated off balance sheet; Bonus and welfare funds are reclassified from owners equity to liabilities. Other than the reclassification of bonus and welfare funds presented in Note 32 to the separate financial statements, comparative figures as at 31 December 2009 and for the year then ended are not restated as Circular 244/2009/TT-BTC does not require retrospective application.
Effects of changes in foreign exchange rates

For the year ended 31 December 2010, the Holdings has adopted Vietnamese Accounting Standard No. 10 - Effects of Changes in Foreign Exchange Rates (the VAS 10). The VAS 10 differs from the accounting policy adopted in prior year under 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 relating to the recognition of unrealised foreign exchange differences as follows: As the impacts of this change in accounting policy on the opening balance of 2010 are immaterial, they have been recorded in this year separate income statement.
4.2 Cash and cash equivalents

Cash and cash equivalents comprise 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.
4.3 Financial investments Investment in subsidiaries

Investments in subsidiaries over which the Holdings has control are carried at cost in the separate financial statements. Appropriated profits from accumulated profits of the subsidiaries arising subsequent to the date of acquisition are recognised in the separate income statement. Distributions from sources other than from such profits are considered a recovery of investment and are deducted from the cost of the investment. A listing of the Holdings subsidiaries is shown in Note 14.1.
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as at and for the year ended 31 December 2010 Investment in BVF1
The capital contribution to BVF1 is accounted for at cost. Profit or loss arising from this investment is recognized in the income statement based on the profit appropriation notice from the Board of Representatives at the reporting date. The provision for impairment losses of investment to BVF1 is recognized when the carrying value of the investment is higher than net asset value (NAV) of BVF 1 at the balance sheet date. Further information of BVF1 and capital contribution of each trustees are shown in Note 14.2.

Unlisted securities
For unlisted shares, the following methods are used in calculating the fair value in order to compare with book value to determine the provision amount: for securities registered to be traded on the trading market of unlisted public companies securities (UPCom), fair value is determined as the average trading prices quoted on UPCom; for securities yet registered to be traded on UPCom, fair value is determined as the average price of public quotations from at least three securities companies as at reporting date; for securities that fair value is not determinable, the Holdings does not make provision for devaluation.
Investment in joint ventures, associates

Investments in joint ventures, associates are accounted for under the cost method of accounting in the separate financial statements. Distributions from the accumulated net profits of the joint ventures, associates arising subsequent to the date of acquisition by the Holdings are recognized as income in the separate income statement. Distributions from sources other than such profits are considered a recovery of investment and are deducted from the cost of the investment. A listing of the Holdings joint ventures and associates is shown in Note 14.3.
Equity investments in other entities

For equity investments in other entities and other long-term investments, a provision for devaluation is set up if the investees are suffering from loss (except where such loss is already included in their business plans prior to the investment). The amount of provision for each investment shall not exceed the invested capital and is calculated according to the following formula given in Circular 228: Investment capital of the Holding x Actual capital contributions of investors in the investee
Investments in securities and other investments

All financial investments are initially recognised at cost and subsequently are recognized at cost less provision for impairments. Short-term investments comprise holdings of listed shares, government bonds, corporate bonds 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 unlisted shares, government bonds, corporate bonds, trusted loans and term-deposits at financial institutions, which are intended to be held for more than one year. Provision amount = Actual capital contributions of investors in the investee Actual owners equity
The basis for setting up the provision is the positive difference between the investors actual capital contributions and the actual amount of owners equity in the investees financial statements at the balance sheet date. The provision amount presented in the balance sheet of the Holdings excludes the provision for devaluation of investments under the trusted investments contracts.
Investments held under trusted investment management contracts

Assets and liabilities under the trusted investments contracts have been aggregated to the separate balance sheet as the management believes that it better reflects the operations of the Holdings.
4.4 Receivables
Receivables comprise of trade receivables and other receivables that are initially recognized at cost and subsequently are recognized at cost less provision for impairment. Provision for impairment of receivables will be made base on their overdue ages. For receivables that are undue and owed by debtors who have become bankrupt or are undergoing dissolution procedures, are missing, have absconded, are prosecuted, detained or tried by law enforcement bodies, are serving sentences or have deceased, provision should be estimated based on the amount of expected loss. The increase or decrease to the provision balance is recorded as an administrative expense in the separate income statement. The Holdings uses the provision policy regulated by the Ministry of Finance in Circular 228/2009/TT-BTC dated 07 December 2009 (Circular 228). Details are as follows:
Provision for devaluation of investments in securities and other investments

The primary source of reference for impairment provisioning is Circular 228/2009/TT-BTC dated 07 December 2009 issued by the Ministry of Finance (the Circular 228). Details of the basis of determination of impairment of investment are as follows:
Listed securities
For listed securities that are carried at cost in accordance with Vietnamese Accounting Standards, if there is objective evidence that their market value is lower than book value, the provision amount is measured as the difference between the securities carrying amount and the closing market value as of the balance sheet date in accordance with the following formula given in Circular 228:
Overdue receivable aging

Overdue from six months to less than one year Number of impaired securities as at reporting date Overdue from one to less than two years x Carrying value of securities Market value of securities Overdue from two to less than three years Overdue over three years
Allowance rate
30% 50% 70% 100%
Provision amount =
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as at and for the year ended 31 December 2010 4.5 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 separate income statement as incurred. When tangible fixed assets are sold or retired, their costs and accumulated depreciation are removed from the balance sheet and any gain or loss resulting from their disposal is included in the separate income statement. Land use rights with indefinite terms are not amortised in accordance with Circular 203/2009/TT-BTC issued by the Ministry of Finance on 20 October 2009.

reserve which was previously created at 10% from the profit after tax and after appropriation for supplementary capital reserve in accordance with the guidance of Circular 64 should be transferred to the retrenchment allowance as allowed under Circular 82.
Other income
Revenues from irregular - activities other than turnover-generating activities are recorded to other incomes as stipulated by VAS 14 - Revenue and other income, including: Revenues from asset liquidation and sale; fines paid by customers for their contract breaches; collected insurance compensation; collected debt which had been written off and included in the preceding period expenses; payable debts now recorded as revenue increase as their owners no longer exist; collected tax amounts which now are reduced and reimbursed; and other revenues.
4.8 Payables and accruals

Payables and accruals are recognised for the amount to be paid in the future for goods and services received, whether or not billed to the Holdings.
Unemployment Insurance Fund

According to the Social Insurance Law No. 71/2006/QH11 issued on 29 June 2006, and Decree 127/2008/ND-CP issued on 12 December 2008, employee and employer are required to contribute 1% each of employee basic salary 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. Vietnam Social Insurance Agency is responsible for the collection, distribution and management of the Fund.
4.9 Employee benefits Post employment benefits

Post employment benefits are paid to retired employees of the Holdings by the Vietnam Social Insurance Agency. The Holdings is required to contribute to these post employment benefits by paying social insurance premiums to the Vietnam Social Insurance Agency at the rate of 16% of employee basic salaries on a monthly basis since 1 January 2010 (15% for the periods before 1 January 2010). The Holdings has no further obligation concerning post employment benefits for its employees other than this.
4.11 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 substantially enacted as at the balance sheet date. Current income tax is charged or credited to the separate 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 Holdings to set off current tax assets against current tax liabilities and when the Holdings intends to settle its current tax assets and liabilities on a net basis. As disclosed in Note 4.1, the Holdings adopted the VAS 10 in relation to foreign currency transactions from the year 2010. However, the Holdings applies Circular 130/2008/TT-BTC dated 26 December 2008 and Circular 177/2009/TT-BTC dated 10 September 2009 issued by the Ministry of Finance in calculating the taxable income relating to these transactions.
4.6 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 separate income statement as incurred. When intangible fixed assets are sold or retired, their costs and accumulated amortisation are removed from the balance sheet and any gain or loss resulting from their disposal is included in the separate income statement. Land use rights are recognised based on the revalued amount as determined by an independent valuer for the land areas that the Holdings had land use right certificates, or was in the process of obtaining the land use right certificates, as at 31 December 2005 for the equitization purpose of the Holdings.
4.10 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Holdings and the revenue can be reliably measured. The following specific revenue recognition criteria must also be met before revenue is recognised:
Voluntary resignation and retrenchment benefits

Voluntary resignation benefits: the Holdings has the obligation, under Section 42 of the Labor Code amended on 2 April 2002, to pay an allowance to voluntarily resigning employees, equal to half of one-months basic salary for each year of employment plus wage allowances (if any) until 31 December 2008. Commencing 1 January 2009, the average monthly salary used in this calculation will be revised at the end of each reporting period based on the average monthly salary of the most recent 6 months up to the reporting date; Retrenchment benefits: the Holdings has the obligation, under Section 17 of the Labor Code, to pay an allowance to employees who are retrenched as a result of organizational restructuring or technological changes. In such cases, the Holdings shall pay to employees an allowance for loss of work equivalent to the aggregate amount of one month salary for each year of employment, but no less than two month salary. Although the obligations under Sections 17 and 42 are compulsory, the implementation of these Sections is subject to detailed guidance by the Ministry of Finance. In accordance with Circular 64/1999/TT-BTC dated 7 June 1999 and subsequently Circular 82/2003/TT-BTC dated 14 August 2003 by the MOF which superseded Circular 64, companies are required to calculate retrenchment allowance at the rate of 1-3% per annum, of the basic salary fund; and the outstanding balance of employee termination
Interest
Revenue is recognised as interest accrues (taking into account the effective yield on the asset) unless the collectability 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.
4.7 Depreciation and amortisation

Depreciation and amortisation of tangible fixed tangible and intangible fixed assets is calculated on a straight-line basis over the estimated useful lives of these assets, which are as follows: Buildings Machinery and equipment Means of transportation and communication Office equipment Other fixed assets Software 6 - 25 years 3 - 7 years 6 - 8 years 3 - 6 years 4 years 3 - 5 years
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:
Dividends and appropriated profits

Income is recognised when the Holdings right to receive the cash dividend or the appropriated profit is established. Stock dividend and bonus shares received are not recognized as income of the Holdings and the respective increase in number of shares are only updated off balance sheet.
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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 temporary 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 in respect of deductible temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, deferred tax assets are recognized 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 utilized. 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 reassessed 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 separate 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 Holdings 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.

5. CASH AND CASH EQUIVALENTS

31 Dec 2010 VND Cash on hand in VND In Holdings Head office In Bao Viet Training Center Cash at bank Cash at bank in VND Bao Viet Holdings own funds Bao Viet Lifes trusted investments Bao Viet Insurances trusted investments MOFs trusted investments Cash at bank in USD Bao Viet Holdings own funds Cash equivalents (*) Bao Viet Holdings own funds Bao Viet Insurances trusted investment contracts MOFs trusted investments 830,825,704 721,861,569 108,964,135 666,687,300,395 666,051,253,350 665,779,662,919 146,417,440 99,432,498 25,740,493 636,047,045 636,047,045 183,500,000,000 124,000,000,000 27,000,000,000 32,500,000,000 851,018,126,099 31 Dec 2009 VND 693,051,531 679,640,280 13,411,251 15,837,261,139 15,443,615,146 13,747,166,957 416,836,059 941,913,244 337,698,886 393,645,993 393,645,993 16,530,312,670
4.12 Offsetting
Financial assets and liabilities are offset and presented on net basis on the separate balance sheet when and only when the Holdings has the intention and legal right to make payment on net basis, or the settlement of financial assets and liabilities happen at the same time.
4.13 Appropriation of net profits

Profit after tax of the Holdings is appropriated in accordance with resolutions of the General Shareholders Meeting and Vietnamese regulatory requirements.
(*) Cash equivalents comprises of term deposits at financial institutions having original maturity of not more than 3 months with interest at rates ranging from 12% to 16% per annum.
4.14 Foreign currency transactions

The Holdings adopted the VAS 10 in relation to foreign currency transactions from the year 2010. Transactions in currencies other than the Holdings reporting currency of VND are recorded at the exchange rates ruling at the date of the transaction. At the end of the year, monetary assets and liabilities denominated in foreign currencies are translated at inter-bank exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the separate income statement. The above guidance related to unrealized foreign exchange differences provided by VAS 10 is different from those stipulated in the Circular 201/2009/TT-BTC issued on 15 October 2009 by the Ministry of Finance providing guidance for the treatment of foreign exchange differences (the Circular 201) as applied by the Holdings in 2009 as described in Note 4.1. The impact to the separate financial statements had the Holdings adopted the Circular 201 in 2010 is presented in Note 30.
6. SHORT-TERM INVESTMENTS
31 Dec 2010 VND Short-term deposits in VND at financial institutions (**) From Bao Viet Holdings own funds From trusted investments of Bao Viet Life From trusted investments of Bao Viet Insurance From trusted investments of MOF Short-term deposits in USD at financial institutions ( VND equivalent) (**) From Bao Viet Holdings own funds Short-term portion of bonds Bao Viet Holdings own funds Total short term investments 3,740,108,825,556 59,429,557,461 59,429,557,461 3,176,729,847,461 32,373,720,000 32.373.720.000 30,320,290,000 30.320.290.000 3,088,006,000,000 483,529,105,556 136,200,000,000 3,707,735,105,556 2,116,760,503,079 416,700,000,000 106,439,496,921 447,080,000,000 3,086,980,000,000 31 Dec 2009 VND
(**) The above short-term deposits at financial institutions have maturity not more than one year and interest at rates ranging from 8.2%% p.a. to 17.5% p.a. for VND and being 1% p.a. for USD.
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7. TRADE RECEIVABLES
Trade receivables represent the interest receivables from investment activities carried out by the Holdings: 31 Dec 2010 VND Interest receivables from: Investments of the Holdings own funds Investments trusted by Bao Viet Life Investments trusted by Bao Viet Insurance Investments trusted by MOF 163,777,164,785 60,177,019,242 16,529,653,845 400,833,333 240,884,671,205 71,961,976,304 27,723,341,367 6,764,865,452 2,477,568,331 108,927,751,454 31 Dec 2009 VND
11. TANGIBLE FIXED ASSETS

Building VND Machinery & equipment VND Means of transportation and communication VND 33,974,348,890 64,806,430,739 64,806,430,739 98,780,779,629 Office equipment VND Other fixed assets VND Total VND
Items
Cost: Balance at 31 December 2009 Additions: New purchases Newly constructed or transferred from CIP Balance at 31 December 2010 164,587,933,800 219,793,540,625 219,793,540,625 384,381,474,425 919,234,639 919,234,639 41,420,110,550 8,712,155,780 2,813,155,780 5,899,000,000 50,132,266,330 57,980,000 57,980,000 240,959,607,879 293,312,127,144 8,712,155,780 284,599,971,364 534,271,735,023
8. RECEIVABLES FROM RELATED PARTIES

31 Dec 2010 VND Receivables from Bao Viet Life Receivables from Bao Viet Insurance Receivables from BVF Receivables from BVSC Receivables from BV - Au Lac Receivables from Bao Viet Bank 612,634,690,349 318,148,907,505 23,583,899,190 4,915,901,362 1,260,000 4,389,623,289 963,674,281,695 31 Dec 2009 VND 601,016,051,505 213,453,540,178 37,469,189,623 1,954,264,162 1,260,000 439,652,120 854,333,957,588
Accumulated depreciation: Balance at 31 December 2009 Depreciation for the year Balance at 31 December 2010 Net book value: Balance at 31 December 2009 Balance at 31 December 2010 140,277,266,690 351,016,145,803 57,542,542 21,199,884 29,540,823,721 85,753,102,726 16,505,039,391 19,333,587,662 15,365,740 4,589,960 186,396,038,084 456,128,626,035 24,310,667,110 9,054,661,512 33,365,328,622 861,692,097 36,342,658 898,034,755 4,433,525,169 8,594,151,734 13,027,676,903 24,915,071,159 5,883,607,509 30,798,678,668 42,614,260 10,775,780 53,390,040 54,563,569,795 23,579,539,193 78,143,108,988
12. INTANGIBLE FIXED ASSETS

Items Land use rights Software VND VND 11,667,900,000 11,667,900,000 20,552,857,228 5,322,093,000 23,303,849,714 49,178,799,942 Total VND 32,220,757,228 5,322,093,000 23,303,849,714 60,846,699,942
9. OTHER RECEIVABLES
31 Dec 2010 VND North East Mai Linh Joint Stock Company Green Star Joint Stock Company Dat Viet Energy Investment Joint Stock Company S.S.G Group Joint Stock Company Advances to Financial Regime Drafting Divisions Petroleum Vietnam SSG Real estate JSC LG Electronic Vietnam Others 5,000,000 26,239,697 579,564,331 270,335,800 162,593,174 176,982,251 265,469,421 1,486,184,674 31 Dec 2009 VND 5,000,000 26,239,697 399,822,222 238,957,263 670,019,182
Cost: Balance at 31 December 2009 Addition New purchases Transferred from CIP Balance at 31 December 2010 Accumulated amortisation: Balance at 31 December 2009 Amortisation during the year Balance at 31 December 2010 Net book value: Balance at 31 December 2009 Balance at 31 December 2010 11,667,900,000 11,667,900,000 2,280,000,474 25,589,091,136 13,947,900,474 37,256,991,136 18,272,856,754 5,316,852,052 23,589,708,806 18,272,856,754 5,316,852,052 23,589,708,806
10. PREPAID EXPENSE

This represents the expenditures related to the Technical Support and Capability Transfer Agreement with HSBC Insurance (Asia Pacific) Holdings Limited which is allocated to expense for 2 years. During the year 2010, VND 9,731,061,326 was allocated into expense and the remaining of VND 9,731,061,326 will be allocated to expense in 2011.
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Trusted investment Trusted investment from Bao Viet Life from Bao Viet Insurance VND VND 77,719,440,000 71,205,200,000 71,205,200,000 148,924,640,000 59,872,226,767 2,000,000,000 57,872,226,767 59,872,226,767 Long-term investment of the Holdings VND 4,616,291,148,720 94,190,239,694 175,050,000,000 1,666,049,095,108 632,871,555,108 200,000,000,000 833,177,540,000 6,551,580,483,522 Total VND 4,616,291,148,720 94,190,239,694 252,769,440,000 1,797,126,521,875 632,871,555,108 202,000,000,000 962,254,966,767 6,760,377,350,289
13. CONSTRUCTION IN PROGRESS

Items Items 31 Dec 2009 VND Increases VND Decreases VND 31 Dec 2010 VND Investment in subsidiaries Investment in BVF1 Headquarter at No 8 Le Thai To, Hanoi Office at No 233 Dong Khoi, HCM Bao Viet Ha Tinh Office Bao Viet Thai Nguyen Office (*) Bao Viet Ha Tay Office Bao Viet An Giang Office BVAccount Software Human resource management Software International accounting software Financial statement consolidation software Anti Virus software Lotus Note software The Holdings Information Center Others 105,024 183,622,163,685 397,105,337 19.917.161.261 25,000,000,000 610,191,011 2,360,570,920 4,176,981,077 170,005,900 10,396,985,085 992,346,078 247,643,615,378 2,677,497,159 32,855,601,387 235,620,226 139,952,554 7,681,099,600 1,047,989,200 1,530,053,100 15,504,757,483 68,455,915,774 801,556,000 130,930,042,483 2,677,602,183 216,000,000,000 15.910.650.980 139,952,554 11,858,080,677 1,700,059,000 15,504,757,483 64,806,430,739 1,786,652,078 330,384,185,694 477,765,072 397,105,337 4.006.510.281 25,235,620,226 610,191,011 2,360,570,920 1,047,989,200 14,046,470,120 7,250,000 48,189,472,167 Provision for impairment of listed shares (*) Part of Bao Viet Thai Nguyen Office Building, owned by Bao Viet Insurance, was constructed under the management of the Holdings, and was recorded as construction in progress in the Holdings book. During 2010, the Holdings has transferred a completed part with a finalised value of VND 15,910,650,980 to be recognised as fixed assets at Bao Viet Insurance. Investment in associates and joint- ventures Other long-term investments Bonds Term deposits Other long-term investments
Provision for impairment of long-term investments

This represents provision for impairment of listed shares, deposit contracts, investment in BVF1 and unlisted shares as at 31 December 2010. Details of the provision for impairment of long-term financial investments are as follows: 31 Dec 2010 VND (176,919,725,000) (58,312,000,000) (95,397,026,975) (9,709,168,079) (340,337,920,054) Provision for impairment of unlisted shares Provision for impairment of deposit contracts Provision for impairment of net assets of BVF1 31 Dec 2009 VND (57,280,000,000) (79,839,500,000) (4,511,712,190) (141,631,212,190)
14. LONG-TERM INVESTMENTS

Items Investment in subsidiaries and BVF1 Investment in subsidiaries Investment in BVF1 Investment in associates and joint-ventures Other long-term investments Bonds Term deposits Other long-term investments Provision for impairment of long-term investments 14.1 14.2 14.3 14.4 14.4.a 14.4.b 14.4.c Notes 31 Dec 2010 VND 4,710,481,388,414 4,616,291,148,720 94,190,239,694 252,769,440,000 1,797,126,521,875 632,871,555,108 202,000,000,000 962,254,966,767 6,760,377,350,289 (340,337,920,054) 6,420,039,430,235 31 Dec 2009 VND 4,210,481,388,414 4,116,291,148,720 94,190,239,694 232,862,440,000 1,461,270,934,725 531,511,227,958 929,759,706,767 5,904,614,763,139 (141,631,212,190) 5,762,983,550,949 Bao Viet Life Bao Viet Insurance BVF BVSC Baoviet Bank BVInvest BV - Au Lac
14.1 Investment in subsidiaries

