Monthly ReportMonthly ReportFeb 2011Feb 2011

2011.02.25

Investment, Finance and Accounting

Cathay Life (VN)

Contents

This month activities1

New law update (Cir. 09/2011/TT-BTC)

2

Business result 20103

Market News4

Next month plan5

1. 2010 Financial statement

2. 2010 Budget performance

3. Tax registration for 2011 invoice

4. Contract with ABBank about Salary payment

5. SMS Project (2I) – Form B –Project Appraisal Report

Accounting Finance

Activities

1. Enhance Investment Yield:

2. Real Estate Project: Investigated land/buildings. (support from Real Estate Dep. TW) Queried MPI (Ministry Of Planning and Investment) and MOF about

some legal issue.

3. Market watch: Follow up the evolution of financial market. Seek opportunity to create other asset class.

Activities

Investment

Guidance of VAT and CIT for Insurance business

• VAT

Cir.09/2011/TT-BTC

Issues Circular 09/2011/TT-BTC Before

1- VAT invoice for premium refund

*Minute of premium refund* Invoice collect back (if any)

*Minute of premium refund* Invoice collect back (compulsory)

2- VAT invoice for insurance adjustment

*Minute of insurance adjustment

*Minute of insurance adjustment

*Issue invoice for adjustment *Issue invoice for adjustment

3- Gift for incentive or advertisement

Issue invoice without VAT (if goods are in-out put store) No issued invoice

Guidance of VAT and CIT for Insurance business

• VAT

Cir.09/2011/TT-BTC

Issues Circular 09/2011/TT-BTC Before

4- Commission for General Agency (GA) who register business

GA has to issue invoice for commission without VAT

GA has to issue invoice for commission without VAT

5- Fund support to General Agency (GA) who register business

*Agreement for fund support

Not clear

*GA has to issue receipt and declare tax. *GA can not deduct VAT output of any equipment purchasing from fund supporting

Guidance of VAT and CIT for Insurance business

2. CIT

There is no change from the last regulation. Legal expenses include:

Benefit payout

Reserve

Commission

Overrides

Other expense as current regulation

Cir.09/2011/TT-BTC

2011 Company Applicable invoice

Start Using date : 01 March 2011

Differences of new and old

1

2

23

4 5

6

67 8

13

4 5

7 8 9

9

2

AddingAdding

1.Colorful with logo shadow

Black and white, no logo shadow

3.Adding more information

Buyer tax code

Buyer address

2.Series and Sequence number

Sequence numbers are printed by company

6

2010 invoices expire date

Expired31/03/2011

01/04/2011 RT/2011Sincechange

-Acc opening forms - Come to C.Thay office- Get agent’s signature

-Acc opening applicant list

Inform Agent’s bank account

Commission payment contract with ABBank

I. Procedure of opening bank account I. Procedure of opening bank account

5 days 2 daysTrainer Agents

ATM Card (ABBank)

7 days

ATM ABBank Network

2010 budget performance (VND mil)

ActualOriginal budget

Variance %

Marketing 85,923 70,699 (15,225) 122%

General Administration 51,293 53,987 2,694 95%

Public Relation 9,072 9,605 533 94%

IT 15,958 16,968 1,010 94%

Accounting & Finance 794 860 66 92%

Human Resources 33,994 37,412 3,418 91%

Audit 36 43 7 84%

Planning 267 344 76 78%

Activities

Generally, mostly departments have controlled the budget well. The feedback are as following:

8/12 departments had to seek BOD approval for the expense items have exceeded the quota. 4/12 departments had utilized less 70% approved budget. This should be aware of making the 2012 budget

ActualOriginal budget

Variance %

Legal 301 436 135 69%

Training 848 1,579 731 54%

Policy Administration 837 1,742 905 48%

Investment 1,191 3,466 2,275 34%

Activities

2010 Results (VND mil)Q1 Q2 Q3 Q4 2010

Revenues 47,825 50,868 61,665 71,277 231,635

Expenses 48,691 56,012 63,476 79,568 247,747

Profits (866) (5,144) (1,811) (8,291) (16,112)

Budget 2010 (4,728) (5,568) (6,850) (4,702) (21,848)

Loss - Actual / Budget 2010 74%231.6

71.361.750.947.8

79.663.556.048.7

247.7

0

50

100

150

200

250

Revenues Expenses

Activities

Investment

Gross Premium (VND mil)Gross Premium (VND mil)Q1 Q2 Q3 Q4 2010

Actual 13,048 19,012 26,929 37,201 96,190

Budget 19,802 23,885 29,728 35,990 109,405

Actual 2009

12,128 9,055 15,201 14,875 51,259

Actual / Budget

Actual 2010 / Actual 2009

88%188%

14.9

19.823.9

29.7 36.0

13.0 19.0

26.9

37.2

12.19.1

15.2

0

10

20

30

40

Q1 Q2 Q3 Q4

Budget 2010 Actual 2010 Actual 2009

Premium trends 2008-2010

0

3

6

9

12

15

18

Jul-0

8

Sep

-08

Nov

-08

Jan-

09M

ar-0

9M

ay-0

9

Jul-0

9

Sep

-09

Nov

-09

Jan-

10M

ar-1

0M

ay-1

0

Jul-1

0

Sep

-10

Nov

-10

16.9

Record

New

Renewal

Activities

Interest RatesInterest Rates

Average Rate (for enterprises)(%)

Group of Banks Currency Demand 3M 6 M 12 M

SOCBsVND 2.4-3.0 13.5-14.0 13.5-14.0 13.5-14.0

USD 0.2-0.3 1.0 1.0 1.0

JSCBsVND 2.4-4.2 13.8-14.0 13.5-14.0 13.5-14.0

USD 0.25-1.0 1.0 1.0 1.0

Generally speaking, VND rate for 1 month is the highest.

USD deposit rate is still 1%.

News

FX RatesFX Rates

SBV adjusted VND from 18932 to 20693, and narrow trading band from 3% to 1% in order to curb the trade deficit.

(As of 17 Feb 2011) Official rate = 20,683 ; Unofficial rate = 20,889; Black market = 22,050

News

Marco Figures Marco Figures

Trade deficit: Jan export growth (18.1 % YoY) outpaced to import growth (15.5% YoY) which narrowed trade deficit to an estimated $1.0bn in Jan.

CPI: Jan CPI increased to its highest level since Feb 2009 : 12.17% YoY & 1.74% MoM. Food and foodstuffs led the increase, rising 16.6% YoY.

Trade DeficitTrade Deficit CPICPI

Accounting and Finance

1 2 3 41. The on-line biz trip reimbursement : Working with

IT to figure out the issues and get the best solutions

2. 2010 Tax Finalization reports

3. SMS (2I) program – continue

Plan

Investment Investment 1. Follow Investment strategy in 2011:

Reinvest Gov. bonds for bonds matured.

2. Real Estate Project:

Keep contact Real Estate Dep. TW

Research related legal document.

3. Support Bank insurance:

Prepare risk assessment report for potential counterparties.

4. Market watch:

Follow up the evolution of financial market.

Monthly investment presentation.

Plan

Accounting & Finance

THE END