31 Dec 2010 VND 1,500,000,000,000 1,500,000,000,000 50,000,000,000 694,895,148,720 780,000,000,000 55,000,000,000 36,396,000,000 4,616,291,148,720 31 Dec 2009 VND 1,500,000,000,000 1,000,000,000,000 50,000,000,000 694,895,148,720 780,000,000,000 55,000,000,000 36,396,000,000 4,116,291,148,720
Details of long-term investments by sources of capital as at 31 December 2010 are as follows:
Details of investments in subsidiaries as at 31 December 2010 are as follows:
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Investee Charter capital VND 1,500,000,000,000 1,500,000,000,000 50,000,000,000 722,339,370,000 780,000,000,000 100,000,000,000 60,660,000,000 Committed contribution capital VND 1,500,000,000,000 1,500,000,000,000 50,000,000,000 432,811,930,000 780,000,000,000 55,000,000,000 36,396,000,000 Contributed capital VND 1,500,000,000,000 1,500,000,000,000 50,000,000,000 694,895,148,720 780,000,000,000 55,000,000,000 36,396,000,000 4,616,291,148,720

14.3 Investments in associates and joint ventures (continued)

Investment from trusted capital of Bao Viet Life Baoviet Tourism Hotel JSC International Investment & Construction Joint Stock Company (VIGEBA) Quang Minh Project Long Viet Investment and Construction JSC 77,719,440,000 9,450,000,000 39,000,000,000 29,269,440,000 252,769,440,000 Details of the investments in associates and joint ventures as at 31 December 2010 are as follows:
Invested company Charter capital VND Committed contribution capital VND 21.000.000.000 % Contributed capital VND Capital to be contributed VND 4.500.000.000
61,712,440,000 4,250,000,000 39,000,000,000 14,000,000,000 4,462,440,000 232,862,440,000
Bao Viet Life Bao Viet Insurance BVF BVSC Baoviet Bank BVInvest BV - Au Lac
Investments in Bao Viet Securities Investment Fund (BVF1)

BVF1 was established as a closed-end member investment fund in Vietnam in accordance with License No. 05/UBCK-TLQTV issued by the State Securities Commission on 19 July 2006. The Fund was licensed to operate for a period of five years. BVF1 originally had a charter capital of VND 500,000,000,000, equivalent to 50,000,000 units with a par value of VND 10,000 per unit. BVF1 increased its charter 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 BVF, a subsidiary of the Holdings. The custodian bank of the Fund is HSBC Bank (Vietnam) Ltd. At 31 December 2010, direct and indirect holding of the Holdings in BVF1 is as follows: Contributed capital VND Direct investment of the Holdings Indirect investment via subsidiaries Bao Viet Life Bao Viet Insurance 94,190,239,694 821,659,537,741 601,214,295,907 220,445,241,834 915,849,777,435 % of charter capital VND 9.42% 82.16% 60.12% 22.04% 91.58%
Associates Baoviet Tourism Hotel JSC VIGEBA Long Viet Investment and Construction JSC Joint ventures Bao Viet Tokio Marine Insurance Joint Venture Company (Control right: 50%) 252.769.440.000 300.000.000.000 153.000.000.000 51% 153.000.000.000 60.000.000.000 35% 16.500.000.000
180.000.000.000 54.000.000.000 65.043.200.000 29.269.440.000
30% 45%
54.000.000.000 29.269.440.000
14.4 Other long-term investments

14.4.a Bonds
31 Dec 2010 VND Corporate Bonds Government Bonds 534,421,421,004 98,450,134,104 632,871,555,108 31 Dec 2009 VND 487,604,752,707 43,906,475,251 531,511,227,958
14.3 Investments in associates and joint ventures

31 Dec 2010 VND Investments from Bao Viet Holdings own funds Baoviet Tourism Hotel JSC Bao Viet Tokio Marine Insurance Joint Venture Company International Investment and Construction JSC (VIGEBA) 175,050,000,000 7,050,000,000 153,000,000,000 15,000,000,000 31 Dec 2009 VND 171,150,000,000 3,150,000,000 153,000,000,000 15,000,000,000
The Holdings bonds include government bonds with interest at rates ranging from 7.86% p.a. to 12.1% p.a. and corporate bonds with interest at rates ranging from 9.4% p.a. to 14.05% p.a.
14.4.b
Long term deposits

31 Dec 2010 VND 31 Dec 2009 VND -
Long term deposits in VND at financial institutions From Bao Viet Insurances trusted funds From Bao Viet Holdings own funds 200,000,000,000 2,000,000,000 202,000,000,000
The Holdings long term deposits in VND at financial institutions include term deposits at Bank for Investment and Development of Vietnam (BIDV) and Thanh Hoa Development Bank with interest at rates ranging from 10.5% p.a. to 11.5% p.a. and one term deposit contract at Da Nang Development Fund with interest rate at 11.3% p.a.
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14.4.c Other long-term investments

31 Dec 2010 Quantity of shares
Investments from Holdings own funds Maritime Commercial Joint Stock Bank Saigon Ha Long Joint Stock Company Vietnam Ocean Shipping Company SSG Construction and Real Estate Joint Stock Company Viet Long Growth Investment Fund Bao Long Insurance Joint Stock Company HiPT Group Joint Stock Company Vietnam National Reinsurance Corporation Sai Gon Beer Alcohol Beverage Joint Stock Company CMC Corporation Vietnam Commercial Joint Stock Bank of Foreign Trade Investments from Bao Viet Life s trusted capital Hai Phong Thermal Power Joint Stock Company Tay Ninh Cable Car Tour Joint Stock Company Tay Ninh Transportation Joint Stock Company Hai Au Shipping Joint Stock Company Hanoi Entertainment Service Joint Stock Company Saigon Phu Quoc Joint Stock Company Investments from Bao Viet Insurances trusted capital Da Nang Bus and Trading Services Company Quang Nam Transportation JSC Vietnam Ocean Shipping Company Hai Phong Thermal Power Joint Stock Company
15. TRADE PAYABLES

31 Dec 2009 Cost Quantity of shares VND 833,177,540,000 3,937,542 1,000,000 3,000,000 2,750,000 3,000,000 6,368,272 1,766,250 5,762,400 500,000 3,200,000 1,092,790 39,375,420,000 10,000,000,000 59,587,500,000 225,000,000,000 30,450,000,000 63,682,720,000 63,250,000,000 57,624,000,000 35,000,000,000 144,000,000,000 105,207,900,000 71,205,200,000 3,777,165 511,490 55,070 441,000 1,800,000 502,720 37,771,650,000 5,114,900,000 550,700,000 4,410,000,000 18,330,750,000 5,027,200,000 57,872,226,767 20,000 58,138 1,000,000 3,722,835 200,000,000 581,376,767 19,862,500,000 37,228,350,000 962,254,966,767 20,000 58,138 1,000,000 3,722,835 3,777,165 538,890 55,070 441,000 1,800,000 502,720 3,937,542 1,000,000 3,000,000 2,250,000 3,000,000 3,184,136 1,125,000 5,762,400 500,000 3,200,000 1,000,000 Cost VND 800,408,280,000 39,375,420,000 10,000,000,000 59,587,500,000 225,000,000,000 30,450,000,000 31,841,360,000 63,250,000,000 57,624,000,000 35,000,000,000 144,000,000,000 104,280,000,000 71,479,200,000 37,771,650,000 5,388,900,000 550,700,000 4,410,000,000 18,330,750,000 5,027,200,000 57,872,226,767 200,000,000 581,376,767 19,862,500,000 37,228,350,000 929,759,706,767 Salary fund payable Taxes Value added tax Enterprise Income Tax Land leasing fee Other taxes License duty Foreign contractor withholding tax Personal income tax Irregular income tax 676,205,276 73,550,488,349 1,276,844,355 600,640,537 596,265,579 79,938,239 75,503,537,980 Enterprise Income Tax expenses for the year is presented in Note 27. 3,632,021,985 35,059,086,140 314,369,742 6,018,631,927 3,000,000 2,687,856,846 2,793,646,349 534,128,732 45,024,109,794 2,793,468,382 111,288,125,756 314,369,742 6,530,009,709 3,000,000 3,286,663,364 2,927,166,465 313,179,880 120,925,973,589 1,514,758,879 (2,678,551,267) 765,466,573 1,834,019 462,745,463 300,887,091 (398,325,815) Prepaid interest from term deposits Prepaid interest from bonds Dividend advance Medicine Technology Development Joint Stock Company Contractors of Building No. 8 Le Thai To Others 31 Dec 2010 VND 13,709,361,125 3,032,054,795 4,881,550,723 110,805,001 518,618,831 822,500,000 23,074,890,475 31 Dec 2009 VND 110,805,001 998,500,000 1,109,305,001
16. STATUTORY OBLIGATIONS

31 Dec 2009 VND Increase VND Paid during the year VND 31 Dec 2010 VND
17. PAYABLES TO EMPLOYEES

31 Dec 2010 VND 20,258,970,199 20,258,970,199 31 Dec 2009 VND 6,197,547,272 6,197,547,272
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18. PAYABLES TO RELATED PARTIES

31 Dec 2010 VND Payables to Bao Viet Life Payables to Bao Viet Insurance Payables to BVInvest 1,089,644,890,232 365,293,699,484 8,285,138,858 1,463,223,728,574 31 Dec 2009 VND 975,576,515,708 347,702,226,512 1,687,863,441 1,324,966,605,661
21. PROVISIONS FOR SEVERANCE ALLOWANCE

31 Dec 2010 VND Opening balance Increase Utilized Closing balance 21,127,205,418 147,059,588 (9,432,000) 21,264,833,006 31 Dec 2009 VND 21,227,073,732 103,982,986 (203,851,300) 21,127,205,418
22. OWNERS EQUITY 19. OTHER PAYABLES

31 Dec 2010 VND Trade Unions fees Social and health insurance Unemployment Insurance Payable related to BAVINA liquidation Payable for HSBC Insurance Asia Pacific Advance from shareholders (*) Dividend payable to the Ministry of Finance (**) Payables for Thanh Vinh Furniture Ltd. Payables related to 30a Program Deposits from tenants at 233 Dong Khoi Other payables 1,078,649,472 190,148,379 17,901,180 10,423,137,760 646,867,673,855 32,926,573,826 190,000,000 14,386,072,248 3,180,775,820 903,176,557 710,164,109,097 31 Dec 2009 VND 751,370,685 119,865,509 12,193,416,456 16,736,723,282 449,895,267,217 5,135,707,709 571,753,764 485,404,104,622 Current year VND Interest from demand deposits (**) This relates to the 2008 dividend payable to MOF that the Holdings was authorized to use to increase MOFs contribution in the Holdings charter capital. During the year 2010, an amount of VND 458,517,600,000 was transferred to a bank account for the preparation of the MOFs contribution in the Holdings charter capital that took place in January 2011. Interest from term deposits Gain from trading securities Income from dividends or distributed profits Bao Viet Insurance Bao Viet Life 31 Dec 2009 VND Bonus Fund Welfare Fund 11,678,792,153 7,368,373,319 19,047,165,472 Increased during the year VND 6,646,711,071 17,586,844,283 24,233,555,354 Used during the year VND 3,725,342,039 17,536,913,333 21,262,255,372 31 Dec 2010 VND 14,600,161,185 7,418,304,269 22,018,465,454 BVF Bao Viet Bank BVSC Bao Viet Tokio Marine Insurance Joint Venture Company Shared dividends from other equity investments Gain from foreign exchange rate differences Income from other financial activities 948,688,305 408,931,325,919 64,230,038,578 731,415,531,077 197,583,757,718 402,095,241,388 19,337,457,239 70,200,000,000 9,911,913,955 32,287,160,777 3,409,602,724 1,303,597,142 1,210,238,783,745 Previous year VND 28,864,672,094 246,459,545,855 62,236,356,695 558,730,600,086 149,205,247,802 326,162,856,501 33,893,752,812 6,390,761,070 13,935,661,901 29,142,320,000 2,467,253,635 898,758,428,365 Contributed Capital VND
As at 31 December 2009 Additional capital contribution Profit of current year Dividends for the year 2009 paid to Shareholders Appropriation to bonus and welfare fund for the year 2009 Remuneration to BOD and Supervisory Committee for the year Recognition of foreign exchange difference to income of the year As at 31 December 2010 5,730,266,050,000 536,824,740,000 6,267,090,790,000
Shares Foreign Exchange Premium Difference VND VND

1,734,745,821,197 1,342,061,850,000 3,076,807,671,197 1,668,684,274 (1,668,684,274) -
Undistributed Profit VND

969,743,897,777 852,068,230,108 (630,329,265,500) (24,233,555,354) (1,088,333,334) 1,166,160,973,697
Total VND
8,436,424,453,248 1,878,886,590,000 852,068,230,108 (630,329,265,500) (24,233,555,354) (1,088,333,334) (1,668,684,274) 10,510,059,434,894
23. INCOME FROM OPERATING ACTIVITIES
(*) This represents the subscription money received from existing shareholders for their exercise of right issues in January 2011.
20. BONUS AND WELFARE FUNDS
90
ANNUAL REPORT 2010
91


24. EXPENSES FROM OPERATING ACTIVITIES

Current year VND Reversal of provision for impairment of investments Provision for impairment of investments Other financial expenses 198,706,707,864 134,600,190 198,841,308,054 Previous year VND (58,133,911,004) 304,128,843 (57,829,782,161)
27. ENTERPRISE INCOME TAX

The Holdings has the obligation to pay Enterprise Income Tax (EIT) at the rate of 25 % of taxable profits of the period. The Holdings tax returns are subject to examination by the tax authorities. Because the application of tax laws and regulations to many types of transactions is susceptible to varying interpretations, the amounts reported in the audited separate financial statements could be changed at a later date upon final determination by the tax authorities. The current tax payable is based on taxable profit for the period. The taxable profit of the Holdings for the period differs from the profit as reported in the separate income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are not taxable or deductible. The Holdings liability for current tax is calculated using tax rates that have been enacted by the balance sheet date. Current Enterprise Income Tax Current year VND Total accounting profit before tax Non taxable dividend income, unrealized foreign exchange gain and other adjustments Total taxable income Enterprise income tax rate Estimated enterprise income tax Additional EIT payable according to tax authorities inspection minutes Enterprise income tax EIT reduction according to Circular No. 03/2009/TT-BTC Enterprise income tax expenses for the year 887,127,316,248 (746,890,971,690) 140,236,344,558 25% 35,059,086,140 35,059,086,140 35,059,086,140 Previous year VND 881,621,550,495 (558,708,980,669) 322,912,569,826 25% 80,728,142,457 285,883,677 81,014,026,134 (7,177,654,108) 73,836,372,026
25. GENERAL AND ADMINISTRATION EXPENSESa

Current year VND Staff costs Materials expenses Office stationery expenses Fixed asset depreciation and amortisation Taxes and fees Consultancy fees Provision for severance allowance Social security expenses External service fees Others 58,787,509,243 1,684,032,812 1,358,963,762 28,896,391,245 382,717,389 17,845,250,184 147,059,588 2,080,000,000 27,385,031,693 19,549,598,107 158,116,554,023 Previous year VND 41,528,000,000 1,102,811,597 772,960,728 19,209,863,945 8,102,418 3,205,752,951 146,080,000 2,350,000,000 19,143,918,647 7,112,617,928 94,580,108,214
26. OTHER INCOME AND EXPENSES

Current year VND Other income Rental income Gain on disposal of BAVINA company Others 35,913,028,904 12,193,416,456 216,942,750 48,323,388,110 Other expenses Building management expenses Others 14,456,793,530 20,200,000 14,476,993,530 Net other income 33.846.394.580 4,056,077,172 25,000,000 4,081,077,172 19.613.448.183 23,629,992,632 41,515,378 23,694,525,355 Previous year VND
28. TRANSACTIONS WITH RELATED PARTIES

During the normal course of operations, the Holdings engages in transactions with entities to which it is related through equity participation. As set out below, the Holdings 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 with the Holdings include: Related parties Ministry of Finance HSBC Insurance (Asia Pacific) Holdings Limited State Capital Investment Corporation (SCIC) Bao Viet Insurance Bao Viet Life Bao Viet Fund Management Ltd, Co (BVF) Bao Viet Securities Joint Stock Company (BVSC) Bao Viet Au Lac Ltd, Co (BV - Au Lac) Relationship Shareholder Shareholder Shareholder Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary
92
ANNUAL REPORT 2010
93

Bao Viet Investment Joint Stock Company (BVInvest) Bao Viet Commercial Joint Stock Bank (Baoviet Bank) Bao Viet Tokio Marine Insurance Joint Venture Company Baoviet Tourism Hotel Joint Stock Company (Bao Viet Resort JSC) International Investment and Construction Joint Stock Company (VIGEBA) Long Viet Investment and Construction JSC (Long Viet JSC) Significant related party transactions during the year are given below: Related parties Transactions For the year ended 31 December 2010 VND 488,730,000,000 1,878,886,590,000 59,050,721,400 116,417,472,000 22,440,000,000 21,052,800,000 14,9 90,971,337 462,138,548 197,583,757,718 402,095,241,388 1,165,979,581 3,737,732,805 19,337,457,239 3,580,954,672 70,200,000,000 14,077,364,968 9,514,588,251 587,361,574 27,000,000,000 9,100,000,000 24,807,000,000 Subsidiary Subsidiary Joint venture Associate Associate Associate

29. EARNINGS PER SHARE

Basic earnings per share (EPS) amount is calculated by dividing net profit after tax for the year attributable to ordinary shareholders of the Holdings by the weighted average number of ordinary shares outstanding during the year. The following information has been used for the calculation of EPS: Current year VND Net profit after tax attributable to holders of ordinary share Weighted average number of ordinary shares during the year EPS 852,068,230,108 623,914,649 1,366 Previous year VND 807,785,178,469 573,026,605 1,410
Ministry of Finance HSBC Insurance (Asia Pacific) Holdings Limited
Dividends for the year 2009 paid to MOF Additional capital contribution to the Holdings Dividends for the year 2009 paid to HSBC Insurance (Asia Pacific) Holdings Limited Additional capital contribution to the Holdings Dividends for the year 2009 paid to SCIC Additional capital contribution to the Holdings Office management fee paid to BVInvest Office rental expense payable to the Holdings Profit transfer to the Holdings Profit transfer to the Holdings
30. THE EFFECTS OF VAS 10 TO THE SEPARATE FINANCIAL STATEMENTS

As disclosed in Note 4.1, for the year ended 31 December 2010, the Holdings has changed its accounting policy for foreign currency transactions from those guided by Circular 201 as applied in 2009 to those required by VAS 10. Had the Holdings continued to follow Circular 201 in 2010, the separate financial position and separate financial operating results of the Holdings would have been as follows: VAS 10 VND Separate balance sheet Foreign exchange difference reserves Retained earnings Separate income statement Net foreign exchange gain taken to the separate income statement Earnings per share Basic 1,366 1,363 3 1,740,918,450 1,740,918,450 1,740,918,450 1,740,918,450 (1,740,918,450) 1,740,918,450 Circular 201 VND Difference VND
SCIC BVInvest Bao Viet Insurance
Bao Viet Life
Investment portfolio management fee Office rental expense payable to the Holdings Profit transfer to the Holdings Office rental expense payable to the Holdings Office rental expense payable to the Holdings Office rental expense payable to the Holdings Office rental expense payable to the Holdings Advisory fee of organizing Shareholders General Meeting Dividend advance to the Holdings Additional capital contribution by the Holdings Additional capital contribution to Long Viet JSC
BVF Baoviet Bank BVSC VIGEBA BaoViet Resort JSC Long Viet JSC
31. EVENTS AFTER BALANCE SHEET DATE

Other than disclosed elsewhere in the separate financial statements, there have been no significant events occurring after 31 December 2010 which would require adjustments or disclosures to be made in the separate financial statements.
32. COMPARATIVE INFORMATION

As referred to in Note 4.1, bonus and welfare fund balance as at 31 December 2009 was reclassified from owners equity to liabilities as follows: 31 Dec 2009 Reported VND Reclassification of bonus and welfare fund Current liabilities Owners equity Impact to total liabilities and owners equity 1,893,181,100,536 8,455,471,618,720 19,047,165,472 (19,047,165,472) 1,912,228,266,008 8,436,424,453,248 Adjustment VND 31 Dec 2009 Reclassified VND
Amounts due to and due from related parties at the balance sheet date are presented in Note 8 and Note 18 to the separate financial statements. Remuneration of members of the Board of Directors and the CEO: Current year VND Remuneration of members of the Board of Directors and the CEO 1,449,600,000 1,449,600,000 Previous year VND 1,464,320,998 1,464,320,998
94
ANNUAL REPORT 2010
95

In addition, some comparative information in the separate financial statements for the year ended 31 December 2009 has been represented to be in conformity with the financial statement presentation of this year.
33. RATIOS ON OVERALL FINANCIAL POSITION AND BUSINESS RESULTS OF THE HOLDINGS
Items 1. Structures of assets and capital sources 1.1 Structure of assets - Current assets/ Total assets - Long-term assets/Total assets 1.2 Structure of capital sources - Liabilities/Total capital sources - Owners equity/Total capital sources 2. Liquidity 2.1 Current ratio 2.2 Quick ratio 3. Profitability ratios 3.1 Profit margin on sales Profit before tax/ Net sales Profit after tax/ Net sales 3.2 Profit/ Total assets Profit before tax/ Total assets Profit after tax/ Total assets 3.3 Profit after tax/ Owners equity % % % 6.95 6.67 8.11 8.57 7.79 9.57 % % 73.30 70.40 98.89 89.88 Times Times 2.59 2.59 2.17 2.17 % % 17.70 82.30 18.64 81.36 % % 45.48 54.52 40.11 59.89 Unit of measurement Current year Previous year
BAO VIET HOLDINGS

Report of the Board of Directors and Audited Consolidated Financial Statements CONTENTS
REPORT OF THE BOARD OF DIRECTORS AUDITED CONSOLIDATED FINANCIAL STATEMENTS Independent auditors report Mr. Nguyen Thanh Hai Chief Accountant 25 March 2011 Mr. Le Hai Phong Chief Financial Officer Ms. Nguyen Thi Phuc Lam Chief Executive Officer Consolidated balance sheet Consolidated income statement Consolidated cash flow statement Notes to the consolidated financial statements
98 - 101
102 103 - 105 106 - 107 108 109 - 160
96
ANNUAL REPORT 2010
CONSOLIDATED FINANCIAL REPORTS
REPORT OF THE BOARD OF DIRECTOR

The Board of Directors of Bao Viet Holdings is pleased to present its report and the consolidated financial statements of Bao Viet Holdings and its subsidiaries (the Group) as at and for the year ended 31 December 2010.
REPORT OF THE BOARD OF DIRECTORS (continued)

Dependently accounted units Bao Viet Training Centre Infrastructure Construction Project Management Unit Address 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Ha Noi 71 Ngo Sy Lien, Dong Da District, Hanoi
CORPORATE INFORMATION
Bao Viet Holdings (herein referred to as the Holdings) was previously a state-owned company that was equitized and became a joint stock company pursuant to Business License approved by Hanoi Authority for Planning and Investment on 15 October 2007. The Business License was subsequently modified the first time on 29 October 2009, the second time on 18 January 2010 and the third time on 10 May 2010. Below is a summary of information extracted from the third modified Business License dated 10 May 2010: Business License Number: Registered company name: Head Offices address: Operating activities: Charter capital: Number of registered shares: Legal representative: 0100111761 Bao Viet Holdings 8 Le Thai To Street, Hoan Kiem District, Hanoi Equity investments in subsidiaries and, financial services and other related services under Vietnamese Laws VND 6,267,090,790,000 626,709,079 Ms. Nguyen Thi Phuc Lam - Chief Executive Officer
RESULTS AND DIVIDENDS

The net profit attributable to the equity holders of the Holdings for the year ended 31 December 2010 was VND 952,597,195,373 (for the year ended 31 December 2009: VND 891,754,255,672). On 17 April 2010, Annual General Meeting of Shareholders declared and approved to pay out dividends to its shareholders at the rate of 11% for the year 2009. The total dividend amount of VND 630,329,265,500 has been completely paid out during 2010.
SIGNIFICANT EVENTS
Below are the significant events during the year ended 31 December 2010: On 18 January 2010, the Holdings issued 53,682,474 additional shares for an amount of VND 1,878,886,590,000 to HSBC Insurance (Asia Pacific) Holdings Limited (HSBC Insurance) through a private placement, which increased the shareholding of HSBC in Bao Viet Holdings from 10.31% to 18%. This share issuance to HSBC Insurance was made pursuant to the agreement between Bao Viet Holdings and HSBC Insurance and in accordance with Resolution 1527/2009/NQ-DHDCD dated 23 December 2009 of Bao Viet General Shareholders Meeting. These additionally issued shares were listed on 21 April 2010 pursuant to the approval granted by the Ho Chi Minh Stock Exchange. At the 2010 Annual General Meeting on 17 April 2010, the shareholders approved the plan to increase the Holdings charter capital to VND 6,800 billion to enable Bao Viet Holdings to pursue its strategy of increasing investment in core business sectors and continually enhancing its information system and processes in accordance with the strategy agreed at the equitization. The increase in charter capital was effected in January 2011. On 11 June 2010, Bao Viet Holdings increased its investment in Bao Viet Insurance Corporation from VND 1,000 billion to VND 1,500 billion.
The Holdings has listed its entire outstanding stocks of 626,709,079 shares, including the issuance of 53,682,474 shares through a private placement on 18 January 2010 to its strategic partner, HSBC Insurance (Asia Pacific) Holdings Limited, on the Ho Chi Minh Stock Exchange (HOSE). The listing of the additional 53,682,474 shares was approved by the HOSE on 21 April 2010. Subsidiaries and dependently accounted units of the Holdings are as follows: % directly owned 100% 100% 100%
Subsidiaries Bao Viet Insurance Corporation (Bao Viet Insurance) Bao Viet Life Corporation (Bao Viet Life) Bao Viet Fund Management Company (BVF) Bao Viet Securities Joint Stock Company (BVSC) Bao Viet Commercial Joint Stock Bank (Baoviet Bank) Bao Viet Investment Joint Stock Company (BVInvest) Bao Viet Au Lac Limited Company (BV - Au Lac)
Address 35 Hai Ba Trung Street, Hoan Kiem District, Hanoi 1 Dao Duy Anh Street, Dong Da District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 71 Ngo Sy Lien, Dong Da District, Hanoi Ha Lieu, Phuong Lieu, Que Vo District, Bac Ninh Province
THE BOARD OF DIRECTORS AND SUPERVISORY BOARD

The members of the Board of Directors for the period from 1 January 2010 to the date of this report are: Name Mr. Le Quang Binh Ms. Nguyen Thi Phuc Lam Position Chairman Member Member Member Member Member Member Date of appointment 04 October 2007 04 October 2007 04 October 2007 04 October 2007 04 October 2007 04 October 2007 23 September 2009
59.92%
Mr. Tran Huu Tien Mr. Tran Trong Phuc Mr. Nguyen Duc Tuan
52% 55% 60%
Mr. David Lawrence Fried Mr. Nguyen Quoc Huy
98
ANNUAL REPORT 2010
99
REPORT OF THE BOARD OF DIRECTORS (continued)

The members of the Supervisory Board for the period from 1 January 2010 to the date of this report are: Name Mr. Le Quang Binh Ms. Nguyen Thi Phuc Lam Mr. Tran Huu Tien Mr. Tran Trong Phuc Mr. Nguyen Duc Tuan Mr. David Lawrence Fried Mr. Nguyen Quoc Huy Position Chairman Member Member Member Member Member Member Date of appointment 04 October 2007 04 October 2007 04 October 2007 04 October 2007 04 October 2007 04 October 2007 23 September 2009 Date of resignation
REPORT OF THE BOARD OF DIRECTORS (continued) STATEMENT OF THE BOARD OF MANAGEMENTS RESPOSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS
The Board of Management of Bao Viet Holdings is responsible for the consolidated financial statements of each financial year which give a true and fair view of the consolidated state of affairs of the Group and of the Groups consolidated results and consolidated cash flows for the year. In preparing those consolidated financial statements, management is required to: select suitable accounting policies and then apply them consistently; make judgments 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 going concern basis unless it is inappropriate to presume that the Group will continue its business. The Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure 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.
The members of the Supervisory Board for the period from 1 January 2010 to the date of this report are: Name Mr. Nguyen Trung Thuc Mr. Tran Minh Thai Mr. Nguyen Ngoc Thuy Mr. Le Van Chi Mr. Christopher Edwards Ms. Marjory Miller Position Chairman Member Member Member Member Member Date of appointment 04 October 2007 04 October 2007 04 October 2007 04 October 2007 17 April 2010 04 October 2007 17 April 2010 Date of resignation
THE BOARD OF MANAGEMENT

The members of the Board of Management for the period from 1 January 2010 to the date of this report are: Name Ms. Nguyen Thi Phuc Lam Mr. Le Hai Phong Mr. Luu Thanh Tam Mr. Phan Tien Nguyen Mr. Duong Duc Chuyen Mr. Alan Royal Mr. Adrian Abbott Mr. Pham Khac Dung Position Chief Executive Officer Chief Financial Officer Chief Property & Estate Officer Chief Property & Estate Officer Chief Human Resources Officer Chief Strategy Officer Chief Investment Officer Chief Information Officer Chief Risk Officer Chief Operating Officer Date of appointment 15 October 2007 30 June 2008 1 February 2011 30 June 2008 30 June 2008 30 June 2008 22 April 2010 08 September 2008 22 April 2010 30 June 2008 15 November 2010 1 February 2011 Date of resignation
APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

We hereby approve the accompanying consolidated financial statements which give a true and fair view of the consolidated financial position of the Group as at 31 December 2010, the consolidated results of its operations 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.
On behalf of the Board of Directors:
EVENTS SINCE THE REPORTING DATE

In accordance with the Annual General Meetings Resolution No. 03/2010/NQ-DHDCD dated 17 April 2010, the Holdings issued additional shares to existing shareholders to increase its charter capital in January 2011. The number of shares issued was 53,762,355, which increased the Holdings charter capital to VND 6,804,714,340,000 on 14 January 2011. These additionally issued shares were approved by the Ho Chi Minh Stock Exchange to be listed on 18 February 2011. There have been no other significant events occurring after 31 December 2010 which would require adjustments or disclosures to be made in the consolidated financial statements.
Mr. Le Quang Binh Chairman Hanoi, Vietnam 25 March 2011
100
ANNUAL REPORT 2010
101
CONSOLIDATED BALANCE SHEET

Code 100 110 111 112 120 121 129 130 131 132 133 137 138 139 140 150 151 155 152 154 156 158 160 161 169
200 220 221 222 223 227 228 229 230 240 250 252 258 259 260 261 262 267 268 270 3. II. III. 1. 2. 3. IV. 1. 2. 3. 4. 2.
ASSET A. I. 1. 2. II. 1. 2. III. 1. 2. 3. 4. 5. 6. IV. V. 1. 2. 3. 4. 5. 6. B. 1. 2.

C. I. 1.
Notes
31 December 2010 VND 18,279,349,724,769 5,844,707,147,758 723,039,874,862 5,121,667,272,896 9,032,191,623,735 9,885,894,075,590 (853,702,451,855) 3,206,514,890,912 1,453,370,439,126 51,438,200,967 15,004,672,895 1,485,851,186,757 272,320,059,245 (71,469,668,078) 117,263,182,664 78,672,879,700 64,122,955,098 149,740,507 1,431,426,197 8,967,622,683 2,994,243,432 1,006,891,783 5,889,067,477,368 5,924,279,393,498 (35,211,916,130)
20,599,519,961,390 1,937,675,150,696
31 December 2009 VND 13,673,103,807,542 2,532,644,263,412 540,937,036,319 1,991,707,227,093 8,576,063,696,075 8,939,362,811,569 (363,299,115,494) 2,427,630,124,465 1,273,174,332,975 9,351,089,507 14,169,850,360 1,068,732,816,372 100,924,531,492 (38,722,496,241) 107,121,526,352 29,644,197,238 18,119,677,599 137,942,020 1,073,545,982 5,322,979,220 3,599,500,616 1,390,551,801 2,624,756,884,104 2,633,023,390,293 (8,266,506,189)
17,416,755,972,025 1,702,679,360,400 569,869,121,953 1,100,690,387,362 (530,821,265,409) 650,130,000,618 707,105,030,491 (56,975,029,873) 482,680,237,829 23,448,947,000 15,630,164,051,412 313,559,572,889 15,512,602,012,844 (195,997,534,321) 60,463,613,213 18,120,011,138 10,654,317,835 20,641,706,845 11,047,577,395 33,714,616,663,671
CURRENT ASSETS Cash and cash equivalents Cash Cash equivalents Short-term investments Short-term investments Provision for impairment of short-term investments Accounts receivables Receivables from insurance activities Trade advances Other advances Receivables from investment activities Other receivables Provision for doubtful debts Inventories Other current assets Short-term prepaid expenses Shortage of current assets waiting for resolution VAT deductible Tax and other receivables from the State Margin deposits Others LOANS AND ADVANCES TO CUSTOMERS Loans and advances to customers Provision for credit losses
NON-CURRENT ASSETS Fixed assets Tangible fixed assets Cost Accumulated depreciation Intangible fixed assets Cost Accumulated amortization Construction in progress Investment Properties Long-term investments Investments in associates and joint-ventures Other long-term investments Provision for impairment of long-term investments Other long-term assets Long-term prepaid expenses Deferred tax assets Long-term margin deposits Other long-term assets TOTAL ASSETS
5 13.1
888,368,098,875 1,502,061,361,597 (613,693,262,722)
10
709,672,873,718 792,990,562,889 (83,317,689,171)
11 12 13.2
339,634,178,103 23,448,947,000 18,543,754,501,476 338,561,803,678 18,402,589,538,431 (197,396,840,633) 94,641,362,218
14 17.2
52,531,464,772 12,668,907,308 25,654,827,632 3,786,162,506 44,767,937,163,527
102
ANNUAL REPORT 2010
103
CONSOLIDATED BALANCE SHEET (continued)

CONSOLIDATED BALANCE SHEET (continued)

Code 300 310 311 312 313 314 315 316 318 319 320 321 322 330 333 335 336 340 341 342 343 344 345 346 A. I. 1. 2. 3. 4. 5. 6. 7. 8. II. 1. 2. III. 1. 2. 3. IV. 1. 2. 3. 4. 5. 6.
RESOURCES LIABILITIES Current liabilities Short-term loans and borrowings Trade payables Advances from customers Statutory obligations Payables to employees Accrued expenses Other payables Bonus and welfare funds Amount due to customers Deposits from commercial banks Deposits from customers Non-current liabilities Long-term deposits, mortgage Deferred tax liabilities Provision for severance allowance Reserves Unearned premium reserve Mathematical reserve Claims reserve Catastrophe reserve Dividend reserve Equalization reserve
Notes
31 December 2010 VND 32,752,630,760,483 6,221,002,414,770
31 December 2009 VND 23,826,885,284,184 2,500,811,457,427 420,948,732,663 960,615,920,164 43,226,021,957 128,841,596,905 135,423,296,316 17,242,129,166 744,657,262,135 49,856,498,121 3,786,961,866,864 1,709,021,432,606 2,077,940,434,258 73,239,449,605 24,444,886,406 4,476,408,636 44,318,154,563 17,465,872,510,288 2,219,898,075,597 13,149,693,155,870 1,096,611,181,704 193,572,226,768 789,360,245,400 16,737,624,949
Code 400 410 411 412 415 416 417 418 419 420 500 440 B. I. 1. 2. 3. 4. 5. 6. 7. 8. C.
RESOURCES EQUITY Owners equity Contributed capital Share premium Foreign exchange differences reserve Statutory reserves for insurance operations Investment and development fund Financial reserve fund Other reserve Undistributed earnings MINORITY INTERESTS TOTAL LIABILITIES AND EQUITY AND MINORITY INTERESTS
Notes
31 December 2010 VND 10,667,776,713,657
31 December 2009 VND 8,538,905,644,218 8,538,905,644,218 5,730,266,050,000 1,734,745,821,197 18,387,227,948 43,521,050,471 10,222,384,015 11,699,111,508 103,568,802,818 886,495,196,261 1,348,825,735,269 33,714,616,663,671
22
10,667,776,713,657 6,267,090,790,000 3,076,807,671,197 16,075,608,000 79,245,733,155 13,810,688,873 18,316,956,265 103,568,802,818 1,092,860,463,349
15 16.1 16.2 17
1,593,235,333,373 3,100,216,309,659 35,305,467,978 87,863,714,694 205,641,088,427 23,372,079,839
18 19 20 20.1 20.2
1,106,255,039,321 69,113,381,479 7,597,839,409,023 3,019,960,785,943 4,577,878,623,080 80,826,657,494 27,376,215,506
23
1,347,529,689,387 44,767,937,163,527
OFF BALANCE SHEET ITEMS

ITEMS 1. Insurance policies signed but not yet effective (VND) Bad debt written off (VND) Foreign currency (USD) Securities under custody (VND) Letters of credit (VND) Other guarantees (VND) 31 December 2010 VND 223,855,361,342 31 December 2009 VND 115,681,301,363
17.2
8,613,670,942 44,836,771,046
21
18,852,962,279,196 2,447,163,648,748 13,947,735,874,260 1,221,357,297,901 307,012,203,931 906,960,197,603 22,733,056,753
2. 3. 4. 5. 6.
4,792,072,858 2,448,850 14,143,012,400,000 234,468,403,536 81,382,221,188
4,401,672,856 3,027,404 15,731,400,660,000 158,727,549,353 15,948,831,827
104
ANNUAL REPORT 2010
105
CONSOLIDATED INCOME STATEMENT

Code 01 02 03 04 05 06 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 33 34 35.1 ITEMS Gross written premium Reinsurance premium assumed Deductions Reinsurance premium ceded Premium deduction Premium returns Increase in unearned premium reserve and technical reserve Commissions on reinsurance ceded Other income Income on reinsurance assumed Income on reinsurance ceded Income from other activities Total net revenue from insurance business (14 = 01+02+03+08+09+10) Claim and maturity payment expenses Claim expenses for reinsurance assumed Deductions Recoveries from reinsurance ceded Subrogation recoveries Salvages Claim expenses on retained risks (21 = 15+16+17) Claim expenses using catastrophe reserve Increase in claims reserve Provision for catastrophe reserve Other insurance operating expenses Other underwriting expenses Commission Risk minimization expenses Loss adjusting fee, risk assessment and others Other reinsurance assumed expenses Other reinsurance ceded expenses Total direct insurance operating expenses (33 = 21+22+23+24+25) Gross insurance operating profit (34 = 14+33) Income from banking activities 25.3 25.1 25.2 Notes 24.1 24.2 24.3 Current year VND 8,243,995,446,509 186,623,651,556 (1,152,034,398,163) (1,083,576,007,876) (2,065,444,546) (66,392,945,741) (1,025,308,291,541) 183,298,558,113 5,958,591,545 2,095,474,697 333,858,761 3,529,258,087 6,442,533,558,019 (4,634,714,084,183) (51,747,327,052) 391,909,000,095 372,222,596,599 6,834,114,530 12,852,288,966 (4,294,552,411,140) (70,365,084,289) (113,439,977,163) (988,931,762,242) (924,160,351,685) (830,054,332,159) (35,566,098,265) (58,539,921,261) (40,479,795,339) (24,291,615,218) (5,467,289,234,834) 975,244,323,185 957,223,058,373 Previous year VND 7,393,367,704,806 151,666,182,986 (1,036,847,985,406) (979,534,348,986) (1,915,407,401) (55,398,229,019) (1,467,453,204,038) 146,828,204,959 5,863,915,547 1,127,872,732 308,514,166 4,427,528,649 5,193,424,818,854 (4,050,560,862,254) (46,246,678,770) 386,713,469,741 366,196,782,586 13,815,213,821 6,701,473,334 (3,710,094,071,283) (105,617,698,741) (98,132,466,119) (860,363,747,027) (812,295,263,119) (714,761,159,822) (54,457,729,341) (43,076,373,956) (35,541,606,643) (12,526,877,265) (4,774,207,983,170) 419,216,835,684 355,479,712,399
CONSOLIDATED INCOME STATEMENT (continued)

for the year ended 31 December 2010 Current year VND (538,591,304,881) 26 418,631,753,492 198,297,078,626 (156,377,596,191) 27 41,919,482,435 (142,837,253,724) 28 (1,724,057,419,395) (1,328,369,465,286) (136,995,092,835) (258,692,861,274) (495,962,395,825) 281,636,660,657 (216,773,378,839) 29.1 29.2 3,078,930,495,583 (1,468,414,780,544) 1,610,515,715,039 23,550,981,715 (1,775,611,065) 30 21,775,370,650 53,709,140,782 1,254,901,112,464 (5,995,431,804) 17.1 (274,604,981,244) 974,300,699,416 21,703,504,043 952,597,195,373 32 1,527 Previous year VND (126,218,988,181) 229,260,724,218 144,166,331,292 (59,566,766,423) 84,599,564,869 (122,023,207,897) (1,449,516,010,995) (1,187,481,587,361) (67,507,827,941) (194,526,595,693) (890,287,959,574) 161,752,896,277 (109,927,030,824) 2,393,475,592,072 (331,877,326,646) 2,061,598,265,426 13,275,225,337 (6,569,981,488) 6,705,243,849 13,057,543,886 1,242,898,959,040 (4,556,421,030) (226,842,397,703) 1,011,500,140,307 119,745,884,635 891,754,255,672 1,556
Code 35.2 35 36.1 36.2 36 37 38 38.1 38.2 38.3 39.1 39.2 39.3 40 41 42 43 44 45 46 47 48 49 50 51 52 53
ITEMS Expenses from banking activities Net operating income from banking activities Revenue from other activities Expenses from other activities Net operating income from other activities Selling expenses General and administrative expenses General and administrative expenses of insurance operation General and administrative expenses of banking operation General and administrative expenses of other operations of the Group Net operating loss from insurance operation (39.1 = 34+37+38.1) Net profit from bank operation (39.2=35+38.2) Net loss from other operation (39.3=36+38.3) Financial income Financial expenses Profit from financial activities (42 = 40+41) Other income Other expenses Net other profit (45 = 43+44) Share of the profit in associates and joint ventures Profit before tax (47 = 39.1+39.2+39.3+42+45+46) Equalisation reserve Enterprise income tax for the year Profit after tax (50 = 47+48+49) Minority interest Net profit attributable to shareholders of the Holdings (52 = 50-51) Earnings per share
Notes
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Current year VND Previous year VND
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Notes
Code I. 01 02 03 05 06 07 10 II. 21 22 23 24 25 26 27 20 III. 31 33 36 37 38 30 40 50 51 60 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6.
ITEMS 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 inflows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase and construction of fixed assets Proceeds from disposals of fixed assets Loans to other entities and payments for purchase 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 Net cash outflows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash receipts from issuing shares of the Holdings Cash receipts short and long term loans Dividends paid out Cash receipts from existing shareholders for the increase in charter capital Other cash outflows from financing activities Net cash inflows from financing activities Net cash inflows during the year Cash and cash equivalents at the beginning of the year Impact of exchange rate fluctuation Cash and cash equivalents at the end of the year
1. CORPORATE INFORMATION
Bao Viet Holdings (herein referred to as the Holdings) was previously a state-owned company that was equitized and became a joint stock company pursuant to Business License approved by Hanoi Authority for Planning and Investment on 15 October 2007. The Business License was subsequently modified the first time on 29 October 2009, the second time on 18 January 2010 and the third time on 10 May 2010. Current Business License number of the Holdings is 0100111761 pursuant to the third modified Business License on 10 May 2010. Below is a summary of information extracted from the third modified Business License dated 10 May 2010: 0100111761 Bao Viet Holdings 8 Le Thai To Street, Hoan Kiem District, Hanoi Equity investments, financial services and other related services under Vietnamese Laws VND 6,267,090,790,000 626,709,079 Ms. Nguyen Thi Phuc Lam - Chief Executive Officer
12,454,944,888,704 (9,981,578,704,434) (570,328,597,249) (318,521,037,200) 3,956,910,541,401 (4,922,592,129,067) 618,834,962,155
8,784,866,696,654 (7,128,510,955,183) (598,670,981,585) (192,697,194,230) 1,022,896,275,546 (1,444,775,176,900) 443,108,664,302
Business License Number: Registered company name: Head Offices address: Operating activities: Charter capital: Number of registered shares: Legal representative:
(244,601,678,911) 654,142,947 (10,594,663,873,796) 4,928,885,195,844 (6,007,088,767,440) 6,739,077,003,398 194,782,794,193 (4,982,955,183,765)
(315,726,997,458) 7,459,136,006 (7,296,464,781,636) 1,287,210,525,579 (2,967,338,985,684) 4,157,816,410,833 497,054,068,939 (4,629,990,623,421)
The Holdings has listed its entire outstanding stocks of 626,709,079 shares, including the issuance of 53,682,474 shares through a private placement on 18 January 2010 to its strategic partner, HSBC Insurance (Asia Pacific) Holdings Limited, on the Ho Chi Minh Stock Exchange (HOSE). The listing of the additional 53,682,474 shares was approved by the HOSE on 21 April 2010. The structure of the Holdings shareholdings as at 31 December 2010 is as follows: No. of shares 577,507,635 444,300,000 112,807,635 20,400,000 49,201,444 626,709,079 % 92.15% 70.89% 18.00% 3.26% 7.85% 100%
1,878,886,590,000 6,260,247,375,606 (651,929,265,500) 188,350,073,855 (150,000,000) 7,675,404,773,961 3,311,284,552,351 5 2,532,644,263,412 778,331,995 5 5,844,707,147,758
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
Shareholders Founding shareholders The Ministry of Finance HSBC Insurance (Asia Pacific) Holdings Limited State Capital Investment Corporation Other shareholders Total
In accordance with the Annual General Meetings Resolution No. 03/2010/NQ-DHDCD dated 17 April 2010, the Holdings issued additional shares to existing shareholders to increase its charter capital in January 2011. The number of shares issued was 53,762,355, which increased the Holdings charter capital to VND 6,804,714,340,000 on 14 January 2011. These additionally issued shares were approved by the Ho Chi Minh Stock Exchange to be listed on 18 February 2011. Details of the Holdings subsidiaries, dependently accounted units and its investment in Bao Viet Securities Investment Fund (BVF1) are as follows:
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)


Subsidiaries % directly owned 100% 100% 100%
Subsidiaries Bao Viet Insurance Corporation (Bao Viet Insurance) Bao Viet Life Corporation (Bao Viet Life) Bao Viet Fund Management Company (BVF) Bao Viet Securities Joint Stock Company (BVSC) Bao Viet Commercial Joint Stock Bank (Baoviet Bank) Bao Viet Investment Joint Stock Company (BVInvest) Bao Viet Au Lac Limited Company (BV- Au Lac)
Address 35 Hai Ba Trung Street, Hoan Kiem District, Hanoi 1 Dao Duy Anh Street, Dong Da District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 8 Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 71 Ngo Sy Lien Street, Dong Da District, Hanoi Ha Lieu, Phuong Lieu, Que Vo District, Bac Ninh Province
Baoviet Bank was incorporated in Vietnam on 11 December 2008 under the Establishment and Operating License No. 328/GPNHNN provided by the Governor of the State Bank of Vietnam and the Business License No. 0103034012 granted by Hanoi Authority for Planning and Investment on 24 December 2008. Baoviet Banks charter capital is VND 1,500,000,000,000. BVInvest was established on 9 January 2009 in accordance with Business License No. 0103034168 granted on 9 January 2009 by Hanoi Authority for Planning and Investment. The charter capital of BVInvest is VND 100,000,000,000. At 31 December 2010, indirect and direct investments of Bao Viet Holdings in BVInvest are as follows: Contributed capital VND Direct investment of the Holdings Indirect investment via subsidiaries Bao Viet Life Insurance Bao Viet Insurance BVSC, in which: The Holdings indirect interest Minority interest 55,000,000,000 45,000,000,000 20,000,000,000 20,000,000,000 5,000,000,000 2,995,500,000 2,004,500,000 100,000,000,000 % of charter capital VND 55% 45% 20% 20% 5% 3% 2% 100%
59.92%
52% 55% 60%
Bao Viet Securities Investment Fund (BVF1) BVF1 was established as a closed-end member investment fund in Vietnam in accordance with License No. 05/UBCK-TLQTV issued by the State Securities Commission on 19 July 2006. The Fund was licensed to operate for a period of five years. BVF1 originally had a charter capital of VND 500,000,000,000, equivalent to 50,000,000 units with a par value of VND 10,000 per unit. BVF1 increased its charter 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 BVF, a subsidiary of the Holdings. The custodian bank of the Fund is HSBC Bank (Vietnam) Ltd. At 31 December 2010, direct and indirect holding by the Holdings in BVF1 is as follows: Contributed capital VND Direct investment of the Holdings Indirect investment via subsidiaries Bao Viet Life Insurance Bao Viet Insurance 94,190,239,694 821,659,537,741 601,214,295,907 220,445,241,834 915,849,777,435 Dependently accounted units: Dependently accounted units Bao Viet Training Centre Infrastructure Construction Project Management Unit Address 8, Le Thai To, Hang Trong Ward, Hoan Kiem District, Hanoi 71 Ngo Sy Lien, Dong Da District, Hanoi % of charter capital VND 9.42% 82.16% 60.12% 22.04% 91.58%
Bao Viet Insurance was established in accordance with Decision No. 1296/QD/BTC issued by the Ministry of Finance on 21 June 2004 and Business License No. 01/GPDC3/KDBH issued by the Ministry of Finance on the same date. On 23 November 2007, the Ministry of Finance has approved the re-establishment of Bao Viet Insurance in pursuant to the Establishment and Operating License No. 45GP/KDBH. On 11 June 2010, the Ministry of Finance has approved the increase of Bao Viet Insurances charter capital to VND 1,500,000,000,000 in pursuant to the Modified License No. 45/GPDC3/KDBH. Bao Viet Life was established in accordance with Decision No. 3668/QD/BTC issued by the Ministry of Finance on 4 December 2003. On 23 November 2007, the Ministry of Finance approved the re-establishment of Bao Viet Life in pursuant to the Establishment and Operating License No. 46/GP/KDBH. The charter capital of Bao Viet Life is VND 1,500,000,000,000. BVF was established in accordance with Decision No. 911/2005/QD/HDQT-BV on 22 August 2005 by the Groups Board of Management and operating in accordance with Business License No. 0104000256 issued on 22 August 2005 by Hanoi Authority for Planning and Investment and modified business registration No. 10/UBCK-GPDCQLQ issued on 14 December 2007 by the State Securities Commission. The charter capital of BVF is VND 50,000,000,000. BVSC is a joint stock company established in Vietnam in accordance with Incorporation License No. 4640/GP-UB dated 1 October 1999 issued by the Hanoi Peoples Committee and Business License No. 056655 issued by the Hanoi Authority for Planning and Investment on 11 October 1999 and Operating License No. 01/GPHDKD dated 26 November 1999 issued by the State Securities Commission. According to the 6th Amended Business License No. 056655 granted on 17 December 2009 by Hanoi Authority for Planning and Investment, the total value of registered securities of BVSC is VND 722,339,370,000. BV - Au Lac was established on 18 February 2009 under the License No. 2300373648 granted by Bac Ninh Authority for Planning and Investment. The charter capital of BV Au Lac is VND 60,660,000,000.
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as at and for the year ended 31 December 2010 Minority interests represent the portion of profit or loss and net assets of the subsidiaries not held by the Holdings and are presented separately in the consolidated income statement and in the consolidated balance sheet.
2. BASIS FOR THE PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

2.1 Accounting standards and system
The consolidated financial statements of the Holdings and its subsidiaries, which are expressed in Vietnamese dong (VND), are prepared in accordance with the Vietnamese Accounting System and other Vietnamese Accounting Standards issued by the Ministry of Finance as per: Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 1); Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2); Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 3); Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5). Bao Viet Holdings is a company operating in equity investments and financial services and prepares its financial statements according to Decision 15/2006/QD-BTC on the formulation of corporate accounting system dated 20 March 2006 issued by the Ministry of Finance. However, as the Holdings and its subsidiaries (the Group) have major operations in insurance services, the consolidated financial statements of the Group are prepared in accordance with Decision 15/2006/QD-BTC and modified to follow the Vietnamese Accounting System for insurance companies issued by the Ministry of Finance in Decision 1296 TC/QD/CDKT dated 31 December 1996 and Decision 150/2001/QD-BTC dated 31 December 2001 on amended accounting policies for insurance companies. Accounting Standard 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 1 January 2011.
2.3 Registered accounting documentation system

The registered accounting documentation system of the Group is the general journal voucher system. The Group maintains its accounting records in Vietnamese dong (VND).
2.4 Fiscal year

The Groups financial year starts on 1 January and ends on 31 December. The Group also prepares its consolidated financial statements quarterly.
3. STATEMENT ON THE COMPLIANCE WITH VIETNAMESE ACCOUNTING STANDARDS AND SYSTEMS

The Board of Management confirms that the Holdings has complied with the Vietnamese Accounting Standards and Systems in preparing the consolidated financial statements. The Holdings has also followed the accounting policy for the recognition of the revalued land use rights as set out in Note 4.8. 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 Vietnams 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.
4. SIGNIFICANT ACCOUNTING POLICIES

4.1. Changes in accounting policies and disclosures
The accounting policies adopted by the Group in preparation of the consolidated financial statements are consistent with those followed in the preparation of the Groups annual financial statements for the year ended 31 December 2009 except for the following changes in the accounting policies in relation to the following: Application of Circular No. 244/2009/TT-BTC During 2010, the Group implemented Circular No. 244/2009/TT-BTC dated 31 Dec 2009 issued by the Ministry of Finance on amending and supplementing the enterprise accounting regime, which causes the following changes: Stock dividend and bonus shares received are not recognized as income of the Group and the respective increase in number of shares are only updated off balance sheet; Bonus and welfare funds are reclassified from owners equity to liabilities. Other than the reclassification of bonus and welfare funds as presented in Note 38 to the financial statements, comparative figures as at 31 December 2009 and for the year then ended are not restated as Circular 244/2009/TT-BTC does not require retrospective application. Effects of changes in foreign exchange rates For the year ended 31 December 2010, the Group has adopted Vietnamese Accounting Standard No. 10 - Effects of Changes in Foreign Exchange Rates (the VAS 10). VAS 10 differs from the accounting policy adopted in prior year under 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 relating to the recognition of unrealised foreign exchange differences as follows:
2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Holdings (the parent company), its subsidiaries and BVF1 as at 31 December 2010 (collectively referred to as the Group). 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 year as the parent entity, using consistent accounting policies. All intra-group balances, income and expenses and unrealized gains or losses arising from intra-group transactions, are eliminated in full
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as at and for the year ended 31 December 2010 Accounting treatment under VAS 10 All unrealised foreign exchange differences are taken to the consolidated income statement. All unrealised foreign exchange differences are taken to the consolidated income statement.

4.4 Loans and advances to customers

Accounting treatment under Circular 201 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 in the following year. Loans and advances to customers are presented at the principal amounts outstanding at the end of financial year.
Transaction Translation of shortterm monetary assets and liabilities denominated in foreign currencies. Translation of longterm monetary liabilities denominated in foreign currencies at year end.
4.5 Provision for credit losses

Loans and advances to customers are classified and provided for credit losses 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/QD-NHNN dated 31 December 2001 by the Governor of the State Bank of Vietnam on lending statutory; Decision 127/2005/QD-NHNN dated 3 February 2005 amending and supplementing Decision 1627/2001/Q-NHNN; Decision 493/2005/QD-NHNN dated 22 April 2005 and Decision 18/2007/QD-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/QD-NHNN and Decision 18/2007/QD-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:
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 years. In any case, the total foreign exchange loss to be charged to current years income statement 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.
Group 1 2 3 4 5
Name Current Special Mention Substandard Doubtful Loss
Specific provision rate 0% 5% 20% 50% 100%
As the impacts of this change in accounting policy on the opening balance of 2010 are immaterial, they have been charged to this years consolidated income statements.
4.2 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.
4.3 Accounts receivables

Accounts receivable comprise of trade receivables and other receivables that are initially recognized at cost and subsequently are recognized at cost less provision for impairment. Provision for impairment of receivables will be made based on their overdue ages. For receivables that are undue and owed by debtors who have become bankrupt or are undergoing dissolution procedures, are missing, have absconded, are prosecuted, detained or tried by law enforcement bodies, are serving sentences or have deceased, provision should be estimated based on the amount of expected loss. The increase or decrease to the provision balance is recorded as an administrative expense in the consolidated income statement. The Group uses the allowance ratio as stipulated in Circular 228/2009/TT-BTC issued on 7 December 2009 by the Ministry of Finance, as follows: Overdue receivables aging Overdue from six months to less than one year Overdue from one to less than two years Overdue from two to less than three years Overdue over three years Allowance ratio 30% 50% 70% 100%
Loans in Substandard, Doubtful or Loss group are considered as non-performing loans. In accordance with Decision 493/2005/QD-NHNN of the State Bank of Vietnam, loan classification is made at the end of each quarter for the first three quarters and on 30 November for the last quarter each year. In accordance with Decision 493/2005/QD-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 Banks potential financial difficulties due to deterioration in loan quality. As such, the Group is required to fully create and maintain a general provision at 0.75% of total loans and advances to customers; guarantees and irrevocable lending commitments and acceptance for payments which are classified from groups 1 to 4 within 5 years commencing from May 2005. The provisions are recorded in the consolidated income statement as an expense and will be used to write off any credit losses incurred. According to Decision 493/2005/Q-NHNN, at the discretion of the Groups Bad Debt Resolution Committee, the Group 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 2010 are presented in Note 8.1 and Note 8.2.
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4.6 Provision for off-balance-sheet commitments

According to Article 6 and 7 of Decision 493/2005/Q-NHNN and Decision 18/2007/Q-NHNN by the 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. Provision expense is recorded in the consolidated income statement and provision balance is recorded in other liabilities in the consolidated balance sheet.
4.10 Investment properties

Investment properties are stated at cost including transaction costs less accumulated depreciation. Subsequent expenditure relating to an investment property that has already been recognized is added to the net book value of the investment property when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing investment property, will flow to the Group. Depreciation and amortisation of investment properties are calculated on a straight-line basis over the estimated useful life of each asset as follows: Land use rights with definite term Buildings Others according to the term specified on the land use right certificate 6 - 25 years 5 - 10 years
4.7 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 balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement.
Investment properties are derecognised when either they have been disposed of or when the investment properties are permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the assets is recognised in the consolidated income statement in the year or retirement or disposal. Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owneroccupation, commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment properties when, and only when, there is change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale.
4.8 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 intangible fixed assets are sold or retired, their costs and accumulated amortisation are removed from the balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement. Land use rights are recognised based on the revalued amount as determined by an independent valuer for the land areas that the Holdings had 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 Holdings.
4.11 Investments 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 Groups 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 Groups proportionate interest in the associate arising from changes in the associates 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 Groups associates is shown in Note 13.2.1.
4.9 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: Buildings Machinery Means of transportation and communication Office equipment Other tangible fixed assets Software Other intangible assets Land use rights with definite term 6 - 25 years 3 - 7 years 6 - 8 years 3 - 6 years 4 years 3 - 5 years 3 years according to the term specified on the land use right certificate
4.12 Interests in jointly controlled entities

Under the equity method, the Groups interest in jointly controlled entities is carried in the consolidated balance sheet at cost plus post joint venture changes in the Groups share of net assets of the jointly controlled entities. The consolidated income statement reflects the share of the post-acquisition results of operation of the jointly controlled entities. The share of profit/ (loss) of the jointly controlled entities is presented on the 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.
Land use rights with indefinite terms are not amortised in accordance with Circular 203/2009/TT-BTC issued by the Minister of Finance on 20 October 2009.
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as at and for the year ended 31 December 2010 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. A listing of the Groups significant joint ventures is presented in Note 13.2.1.

as at and for the year ended 31 December 2010 Investment capital of the Group x Actual capital contributions of investors in the investee
Provision amount
Actual capital contributions of investors in the investee
Actual owners equity
4.13 Investments in securities and other investments

All financial investments are initially recognised at cost and subsequently are recognized at cost less provision for impairment. Short-term investments comprise holdings of listed shares, government bonds, corporate bonds 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 unlisted shares, government bonds, corporate bonds, trusted loans and term-deposits at financial institutions, which are intended to be held for more than one year. Provision for devaluation of investments in securities and other investments The primary source of reference for impairment provisioning is Circular 228/2009/TT-BTC dated 07 December 2009 issued by the Ministry of Finance (the Circular 228). Details of the basis of determination of impairment of investment are as follows: Listed securities For listed securities that are carried at cost in accordance with Vietnamese Accounting Standards, if there is objective evidence that their market value is lower than book value, the provision amount is measured as the difference between the securities carrying amount and the closing market value as of the balance sheet date in accordance with the following formula given in Circular 228:
The basis for setting up the provision is the positive difference between the investors actual capital contributions and the actual amount of owners equity in the investees financial statements at the balance sheet date.
4.14 Advances on surrender value

Policyholders who have fulfilled their premium payment obligations for at least twenty-four (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. Advances on surrender value are carried at cost.
4.15 Securities purchased/sold under agreement to resell/repurchase (repo)

Securities sold under agreements to repurchase at a specified future date (repo) are not derecognized from the consolidated financial statements. The corresponding cash received is recognized as a liability in the consolidated balance sheet. The difference between the selling price and repurchasing price is allocated to expense in the consolidated income statement over the life of the agreement using straight-line method. Securities purchased under agreements to resell at a specified future date (reverse repo) are not recognized in the consolidated financial statement. The corresponding cash paid is recognized as an asset in the consolidated balance sheet. The difference between the purchasing price and reselling price is allocated to income in the consolidated income statement over the life of the agreement using straight-line method.
Provision amount
Number of impaired securities as at reporting date
Carrying value of securities
Market value of securities
4.16 Payables and accruals

Unlisted securities For unlisted shares, the following methods are used in calculating the fair value in order to compare with book value to determine the provision amount: for securities registered to be traded on the trading market of unlisted public companies securities (UPCom), fair value is determined as the average trading prices quoted on UPCom; for securities yet registered to be traded on UPCom, fair value is determined as the average price of public quotations from at least three securities companies as at reporting date; for securities that fair value is not determinable, the Group does not make provision for devaluation. Equity investments in other entities For equity investments in other entities and other long-term investments, a provision for devaluation is set up if the investees are suffering from loss (except where such loss is already included in their business plans prior to the investment). The amount of provision for each investment shall not exceed the invested capital and is calculated according to the following formula given in Circular 228: 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.
4.17 Provision for severance allowance

Post employment benefits Post employment benefits are paid to retired employees of the Group by the Vietnam Social Insurance Agency. The Group is required to contribute to these post employment benefits by paying social insurance premiums to the Vietnam Social Insurance Agency at the rate of 16% of employee basic salaries on a monthly basis since 1 January 2010 (15% for the periods before 1 January 2010). The Group has no further obligation concerning post employment benefits for its employees other than this. Voluntary resignation and retrenchment benefits Voluntary resignation benefits: the Holdings has the obligation, under Section 42 of the Labor Code amended 2 April 2002, to pay an allowance to voluntarily resigning employees, equal to half of one-months basic salary for each year of employment plus wage allowances (if any) until 31 December 2008. Commencing 1 January 2009, the average monthly salary used in this calculation will be revised at the end of each reporting period based on the average monthly salary of the most recent 6 months up to the reporting date;
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Retrenchment benefits: the Holdings has the obligation, under Section 17 of the Labor Code, to pay an allowance to employees who are retrenched as a result of organizational restructuring or technological changes. In such cases, the Holdings shall pay to employees an allowance for loss of work equivalent to the aggregate amount of one month salary for each year of employment, but no less than two month salary. Although the obligations under Sections 17 and 42 are compulsory, the implementation of these Sections is subject to detailed guidance by the Ministry of Finance. In accordance with Circular 64/1999/TT-BTC dated 7 June 1999 and subsequently Circular 82/2003/TT-BTC dated 14 August 2003 by the MOF which superseded Circular 64, companies are required to calculate retrenchment allowance at the rate of 1-3% per annum, of the basic salary fund; and the outstanding balance of employee termination reserve which was previously created at 10% from the profit after tax and after appropriation for supplementary capital reserve in accordance with the guidance of Circular 64 should be transferred to the retrenchment allowance as allowed under Circular 82. Unemployment Insurance Fund According to the Social Insurance Law No. 71/2006/QH11 issued on 29 June 2006, and Decree 127/2008/ND-CP issued on 12 December 2008, employee and employer are required to contribute 1% each of employee basic salary 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. Vietnam Social Insurance Agency is responsible for the collection, distribution and management of the Fund.
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: Annual contributions shall be made up until the time when this reserve is equal to five per cent (5%) of the premiums collected in the fiscal year of an insurer. The rate of annual contributions shall be one per cent (1%) of the before-tax profit of the issuer.
4.18.2 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: Unearned premium reserve = Retained premiums X Unearned premium rate
4.18 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/ND-CP of the Government dated 27 March 2007 on financial regime applicable to insurers and insurance brokers. The Groups technical reserves include: Life insurance services Unearned premium reserve Claims reserve Mathematical reserve Dividend reserve Equalisation reserve Details on the reserve calculation method are as follows: General insurance services Unearned premium reserve Claims reserve Catastrophe reserve
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: Retained premiums x Remaining day of insurance policy ------------------------------------------------------------------------------------------------Number of coverage days
Unearned premium reserve
Claims reserve Claims reserve includes the reserve for outstanding claims and for claims incurred but not reported. Outstanding claims 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 156/2007/TT-BTC; and Reserve for incurred but not reported claims for which the insurer is liable (IBNR). Circular 156 stipulates the application of a formula for calculation of IBNR which requires statistical information inputs of the past three years. However, the Groups information system in use for the mentioned period did not maintain the required statistical data. On application by the Group, the Ministry of Finance granted permission to modify the application of the formula stipulated in the Circular 156 to enable the Group to reasonably comply with the requirements of the said Circular. In this regard, the Ministry of Finance has approved the Group to use the statistic data of the reporting year only for the purpose of calculation of IBNR as per the Official Letter No.1393/BTC-QLBH dated 06 February 2009 and the Official Letter No.2250/BTC-QLBH dated 24 February 2011. On this basis, the reserve for incurred but not reported claims is established based on the following formula:
4.18.1 Life insurance reserves

Mathematical Reserve: is the difference between present value of total insurance payables 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; The Group estimates the mathematical reserve for universal life products in accordance with the provisions and instructions of MOFs Decision 96/2007/QD-BTC dated 23 November 2007 as amended by Circular 86/2009/TT-BTC dated 28 April 2009 and 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. 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; Claims Reserve: is the provision for claims submitted but still in the course of settlement as at the balance sheet date;
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as at and for the year ended 31 December 2010 Moreover, the Financial Risk Reserve is calculated based on profit after tax, and after deducting the allocation to the supplementary capital reserve (remaining profit after tax): Financial risk reserve 10% of remaining profit after tax 25% charter capital
Reserve for payment of losses which have incurred = but not yet reported for the current fiscal year
Total indemnity for claims incurred but not reported at the end of the last year Total indemnity for losses arising in the last year x
Indemnity for losses arising in x the current fiscal year
Net operating revenue of current fiscal year
Net operating revenue of the previous fiscal year
In 2010, Baoviet Bank has temporarily made 5% of its profit after tax for supplementary capital reserve and 10% of the profit after tax for financial risk reserve. The appropriation to statutory reserve of Baoviet Bank is determined by Shareholders meeting. The utilization of these statutory reserves is in accordance with guidelines as stipulated in Decree. 146.
4.20 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 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 payables 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 balance sheet date are shown as premiums in advance and included in the Other payables in the consolidated 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 reserves in the consolidated balance sheet. General insurance Gross written premiums are recognized in accordance with Circular 156/2008/TT-BTC issued by the Ministry of Finance on 20 December 2008 (Circular 156) and Circular 86/2009/TT-BTC modifying some clauses of Circular 156 on financial regime applicable to insurers and insurance brokers. 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 Corporation and the insured for delayed payment of insurance premium. Prepaid premium before due date is recorded as Premium received in advance in the consolidated balance sheet as at the balance sheet date. 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. Interest income from banking activities is recognized in the consolidated income statement on an accrual basis using nominal interest rate. The recognition of accrued 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/QD-NHNN dated 22 April 2005 and Decision 18/2007/QD-NHNN dated 25 April 2007 by the State Bank of Vietnam. Suspended interest income is recorded off-balance sheet and recognized in the consolidated income statement upon actual receipt. Fees from rendering of services Fees from rendering of services include fund management fees, placement fees, incentive fees, brokerage, underwriting activities, which are recognized when services are performed and the revenue can be reliably measured.
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 Insurances managements experience of historical data. On 28 December 2005, the Ministry of Finance issued Decision 100/2005/QD-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 at 3.5% of total retained premium for the year ended 31 December 2010 according to official letter No.1393/BTC-QLBH dated 06 February 2009 and Official letter No.727/BTC-QLBH dated 18 January 2010.
4.19 Statutory reserves

The below statutory reserve funds are made in accordance with the regulations applicable to specific industries that the Groups subsidiaries are operating in. Insurance operation The compulsory reserve fund is established in order to supplement the contributed capital of Bao Viet Life and Bao Viet Insurance and ensure solvency. Appropriation to the compulsory reserve fund is made annually at 5% of after-tax profits until it reaches 10% of contributed capital in compliance with Decision 46/2007/ND-CP dated 27 March 2007. Securities operation Exclusively applied for the securities companies, investment and development reserve fund is appropriated at the rate of 5% of the companies annual net profit and is limited to 100% of contributed capital in accordance with Decision No. 27/2007/TT- BTC dated 24 April 2007 issued by Ministry of Finance. This fund is set aside for use in the companies expansion of its operation or increase in contributed capital. Financial reserve fund is appropriated at the rate of 5% of the companies annual net profit and is limited to 10% of contributed charter capital in accordance with Decision No. 27/2007/TT- BTC. This reserve is set aside to secure the companies normal operations from business risks or losses, or to prepare for unforeseen losses or damages due to objective reasons. Banking operation On 23 November 2005, the Government issued Decree No. 146/2005/ND-CP regarding the financial management regime of credit institutions which was effective from 16 December 2005. Accordingly, commercial banks are required to make the following allocations of profit after tax to create statutory reserves: Percentage of profit after tax Supplementary capital reserve Not applicable Maximum balance Not applicable
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as at and for the year ended 31 December 2010 Gains from securities trading Gains from securities trading are the excess of selling prices over the weighted average cost of securities sold. Dividends and appropriated profits Income is recognised when the Groups right to receive the cash dividend or the appropriated profit is established. Stock dividend and bonus shares received are not recognized as income of the Group and the respective increase in number of shares are only updated off balance sheet. Other income Revenues from irregular - activities other than turnover-generating activities are recorded to other incomes as stipulated by VAS 14 - Revenue and other income, including: Revenues from asset liquidation and sale; fines paid by customers for their contract breaches; collected insurance compensation; collected debt which had been written off and included in the preceding period expenses; payable debts now recorded as revenue increase as their owners no longer exist; collected tax amounts which now are reduced and reimbursed; and other revenues.

as at and for the year ended 31 December 2010 Reinsurance commission is recognized when there is a corresponding reinsurance premium ceded. (ii) Reinsurance assumed Reinsurance assumed under treaty arrangement Income 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.
4.21 Expense recognition

Claim and maturity payments Claim and maturity payment expenses for life insurance are recognised when the liability to the policyholder under the policy has been determined. 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 expenses. Any claim that is not yet approved by authorized persons is considered an outstanding claim and included in claims reserve. Commission For life insurance, commission expenses are calculated as the percentages of premium revenue and are recognized in the consolidated 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/ND-CP dated 27 March 2007 on Law on Insurance and Circular 86/2009/TT-BTC issued on 28 April 2009 by the Ministry of Finance to provide guidance and amendment to Circular 155/2007/TT-BTC. For general insurance, commission expense is recognized when incurred. 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 consolidated income statement on a straight-line basis over the term of the lease.
4.23 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 consolidated 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. As disclosed in Note 4.1, the Group adopted the VAS 10 in relation to foreign currency transactions from the year 2010. However, the Group applies Circular 130/2008/TT-BTC dated 26 December 2008 and Circular 177/2009/TT-BTC dated 10 September 2009 issued by the Ministry of Finance in calculating the taxable income relating to these transactions. 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 recognized for all deductible temporary differences, carried forward unused tax credit and unused tax losses, to the extent that it is probable that future taxable profits will be available against which these deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilized, except:
4.22 Recognition of reinsurance activities of general insurance

(i) 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 recoveries are recognized when there is evidence of liability on the part of the reinsurer. Reinsurance recoveries are recognized when there is evidence of liability on the part of the reinsurer.
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as at and for the year ended 31 December 2010 Where the deferred tax arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss. in respect of deductible temporarily differences associated with investments in subsidiaries, associates, and interests in joint ventures, deferred tax assets are recognized 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 utilized. The carrying amount of deferred income tax assets is audited 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 consolidated 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 and the Group intends to settle its current tax assets and liabilities on a net basis.

4.27 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.
4.28 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 consolidated balance sheet until the premium is collected or the policies become effective.
4.24 Appropriation of net profits

Profit after tax of the Group is appropriated in accordance with resolutions of the General Shareholders Meeting and Vietnamese regulatory requirements.
4.25 Transactions in foreign currencies

The Group adopted the VAS 10 in relation to foreign currency transactions from the year 2010. Transactions in currencies other than the Group reporting currency of VND are recorded at the exchange rates ruling at the date of the transaction. At the end of the year, monetary assets and liabilities denominated in foreign currencies are translated at interbank exchange rates ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the consolidated income statement. The above guidance relating to unrealized foreign exchange differences provided by VAS 10 is different from those stipulated in the Circular 201/2009/TT-BTC issued on 15 October 2009 by the Ministry of Finance providing guidance for the treatment of foreign exchange differences (the Circular 201) as applied by the Group in 2009. The differences are described in Note 4.1. The impact to the consolidated financial statements had the Holdings adopted the Circular 201 in 2010 is presented in Note 34.
4.26 Offsetting
Financial assets and liabilities are offset and presented on net basis on the consolidated balance sheet when and only when the Group has the intention and legal right to make payment on net basis, or the settlement of financial assets and liabilities happen at the same time.
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5. CASH AND CASH EQUIVALENTS

31 December 2010 VND Cash on hand Cash at banks Cash in transit Cash equivalents (*) 155,587,174,546 507,654,505,084 59,798,195,232 5,121,667,272,896 31 December 2009 VND 68,973,179,827 471,869,527,792 94,328,700 1,991,707,227,093
7. INVENTORIES
31 December 2010 VND Pre-printed certificates Materials and stationery Tools/ Equipment Work in progress (*) 13,750,685,339 8,636,859,860 2,116,641,003 92,758,996,462 31 December 2009 VND 10,177,565,405 9,488,302,527 574,125,330 86,881,533,090
Total cash and cash equivalents
5,844,707,147,758
2,532,644,263,412
Total inventories
Provision for obsolete inventories
117,263,182,664
117,263,182,664
107,121,526,352
107,121,526,352
(*) Cash equivalents comprise of term deposits at financial institutions having original maturities of no more than 3 months and interest at rates denominated in Vietnam dong ranging from 8.5% to 16.5% per annum and in US dollar with interest rate ranging from 0.2% to 1.4% per annum.
Net realisable value of inventories
6. ACCOUNTS RECEIVABLES
31 December 2010 VND Receivables from insurance activities Gross written premium receivables Reinsurance assumed receivables Reinsurance ceded receivables Other receivables from insurance activities Receivables from co-insurers 501,744,386,049 69,830,833,871 857,276,129,659 1,264,166,676 23,254,922,871 318,134,288,531 74,315,180,815 873,267,024,099 1,122,133,839 6,335,705,691 31 December 2009 VND
(*) Work in progress represents investment properties under construction of BVInvest. These items are recorded in inventory account and will be recognized in cost of goods sold when theyre sold.
8. LOANS AND ADVANCES TO CUSTOMERS

31 December 2010 VND 31 December 2009 VND
Commercial loans
In which: Short-term loans Medium-term loans Long-term loans
5,394,881,793,498
2,945,413,518,436 1,115,916,458,477 1,333,551,816,585
2,070,446,430,293
1,224,593,789,651 471,228,961,441 374,623,679,201
1,453,370,439,126 Trade advances

Advances to suppliers Other advances Receivables from investment activities Dividend receivables Bank deposit interest Bond coupon receivables Receivables from repo contracts Receivables from securities trading Interest receivables from automatic loans Loans interest receivables from customers Interest receivables from advances on surrender value Other receivables from investment activities 10,923,835,861 432,084,476,342 750,381,556,782 993,842,121 4,822,755,596 4,196,209,448 238,920,490,000 43,528,020,607 1,485,851,186,757 51,438,200,967 51,438,200,967
1,273,174,332,975
9,351,089,507 9,351,089,507
Loans and advances to credit institutions Provision for credit losses Net loans and advances to credit institutions
529,397,600,000 5,924,279,393,498 (35,211,916,130) 5,889,067,477,368
562,576,960,000 2,633,023,390,293 (8,266,506,189) 2,624,756,884,104
15,004,672,895
14,169,850,360
8,928,848,933 293,214,114,444 511,835,722,629 22,988,904,912 11,067,001,000 2,874,246,605 5,021,488,048 208,516,086,800 4,286,403,001 1,068,732,816,372
For the year ended 31 December 2010 interest rate (% per annum) Commercial loans in VND Commercial loans in foreign currency 12% - 22% 4% - 9%
8.1. Analysis of commercial loans by quality

31 December 2010 VND Current Special mention Substandard Doubtful Loss 5,341,330,710,017 53,084,683,481 466,400,000 31 December 2009 VND 2,069,588,097,293 858,333,000 -
Other receivables (*)

Total receivables
272,320,059,245
3,277,984,558,990
100,924,531,492
2,466,352,620,706
Provision for doubtful debts Net receivables
(71,469,668,078) 3,206,514,890,912
(38,722,496,241) 2,427,630,124,465
(*) Other receivables as at 31 December 2010 include an amount of VND 106,761,864,000 being the money transferred to issuers to buy shares for BVSCs customers under brokerage contracts signed between BVSC and clients.
5,394,881,793,498
2,070,446,430,293
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8.2 Provision for credit losses

Changes in the provision for credit losses for the year ended 31 December 2010 are summarized below: Specific provision VND Balance as at 31 Dec 2009 Provision expense in the year for credit losses 13,750,000 370,683,381 General provision VND 8,252,756,189 26,574,726,560 Total VND 8,266,506,189 26,945,409,941
10. INTANGIBLE FIXED ASSETS

Land use rights VND Software VND Other intangible fixed assets VND 1,892,101,756 1,892,101,756 1,013,362,694 503,345,356 Total VND
Cost:
31 Dec 2009 New purchases Disposals 31 Dec 2010 Accumulated amortisation: 31 Dec 2009 Amortisation during the year Decrease due to disposals 619,162,684,653 2,551,361,733 (293,441,118) 621,420,605,268 7,105,055,229 5,336,369,799 (246,883,623) 86,050,244,082 83,627,611,783 169,677,855,865 48,856,611,950 20,749,827,766 707,105,030,491 86,178,973,516 (293,441,118) 792,990,562,889 56,975,029,873 26,589,542,921 (246,883,623)
Balance as at 31 Dec 2010
384,433,381
34,827,482,749
35,211,916,130
9. TANGIBLE FIXED ASSETS

Building VND Cost: 31 Dec 2009 Additions In which: 574,108,338,213 281,846,912,137 35,388,309,102 8,594,245,653 177,122,050,807 84,407,057,820 313,023,765,644 41,997,209,133 1,047,923,596 37,232,955 1,100,690,387,362 416,882,657,698 Machinery VND Means of transportation and communication VND Office equipment VND Others tangible fixed assets VND Total VND
31 Dec 2010
Net book value: 31 Dec 2009 31 Dec 2010
12,194,541,405
612,057,629,424 609,226,063,863
69,606,439,716
37,193,632,132 100,071,416,149
1,516,708,050
878,739,062 375,393,706
83,317,689,171
650,130,000,618 709,672,873,718
11. CONSTRUCTION IN PROGRESS

31 December 2010 31 December 2009 VND 52,547,596,674 429,277,918,123 854,723,032
New purchases Newly constructed

Others Disposals 31 Dec 2010 Accumulated depreciation: 31 Dec 2009 Depreciation for the year Decrease due to disposal 31 Dec 2010
60,708,691,265 221,138,220,872 (1,744,867,469) 854,210,382,881
8,485,455,153 108,790,500 (1,083,369,873) 42,899,184,882
19,600,627,081 64,806,430,739 (2,649,079,218) 258,880,029,409
35,548,957,133 6,448,252,000 (10,008,573,903) 345,012,400,874
37,232,955 (25,793,000) 1,059,363,551
124,380,963,587
VND Purchasing fixed assets 97,139,041,830 242,422,455,753 72,680,520
292,392,903,611 108,790,500 (15,511,683,463) 1,502,061,361,597
Capital constructions in progress Major assets overhaul
339,634,178,103
Details of the capital constructions in progress at 31 December 2010 are as follows: 31 December 2010
482,680,237,829
31 December 2009 VND 21,899,868,122 2,482,812,425 157,251,622,198 240,936,057,481 6,707,557,897
184,440,340,420 33,225,493,358 (1,744,867,469) 215,920,966,309
16,170,370,407 6,981,298,669 (1,077,837,669) 22,073,831,407
94,238,307,189 24,490,972,656 (2,649,079,218) 116,080,200,627
234,988,112,711 33,421,297,978 (9,797,612,618) 258,611,798,071
984,134,682 48,124,625 (25,793,000) 1,006,466,307
530,821,265,409 98,167,187,287 (15,295,189,974) 613,693,262,722
VND Buildings under construction at Bao Viet Insurance Buildings under construction at Baoviet Bank Buildings under construction at Bao Viet Life Buildings under construction at the Holdings 12,879,128,752 6,352,444,033 174,930,810,801 30,734,441,927 17,455,030,240
Net book value: 31 Dec 2009 31 Dec 2010 389,667,997,793 638,289,416,572 19,217,938,695 20,825,353,475 82,883,743,618 142,799,828,782 78,035,652,933 86,400,602,803 63,788,914 52,897,244 569,869,121,953 888,368,098,875
Software under development at the Holdings Construction in progress of BVSC
70,600,000 242,422,455,753
429,277,918,123
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12. 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 held for capital appreciation at the date of preparation of these consolidated financial statements.
13.1.3 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.
13. INVESTMENTS
13.1 Short-term investments
Notes Term deposits at financial institutions Bonds Listed shares Other short-term investments 13.1.1 13.1.2 13.1.3 31 December 2010 VND 6,889,370,528,889 860,005,838,111 1,885,055,919,490 251,461,789,100 31 December 2009 VND 6,652,102,000,000 478,650,208,005 1,808,610,603,564 -
13.2 Long-term investments

Notes 31 December 2010 VND 31 December 2009 VND
Investments in associates and joint ventures

Other long-term investments Term deposits at financial institutions Bonds Loans and trusted loans Advances from surrender value Other long-term investments
13.2.1
338,561,803,678
313,559,572,889
13.2.2 13.2.3 13.2.4 13.2.5 13.2.6
1,683,500,000,000 14,450,546,217,240 41,385,137,366 862,658,975,058 1,364,499,208,767
789,000,000,000 12,218,952,105,078 42,662,403,128 903,945,810,246 1,558,041,694,392
9,885,894,075,590
Provision for impairment of short-term investments (853,702,451,855)
8,939,362,811,569
(363,299,115,494)
Net value of short term investments
9,032,191,623,735
8,576,063,696,075
Total long-term investments
18,402,589,538,431
15,512,602,012,844
13.1.1 Term deposits at financial institutions

31 December 2010 VND Term deposits in VND Term deposits in USD 6,889,370,528,889 31 December 2009 VND 6,598,279,000,000 53,823,000,000
18,741,151,342,109
15,826,161,585,733
Provision for impairment Net value of long-term investments
(197,396,840,633) 18,543,754,501,476
(195,997,534,321) 15,630,164,051,412
13.2.1 Investments in associates and joint ventures

As at 31 December 2010, the Groups investments in associates and joint ventures include: Notes 31 December 2010 VND Bao Viet Tourism Hotel JSC International Investment & Construction Joint Stock Company (VIGEBA) Long Viet Investment and Construction Co. Ltd and Quang Minh Project Bao Viet Tokio Marine Insurance Joint Venture Company Bao Viet-SCIC Investment Limited Company (BV-SCIC) 13.2.1.a 13.2.1.b 13.2.1.c 13.2.1.d 13.2.1.e 16,500,000,000 54,000,000,000 34,812,144,191 212,554,391,751 20,695,267,736 31 December 2009 VND 7,400,000,000 54,000,000,000 19,797,937,689 186,892,261,619 45,469,373,581
6,889,370,528,889
6,652,102,000,000
The above short-term deposits have maturities not over one year and interest at rates ranging from 8.2% to 17.8% per annum for VND and being1% per annum for USD.
13.1.2 Bonds
Type of bonds Corporate bonds Government bonds Currency VND VND Term (years) 1-5 years 5-7 years Rate (%) 8% - 15% 7.15% - 16% 31 December 2010 VND 650,022,000,000 209,983,838,111
860,005,838,111
The Groups short-term bonds are bonds which have remaining maturity of not over one year.
338,561,803,678
313,559,572,889
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as at and for the year ended 31 December 2010 Details of the investments in associates and joint ventures as at 31 December 2010 are presented as below: Charter capital VND Committed contribution capital VND % Contributed capital VND Capital to be contributed VND

13.2.1.c Investment in Long Viet Investment and Construction Company Ltd (Long Viet) and
31 December 2010 VND Opening balance Capital recovery upon the liquidation of Quang Minh Project Increase investment in Long Viet Dividend received Share of retained profit for the year 19,797,937,689 (14,000,000,000) 24,807,000,000 4,207,206,502 34,812,144,191
interest in Quang Minh Project

31 December 2009 VND 21,405,085,041 (3,637,321,762) 2,030,174,410 19,797,937,689
Invested company Associates Bao Viet Tourism Hotel JSC VIGEBA Long Viet Investment and Construction Co. Ltd Joint ventures Bao Viet Tokio Marine Insurance Joint Venture (Control right: 50%) Bao Viet-SCIC Investment Limited Company
60,000,000,000 180,000,000,000 65,043,200,000
21,000,000,000 54,000,000,000 29,269,440,000
35% 30% 45%
16,500,000,000 54,000,000,000 29,269,440,000
4,500,000,000 -
300,000,000,000 153,000,000,000 40,000,000,000 20,000,000,000
51% 50%
153,000,000,000 20,000,000,000 272,769,440,000
Closing balance
13.2.1.d Bao Viet Tokio Marine Insurance Joint Venture Company

31 December 2010 VND Opening balance 186,892,261,619 (9,911,913,955) (3,629,917,600) 39,203,961,687 212,554,391,751 31 December 2009 VND 186,640,010,026 (13,935,661,901) 3,629,917,600 10,557,995,894 186,892,261,619
13.2.1.a Bao Viet Tourism Hotel JSC

31 December 2010 VND Opening balance Increase in capital Closing balance 7,400,000,000 9,100,000,000 16,500,000,000 31 December 2009 VND 7,400,000,000 7,400,000,000 Dividend received Foreign exchange difference due to application of Circular 201 in 2009 Adjustment for the foreign exchange difference as the Group applied VAS 10 in 2010 Share of retained profit for the year
13.2.1.b International Investment & Construction Joint Stock Company (VIGEBA)

31 December 2010 VND Opening balance Increase in capital Dividend paid Share of net profit during the year Closing balance 54,000,000,000 (9,426,417,396) 9,426,417,396 54,000,000,000 31 December 2009 VND 39,000,000,000 15,000,000,000 54,000,000,000
Closing balance
13.2.1.e Bao Viet-SCIC Investment Limited Company

31 December 2010 VND Opening balance (Decrease)/Increase in capital Dividend paid Share of retained profit for the year Closing balance 45,469,373,581 (25,000,000,000) (645,661,041) 871,555,196 20,695,267,736 31 December 2009 VND 45,000,000,000 469,373,581 45,469,373,581
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13.2.2 Term deposits at credit institutions

31 December 2010 VND Term deposits in VND 1,683,500,000,000 1,683,500,000,000 31 December 2009 VND 789,000,000,000 789,000,000,000
13.2.5 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.
13.2.6 Other long-term investments

These deposits have terms ranging from 1 to 15 years and interest at rates ranging from 8.8% to 16% per annum.
13.2.3 Bonds
Type of bonds Corporate bonds Government bonds Currency VND VND Term (years) 2-20 years 2-15 years Interest rate (%) 7.2%-16% 7.7%-12.1% Value as at 31 December 2010 VND 4,159,352,934,482 10,291,193,282,758 14,450,546,217,240
These are equity investments in other entities which the Group has neither control right nor significant influence on. Hence, these are not investment in joint-ventures or associates. Breakdown of the investments by source is as follows: Breakdown of the investments by source is as follows: 31 December 2010 VND The Holdings Bao Viet Insurance Bao Viet Life Bao Viet Security Joint Stock Company Bao Viet Security Investment Fund Bao Viet Fund Management Company 962,254,966,767 60,500,000,000 88,747,960,000 92,911,383,000 105,346,105,000 14,770,461,000 39,968,333,000 1,364,499,208,767 31 December 2009 VND 638,504,280,000 103,460,559,767 226,072,777,000 400,058,558,625 125,466,565,000 24,510,621,000 39,968,333,000 1,558,041,694,392
13.2.4 Loans and trusted loans

As at 31 December 2010, details of the loans under investment category of the Group are as follows:
Loans
Name of borrower Greenline Limited Company Ltd Term (years) 2 years Interest rate (%) 9.6% 31 December 2010 VND 2,106,027,200 2,106,027,200
BVInvest
Trusted loans
Name of borrower Orion Hanel Company Ltd Currency USD Trusted bank BIDV - Bac Thang Long Term 6 years Rate (%) 7.4% 31 December 2010 VND 39,279,110,166 39,279,110,166 Total loans and trusted loan 41,385,137,366
14. LONG-TERM PREPAID EXPENSES

31 December 2010 VND Beginning balance Increase Charged as expenses Ending balance 18,120,011,138 91,609,710,537 (57,198,256,903) 52,531,464,772 31 December 2009 VND 18,692,585,177 18,546,776,391 (19,119,350,430) 18,120,011,138
The above loans and trusted loans are overdue and borrowers have no capacity for paying back the loans. Hence, the Group has made 100% provision for credit losses for these loans.
15. SHORT-TERM LOANS AND BORROWINGS

These are loans of Baoviet Bank from the State Bank of Vietnam, including loans in VND for capital replenishment under the form of valuable paper discounting to ensure the Banks liquidity. These loans have a term of 7 days and bear interest at rate of 10% p.a.
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16. ACCOUNTS PAYABLES

16.1 Trade payables
31 December 2010 VND Insurance activities Life insurance Claims payables Commissions payables Premium returns payables Dividends payables - life insurance General insurance Commissions payables Payables relating to direct insurance activities Reinsurance assumed payables Reinsurance ceded payables 101,637,171,829 41,928,770,562 56,791,508,044 105,682,201 2,811,211,022 561,633,862,961 40,544,856,355 45,942,008,701 42,537,943,062 432,609,054,843 663,271,034,790 Financial activities Prepaid bond interest Prepaid deposit interest Interest payable to customer deposits Other payables from financial activities 45,470,109,657 39,504,785,202 71,080,071,486 51,209,531,821 207,264,498,166 Payables to suppliers and service providers Payables to suppliers Payables to securities issuing organisations Payables to lender in repo contracts Others 58,620,367,443 4,193,069,302 2,165,153,642,558 1,713,697,400 2,229,680,776,703 3,100,216,309,659 29,436,471,962 7,364,535,134 174,367,077,046 24,726,679,614 235,894,763,756 960,615,920,164 48,737,767,142 13,622,315,414 22,107,099,657 34,430,572,452 118,897,754,665 78,294,863,262 30,909,622,212 45,118,047,019 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 December 2009 VND
16.2 Advances from customers

31 December 2010 VND Advances from customers for securities trading Premium in advance 4,648,902,058 30,656,565,920 35,305,467,978 31 December 2009 VND 3,973,208,500 39,252,813,457 43,226,021,957
17. STATUTORY OBLIGATIONS

31 Dec 2009 VND Increase VND Paid VND 31 Dec 2010 VND
Taxes Value added tax Enterprise Income Tax Personal Income Tax Land lease tax Other taxes 18,042,750,720 93,170,087,183 3,939,485,398 9,817,641 13,679,455,963 128,841,596,905 295,947,115,802 272,482,308,411 71,590,043,372 2,263,656,733 29,487,645,126 671,770,769,444 287,403,399,457 318,521,037,200 67,056,801,811 2,207,299,048 37,560,114,139 712,748,651,655 26,586,467,065 47,131,358,394 8,472,726,959 66,175,326 5,606,986,950 87,863,714,694
17.1 Current Enterprise Income Tax

In 2010, except for the case of Bao Viet Fund Management Company and BV Au Lac, the Group has the obligation to pay Enterprise Income Tax (EIT) at the rate of 25% of taxable profits. For the training service of BV - Au Lac, the Enterprise Income Tax rate imposed is 10%. In the first 10 years from the establishment of the company, BVF is subject to enterprise income tax at the rate of 20%. The company is exempted from EIT for two years from the first profit making year and enjoy a reduction of 50% in the next 3 years. Therefore from 2008 to 2010, BVF has the obligation to pay the tax at the rate of 10%. The Groups 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.
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Current year VND Current Enterprise Income Tax Deferred Enterprise Income Tax Enterprise Income Tax Expense 272,482,308,411 2,122,672,833 274,604,981,244
Previous year VND 227,108,847,520 (266,449,817) 226,842,397,703
17.2 Deferred Tax

The following are the major deferred tax assets and liabilities recognized by the Group, and the movements thereon, during the current and prior reporting periods. Consolidated balance sheet 31 December 2010 VND Deferred tax assets on deductible temporary differences Deferred tax liabilities on taxable temporary differences Net deferred income tax credit (charge) to consolidated Income statement 12,668,907,308 (8,613,670,942) 31 December 2009 VND 10,654,317,835 (4,476,408,636) Consolidated income statement Current year VND 2,014,589,473 (4,137,262,306) (2,122,672,833) Previous year VND 3,797,053,009 (3,530,603,192) 266,449,817
The current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Groups liability for current tax is calculated using tax rates that have been enacted by the balance sheet date. Current year VND
Profit before tax Increase adjustment on profit before tax Expenses disallowed for tax purpose Reduction adjustment on profit before tax Dividends (tax exempted) Bond interest which is subject to tax exemption Gain from foreign exchange difference Other reductions Non-taxable (loss)/profit arising from consolidation adjustments Non-taxable loss Loss transferred from last year Total adjustment on profit before tax Equalization reserve Estimated current taxable income in which: Profit taxed at 25% Profit taxed at preferential rate of 17.5% Profit taxed at 10% Profit taxed at preferential rate of 7% Adjustment according to State Investigators Total estimated tax expense EIT reduction according to Circular No. 03/2009/TT-BTC Other adjustments Tax expense charged to current year Opening balance of EIT payables Current EIT paid during the year Estimated enterprise Income Tax payables 1,051,842,920,820 21,042,296,436 7,579,376,993 272,482,308,411 (162,028,433) 272,482,308,411 93,170,087,183 (318,521,037,200) 47,131,358,394 869,652,559,502 79,364,908,893 38,551,700,247 234,000,617,951 (7,177,654,108) 285,883,677 227,108,847,520 58,758,433,893 (192,697,194,230) 93,170,087,183 1,254,901,112,464 31,906,643,605 31,906,643,605 (249,761,504,870) (133,558,710,320) (43,637,255,776) (34,922,724,364) (37,642,814,410) (112,629,466,034) 154,463,863,895 (176,020,463,404) (5,995,431,804) 1,072,885,217,256
Previous year VND

1,242,898,959,040 16,764,412,148 16,764,412,148 (142,942,648,620) (115,183,397,972) (9,853,616,104) (17,905,634,544) 253,626,218,571 (378,221,351,467) (250,773,369,368) (4,556,421,030) 987,569,168,642
18. OTHER PAYABLES

31 December 2010 VND Surplus assets awaiting resolution Social Insurance, Health Insurance, Trade Union Fees Share allotment monies received (*) Dividend payables to shareholders Deferred revenue Payables relating to security operation Payables to Ministry of Finance (**) Payable to HSBC Insurance (Asia Pacific) Holdings Limited for Technical Support and Capability Transfer Agreement (TSCTA) Others (***) 38,459,281 5,268,842,172 646,867,673,855 10,613,306,875 18,974,714,214 12,501,781,144 32,926,520,739 74,408,814,579 304,654,926,462 1,106,255,039,321 31 December 2009 VND 22,729,580 5,733,287,034 8,085,122,877 449,895,267,217 106,072,353,436 174,848,501,991 744,657,262,135
(*) This represents the subscription money received from existing shareholders for their exercise of right issues in January 2011. (**) This relates to the dividend payable in respect of 2008 to the Ministry of Finance (the MOF) that the Holdings has been authorized to use as the MOFs contribution in the Holdings charter capital. During the year 2010, an amount of VND 458,517,600,000 was transferred to a bank account for the preparation of the MOFs contribution in the Holdings charter capital that took place in January 2011. (***) These include amounts received from customers under brokerage contracts to buy shares totaling VND 106,761,864,000.
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19. BONUS AND WELFARE FUNDS

31 December 2010 VND Opening balance Increased during the year Utilized during the year Closing balance 49,856,498,121 68,159,512,505 (48,902,629,147) 69,113,381,479 31 December 2009 VND 36,500,034,959 35,048,205,891 (21,691,742,729) 49,856,498,121
20.2 Deposits from customers

31 December 2010 VND Demand deposits Demand deposits in VND Demand savings deposits in VND Demand deposits in foreign currencies Demand savings deposits in foreign currencies Term deposits Term deposits in VND 452,914,877,809 444,262,169,207 3,422,568 8,591,260,022 58,026,012 4,104,108,685,744 2,623,855,520,334 826,429,877,181 17,376,853,389 636,446,434,840 20,855,059,527 13,649,052,864 7,206,006,663 4,577,878,623,080 31 December 2009 VND 365,294,918,913 362,572,397,652 232,324 2,482,959,406 239,329,531 1,675,619,756,327 1,265,467,327,953 235,524,744,555 48,874,345,273 125,753,338,546 37,025,759,018 9,604,677,526 27,421,081,492 2,077,940,434,258
20. AMOUNT DUE TO CUSTOMERS

31 December 2010 VND Deposits from commercial banks Deposits from customers 3,019,960,785,943 4,577,878,623,080 7,597,839,409,023 31 December 2009 VND 1,709,021,432,606 2,077,940,434,258 3,786,961,866,864
Term savings deposits in VND Term deposits in foreign currencies Term savings deposits in foreign currencies Margin deposits Margin deposits in VND Margin deposits in foreign currencies
Current year interest rate
Previous year interest rate per annum 3.6% 3.6% 0.6% 0.6%
20.1 Deposits from commercial banks

Demand deposits in VND 31 December 2010 VND Term deposits In VND In gold and foreign currencies 2,754,912,785,943 265,048,000,000 3,019,960,785,943 1,655,198,432,606 53,823,000,000 1,709,021,432,606 Term deposits in VND Term savings deposits in VND Term deposits in foreign currencies Term savings deposits in foreign currencies Certificates of deposit in VND 31 December 2009 VND Demand savings deposits in VND Demand deposits in foreign currencies Demand savings deposits in foreign currencies
per annum 2.4% 2.4% 0.5% - 0.6% 0.5% - 0.6%
10% - 14% 10.49% - 14% 0.8% - 6.02% 2.57% - 6.05% 10.49% - 14%
7.5% - 10.49% 7.2% - 10.49% 2.8% - 3.3% 4.3% 7.2% - 10.15%
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21. RESERVES
UPR Reserve VND Life Insurance Balance at 31 Dec 2009 Net movement of provision Balance at 31 Dec 2010 845,499,257,711 6,282,742,289 851,782,000,000 13,149,693,155,870 798,042,718,390 13,947,735,874,260 7,640,970,100 (1,834,693,300) 5,806,276,800 789,360,245,400 117,599,952,203 906,960,197,603 16,737,624,949 5,995,431,804 22,733,056,753 14,808,931,254,030 926,086,151,386 15,735,017,405,416 Mathematical Reserve VND Claims Reserve VND Catastrophe Reserve VND Dividend Reserve VND Equalisation Reserve VND Total VND
23. MINORITY INTERESTS

Minorities interest VND 31 Dec 2009 Profit for the year Dividends for the year 2009 Profit appropriation to bonus and welfare funds for the year 2009 Payment to the Board of Directors and Supervisory Board 1,348,825,735,269 21,703,504,043 (21,600,000,000) (960,000,000) (363,049,925) (76,500,000) 1,347,529,689,387
General Insurance Balance at 31 Dec 2009 Net movement of provision Balance at 31 Dec 2010 Total balance at 31 Dec 2009 Balance at 31 Dec 2010 1,374,398,817,886 220,982,830,862 1,595,381,648,748 2,219,898,075,597 2,447,163,648,748 13,149,693,155,870 13,947,735,874,260 1,088,970,211,604 126,580,809,497 1,215,551,021,101 1,096,611,181,704 1,221,357,297,901 193,572,226,768 113,439,977,163 307,012,203,931 193,572,226,768 307,012,203,931 789,360,245,400 906,960,197,603 16,737,624,949 22,733,056,753 2,656,941,256,258 461,003,617,522 3,117,944,873,780 17,465,872,510,288 18,852,962,279,196
Buy treasury shares 31 Dec 2010
24. REVENUE
24.1 Gross written premium
Current year VND Life Insurance Endowment insurance Universal life 3,387,950,268,309 507,352,226,058 2,364,709,869 9,240,606,719 35,607,154,756 100,921,532,389 2,408,767,617 4,045,845,265,717 3,427,486,254,644 142,598,222,121 2,350,738,591 10,436,638,371 44,628,470,307 81,977,216,471 929,248,718 3,710,406,789,223 Previous year VND
22. OWNERS EQUITY

Contributed capital VND Share premium VND Foreign exchange differences reserve (*) VND 18,387,227,948 Statutory reserves for insurance operation VND 43,521,050,471 35,724,682,684 Investment and development fund VND 10,222,384,015 3,588,304,858 Financial reserve fund VND 11,699,111,508 6,617,844,757 Other reserve (**) VND 103,568,802,818 886,495,196,261 952,597,195,373 (45,930,832,299) Undistributed earnings VND Total VND 8,538,905,644,218 1,878,886,590,000 952,597,195,373 -
Term insurance Whole Life insurance Life annuity
31 Dec 2009 Additional capital contribution Profit of current year Appropriation to other reserves Dividends for the year 2009 paid to Shareholders Appropriation to bonus and welfare fund for the year 2009 Remuneration to the Board of Directors and Supervisory Board of the Holdings and subsidiaries for the year Recognition foreign exchange difference to income of the year 31 Dec 2010
5,730,266,050,000 536,824,740,000 -
1,734,745,821,197 1,342,061,850,000 -
Rider Bancassurance Total life insurance premium General Insurance Cargo Insurance
(630,329,265,500)
(630,329,265,500)
310,121,673,435 526,994,515,342 43,003,905 197,709,637,806 391,534,726,447 333,230,309,272 81,200,645,832 1,838,316,517 1,272,336,429,565 1,083,140,922,671 4,198,150,180,792 8,243,995,446,509
268,817,818,616 493,828,426,844 1,280,716,534 209,152,701,150 292,439,471,825 289,678,053,640 77,382,803,115 1,691,144,952 1,141,252,840,591 907,436,938,316 3,682,960,915,583 7,393,367,704,806
(67,199,512,505)
(67,199,512,505)
Hull- P&I Insurance Oil & Gas Insurance
(2,772,317,981)
(2,772,317,981)
Aviation Insurance Engineering Insurance
(2,311,619,948)
(2,311,619,948)
Fire & Special Risk Insurance General Indemnity Insurance
6,267,090,790,000
3,076,807,671,197
16,075,608,000
79,245,733,155
13,810,688,873
18,316,956,265
103,568,802,818
1,092,860,463,349
10,667,776,713,657
Agriculture Insurance Automobile Insurance Health & Personal Accident Insurance Total general insurance premium Total gross premium
(*) The balance of foreign exchange translation reserve of VND 16,075,608,000 as at 31 December 2010 represents the foreign exchange difference resulted from the conversion of accounting currency of Bao Viet Tokio Marine Insurance Joint Venture from USD to VND since 1 January 2008. This balance does not include the foreign exchange difference related to the application of Circular 201 in 2009, as that difference has been charged to this years consolidated income statement arising from the Groups change in accounting policy to adopt VAS 10 during the year. (**) Other reserve represents the Groups retained interest in share premium of Bao Viet Securities Joint Stock Company (BVSC) arising after consolidating the financial statements of BVSC into the Groups consolidated income statements.
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24.2 Reinsurance premium assumed

Current year VND Cargo Insurance Hull- P&I Insurance Oil & Gas Insurance Aviation Insurance Engineering Insurance Fire & Other Insurance 12,283,819,020 41,207,200,435 8,467,641,186 8,848,088,784 44,833,749,971 70,983,152,160 186,623,651,556 Previous year VND 11,516,394,816 38,733,182,917 8,714,791,012 3,500,005,364 42,955,324,747 46,246,484,130 151,666,182,986
25. DIRECT EXPENSES OF INSURANCE ACTIVITIES

25.1 Claim and maturity payment expenses
Current year VND Life Insurance Maturity payments Surrender value payments Claim expenses 2,020,411,495,836 826,993,601,131 31,882,227,401 2,879,287,324,368 General Insurance Cargo Insurance Hull- P&I Insurance 107,378,918,707 206,806,356,882 8,931,661,968 59,823,323,111 95,969,490,634 118,940,856,929 2,041,459,452 675,134,056,935 480,400,635,197 1,755,426,759,815 4,634,714,084,183 133,927,217,887 242,342,170,242 242,795,847 113,083,558 54,783,755,715 159,315,273,022 1,956,066,928 285,074,800 603,796,494,981 428,940,001,864 1,625,701,934,844 4,050,560,862,254 1,895,897,507,201 474,487,748,506 54,473,671,703 2,424,858,927,410 Previous year VND
24.3 Deductions
Current year VND Reinsurance premium ceded Cargo Insurance Hull- P&I Insurance Oil & Gas Insurance Aviation Insurance Engineering Insurance Fire & Other Insurance Human Insurance 1,083,576,007,876 45,600,557,199 286,400,031,710 1,077,373,187 181,396,605,802 226,464,250,181 296,816,794,625 45,820,395,172 Previous year VND 979,534,348,986 76,721,126,322 233,587,174,870 (1,409,820,503) 190,016,987,506 176,784,037,350 278,087,207,798 25,747,635,643
Oil & Gas Insurance Aviation Insurance Engineering Insurance Fire & Special Risk Insurance General Indemnity Insurance Agriculture Insurance Automobile Insurance Health & Personal Accident Insurance
25.2 Claim expenses for reinsurance assumed

Current year VND Cargo Insurance Hull- P&I Insurance 2,070,264,209 12,023,826,740 1,557,868,354 707,650,153 6,958,028,162 28,429,689,434 51,747,327,052 Previous year VND 6,298,835,423 15,328,421,879 7,428,276,775 1,648,424,215 5,536,872,520 10,005,847,958 46,246,678,770
Premium deduction General insurance activities
2,065,444,546 2,065,444,546
1,915,407,401 1,915,407,401
Premium returns Life insurance activities General insurance activities Total deductions
66,392,945,741 8,402,770,465 57,990,175,276 1,152,034,398,163
55,398,229,019 6,005,633,096 49,392,595,923 1,036,847,985,406
Oil & Gas Insurance Aviation Insurance Engineering Insurance Fire & Other Insurance
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25.3 Recoveries from reinsurance ceded

Current year VND Cargo Insurance Hull- P&I Insurance Oil & Gas Insurance Aviation Insurance Engineering Insurance Fire & Other Insurance Health care Insurance 19,274,421,947 79,633,378,294 11,347,465,053 55,593,521,765 83,917,052,395 100,131,198,536 22,325,558,609 372,222,596,599 Previous year VND 37,429,513,061 114,047,743,691 6,120,499,548 764,236,373 40,836,724,293 166,998,065,620 366,196,782,586
27. NET OPERATING INCOME FROM OTHER ACTIVITIES

Current year VND Operating income from other activities Brokerage service Securities underwriting Investment advisory service Custody service Portfolio investment management Previous year VND 206,083,468,641 94,225,028,212 48,332,027,190 13,364,930 348,653,888,973 2,789,620,472 4,036,202,954 6,825,823,426 355,479,712,399 108,394,933,939 3,676,414,055 107,220,485 112,178,568,479 1,321,937,625 3,921,252,976 8,797,229,101 14,040,419,702 126,218,988,181 229,260,724,218 Net operating income from other activities 41,919,482,435 84,599,564,869 Investment advisory service Custody service Real estate management service Construction machinery trading activities Others 5,024,520,498 8,125,310,878 9,190,954,318 78,136,774,389 28,070,511,736 156,377,596,191 5,643,012,432 4,866,974,216 2,047,858,373 15,126,970,277 5,048,967,724 59,566,766,423 Operating expenses from other activities Brokerage service expense Securities underwriting 25,831,402,828 1,998,121,544 26,733,548,719 99,434,682 Others 38,665,236,921 198,297,078,626 3,437,821,775 144,166,331,292 Training services Construction machinery trading activities 237,105,833,881 459,976,442,570 194,560,997,283 7,156,614,750 898,799,888,484 60,270,507,596 6,490,795,709 6,300,671,770 2,064,448,252 162,222,222 17,486,448,587 66,856,747,569 91,806,996,273 2,305,985,042 6,677,103,761 2,533,336,169 3,709,429,446 17,788,076,627 15,907,582,199 Previous year VND
26. NET OPERATING INCOME FROM BANKING ACTIVITIES

Current year VND Interest and similar income Interest income from deposits Interest income from lending Interest from debt securities investment Other income from credit activities Other banking operating income Fee income from banking activities Gain from FX trading Income from securities trading Total revenue from banking activities Interest and similar expenses Interest expenses on deposits Interest expenses on borrowings Other expenses on credit activities Other banking operating expenses Expenses on banking operations Loss from FX trading Loan loss provision expenses Total expenses from banking activities Net banking operation income 5,564,749,733 15,589,850,139 30,159,694,493 51,314,294,365 538,591,304,881 418,631,753,492 386,713,119,676 94,347,313,673 6,216,577,167 487,277,010,516 15,833,714,048 27,703,529,777 14,885,926,064 58,423,169,889 957,223,058,373
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28. GENERAL AND ADMINISTRATIVE EXPENSES

Current year VND Insurance operation Salaries and other staff costs Materials and office supplies Depreciation expenses Taxes and fees expenses Expenses for external service Provision expenses Other expenses 568,299,751,178 87,459,804,250 68,437,181,254 12,124,236,677 219,250,791,704 21,625,743,138 351,171,957,085 1,328,369,465,286 452,971,660,097 68,231,108,682 67,261,604,448 1,528,189,590 299,281,711,491 19,344,876,192 278,862,436,861 1,187,481,587,361 Previous year VND
29. FINANCIAL ACTIVITIES

29.1 Financial income
Current year VND Interest from term deposits Interest from investments in bonds and treasury bills Loan interest Dividend income Gains from foreign exchange rate difference Gain from securities trading 1,185,626,488,564 1,292,247,734,837 138,779,643,025 172,649,771,720 85,159,812,378 202,266,719,820 2,200,325,239 3,078,930,495,583
Previous year VND 798,608,237,220 1,009,383,409,804 134,587,760,205 115,183,397,972 37,962,027,832 296,360,210,695 1,390,548,344 2,393,475,592,072
Banking operation Salaries and other staff costs Materials and office supplies Depreciation expenses Taxes and fees expenses Expenses for external service Other expenses 62,209,575,963 5,656,293,280 14,431,718,993 2,057,071,774 41,870,252,454 10,770,180,371 136,995,092,835 32,968,069,187 924,431,393 8,536,910,164 13,865,930,257 7,162,925,528 4,049,561,412 67,507,827,941
Other financial income
29.2 Financial expenses
Current year VND Dividend reserves 117,599,952,203 81,604,113,636 188,219,664,922 165,930,761,116 356,479,792,648 491,802,642,676 66,777,853,343 1,468,414,780,544
Previous year VND 258,514,225,821 47,113,399,541 81,675,392,628 90,993,378,238 (636,133,369,371) 489,714,299,789 331,877,326,646
Other operations of the group Salaries and other staff costs Materials and office supplies Depreciation expenses Taxes and fees expenses Expenses for external service Provision expenses Other expenses 98,682,356,086 9,070,666,532 36,166,622,296 1,914,388,743 72,338,229,727 11,121,428,699 29,399,169,191 258,692,861,274 1,724,057,419,395 90,151,037,799 8,294,082,609 30,727,698,249 200,492,030 40,797,439,737 24,355,845,269 194,526,595,693 1,449,516,010,995
Exchange rate difference Loan interest expenses Dividend paid to policyholders Loss from trading securities Financial provision expenses/(reversal) Other financial expenses
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as at and for the year ended 31 December 2010 Significant related party transactions during the year are given below:
For the year ended 31 December 2010 VND 488,730,000,000 1,878,886,590,000 59,050,721,400 116,417,472,000 22,440,000,000 21,052,800,000 27,000,000,000 9,100,000,000 24,807,000,000
30. NET OTHER PROFIT

Current year VND Other income Proceeds on disposal of assets Collection of bad debts Gain on disposal of BAVINA company Other income 1,255,104,284 77,364,151 12,193,416,456 10,025,096,824 23,550,981,715 Other expenses Expenses on disposal of assets Others 60,116,749 1,715,494,316 1,775,611,065 Net other profit 21,775,370,650 102,046,181 6,467,935,307 6,569,981,488 6,705,243,849 8,191,844,310 5,083,381,027 13,275,225,337 Previous year VND
Related parties Ministry of Finance HSBC Insurance (Asia Pacific) Holdings Limited
Transactions Dividends for the year 2009 paid to MOF Additional capital contribution to the Holdings Dividends for the year 2009 paid to HSBC Insurance (Asia Pacific) Holdings Limited Additional capital contribution to the Holdings
SCIC
Dividends for the year 2009 paid to SCIC Additional capital contribution to the Holdings
VIGEBA Bao Viet Resort JSC Long Viet JSC
Dividend advance to the Holdings Additional capital contribution by the Holdings Additional capital contribution to Long Viet JSC
Remuneration of members of the Board of Directors and the CEO of the Holdings: Current year VND Previous year VND 1,464,320,998 1,464,320,998
31. RELATED PARTIES TRANSACTIONS

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 of the Group as at and for the year ended 31 December 2010 include: Related parties Ministry of Finance HSBC Insurance (Asia Pacific) Holdings Limited State Capital Investment Corporation (SCIC) Bao Viet-SCIC Investment Limited Company (BV-SCIC) Bao Viet Tokio Marine Insurance Joint Venture Long Viet Investment and Construction JSC (Long Viet JSC) Baoviet Tourism Hotel JSC (Bao Viet Resort JSC) International Investment and Construction JSC (VIGEBA) Relationship Shareholder Shareholder Shareholder Joint Venture Joint Venture Associate Associate Associate
Remuneration of members of the Board of Directors and the CEO of the Holdings
1,449,600,000 1,449,600,000
32. EARNINGS 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. Current year VND Net profit after tax attributable to ordinary equity holders for basic earnings Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share EPS 952,597,195,373 623,914,649 1,527 Previous year VND 891,754,255,672 573,026,605 1,556
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these consolidated financial statements.
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33. SEGMENT INFORMATION

The primary segment reporting format is determined to be business segments as the Groups risks and rates of return are affected predominantly by differences in the products and services rendered. 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 offering different products and serves different markets. Accordingly, the Groups management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. 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 Endowment, Term Life, Endowment, Annuity, Universal life, Bancassurance, Healthcare and personal accident riders, other types of 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. 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, securities underwriting and issuance agency, securities trading, custody, investment and financial consulting services are provided by 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, Hanoi 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 Ho Chi Minh City and other real estate projects around the countries.
The following table presents operating result of the Groups operating segments for the year ended 31 December 2010:
Unit: Million VND
For the year ended 31 December 2010 Life insurance services General insurance services Financial services Banking services Real -estate operations and other activities -
Adjustments and eliminations
Total
Gross written premium Reinsurance premium assumed Deductions (Increase)/decrease in unearned premium reserve and mathematical 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 claims 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
4,045,845 (8,403) (804,325)
4,198,150 186,624 (1,143,632) (220,983)
8,243,995
186,624 (1,152,035) (1,025,308)
3,233,117 (2,879,287) 1,835 (380,273) (3,257,725) (24,608) (142,184) (405,863) 1,163,821 6,967
183,299 5,959 3,209,417 (1,755,427) (51,747) 391,909 (72,200) (113,440) (608,659) (2,209,564) 999,853 (926,244) 232,045 5,321
95,854 (264,965) 933,466 11,581
326,006 (149,837) -
9,304 (653) (9,580) 1,910 36
92,626 (63,239) 32,432 (720,726) (2,654)
183,299 5,959 6,442,534 (4,634,714) (51,747) 391,909 (70,365) (113,440) (988,932) (5,467,289) 975,245 418,632 41,919 (142,837) (1,724,057) 1,610,516 21,774
Transfer prices between business segments are set on an arms length basis in a manner similar to transactions with third parties. Segment revenue, segment expenses and segment result include transfers between business segments. Those transfers are eliminated in preparation of consolidated financial statements. Geographical segments These consolidated financial statements do 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 Groups business segments for the year ended 31 December 2010 and for the year ended 31 December 2009, respectively:
Other income
523
Profit in associates and joint venture
1,411
176,692
52,298
53,709
Profit before tax
599,544
310,975
775,936
1,017
(609,263)
1,254,901
1 Currently, the Group has not yet provided life reinsurance services.
2 Majority of this adjustment relate to dividend and profit transferred from subsidiaries, associates and joint-ventures to the Parent Company
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The following table presents operating results of the Groups operating segments for the year ended 31 December 2009:
Unit: Million VND
For the year ended 31 December 2009 Life insurance services General insurance services Financial services Banking services Real -estate operations and other activities
-
The following table presents financial position of the Groups operating segments as at 31 December 2010:
Unit: Million VND
As at 31 December 2010 Life insurance services General insurance services Financial services Banking services Real -estate operations and other activities Adjustments and eliminations Total
Adjustments and eliminations
Total
ASSETS
Gross written premium Reinsurance premium assumed Deductions (Increase)/decrease in unearned premium reserve and mathematical 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 claims 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 in associates and joint venture Profit before tax 2,463,326 (2,424,859) (2,624) (332,530) (2,760,013) (296,687) 3,540 (122,023) (419,814) 1,289,576 1,050 455,642 146,828 5,864 2,730,099 (1,625,702) (46,247) 386,713 (102,994) (98,132) (527,834) (2,014,196) 715,903 (748,323) 245,912 5,753 219,245 145,660 (190,899) 1,357,548 (152) 1,312,157 20,410 (20,417) 5,174 16 5,183 72,776 (85,011) 9,968 (836,612) 13,058 (825,821) 146,828 5,864 3,710,407 (6,006) (1,241,075) 3,682,961 151,666 (1,030,842) (226,378) 7,393,368 151,666 (1,036,848) (1,467,453)
Cash and cash equivalents
172,981
86,399
1,271,228
3,499,094
8,673
806,332
5,844,707
Receivables from reinsurance
927,107
927,107
Receivables from insurance
32,361
32,361
Other receivables
973,726
565,950
1,418,379
543,553
60,365
(1,314,927)
2,247,046
Financial investments
5,193,425 (4,050,561) (46,247) 386,713 -
18,741,596
3,455,848
12,097,469
3,653,044
39,968
(10,411,978)
27,575,947
Tangible fixed assets
155,146
185,934
464,780
39,078
43,430
888,368
Intangible fixed assets
210,517
398,806
44,088
41,621
14,640
709,672
Loans to customers
5,889,067
5,889,067
Other assets
(105,618) (98,132) (860,364) (4,774,209)
307,587
100,615
74,627
52,414
94,263
24,156
653,662
TOTAL ASSETS
20,593,914
5,720,659
15,370,571
13,717,871
261,339
(10,896,417)
44,767,937
LIABILITIES
Short-term liabilities
3,250,231
1,050,914
2,754,358
1,758,828
96,010
(2,689,338)
6,221,003
156,484 (80,030)
419,216 229,260 84,599 (122,023)
Customer deposits
10,311,172
(2,713,333)
7,597,839
Long-term liabilities
27,653
11,763
21,331
20,080
80,827
Insurance technical reserves

(1,449,515) 2,061,598 6,706 13,058 1,242,899
15,735,017
3,117,945
18,852,962
39
76,493
TOTAL LIABILITIES
19,012,901
4,180,622
2,775,689
12,070,000
96,010
(5,382,591)
32,752,631
OWNERS EQUITY
1,581,013
1,540,037
12,594,882
1,647,871
165,329
(6,861,356)
10,667,776
MINORITY INTERESTS
1,347,530
1,347,530
TOTAL LIABILITIES AND OWNERS EQUITY
20,593,914
5,720,659
15,370,571
13,717,871
261,339
(10,896,417)
44,767,937
3 Majority of this adjustment relate to dividend and profit transferred from subsidiaries, associates and joint-ventures to the Parent Company
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The following table presents financial position of the Groups operating segments as at 31 December 2009:
Unit: Million VND
As at 31 December 2009 Life insurance services General insurance services Financial services Banking services Real -estate operations and other activities Adjustments and eliminations Total
34. THE EFFECTS OF VAS 10 TO THE CONSOLIDATED FINANCIAL STATEMENTS

As disclosed in Note 4.1, the Group has changed its accounting policy for treatment of foreign currency exchange differences from guidance provided under Circular 201, as applied in 2009, to adoption of VAS 10. Had the Group continued to adopt the guidance under the Circular 201 in 2010, the consolidated financial position and consolidated financial operating results of the Group would have been as follows: VAS 10 VND Circular 201 VND Difference VND
ASSETS
Cash and cash equivalents
204,451
104,458
379,849
1,891,961
33,737
(81,812)
2,532,644
Consolidated balance sheet Foreign exchange difference reserves Retained earnings 5,566,044,904 5,566,044,904 (5,566,044,904) 5,566,044,904
Receivables from reinsurance
947,582
947,582
Receivables from insurance
21,099
303,371
324,470
Consolidated income statement Net foreign exchange gain taken to the consolidated income statement Basic earnings per share 5,566,044,904 1.527 1.518 5,566,044,904 9
Other receivables
765,550
171,600
1,064,688
128,946
16,523
(991,729)
1,155,578
Financial Investments
15,576,620
2,499,449
10,856,161
2,369,066
39,968
(7,111,588)
24,229,676
348,860
175,511
448,211
31,467
48,500
1,052,549
35. COMMITMENT UNDER OPERATING LEASES

The minimum lease payments under non-cancellable leases of offices are as follows: 31 December 2010 31 December 2009 VND
Intangible fixed assets
202,727
393,983
15,394
23,386
14,640
650,130
Loans to customers
2,809,879
(185,122)
2,624,757
VND Total lease payments under non-cancellable operating lease contracts which fall due: Within one year From one to five years 39,150,040,652 153,566,642,631 56,782,451,578 249,499,134,861
Other assets
30,774
40,349
18,776
15,050
88,474
3,808
197,231
TOTAL ASSETS
17,150,081
4,636,303
12,783,079
7,269,755
241,842
(8,366,443)
33,714,617
69,831,611,273 147,660,558,069 11,035,983,931 228,528,153,273
LIABILITIES
Above five years

789,010 958,273 2,126,666 483,285 76,663 (1,933,085) 2,500,812
Short-term liabilities
Customer deposits Long-term liabilities
24,707
7,988
21,200
5,223,362 -
(1,436,400) 19,345
3,786,962 73,240
36. CONTINGENT LIABILITIES

Outstanding dispute, litigations As at 31 December 2010, general insurance business of the Group has on-going disputes or litigations with its customers on claims lodged by the customers, which the Group does not accept or accepting only partially. The total outstanding claims lodged by the customers which are being disputed or under on-going litigations as at the 31 December 2010 amounted to VND 13,452,215,000. The final outcome of these disputes or litigations can only be finalized upon the verdict of an arbitrator, or by the court. Accordingly, the Group has not made any provision in respect of these claims in the financial statements as the Group considers that the likelihood of financial loss is remote based on the information available as at 31 December 2010. Foreign contractor withholding tax The general insurance business of 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 01 Jan 2005 to 31 December 2008 as this was based on the practice of the insurance industry as well as the tax finalisation results in previous years. According to Official Letter No. 8667/BTC-TCT dated 06 July 2010 by the Ministry of Finance, reinsurance premium ceded to overseas reinsurers who are
Insurance technical reserves
14,808,931
2,656,941
17,465,872
TOTAL LIABILITIES
15,622,648
3,623,202
2,147,866
5,706,647
76,663
(3,350,140)
23,826,886
OWNERS EQUITY
1,527,433
1,013,101
10,635,213
1,563,108
165,179
(6,365,219)
8,538,815
MINORITY INTERESTS TOTAL LIABILITIES AND OWNERS EQUITY
17,150,081
4,636,303
12,783,079
7,269,755
241,842
1,348,916 (8,366,443)
1,348,916 33,714,617
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as at and for the year ended 31 December 2010 from countries which have Double Taxation Agreement with Vietnam would be exempted from Foreign Contractor Withholdings Taxes (FCWT). For the period from 2005 to 2008, the estimated FCWT on the reinsurance premium ceded to overseas reinsurers who are not from countries which have Double Taxation Agreement with Viet Nam is VND 1,472 million. For reinsurance premium ceded to overseas reinsurers who are from countries which have Double Taxation Agreement with Viet Nam, the estimated FCWT amount is VND 33,620 millions. The Group is carrying the procedure to finalise those tax liabilities. For the year 2009 and 2010, the Group only accounted for the FCWT 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 FCWT amount that the Group has not withheld is estimated at VND 11,449,777,111.
37. EVENTS AFTER BALANCE SHEET DATE

Other than disclosed elsewhere in the consolidated financial statements, there have been no significant events occurring after 31 December 2010 which would require adjustments or disclosures to be made in consolidated financial statements.
38. COMPARATIVE INFORMATION

As referred to in Note 4.1, bonus and welfare fund balance as at 31 December 2009 was reclassified from owners equity to liabilities as follows: 31 Dec 2009 Reported VND Reclassification of bonus and welfare fund Current liabilities Owners equity Impact to total liabilities and owners equity 2,450,954,959,306 8,588,762,142,339 49,856,498,121 (49,856,498,121) 2,500,811,457,427 8,538,905,644,218 Adjustment VND 31 Dec 2009 Reclassified VND
Bao Viet Holdings

Supplementary financial information in accordance with the International Financial Reporting Standards (IFRS)
In addition, some comparative information in the consolidated financial statements for the year ended 31 December 2009 has been represented to be in conformity with the financial statement presentation of this year.
160
ANNUAL REPORT 2010
SUPPLEMENTARY FINANCIAL INFORMATION
SUPPLEMENTARY FINANCIAL INFORMATION

SUPPLEMENTARY FINANCIAL INFORMATION (continued)

CONSOLIDATED INCOME STATEMENT
This supplementary financial information is extracted from the audited consolidated financial statements of Bao Viet Holdings and its subsidiaries (the Group), which were prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board. The preparation of these IFRS financial statements is not required under Vietnamese rules or regulations but as part of the Groups restructuring and enhancing corporate governance programs in order to improve the prestige and strengthen the competitiveness in Vietnam and international markets. The disclosure of this supplementary financial information is solely on a voluntary basis. The Groups management believes the disclosure of this supplementary financial information may help the users of this annual report to better understand the Group from an internationally accepted accounting principles. A full detailed audited consolidated financial statements prepared under IFRS for the year ended 31 December 2010 is available for download in our website (www.baoviet.com.vn). Users of this annual report should refer to the full set audited consolidated financial statements to ensure the completeness and accuracy of financial information.
2010 VND
Gross premiums Less: Reinsurance premiums ceded Net written premiums Changes in unearned premium reserves Net earned premiums Commission income on reinsurance ceded Other insurance income Total revenue from insurance business Net income from banking operations Investment income Other operating income Total other revenues TOTAL OPERATING INCOME Gross benefit and claim expenses Claims expenses for reinsurance assumed Claims ceded to reinsurers Gross change in insurance contract liabilities Change in insurance contract liabilities ceded to reinsurers Net claims and benefits incurred Commission and underwriting expenses of insurance operations Other reinsurance assumed expenses Expenses on reinsurance ceded Selling expenses General and administrative expenses Financial expenses Other operating expenses Total commission and expenses TOTAL BENEFITS, CLAIMS AND OTHER EXPENSES Profit before share of profit of associates and joint ventures Share of profits of associates and joint ventures PROFIT BEFORE TAX Income tax expense PROFIT AFTER TAX 8,362,160,707,778 (1,083,576,007,876) 7,278,584,699,902 (220,982,830,862) 7,057,601,869,040 183,298,558,113 5,958,591,545 7,246,859,018,698 403,745,827,428 2,136,964,480,980 221,848,060,341 2,762,558,368,749 10,009,417,387,447 (4,898,558,394,006) (51,747,327,052) 372,222,596,603 (1,165,179,176,829) 221,988,660,835 (5,521,273,640,449) (924,160,351,685) (40,479,795,339) (24,291,615,218) (142,837,253,724) (1,815,221,814,718) (266,230,168,791) (159,466,623,297) (3,372,687,622,772) (8,893,961,263,221) 1,115,456,124,226 53,709,140,782 1,169,165,265,008 (227,581,071,801) 941,584,193,207
2009 VND
7,487,720,251,372 (979,534,348,986) 6,508,185,902,386 (215,504,405,765) 6,292,681,496,621 146,828,204,959 5,863,915,547 6,445,373,617,127 229,260,724,218 2,524,029,143,776 164,619,210,737 2,917,909,078,731 9,363,282,695,858 (4,370,233,793,548) (46,246,678,770) 366,196,782,586 (1,412,603,234,671) 21,340,944,724 (5,441,545,979,679) (812,295,263,119) (35,541,606,643) (12,526,877,265) (122,023,207,897) (1,508,025,648,804) (89,309,579,912) (62,080,670,739) (2,641,802,854,379) (8,083,348,834,058) 1,279,933,861,800 13,057,543,886 1,292,991,405,686 (235,025,704,943) 1,057,965,700,743
162
ANNUAL REPORT 2010
163


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2010
31 December 2010 VND 31 December 2009 VND
2010 VND Net profit attributable to: Equity holders of the parent Non-controlling interests 919,459,250,402 22,124,942,805 941,584,193,207
2009 VND
Assets Tangible fixed assets Investment properties Intangible assets Investments in associates and joint ventures 979,030,747,437 23,448,947,000 576,759,679,199 338,561,803,678 10,519,261,133,615 13,405,885,995,299 2,091,984,300,963 815,858,725,100 5,930,242,259,658 1,106,402,220,654 278,252,333,116 394,053,603,348 1,737,555,070,923 1,049,074,183,733 5,877,952,763,741 45,124,323,767,464 873,384,210,750 23,448,947,000 477,971,962,067 313,559,572,889 8,836,925,601,627 11,873,808,593,954 2,735,560,526,347 765,373,585,900 2,651,619,373,077 1,030,002,323 1,115,336,143,651 174,133,911,091 259,370,910,528 1,530,374,005,223 593,395,822,082 2,544,295,519,291 34,769,588,687,800
953,906,618,399 104,059,082,344 1,057,965,700,743
Fixed maturity investments Available-for-sale Loans and receivables Equity investments Available-for-sale Fair value through profit or loss Loans and advances to customers Loans and trusted loans Policy loans Deferred tax assets Insurance receivables Reinsurance assets Other assets and prepayments Cash and cash equivalents TOTAL ASSETS Shareholders Equity Contributed capital Share premium reserve Retained earnings 6,267,090,790,000 3,076,807,671,197 688,471,240,981 (22,868,249,209) 16,075,608,000 13,810,688,873 18,316,956,265 79,245,733,155 103,568,802,818 10,240,519,242,080 1,355,361,118,553 11,595,880,360,633 19,722,345,843,077 28,797,689,798 4,619,623,951,636 4,642,530,862,246 35,305,467,978 87,863,714,694 14,774,169,054 663,271,034,790 3,713,930,673,558 33,528,443,406,831 45,124,323,767,464 5,730,266,050,000 1,734,745,821,197 515,243,918,864 616,252,858,196 18,387,227,948 10,222,384,015 11,699,111,508 43,521,050,471 103,568,802,818 8,783,907,225,017 1,369,851,950,129 10,153,759,175,146 18,157,177,388,009 44,318,154,563 2,097,098,977,495 2,132,918,721,689 43,226,021,957 128,841,596,905 164,512,319,485 605,823,401,743 1,241,912,930,808 24,615,829,512,654 34,769,588,687,800
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2010 VND PROFIT AFTER TAX 941,584,193,207
2009 VND 1,057,965,700,743
Other comprehensive income for the year Available-for-sale investments: net movement in the fair value reserve Income tax relating to components of other comprehensive income Other comprehensive income for the year, net of tax Total comprehensive income for the year, net of tax Total comprehensive income attributable to: Equity holders of the parent Non-controlling interests 280,338,142,997 8,508,718,365 1,165,450,111,352 126,086,082,472 (861,692,667,688) 208,955,335,843 (652,737,331,845) 288,846,861,362 293,635,150,900 (60,064,657,819) 233,570,493,081 1,291,536,193,824
Revaluation reserve for available-for-sale assets Foreign exchange translation reserve Investment and development fund Finance reserve fund Statutory reserve Other reserves Shareholders Equity Non-controlling interests TOTAL EQUITY Liabilities Insurance contract liabilities Severance allowance Amount due to customers Due to banks and other financial institutions Advances from customers Tax and statutory obligations Deferred tax liabilities Insurance payables Trade and other liabilities TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES
164
ANNUAL REPORT 2010
165

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS
Share capital
Share premium reserve
Retained earnings
VND Balance at 1 January 2009 Profit for the year Profit appropriation to other reserves Dividends paid to shareholders Payment to Board of Directors and Supervisory Board Buy treasury shares Movement in value of Availablefor-sale investments Other increase/(decrease) 5,730,266,050,000 -
VND 1,736,438,449,955 (1,692,628,758)
VND 175,924,227,439 953,906,618,399 (31,156,362,253) (581,239,974,257) (1,655,222,225) (90,775,901) (444,592,338)
Revaluation reserve for available-forsale assets VND 404,709,365,243 211,543,492,953 -
Foreign exchange difference VND 16,075,608,000 2,311,619,948
Investment and development fund VND 8,609,458,421 1,612,925,594 -
Financial reserve
Statutory reserves
Other reserve
Total
2010 VND 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 tangible fixed assets Proceeds from disposals of tangible fixed asset (244,601,678,911) 654,142,947 (10,573,069,513,692) 4,928,885,195,844 (6,007,088,767,440) 6,739,077,003,398 194,782,794,193 (4,961,360,823,661) 12,454,944,888,704 (9,981,578,704,434) (570,328,597,249) (318,521,037,200) 3,956,910,541,401 (4,922,592,129,067) 618,834,962,155
2009 VND
VND 8,609,458,421 3,089,653,087 -
VND 17,067,266,899 26,453,783,572 -
VND 103,568,802,818 -
VND 8,201,268,687,196 953,906,618,399 (581,239,974,257) (1,655,222,225) (90,775,901) 211,543,492,953 174,398,852
8,784,866,696,654 (7,128,510,955,183) (598,670,981,585) (192,697,194,230) 1,022,896,275,546 (1,444,775,176,900) 443,108,664,302
Balance as at 31 December 2009 and 1 January 2010 Additional capital contribution Profit for the period Profit appropriation to other reserves Dividend paid to shareholders Profit appropriation to bonus and welfare fund Payment to BOD and Supervisory Board Movement in value of Available-for-sale investments
5,730,266,050,000 536,824,740,000 -
1,734,745,821,197 1,342,061,850,000 -
515,243,918,864 919,459,250,402 (45,930,832,299) (630,329,265,500) (67,199,512,505)
616,252,858,196 -
18,387,227,948 -
10,222,384,015 3,588,304,858 -
11,699,111,508 6,617,844,757 -
43,521,050,471 35,724,682,684 -
103,568,802,818 -
8,783,907,225,017 1,878,886,590,000 919,459,250,402 (630,329,265,500) (67,199,512,505)
(315,726,997,458) 7,459,136,006 (7,284,813,525,757) 1,287,210,525,579 (2,967,338,985,684) 4,157,816,410,833 497,054,068,939 (4,618,339,367,542)
Loans to other entities and payments for purchases of debt instruments Repayments from borrowers and proceeds from sales of debt instruments Payments for investments Proceeds from sales of investments
(2,772,317,981)
(2,772,317,981)
Interest received, coupon and distributed profits Net cash outflows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash receipts from issuing additional shares Cash receipts short and long term loans Dividends paid to shareholders Cash receipts from the rights issue Other cash outflows from financing activities 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
(639,121,107,405)
(639,121,107,405)
Foreign exchange difference
(2,311,619,948)
(2,311,619,948)
Balance as at 31 December 2010
6,267,090,790,000
3,076,807,671,197
688,471,240,981
(22,868,249,209)
16,075,608,000
13,810,688,873
18,316,956,265
79,245,733,155
103,568,802,818
10,240,519,242,080
1,878,886,590,000 6,260,247,375,606 (651,929,265,500) 188,350,073,855 (150,000,000) 7,675,404,773,961 3,332,878,912,455 2,544,295,519,291 778,331,995 5,877,952,763,741
720,000,000,000 5,646,136,030,318 (128,728,400,000) 6,237,407,630,318 2,062,176,927,078 480,836,990,174 1,281,602,039 2,544,295,519,291
166
ANNUAL REPORT 2010
167

MATERIAL GAAP DIFFERENCES

MATERIAL GAAP DIFFERENCES (continued)
1. RECONCILIATION OF GAAP DIFFERENCES BETWEEN VIETNAMESE ACCOUNTING STANDARDS (VAS) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR NET PROFIT AND EQUITY
(i) Net profit attributable to equity holders of the parent
2010 VND Prepared in accordance with VAS Financial assets Valuation differences and impairment adjustments Bond investments Equity investments Term deposits Insurance related balances Insurance contracts liabilities Reversal of catastrophe and equalisation reserve Impairment on direct premium and reinsurance premium receivables Other accounting balances Inventories written (off )/back to/from income statement Bonus and welfare fund written off Reversal on loan and receivables provision Fixed assets impairment and written off REPO contracts fee amortisation adjustment Adjustment on severance allowance provision Adjustment on professional expenses due to different recognition basis Deferred tax provision on above adjusting items Non-controlling interests Prepared in accordance with IFRS and reported in this supplementary financial information (4,264,192,940) (12,576,381,390) (1,313,416,041) 16,039,081,248 (44,642,173,637) 47,023,909,443 (421,438,762) 919,459,250,402 4,380,159,817 (35,048,205,891) 22,405,692,895 (1,052,152,099) (68,499,971,022) 119,435,408,967 (45,720,728,597) (33,695,792,934) 102,688,887,149 (1,838,118,035) (216,338,590,915) 86,798,827,182 91,341,721,493 (33,818,926,325) 44,344,913,420 (20,895,244,429) 952,597,195,373 2009 VND 891,754,255,672
(ii) Shareholders Equity 31 December 2010 VND Prepared in accordance with VAS Financial assets Valuation differences and impairment adjustments Bond investments Equity investments Term deposits Insurance related balances Insurance contracts liabilities Reversal of catastrophe and equalisation reserve Impairment on direct premium and reinsurance premium receivables Other accounting balances Inventories written off Fixed assets impairment and written off REPO contracts fee amortisation adjustment Adjustment on severance allowance provision Adjustment on professional expenses due to different recognition basis Deferred tax provision on above adjusting items (24,504,186,202) (86,677,923,337) (1,313,416,041) 16,039,081,248 (44,642,173,637) 259,422,927,696 (1,355,361,118,553) 10,240,519,242,080 (20,239,993,262) (74,101,541,947) 3,443,682,408 (1,369,851,950,128) 8,783,907,225,017 (382,097,730,829) 329,745,260,684 (78,444,619,212) (313,597,759,806) 210,309,851,717 (32,723,890,616) (728,649,915,711) 251,250,175,881 70,446,477,049 (136,667,006,402) 650,499,697,995 (20,895,244,429) 12,015,306,403,044 31 December 2009 VND 9,887,731,379,487
(1,005,653,132) 15,686,802,291 953,906,618,399
Non-controlling interests Prepared in accordance with IFRS and reported in this supplementary financial information
168
ANNUAL REPORT 2010
169


2 NARRATIVE DESCRIPTION OF MATERIAL MEASUREMENT AND INCOME RECOGNITION DIFFERENCES BETWEEN VAS AND IFRS
ITEM Financial assets VAS Investments in securities and other investments are stated at their acquisition cost. Short term investments comprise the 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-thecounter 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. i) IFRS 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. ii) 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 consolidated income statement. iii) 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 consolidated income statement when the investments are derecognised or impaired, as well as through the amortisation process.
ITEM Impairment
VAS Allowance for the diminution in value of all shares is created representing the excess of the acquisition cost over the market value at the reporting date.
IFRS 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 income. Past impairment losses on AFS debt instruments (monetary assets) are reversed through income when fair value increases. For AFS equity instruments (non-monetary assets), past impairment losses are reversed through equity. An investment in an associate is stated initially at cost and is thereafter adjusted for the post-acquisition change in the Groups share of the assets of the investee. This carrying value is reduced where there is objective evidence of impairment.
Associate
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 nonpayment 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 specific approval is received from the Ministry of Finance.
Receivables
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.
170
ANNUAL REPORT 2010
171

ITEM
VAS 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. 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. Catastrophe reserve is accrued based on retained premiums and management judgement.
IFRS 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).
Intangible assets
Life insurance reserves
General insurance reserves
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.
Presentation
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 statement of financial position and the consolidated income statement impact is similarly presented gross.
Income tax
VAS 17 does not address temporary differences and the deferred tax recognition in respect of business 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.
172
ANNUAL REPORT 2010

Financial Statements and Shareholder Relations

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FINANCIAL STATEMENTS CO COMMUNITY INVOLVEMENT INV AND SHAREHOLDER AN RELATIONS

Vietnam Accounting Standard International Financial Reporting Standard

B BAO VIET NEW FOUNDATION N

REPORT OF THE CHIEF EXECUTIVE OFFICER

REPORT OF THE CHIEF EXECUTIVE OFFICER

Real Estate and Property Development and Management

Investment in Human Resources

Improvements in Corporate Governance

Profit after Tax of Holdings

Securities and Brokerage

Innovation in Management Information Technology

REPORT OF THE CHIEF EXECUTIVE OFFICER

ONE BAO VIET ONE NEW FOUNDATION

Improved Financial Capacity

Estimated Total Consolidated Revenues 2011

Estimated Consollidated Profit before Tax 2011

Improvements Strengthening Subsidiaries

in Service Quality, Coordination among

Estimated Total PAT 2011

2011 Business Targets

2011 BUSINESS PLAN

Chief Executive Officer

Nguyen Thi Phuc Lam

REPORT IP NM 2010 THNG OF THE CHIEF EXECUTIVE OFFICER

KEY PERFORMANCE INDICATORS

Total Consolidated Revenues

Consolidated Profit before Tax

Unit: VND billion

Profit before Tax

4,295 311 219

BAO VIET INSURANCE CORPORATION

Total Consolidated Revenues by Subsidiaries

Total Consolidated Revenues by Businesses

2010 Total Revenues Profit Before Tax

44,768 39,333 33,715 29,387

Profit before Tax

BAO VIET LIFE CORPORATION

Total Consolidated Assets

Total Consolidated Invested Assets under management

Unit: VND billion

Profit before Tax

Profit Before Tax

One Bao Viet One New Foundation

ONE BAO VIET - ONE NEW FOUNDATION

BOARD OF DIRECTORS OF BAO VIET HOLDINGS

Mr. Tran Huu Tien

Mr. David Fried

Mr. Le Quang Binh

Mdm. Nguyen Thi Phuc Lam

Mr. Tran Trong Phuc

Mr. Nguyen Duc Tuan

Mr. Nguyen Quoc Huy

ONE BA VIETONE NEW FOUNDATION BAO

HUMAN RESOURCES DEVELOPMENT

BLOCK HEADS AND EXECUTIVES OF BAO VIET HOLDINGS

BAO VIET 2011-2015 STRATEGY

CORE VALUES OF BAO VIET

STRATEGIC DEVELOPMENT PHASES

COLLECTIVE STRENGTH ADVANCED BUSINESS MODEL NEW FOUNDATION

BAO VIET DEVELOPMENT MILESTONES

Launch of new brand identity

Listing of Bao Viet Holdings shares (BVH) on HOSE

CHIEF EXECUTIVE OFFICER